dunedinincomegrowth.co.uk
Dunedin Income Growth
Investment Trust PLC
Annual Report 31 January 2023
Targeting income and long-term growth from mainly UK companies
chosen for their quality and commitment to improving sustainability
The Company targets income and long-
term growth from mainly UK companies
chosen for their quality and commitment
to improving sustainability.
Dunedin Income Growth Investment Trust PLC 1
“Although underperforming over the short term, the
NAV total return of the Company remains ahead of
the benchmark and peers over the longer term and
it is encouraging that the Company’s shares are
trading at a tighter discount than the average of the
UK equity income sector.“
David Barron, Chairman
“We consider the portfolio to be in good shape with
our focus on higher quality companies, an emphasis
on investments that can deliver both income and
capital growth whilst also meeting the Company’s
sustainable and responsible investing criteria,
positioning the Company to be able to cope with
what may be difficult market conditions ahead.”
Ben Ritchie and Rebecca Maclean,
abrdn Investments Limited
2 Dunedin Income Growth Investment Trust 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 independent financial advice from your
stockbroker, bank manager, solicitor, accountant or other
financial adviser authorised under the Financial Services
and Markets Act 2000 (as amended by the Financial
Services Act 2012) if you are in the United Kingdom or,
if not, from another appropriately authorised
financial adviser.
If you have sold or otherwise transferred all your Ordinary
shares in Dunedin Income Growth Investment Trust PLC,
please forward this document, together with the
accompanying documents immediately to the purchaser
or transferee, or to the stockbroker, bank or agent through
whom the sale or transfer was effected for transmission to
the purchaser or transferee.
Overview
Performance Highlights 3
Company Summary 4
Calendar and Financial Highlights 5
Financial Highlights 6
Strategic Report
Chairman’s Statement 8
Overview of Strategy 13
Promoting the Success of the Company 20
Performance 23
Investment Process 27
Investment Manager’s Review 35
Information About the Investment Manager 39
Portfolio
Ten Largest Investments 42
Portfolio 43
Portfolio Sector Breakdown 45
Sector Analysis 46
Investment Case Studies 48
Governance
Board of Directors 52
Directors’ Report 55
Directors’ Remuneration Report 62
Audit Committee’s Report 66
Financial Statements
Statement of Directors’ Responsibilities 72
Independent Auditor’s Report 73
Statement of Comprehensive Income 81
Statement of Financial Position 82
Statement of Changes in Equity 83
Statement of Cash Flows 84
Notes to the Financial Statements 85
Other Information
Investor Information 106
Glossary of Terms 110
Your Company’s History 113
Share Capital History 114
AIFMD Disclosures (Unaudited) 115
Alternative Performance Measures 116
General
Notice of Annual General Meeting 120
Contact Addresses 125
Contents
Dunedin Income Growth Investment Trust PLC 3
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Net asset value total return
AB
Earnings per share (revenue)
+2.4% 13.0
p
2022 +8.1% 2022 12.9p
Ongoing charges
A
Share price total return
A
0.64%
(
0.9
)
%
2022 0.59% 2022 +12.5%
Premium/(discount) to net asset value
AB
Dividends per Ordinary share
(
2.9
)
% 13.1
p
2022 0.3% 2022 12.9p
A
Alternative Performance Measure (see pages 117 and 118).
B
With debt at fair value, dividends reinvested (see pages 95 and 96).
Net Asset Value per share –
debt at fair value
Share price Dividends per share
At 31 January – pence At 31 January – pence Year ended 31 January - pence
266.8
312.2
297.6
309.0
302.8
19 20 21 22 23
242.0
301.0
287.0
310.0
294.0
19 20 21 22 23
12.45
12.70 12.80 12.90 13.10
19 20 21 22 23
Performance Hi
g
hli
g
hts
4 Dunedin Income Growth Investment Trust PLC
Dunedin Income Growth Investment Trust plc
Investing for income, for growth and a more sustainable future.
Built to help your returns
keep pace with the
cost of living
Searching out the UK and
European companies
shaping a better future
Actively investing to bring
together what we believe
are the best opportunities
Long term growth
To capture long-term growth, the Investment Manager looks
across the UK and Europe to find companies, from major multi-nationals to
dynamic small-caps, benefiting from major economic trends such
as energy transition, digitisation, shifting demographics and
changing consumer behaviour.
Reliable quarterly income
To keep delivering a reliable and growing quarterly income, the
team invests in well-managed, financially healthy companies
with robust earnings potential.
A sustainable focus
By using a range of forward-looking tools to interrogate
environmental, social and governance (“ESG”) practices, the
Investment Manager looks to ensure that every company it
invests in is leading on sustainability today or taking steps to
lead the way tomorrow.
Robust financial returns
By applying these stringent criteria, the Company is dedicated
to delivering robust financial returns for investors – and helping to
shape a better future for everyone.
Company Summary
Dunedin Income Growth Investment Trust PLC 5
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Calendar
Online shareholder presentation
3 May 2023
Annual General Meeting (Dundee)
16 May 2023
Expected payment dates of quarterly dividends
30 May 2023
25 August 2023
24 November 2023
23 February 2024
Half year end
31 July 2023
Expected announcement of results for the
six months ending 31 July 2023
September 2023
Financial year end
31 January 2024
Expected announcement of results for the
year ending 31 January 2024
April 2024
Calendar and Financial Hi
g
hli
g
hts
6 Dunedin Income Growth Investment Trust PLC
31 January 2023 31 January 2022 % change
Total assets (£’000) (see page 112 for definition) 492,105 507,344 (3.00)
Equity shareholders’ funds (£’000) 448,605 464,579 (3.44)
Market capitalisation (£’000) 435,898 459,310 (5.10)
Net asset value per Ordinary share 302.57p 313.56p (3.50)
Net asset value per Ordinary share with debt at fair value
A
302.80p 309.03p (2.01)
Share price (mid) 294.00p 310.00p (5.16)
FTSE All-Share Index 4,255.72 4,191.81 +1.52
Premium/(discount) (difference between share price and net asset value)
Premium/(discount) where borrowings are deducted at fair value
A
(2.91%) +0.31%
Gearing (see page 110 for definition)
Net gearing
A
7.11% 8.41%
Dividends and earnings
Total return per share 1.92p 23.78p
Revenue return per share 13.02p 12.87p +1.17
Total dividend per share for the year 13.10p 12.90p +1.55
Dividend cover
A
0.99 1.00
Revenue reserves
Prior to payment of third and final dividends
B
16.07p 15.95p
After payment of third and final dividends
BC
8.97p 9.05p
Operating costs
Ongoing charges
AD
0.64% 0.59%
A
Considered to be an Alternative Performance Measure as defined on pages 116 and 117.
B
Calculated by dividing the revenue reserve per the Statement of Financial Position on page 82 by the number of shares in issue at the reporting date per note 16 on page 95.
C
Third interim dividend for the year ended 31 January 2023 of 3.00p per share (2022 – 3.00p). Final dividend for the year ended 31 January 2023 of 4.10p per share (2022 – final
dividend of 3.90p). See note 16 on page 95 for further details.
D
Calculated in accordance with the latest AIC guidance issued in October 2020 to increase the scope of reporting the look-through costs of holdings in investment companies.
Financial Hi
g
hli
g
hts
Dunedin Income Growth Investment Trust PLC
7
Strategic Report
The Company is an investment
trust with a premium listing on the
London Stock Exchange.
The Company’s objective is to
achieve growth of income and
capital from a portfolio invested
mainly in companies listed or
quoted in the United Kingdom
that meet the Company’s
sustainable and responsible
investing criteria as set by
the Board.
12.2% of the Company’s total assets are
invested in the Pharmaceuticals and
Biotechnology sub-sector.
8 Dunedin Income Growth Investment Trust PLC
The Company was launched in Dundee in 1873 and this year we celebrate its 150
th
anniversary. In an eventful and
difficult year for markets, the Company produced a positive absolute net asset value total return of 2.4% and delivered
an increase in its dividend for the 12th year in succession, providing a dividend yield of 4.5% at the year end. In recognition
of its heritage, the Company’s AGM this year will be held in Dundee.
A summary of the Company’s history is included on page 113 and a book entitled “The History of Dunedin Income
Growth Trust PLC” is available on the Company’s website.
Performance
In a difficult year for markets, your Company delivered a
positive absolute return for the year ended 31 January
2023, albeit this lagged the return of the wider market in
what was a positive year for UK equities in a global
context. The Company’s net asset value (“NAV”) increased
by 2.4% on a total return basis, underperforming the FTSE
All-Share Index which produced a total return of 5.2%.
Emerging from the shadow of Covid, 2022 proved to be an
eventful year, dominated by the Russian invasion of
Ukraine, the highest levels of inflation in a generation and a
consequential rapid rise in interest rates, not to mention
producing the shortest tenured Prime Minister in British
political history. Despite all of this, UK equities proved more
resilient than many global markets, benefitting from their
exposure to more “old economy” sectors, particularly
commodities, and their relatively low starting valuations.
While the portfolio’s total return trailed the FTSE All-Share
Index, it delivered a positive absolute return. Returns in the
market were more highly concentrated than usual, with
just 23% of companies outperforming in the FTSE All-
Share Index. The best performing sectors were energy,
defence and mining which are typically sectors in which
the Company is, and has been, underweight, given the
investment approach. Given the backdrop, we believe
this to be a creditable result given the strategic focus of
the portfolio on high quality companies with an emphasis
on dividend growth and sustainability, which we believe
will deliver more sustainable returns over the medium to
long term.
Despite the headwinds to performance, partly driven by
our distinct approach and style, the Company has
delivered a NAV total return of 29.7% compared to the
benchmark return of 23.1% over five years, and over the
same period ranks 5
th
out of 20 in the AIC UK Equity
Income sector by NAV total return.
The Board recognises the importance of the dividend
return to shareholders and we are pleased to report
that the portfolio has seen continued revenue growth,
with revenue earnings per share reaching another record
high and some way above our original expectations for
the year.
Although underperforming over the short term, the NAV
total return of the Company remains ahead of the
benchmark and peers over the longer term and it is
encouraging that the Company’s shares are trading at a
tighter discount than the average of the UK equity income
sector. The portfolio remains highly differentiated to its
peer group, offering a highly active, relatively
concentrated strategy, with a sustainability overlay that
remains unique within the sector and rare within the wider
investment trust universe.
In an eventful and difficult year for
markets, the Company produced a
positive absolute net asset value total
return of 2.4% and delivered an
increase in its dividend for the 12th
year in succession, providing a
dividend yield of 4.5% at the year end.
From an Environmental, Social and Governance (“ESG”)
perspective we recognise the growing backlash against
the consideration of ESG factors by portfolio managers
and asset owners, particularly in North America. In
addition, there is significant scepticism about the ESG
claims of many portfolio managers. We believe it is
correct to apply intellectual rigour and challenge to
sustainability claims being made by investors and
companies alike. This should raise the standard of ESG
integration and responsible investment globally.
Chairman’s Statement
Dunedin Income Growth Investment Trust PLC 9
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
We remain committed to the sustainability ambitions of
the Company and believe it is the right approach when
investing for the long term and to deliver sustainable and
growing dividends. We expect that investors will return
their focus towards this segment of the market as
environmental and social risks rise and asset owners turn
their attention to the impact of their holdings. For us, this is
about both avoiding risks and taking advantage of
opportunities to invest behind the powerful demand
trends stemming from the climate transition and social
equality. The conflict in Ukraine has only served to
accelerate the energy transition in order to address
security of supply. It has also thrown a social spotlight on
companies with both governments and consumers
forcing businesses to divest their operations in Russia.
Social awareness is likely to become a bigger dynamic
and risk.
The Company is classified as a ‘next
generation of dividend heroes’ by the
Association of Investment Companies,
being one of the 27 investment trusts
that have raised their dividend for 10
to 19 consecutive years.
Earnings
Income increased by 2.0% during the year, reflecting good
progress in dividend distributions from companies in the
portfolio, helping to mitigate the lack of the very large one-
off dividends we had received during the previous year,
notably from the mining sector, as well as
GlaxoSmithKline’s rebasing of its dividend following the
demerger of Haleon. The revenue return per share
increased by 1.2% reaching an all-time high of 13.0p,
growing slightly less than income due mainly to higher
withholding taxes on overseas income.
Dividend
Having paid three quarterly dividends of 3.0p per share,
we are proposing a final dividend of 4.1p per share,
payable on 30 May 2023 to shareholders on the register
on 5 May 2023. This will make a total dividend of 13.1p per
share for the year, an increase of 1.6% on last year. This
will be the 39th year out of the past 43 that the Company
has grown its dividend, with the distribution maintained in
the other four years. Furthermore, having increased the
dividend in every year since 2011, the Company is
classified as a ‘next generation of dividend heroes’ by the
Association of Investment Companies, being one of the 27
investment trusts that have raised their dividend for 10 to
19 consecutive years.
Following payment of the final dividend, we will have
utilised 0.08p per share of the Company’s revenue
reserves, meaning that 8.97p per share will be available to
support future distributions, representing approximately
70% of the current annual dividend cost. The net revenue
earned during the financial year represents 99.4% of the
proposed dividend cost for the year. The Company has
drawn 2.6p per share from revenue reserves since
January 2019, both through the transition away from
higher yielding, lower growth companies and, particularly
in 2020/21, when 1.9p per share was utilised from revenue
reserves following the impact of the Covid pandemic on
the portfolio. It is our intention that revenue reserves are
used to support the dividend in periods when the natural
income generating capacity of the portfolio is impacted
by one-off factors, rather than to increase dividends to
levels that may not be sustained by underlying revenue
account performance.
The resilient revenue account performance of the
Company over recent years, and through the
Covid pandemic compared with many of its peers,
is note worthy.
10 Dunedin Income Growth Investment Trust PLC
Over recent years the Investment Manager has, as noted,
been reducing the Company’s dependence on higher
yielding, lower growth companies and enhancing the
Company’s longer term potential for both faster dividend
growth and better capital performance. The Company
delivered a record level of revenue earnings per share
during the year and, although the rate of dividend
increase for the year lags the rate of inflation, the
increased dividend of 13.1p per share represents a yield of
4.5% based on the share price of 294p at the end of the
year, compared to a notional yield of 3.7% from the FTSE
All-Share Index. Our distribution policy remains to grow
the dividend faster than inflation over the medium term
and, with the Company’s robust revenue reserves and the
healthy underlying dividend growth of the companies
within the portfolio, we believe that the policy remains well
supported, although its delivery may prove more
challenging if inflation remains persistently high.
As explained in more detail in the Directors’ Report on
page 55, during the year, the Board decided that, going
forward, amounts of unclaimed dividends greater than 12
years old, which are returned annually to the Company by
the Registrar in accordance with the Company Articles of
Association, would be donated to charity. Accordingly, the
Company made a donation of £16,000 (2022: £nil) to the
abrdn Charitable Foundation, which directs funding to
charities around the world.
Gearing
The Board believes that the sensible use of modest
financial gearing, whilst amplifying market movements in
the short term, will enhance returns of both capital and
income to shareholders over the long term. We also
recognise the benefit that having a reasonable proportion
of long-term fixed rate funding provides to managing the
Revenue Account, through greater certainty over
financing costs.
The Company currently employs two sources of gearing.
The £30 million loan notes maturing in 2045, and a £30
million multi-currency revolving credit facility that expires
in July 2023. A Sterling equivalent of £13.8 million was
drawn down at the year end. The Board will make a
further announcement with regard to the multi-currency
revolving facility in due course.
With debt valued at par, the Company’s net gearing
decreased from 8.4% to 7.1% during the year. This decline
was due to holding a higher cash balance at the year end.
The Board believes this remains a relatively conservative
level of gearing and, with part of the revolving credit
facility undrawn, this provides the Company with financial
flexibility should opportunities to deploy additional
capital arise.
Discount
The share price total return for the year of -0.9%
underperformed the NAV total return, reflecting a move
from a small premium of 0.3% at the end of last year to a
modest discount of 2.9% as at 31 January 2023 (on a
cum-income basis with borrowings stated at fair value).
During the year, 100,000 shares were issued at a premium
to the NAV.
In recent years, we have seen a
re-rating of the shares and the Board
believes a consistent rating of the
Company’s shares close to the
underlying asset value is of significant
benefit to shareholders.
As stated above, the Board believes that the successful
implementation by the Investment Manager of the
investment strategy should enhance the Company’s
longer-term potential for improved performance. In
recent years, we have seen a re-rating of the shares and
the Board believes a consistent rating of the Company’s
shares close to the underlying asset value is of significant
benefit to shareholders. As in previous years, we will seek
shareholders’ permission at the forthcoming AGM to buy
back shares and issue new shares.
Chairman’s Statement
Continued
Dunedin Income Growth Investment Trust PLC 11
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Annual General Meeting and Online
Shareholder Presentation
AGM
The AGM will be held at 12 noon on 16 May 2023 at V&A
Dundee, 1 Riverside Esplanade, Dundee DD1 4EZ. The
meeting will include a presentation from the Investment
Manager and will be followed by lunch.
We encourage all shareholders to complete and return
the Proxy Form enclosed with the Annual Report so as to
ensure that your votes are represented at the meeting. If
you hold your shares in the Company via a share plan or a
platform and would like to attend and/or vote at the AGM,
then you will need to make arrangements with the
relevant administrator. For this purpose, investors who
hold their shares in the Company via the abrdn Investment
Plan for Children, Share Plan or ISA will find a Letter of
Direction enclosed. Shareholders are encouraged to
complete and return their Proxy Forms / Letters of
Direction in accordance with the instructions.
The Notice of Meeting is contained on pages 120 to 124.
Online Shareholder Presentation
In order to encourage as much interaction as possible with
our shareholders, and especially for those who are unable
to attend the AGM, we will also be hosting an Online
Shareholder Presentation, which will be held at 11.00 am
on 3 May 2023. At this event you will receive a presentation
from the Investment Manager and have the opportunity to
ask live questions of the Chairman and the Investment
Manager. The online presentation is being held ahead of
the AGM to allow shareholders to submit their proxy votes
subsequently.
Full details on how to register for the online event can be
found at: https://bit.ly/abrdn-dunedin-income
Details are also contained on the Company’s website.
Amendment to Investment Policy
(Overseas Exposure)
During the year, the Board and Investment Manager
reviewed the guidelines governing the management of
the portfolio and determined that the part of the
investment policy relating to the limit on the exposure to
investments in companies listed or quoted overseas
should be amended from its current limit of 20% to a new
limit of 25%. This higher limit will provide the Investment
Manager with greater flexibility to invest in overseas
companies but does not represent a change in the way
that the portfolio is managed and it is not a material
change to the investment policy that would require
shareholder approval. The change will take effect on
1 May 2023.
Outlook
Over recent years the Company has undergone a
significant shift in its portfolio to focus more on total return
and dividend growth and adjusted its mandate to formally
incorporate a greater focus on sustainability. While the
past two financial years have been a difficult period for
relative performance, the Board believes that this is the
correct strategy to deliver earnings and dividend growth
over the longer term. The volatile economic and political
environment that has been unleashed by both the rapid
tightening in global monetary policy and the conflict in the
Ukraine should further support a focus on resilience,
although we recognise some of the headwinds to the
Investment Manager’s style of investment that these
conditions have created in the recent years.
As we look forward, there are some reasons for cautious
optimism. Commodity prices have retreated, particularly
natural gas. This could lead to the prospect of falling
energy bills for consumers as we move through 2023.
Government finances are in better shape than
anticipated at the time of the mini budget in October, as
energy price caps have proved less expensive than
originally expected. Supply chain disruption is easing,
freight rates have fallen sharply and Europe has managed
to navigate the energy price crisis. The US consumer has,
so far at least, remained resilient and China has removed
its Covid related restrictions far more quickly than had
been envisaged. Meanwhile, the market valuation of UK
equities is attractive on an absolute and relative basis.
12 Dunedin Income Growth Investment Trust PLC
We also believe that the income growth of the Company
is not overly dependent on interest rates or commodity
prices, albeit a lack of exposure to these elements has
been a detractor to performance over the past 18
months. These are both areas where forecasting
accuracy is notoriously low. That gives your portfolio
managers a higher degree of confidence on the likely
path of income generation. We believe the balance of the
portfolio means it is well set to navigate volatile markets
and demonstrate resilience in a range of different
market environments.
That all said, inflation remains high and the impact of the
significant tightening in monetary policy has arguably yet
to be fully felt in the real economy. Yield curve inversion
tends to be a precursor to a recession and it is likely still too
early to signal that we will avoid an outright economic
contraction. In such an environment, we think it is
important to maintain a relatively well balanced portfolio.
Against a challenging backdrop, the Investment
Manager’s focus on investing in companies with pricing
power, strong balance sheets and with greater exposure
to structural, rather than cyclical, growth should offer
greater resilience in both capital and income generation.
The Company’s track record over the past five years
adopting this strategy remains creditable.
The Board is confident that the Company is well-
positioned to deliver relative total return outperformance
over the medium and long term. This, combined with the
ambition to grow the dividend in real terms over the
medium term, should enable the Company’s shares to
continue to trade close to NAV and return to real growth in
dividend distributions.
David Barron
Chairman
5 April 2023
Chairman’s Statement
Continued
Dunedin Income Growth Investment Trust PLC 13
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Business
The Company is an investment trust with a premium listing
on the London Stock Exchange.
Investment Objective
The Company’s objective is to achieve growth of income
and capital from a portfolio invested mainly in companies
listed or quoted in the United Kingdom that meet the
Company’s sustainable and responsible investing criteria
as set by the Board.
Investment Policy
In pursuit of its objective, the Company's investment policy
is to invest in high quality companies with strong income
potential and providing an above-average portfolio yield.
The Company may only make material changes to its
investment policy (including the level of gearing set by the
Board) with the approval of shareholders in the form of an
ordinary resolution.
Risk Diversification
The Company maintains a diversified portfolio consisting,
substantially, of equity or equity-related securities, and it
can invest in other financial instruments. The Company is
invested mainly in companies listed or quoted in the
United Kingdom and can invest up to 20% of its gross
assets overseas.
It is the policy of the Company to invest no more than
15% of its gross assets in other listed investment
companies and no more than 15% of its gross assets
in any one company.
Gearing
The Board is responsible for determining the gearing
strategy for the Company, with day-to-day gearing
decisions being made by the Manager within the remit set
by the Board. The Board has set its gearing limit at a
maximum of 30% of the net asset value at the time of
draw down. Gearing is used selectively to leverage the
Company's portfolio in order to enhance returns where
and to the extent considered appropriate.
Delivering the Investment Objective
The Directors are responsible for determining the
Company’s investment objective and investment policy.
Day-to-day management of the Company’s assets has
been delegated, via the AIFM, to the Investment Manager.
Investment Process
The Investment Process adopted by the Investment
Manager is contained on pages 27 to 34.
Benchmark
The Company’s benchmark is the FTSE All-Share Index
(total return). Performance is measured on a net asset
value total return basis over the long-term.
Promoting the Success of the Company
The Board’s statement on pages 20 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.
Overview of Strate
g
y
14 Dunedin Income Growth Investment Trust PLC
Key Performance Indicators (“KPIs”)
The Board uses a number of financial performance measures to assess the Company’s success in achieving its
objective and determining the progress of the Company in pursuing its investment policy. The main KPIs are shown in
the table below.
KPI Description
Performance of NAV against benchmark index
and comparable investment trusts
The Board measures the Company’s NAV total return performance against the total
return of the benchmark index – the FTSE All-Share Index. The figures for this year
and for the past three and five years, and a graph showing performance against the
benchmark index over the past five years are shown on page 23. The Board also
monitors performance relative to a peer group of investment trusts which have
similar objectives, policies and yield characteristics.
Revenue return per Ordinary share The Board monitors the Company’s net revenue return. The revenue returns per
Ordinary share for each of the past 10 years are set out on page 25.
Dividend per Ordinary share The Board monitors the Company’s annual dividends per Ordinary share. The
dividends per share for each of the past 10 years are set out on page 25.
Share price performance The Board monitors the performance of the Company’s share price on a total return
basis. The returns for this year and for the past three and five years, and a graph
showing the share price total return performance against the benchmark index
over the past five years are shown on page 23.
Premium/discount to NAV The premium/discount of the share price relative to the NAV per share is monitored
by the Board. The discount at the year end and at the end of the previous year are
disclosed on page 6.
Ongoing charges The Board monitors the Company’s operating costs carefully. Ongoing charges for
the year and the previous year are disclosed on page 6.
Overview of Strate
g
y
Continued
Dunedin Income Growth Investment Trust PLC 15
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Principal Risks and Uncertainties
The Board carries out a regular review of the risk environment in which the Company operates, changes to the
environment and individual risks. The Board also considers emerging risks which might affect the Company. The Board
receives updates from the Manager on the risks that could affect the Company. During the year, the prominent
emerging risk was inflation and the resultant volatility that it created in global stock markets. In addition, the conflict in
Ukraine and continued tensions between China and the USA have created geo-political uncertainties which have further
increased market risk and volatility.
There are a number of other risks which, if realised, could have a material adverse effect on the Company and its
financial condition, performance and prospects. The Board has carried out a robust assessment of the Company’s
principal and emerging risks, which include those that would threaten its business model, future performance, solvency,
liquidity or reputation.
The principal and emerging risks and uncertainties faced by the Company are reviewed by the Audit Committee in the
form of risk matrices.
The principal risks and uncertainties facing the Company at the current time, together with a description of the
mitigating actions the Board has taken, are set out in the table below.
The principal risks associated with an investment in the Company’s shares are published monthly in the Company’s
factsheet and they can be found in the pre-investment disclosure document (“PIDD”) published by the Manager, both of
which are available on the Company’s website.
Risk Mitigating Action
Investment objectives - a lack of demand for
the Company’s shares due to its objectives
becoming unattractive to investors could
result in a widening of the discount of the
share price to its underlying NAV and a fall in
the value of
its shares.
Board review. The Board formally reviews the Company’s objectives
and strategies for achieving them on an annual basis, or more regularly
if appropriate.
Shareholder communication. The Board is cognisant of the importance of regular
communication with shareholders. Directors attend meetings with the Company’s
largest shareholders and meet other shareholders at the Annual General Meeting
and, as explained in the Chairman’s Statement, the Company will hold an online
shareholder presentation in advance of the Annual General Meeting this year
including the opportunity for an interactive question and answer session. The Board
reviews shareholder correspondence and investor relations reports and also
receives feedback from the Company’s Stockbroker.
Discount monitoring. The Board, through the Manager, keeps the level of discount
under constant review. The Board is responsible for the Company’s share buy back
policy and is prepared to authorise the use of share buy backs to provide liquidity to
the market and try to limit any widening of the discount.
Investment strategies - the Company adopts
inappropriate investment strategies in pursuit
of its objectives
which could result in investors avoiding the
Company’s shares, leading to a widening of
the discount and poor investment
performance.
Adherence to investment guidelines. The Board sets investment guidelines and
restrictions which the Manager follows, covering matters such as asset allocation,
diversification, gearing, currency exposure and use of derivatives, as well as the
Company’s sustainable and responsible investment criteria. These guidelines are
reviewed regularly and the Manager reports on compliance with them at
Board meetings.
In order to ensure adequate diversification, the Board has set absolute limits on
maximum holdings and exposures in the portfolio at the time of investment, which
are in addition to the limits contained in the Company’s investment policy,
16 Dunedin Income Growth Investment Trust PLC
Risk Mitigating Action
including the following:
y No more than 10% of gross assets to be invested in any single stock; and
y The top five holdings should not account for more than 40% of gross assets.
Regular shareholder communication and discount monitoring, as above.
Investment performance - the appointment or
continuing appointment of an investment
manager with inadequate resources, skills or
expertise or which makes poor investment
decisions. This could result in poor investment
performance, a loss of value for shareholders
and a widening discount.
Monitoring of performance. The Board meets the Investment Manager on a regular
basis and keeps under close review (inter alia) its resources and adherence to
investment processes, including in relation to the Company’s sustainable and
responsible investment criteria. The Board also keep under review the adequacy of
risk controls and investment performance.
Management Engagement Committee. A detailed formal appraisal of the Manager is
carried out annually by the Management Engagement Committee.
Income/dividends - the Company adopts an
unsustainable dividend policy resulting in cuts
to or suspension of dividends to shareholders,
or one which fails to meet investor demands.
Revenue forecasting and monitoring. The Manager presents detailed forecasts of
income and expenditure covering both the current and subsequent financial years
at Board meetings. Dividend income received is compared to forecasts and
variances analysed.
Use of reserves. The Company has built up revenue reserves which are available to
smooth dividend distributions to shareholders should there be a shortfall in
revenue returns.
Financial/market - insufficient oversight or
controls over financial risks, including market
risk, foreign currency risk, liquidity risk and
credit risk could result in losses to the
Company.
Management controls. The Manager has a range of procedures and controls
relating to the Company’s financial instruments, including a review of investment
risk parameters by its Investment Risk department and a review of credit worthiness
of counterparties by its Counterparty Credit Risk team.
Foreign currency hedging. It is not the Company’s policy to hedge foreign currency
exposure but the Company may, from time to time, partially mitigate it by drawing
down borrowings in foreign currencies.
Board review. As stated above, the Board sets investment guidelines and restrictions
which are reviewed regularly and the Manager reports on compliance with them at
Board meetings.
Further details of the Company’s financial instruments and risk management are
included in note 19 to the financial statements.
Gearing - gearing accentuates the effect of
rises or falls in the market value of the
Company’s investment portfolio on its NAV.
An inappropriate level of gearing at a time of
falling values could result in a significant fall in
the value of the Company’s net assets and
share price. Such a fall in the value of the
Company’s net assets could result in a
breach of loan covenants and trigger
demands for
Gearing restrictions. The Board sets gearing limits within which the Manager
can operate.
Monitoring. Both the limits and actual levels of gearing are monitored on an ongoing
basis by the Manager and at regular Board meetings. In the event of a possible
impending covenant breach, appropriate action would be taken to reduce
borrowing levels.
Scrutiny of loan agreements. The Board takes advice from the Manager and the
Company’s lawyers before approving details of loan agreements. Care is taken to
ensure that covenants are appropriate and unlikely to be breached.
Overview of Strate
g
y
Continued
Dunedin Income Growth Investment Trust PLC 17
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
early repayment or require investments
to be sold to meet any shortfall. This could
result in further losses.
Limits on derivative exposure. The Board has set limits on derivative exposures and
positions are monitored at regular Board meetings.
Regulatory - changes to, or failure to
comply with, relevant regulations
(including the Companies Act, The
Financial Services and Markets Act, The
Alternative Investment Fund Managers
Directive, accounting standards,
investment trust regulations, the
Packaged Retail and Insurance-based
Investment Product Regulations, the
Listing Rules, Disclosure Guidance and
Transparency Rules and Prospectus
Rules) could result in fines, loss of
reputation, reduced demand for the
Company’s shares and potentially loss of
an advantageous tax regime.
Board awareness. The Directors have an awareness of the more important regulations
and are provided with information on changes by the Association of Investment
Companies. In terms of day to day compliance with regulations, the Board is reliant on
the knowledge and expertise of the Manager. However, where necessary, the Board
engages the service of external advisers. In addition, all Directors are encouraged to
attend relevant training courses.
Management controls. The Manager’s company secretariat and accounting teams use
checklists to aid compliance and these are backed by the Manager’s compliance
monitoring programme and risk based internal audit investigations.
Operational (including cyber-crime) - the
Company is reliant on services provided
by third parties (in particular those of the
Manager and the Depositary) and any
control gaps and failures in their
operations could expose the Company to
loss or damage.
Agreements. Written agreements are in place defining the roles and responsibilities of
all third party service providers.
Internal control systems of the Manager. The Board receives reports on the operation
and efficacy of the Manager’s IT and control systems, including those relating to cyber-
crime, and its internal audit and compliance functions.
Safekeeping of assets. The Depositary is ultimately responsible for the safekeeping of
the Company’s assets and its records are reconciled to those of the Manager on a
regular basis. Through a delegation by the Depositary, the Company’s investments and
cash balances are held in segregated accounts by the Depositary.
Monitoring of other third party service providers. The Manager monitors closely the
control environments and quality of services provided by third parties, including those of
the Depositary. This includes controls relating to cyber-crime and is conducted through
service level agreements, regular meetings and key performance indicators. The
Directors review reports on the Manager’s monitoring of third party service providers on
a periodic basis.
Geo-political (including a pandemic,
climate change and the conflict in Ukraine)
– the impact of geo-political events could
result in losses to the Company.
Board and Manager awareness. Geo-political events over which the Company has no
control are always a risk. The Board and Manager do what they can to address these
risks where possible.
18 Dunedin Income Growth Investment Trust PLC
Promotional Activities
The Board recognises the importance of promoting the
Company to prospective investors both for improving
liquidity and enhancing the rating of the Company’s
shares. The Board believes one effective way to achieve
this is through subscription to, and participation in, the
promotional programme run by abrdn on behalf of a
number of investment trusts under its management. The
Company’s financial contribution to the programme is
matched by the Manager. The Company also supports
the Manager’s investor relations programme which
involves regional roadshows, promotional and public
relations campaigns. The Manager’s promotional and
investor relations teams report to the Board on a quarterly
basis giving analysis of the promotional activities as well as
updates on the shareholder register and any changes in
the make-up of that register.
The purpose of the promotional and investor relations
programmes is both to communicate effectively with
existing shareholders and to gain new shareholders, with
the aim of improving liquidity and enhancing the value and
rating of the Company’s shares. Communicating the long-
term attractions of the Company is key. The promotional
programme includes commissioning independent paid for
research on the Company, most recently from Kepler
Trust Intelligence. A copy of the latest research note is
available from the Key Literature section of the
Company's website.
Board Diversity Policy
The Board recognises the importance of having a range
of skilled, experienced individuals with the right knowledge
represented on the Board in order to allow it to fulfil its
obligations. The Board also recognises the benefits and is
supportive of the principle of diversity in its recruitment of
new Board members. The Board will not display any bias
for age, gender, race, sexual orientation, religion, ethnic or
national origins, or disability in considering the
appointment of its Directors. In view of its size, the Board
will continue to ensure that all appointments are made on
the basis of merit against the specification prepared for
each appointment and the Board does not therefore
consider it appropriate to set measurable objectives in
relation to its diversity.
At 31 January 2023, there were three male and two
female Directors on the Board.
Environmental, Social and Human
Rights Issues
The Company has no employees as the Board has
delegated the day to day management and
administrative functions to the Manager. There
are therefore no disclosures to be made in respect
of employees.
Modern Slavery Act
Due to the nature of its business, being a company that
does not offer goods and services to customers, the Board
considers that the Company is not within the scope of the
Modern Slavery Act 2015. The Company is therefore not
required to make a slavery and human trafficking
statement. In any event, the Board considers the
Company’s supply chains, dealing predominantly with
professional advisers and service providers in the financial
services industry, to be low risk in relation to this matter.
Environmental, Social and Governance
(“ESG”) Matters
The Investment Manager’s Approach to ESG matters is
included within the Investment Process on pages 27 to 34.
The UK Stewardship Code and Proxy Voting
The Company supports the UK Stewardship Code, and
seeks to play its role in supporting good stewardship of the
companies in which it invests. Responsibility for actively
monitoring the activities of portfolio companies has been
delegated by the Board to the Manager which has sub-
delegated that authority to the Investment Manager.
abrdn plc is a tier 1 signatory of the UK Stewardship Code
which aims to enhance the quality of engagement by
investors with investee companies in order to improve
their socially responsible performance and the long term
investment return to shareholders. While delivery of
stewardship activities has been delegated to the
Manager, the Board acknowledges its role in setting the
tone for the effective delivery of stewardship on the
Company’s behalf.
The Board has also given discretionary powers to the
Manager to exercise voting rights on resolutions proposed
by the investee companies within the Company’s portfolio.
The Manager reports on a quarterly basis on stewardship
(including voting) issues.
Overview of Strate
g
y
Continued
Dunedin Income Growth Investment Trust PLC 19
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Global Greenhouse Gas Emissions
The Company has no greenhouse gas emissions to report
from its operations, nor does it have responsibility for any
other emissions producing sources under the Companies
Act 2006 (Strategic Report and Directors’ Reports)
Regulations 2013.
Under Listing Rule 15.4.29(R), the Company, as a closed
ended investment company, is exempt from complying
with the Task Force on Climate-related Financial
Disclosures.
The carbon intensity of the portfolio is shown on page 30.
Viability Statement
The Board considers that the Company, which does not
have a fixed life, is a long term investment vehicle and, for
the purposes of this statement, has decided that five years
is an appropriate period over which to consider its viability.
The Board considers that this period reflects a balance
between looking out over a long term horizon and the
inherent uncertainties of looking out further than five
years.
Taking into account the Company’s current position and
the potential impact of its principal risks and uncertainties,
the Directors have a reasonable expectation that the
Company will be able to continue in operation and meet
its liabilities as they fall due for a period of five years from
the date of this Report.
In assessing the viability of the Company over the review
period, the Directors have focused upon the following
factors:
y The principal risks and uncertainties detailed on pages
15 to 17 and the steps taken to mitigate these risks.
y The relevance of the Company’s investment objective.
y The Company is invested in readily-realisable listed
securities.
y Share buy backs carried out in the past have not
resulted in significant reductions to the capital of the
Company.
y Although the Company’s stated investment policy
contains a maximum gearing limit of 30% of the NAV at
the time of draw down, the Board’s policy is to have a
relatively modest level of equity gearing and the
financial covenants attached to the Company’s
borrowings provide for significant headroom.
y The ability of the Company to refinance its £30 million
multi-currency credit facility when it matures in July
2023 (see Going Concern on page 59).
y The level of ongoing charges.
y The robustness of the operations of the Company’s third
party service suppliers.
In making its assessment, the Board is also aware that
there are other matters that could have an impact on the
Company’s prospects or viability in the future, including
the conflict in Ukraine, economic shocks or significant
stock market volatility caused by other factors, and
changes in regulation or investor sentiment.
Outlook
The Board’s view on the general outlook for the Company
can be found in the Chairman’s Statement on pages 11 to
12 whilst the Investment Manager’s views on the outlook
for the portfolio are included on page 38.
On behalf of the Board
David Barron
Chairman
5 April 2023
20 Dunedin Income Growth Investment Trust PLC
Introduction
Section 172 (1) of the Companies Act 2006 (the “Act”)
requires each Director to act in the way he/she considers,
in good faith, would be most likely to promote the success
of the Company for the benefit of its members as a whole.
The Board is required to describe to the Company’s
shareholders how the Directors have discharged their
duties and responsibilities over the course of the financial
year under that provision of the Act (the “Section 172
Statement”). This statement provides an explanation of
how the Directors have promoted the success of the
Company for the benefit of its members as a whole, taking
into account, among other things, the likely long term
consequences of decisions, the need to foster
relationships with all stakeholders and the impact of the
Company’s operations on the environment.
The Purpose of the Company and
Role of the Board
The purpose of the Company is to act as a vehicle to
provide, over time, financial returns (both income and
capital) to its shareholders. Investment trusts, such as the
Company, are long-term investment vehicles and are
typically externally managed, have no employees, and
are overseen by an independent non-executive board of
directors.
The Board, which at the end of the year comprised five
independent non-executive Directors with a broad range
of skills and experience across all major functions that
affect the Company, retains responsibility for taking all
decisions relating to the Company’s investment objective
and policy, gearing, corporate governance and strategy,
and for monitoring the performance of the Company’s
service providers.
The Board’s philosophy is that the Company should
operate in a transparent culture where all parties are
provided with the opportunity to offer practical challenge
and participate in positive debate which is focused on the
aim of achieving the expectations of shareholders and
other stakeholders alike. The Board reviews the culture
and manner in which the Manager and Investment
Manager operate at its regular meetings and receives
regular reporting and feedback from the other key service
providers. The Board works very closely with the Manager
and Investment Manager in reviewing how stakeholder
issues are handled, ensuring good governance and
responsibility in managing the Company’s affairs, as well
as visibility and openness in how the affairs are conducted.
The Company’s main stakeholders have been identified
as its Shareholders, the Manager (and Investment
Manager), Service Providers, Investee Companies, Debt
Providers and, more broadly, the environment and
community at large.
How the Board Engages with Stakeholders
The Board considers its stakeholders at Board meetings
and receives feedback on the Manager’s interactions
with them.
Further details are included in the table below.
Stakeholder How We Engage
Shareholders Shareholders are key stakeholders and the Board places great importance on communication
with them. The Board welcomes all shareholders’ views and aims to act fairly between all of them.
The Manager and Company’s Stockbroker meet regularly with current and prospective
shareholders to discuss performance and shareholder feedback is discussed by the Directors at
Board meetings. In addition, the Manager meets with analysts who cover the investment trust
sector and the Directors attend meetings with the Company’s largest shareholders and meet other
shareholders at the Annual General Meeting.
The Company subscribes to the Manager’s investor relations programme in order to maintain
communication channels, in particular, with the Company’s institutional shareholder base.
Regular updates are provided to shareholders through the Annual Report, Half Yearly Report,
monthly factsheets, Company announcements, including daily NAV announcements, and the
Promotin
g
the Success of the Company
Dunedin Income Growth Investment Trust PLC 21
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Company’s website.
The Company’s Annual General Meeting provides a forum, both formal and informal, for
shareholders to meet and discuss issues with the Directors and Manager. The Board encourages as
many shareholders as possible to attend the Company’s Annual General and to provide feedback
on the Company. In addition to the Annual General Meeting, this year the Board will again hold an
interactive online shareholder presentation at which shareholders will receive updates from the
Chairman and Investment Manager and there will be the opportunity for an interactive question
and answer session.
Manager
(and Investment Manager)
The Investment Manager’s Review on pages 35 to 38 details the key investment decisions taken
during the year. The Investment Manager has continued to manage the Company’s assets in
accordance with the mandate provided by the Company, with the oversight of the Board.
The Board regularly reviews the Company’s performance against its investment objective and the
Board undertakes an annual strategy review meeting to ensure that the Company is positioned
well for the future delivery of its objective for its stakeholders.
The Board receives presentations from the Investment Manager at every Board meeting to help it
to exercise effective oversight of the Investment Manager and the Company’s strategy.
The Board, through the Management Engagement Committee, formally reviews the performance
of the Manager at least annually. More details are provided on page 58.
Service Providers The Board seeks to maintain constructive relationships with the Company’s suppliers either directly
or through the Manager, with regular communications and meetings.
The Management Engagement Committee conducts an annual review of the performance, terms
and conditions of the Company’s main service providers to ensure they are performing in line with
Board expectations, carrying out their responsibilities and providing value for money.
Investee Companies Responsibility for actively monitoring the activities of portfolio companies has been delegated by
the Board to the Manager which has sub-delegated that authority to the Investment Manager.
The Board has also given discretionary powers to the Manager to exercise voting rights on
resolutions proposed by the investee companies within the Company’s portfolio. The Manager
reports on a quarterly basis on stewardship (including voting) issues.
Through engagement and exercising voting rights, the Investment Manager actively works with
companies to improve corporate standards, transparency and accountability. Further details are
provided on pages 32 to 34.
The Manager reports regularly to the Board on investment and engagement activity.
Debt Providers On behalf of the Board, the Manager maintains a positive working relationship with The Bank of
Nova Scotia, London Branch, the provider of the Company’s multi-currency loan facility, and
provides regular updates on business activity and compliance with its loan covenants.
The Manager also provides regular covenant compliance certificates to the holders of the
Company’s £30 million Loan Notes.
Environment and Community The Board and Manager are committed to investing in a responsible manner and the Investment
Manager embeds Environmental, Social and Governance (“ESG”) considerations into the research
and analysis as part of the investment decision-making process. Further details are provided within
the Investment Process on pages 27 to 34.
22 Dunedin Income Growth Investment Trust PLC
Specific Examples of Stakeholder
Consideration During the Year
While the importance of giving due consideration to the
Company’s stakeholders is not a new requirement, and is
considered during every Board decision, the Directors
were particularly mindful of stakeholder considerations
during the following decisions undertaken during the year
ended 31 January 2023. Each of these decisions was
made after taking into account the short and long term
benefits for stakeholders.
Investment Objective and Portfolio
The Investment Manager’s Review details the key
investment decisions taken during the year. The overall
shape and structure of the investment portfolio is an
important factor in delivering the Company’s stated
investment objective and is reviewed at every Board
meeting, including compliance with the Company’s
sustainable and responsible investing criteria.
During the year, the Management Engagement
Committee decided that the continuing appointment of
the Manager is in the best interests of shareholders.
Dividend
Following the payment of the final dividend for the year, of
4.1p per Ordinary share, total dividends for the year will
amount to 13.1p per Ordinary share. This represents an
increase of 1.6% compared to the previous year. This will
be the 39th year out of the past 43 that the Company has
grown its dividend, with the distribution maintained in the
other four years, and is in accordance with its policy to
grow total annual dividends in real terms over the
medium term.
Through meetings with shareholders and feedback from
the Manager and the Company’s Stockbroker, the Board
is conscious of the importance that shareholders place on
the level of dividends paid by the Company.
Promotional Activities
During the year, the Board and Manager agreed a set of
key marketing messages designed to assist with the
promotion of the Company. The Board also agreed a
series of key performance indicators with the Manager
relating to promotional activities, to help it monitor
progress with the activities undertaken.
Online Shareholder Presentation
To encourage and promote stronger interaction and
engagement with the Company’s shareholders, the Board
will hold an interactive online shareholder presentation
which will be held at 11.00am on Wednesday 3 May 2023.
At the presentation, shareholders will receive updates
from the Chairman and Investment Manager and there
will be the opportunity for an interactive question and
answer session. The online presentation is being held
ahead of the Annual General Meeting to allow
shareholders to submit their proxy votes prior to the
meeting. Details of how to register for the event can be
found in the Chairman’s Statement on page 11.
On behalf of the Board
David Barron
Chairman
5 April 2023
Promotin
g
the Success of the Company
Continued
Dunedin Income Growth Investment Trust PLC 23
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Performance (total return)
1 year 3 year 5 year
% return % return % return
Total return (Capital return plus net dividends reinvested)
Net asset value
AB
+2.4% +10.4% +29.7%
Share price
B
(0.9%) +11.6% +42.5%
FTSE All-Share Index +5.2% +15.6% +23.1%
Capital return
Net asset value
A
(2.0%) (3.0%) +4.2%
Share price (5.2%) (2.3%) +13.1%
FTSE All-Share Index +1.5% +4.9% +2.9%
A
Cum-income NAV with debt at fair value.
B
Considered to be an Alternative Performance Measure (see page 118)
Source: abrdn, Factset & Morningstar
Comparison of NAV and Share Price Total Return Performance to
FTSE All-Share Index (figures rebased to 100)
Five years to 31 January 2023
90
100
110
120
130
140
150
31/01/18 31/01/19 31/01/20 31/01/21 31/01/22 31/01/23
Source: abrdn, Morningstar & Lipper
Share price total return
NAV total return with debt at
fair value
FTSE All-Share total return
Performance
24 Dunedin Income Growth Investment Trust PLC
Comparison of NAV Total Return Performance to FTSE All-Share Index
Total Return for 5 years
-3.9%
22.2%
-0.3%
8.1%
2.4%
29.6%
-3.8%
10.7%
-7.5%
18.9%
5.2%
23.1%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
Year to
31/01/19
Year to
31/01/20
Year to
31/01/21
Year to
31/01/22
Year to
31/01/23
5 year total
return
(cumulative)
Source: abrdn, Morningstar & Lipper
NAV total return
with debt at fair
value
FTSE All-Share
total return
Analysis of Total Return Performance for the year ended 31 January 2023
%
Gross assets total return 1.9
Total NAV return per share
A
2.4
Total return on FTSE All-Share Index 5.2
Relative performance (2.8)
A
With debt at fair value.
Analysis of Performance for the year Relative to the FTSE All-Share Index
-3.4
1.5
-4.9
1.0
-0.4
-0.1
-2.8
Listed equities
- Stock selection^
- Sector allocation^
Borrowings & cash
Fees and expenses
Tax
Total
%
^ Further analysis of performance attributable to listed equities
Performance
Continued
Listed equities
- Stock selection
^
- Sector allocation
^
Borrowings & cash
Fees and expenses
Tax
Total
Dunedin Income Growth Investment Trust PLC 25
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Ten Year Financial Record
Year ended 31 January 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Total revenue (£’000) 20,750 20,994 20,359 21,963 22,317 22,263 20,518 18,346 21,518 21,950
Per share (p)
Revenue return 11.89 11.90 12.11 12.55 12.64 12.68 12.08 10.90 12.87 13.02
Dividends paid/proposed 11.10 11.25 11.40 11.70 12.10 12.45 12.70 12.80 12.90 13.10
Revenue reserve
A
8.22 8.89 9.63 10.51 11.16 11.54 10.94 9.07 9.05 8.97
Net asset value
B
262.34 279.66 237.48 270.34 290.57 266.83 312.22 297.64 309.03 302.80
Total return
C
22.24 27.76 (28.94) 43.83 30.83 (11.95) 58.57 (1.81) 23.78 1.92
Shareholders’ funds (£’000) 403,526 428,702 368,041 415,810 442,384 401,731 469,806 448,293 464,579 448,605
A
After payment of third interim and final dividends (see note 16 on page 95 for further details).
B
With debt at fair value.
C
Per Statement of Comprehensive Income.
Comparison of Dividend Growth to Inflation (figures rebased to 100)
Five years ended 31 January 2023
95
100
105
110
115
120
125
31/01/18 31/01/19 31/01/20 31/01/21 31/01/22 31/01/23
Source: abrdn , ONS & Facstet
DIGIT
dividend
growth
Consumer
Price
Index
26 Dunedin Income Growth Investment Trust PLC
Dividends per Share – Pence
Year to 31 January
11.10
11.25
11.40
11.70
12.10
12.45
12.70
12.80
12.90
13.10
0
5
10
15
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Dividends per Share
Dividend per share Rate xd date Record date Payment date
Final dividend 2023
4.10p 4 May 2023 5 May 2023 30 May 2023
Third interim dividend 2023 3.00p 2 February 2023 3 February 2023 24 February 2023
Second interim dividend 2023 3.00p 3 November 2022 4 November 2022 25 November 2022
First interim dividend 2023 3.00p 4 August 2022 5 August 2022 26 August 2022
Total dividend 2023 13.10p
Dividend per share Rate xd date Record date Payment date
Final dividend 2022 3.90p 5 May 2022 6 May 2022 27 May 2022
Third interim dividend 2022 3.00p 3 February 2022 4 February 2022 25 February 2022
Second interim dividend 2022 3.00p 4 November 2021 5 November 2021 26 November 2021
First interim dividend 2022 3.00p 5 August 2021 6 August 2021 27 August 2021
Total dividend 2022 12.90p
Performance
Continued
Dunedin Income Growth Investment Trust PLC 27
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Investment Philosophy and Style
The Investment Manager believes that building a
concentrated portfolio of high quality companies that
meet its sustainable and responsible investment criteria
will deliver both real income growth and attractive total
returns over the long-term.
The application of sustainable and responsible investing
principles enables the Investment Manager to reduce risks
in the portfolio by identifying and excluding companies
whose business models it considers face significant
threats from Environmental, Social and Governance
(“ESG”) factors. It also enables the Investment Manager to
identify positive opportunities for companies to benefit
from the same trends as well as giving the potential for
engagement to improve companies’ performance and
increase shareholder value.
A focus on high quality companies and sustainable and
responsible investing principles is therefore well aligned
with the generation of resilient and growing dividend
income, and a capital return profile that is both robust in
difficult market conditions and able to participate in
upside opportunities, enhancing risk adjusted returns.
Investment Process
The investment process has five stages:
1. Idea Generation
The Investment Manager’s teams of investment
analysts generate investment ideas from their
comprehensive coverage of the UK and European
equity markets. This involves them considering the
merits of over 1,000 listed businesses across the
market cap spectrum.
2. Sustainability
Companies with excessive ESG risks are excluded
through a combination of pre-set screens and
quantitative and fundamental analysis. This removes
around a quarter of the companies monitored from
the Investment Manager’s consideration.
3. Quality
Businesses that don’t meet the analysts’ quality criteria
are then filtered out. Only around 20% of companies
will meet this hurdle and the Investment Manager
particularly emphasises allocation to companies that
are considered to be sustainable leaders.
4. Total Returns
Focus is then placed on those companies that the
analysts identify as having the most attractive total
return potential as well as those that have compelling
income generation characteristics.
5. Portfolio Construction
The Investment Manager then builds a concentrated
portfolio that can deliver the income and total return
requirements while matching the style and risk profile
and meeting the sustainable and responsible
investing principles.
Investment Process
28 Dunedin Income Growth Investment Trust PLC
A Highly Selective Strategy
Emphasis on sustainability, quality, total return and income
The Investment Manager’s Approach to ESG
Introduction
The Investment Manager believes that effective analysis
of, and engagement with, the ESG risks and opportunities
that companies face will enhance investors’ risk
adjusted returns.
While sustainable and responsible investing principles
were formally incorporated into the Company’s
investment objective in 2021, a focus on ESG factors
has been a long standing part of the Investment
Manager’s process, making the transition a relatively
straightforward one.
Those sustainable and responsible investment principles
are integrated into the investment process through a
combination of exclusions, positive allocation and ongoing
corporate engagement. To deliver this, the Investment
Manager utilises binary screens, qualitative analytical
assessment, proprietary quantitative tools and ongoing
corporate access and voting policy.
The Investment Manager draws upon three resources to
assist it with the integration of ESG into the investment
process; the team of approximately 18 equity analysts,
two ESG analysts and the central ESG team. Each plays
an important yet distinct role in implementation.
While deploying these resources, the ultimate
responsibility for stock selection and portfolio construction
lies with the Company’s portfolio managers.
Investment Process
Continued
Dunedin Income Growth Investment Trust PLC 29
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Exclusions
The Investment Manager uses three different forms of exclusions. These are complementary in form with binary
exclusions providing assurance to shareholders that companies with certain types of business activities will not be
invested in. Additionally, the Investment Manager utilises both the judgement of its investment analysts and its own
proprietary quantitative tools to exclude companies with poorly managed ESG risks.
1. Binary exclusions – these screens focus on areas where the Investment Manager sees long-term risks arising from ESG
factors to companies’ business models and, as a result, it chooses not to invest. These will be subject to ongoing review to
ensure that they are consistent with industry best practice.
2. ESG House Score – this is a proprietary quantitative tool that scores the companies in the investment universe on
operational and governance risks. The Investment
Manager excludes the bottom 10% of companies from consideration for the portfolio.
3. ESG Quality Score – every company under research coverage is judged by the analysts on the quality of its
management of ESG risks. Companies deemed to be below average are excluded from consideration for the portfolio.
The effect of the above screening process is that the number of investible companies available to the Investment
Manager is reduced by approximately 22%.
30 Dunedin Income Growth Investment Trust PLC
Carbon Intensity
The Company also commits to having a carbon intensity of less than 80% of the FTSE All-Share Index, which constrains
investment in high carbon emitting companies.
Weighted Average Carbon Intensity (WACI)
In tonnes of CO2e / million USD revenue
Scope 1 & 2 Scope 1 Scope 2 Scope 3
Portfolio 92.54 78.19 14.35 150.41
Benchmark 142.48 105.27 37.21 258.70
Relative carbon intensity % 64.95 74.28 38.57 58.14
Total Emissions
(In tonnes of CO2e)
Scope 1 & 2 Scope 1 Scope 2 Scope 3
Portfolio 24,110 20,637 3,473 42,954
Benchmark 66,701 52,524 14,177 128,898
Relative carbon intensity % 36.15 39.29 24.50 33.32
Avoided emissions 42,591 31,887 10,704 85,944
Source: Trucost
The Company’s portfolio currently has a Carbon Intensity on Scope 1 and 2 emissions of 65% of the benchmark, and
60% on Scope 1 to 3 emissions.
On a total emissions basis, the portfolio sits at 36% of the benchmark on Scope 1 and 2 emissions and 34% on Scope 1 to
3 emissions.
Investment Process
Continued
Dunedin Income Growth Investment Trust PLC 31
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Positive Allocation
Companies that investment analysts score highly on the quality of their ESG risk management are designated as
sustainable leaders. Those sustainable leaders that have a high alignment of revenues or investment with the UN
sustainable development goals will additionally be designated as solutions providers. The majority of the Company’s
portfolio will be invested into those two leadership categories and the Investment Manager will actively search for
opportunities where it believes these attributes to be undervalued.
Split of Sustainable Leaders, Solutions Providers and Improvers
32 Dunedin Income Growth Investment Trust PLC
Engagement
Rather than taking a purely best-in-class approach, the
Investment Manager also invests in companies that are
taking real steps to improve their ESG performance.
Improvers are typically companies whose ESG potential is
being overlooked by the market and the Investment
Manager supports these companies through active
engagement. Clearly defined opportunities for
improvement are identified by the team of investment
analysts in conjunction with the Investment Manager’s on-
desk ESG analysts and central ESG team, and these are
closely monitored from initiation through to completion.
The Investment Manager believes that effective
engagement presents a significant opportunity to add
shareholder value over time.
During the year ended 31 January 2023, the Investment
Manager held 86 separate meetings with portfolio
companies where ESG topics were raised, covering 34
holdings. 15 of these were dedicated priority engagement
meetings, addressing areas of material improvement. By
topic, Corporate Governance was the area most
discussed, but there was also significant focus on
Climate and Corporate Behaviour and, increasingly,
on Social Issues.
% of Meetings where Topic Discussed
Investment Process
Continued
Dunedin Income Growth Investment Trust PLC 33
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Engagement Case Studies
SSE (Solutions)
The Investment Manager engaged with SSE as part of its engagements with the Top 20 financed emitters under its Net
Zero framework. SSE published a Net Zero Strategy earlier in 2022 in which it updated its targets and aligned to a 1.5
degrees Paris scenario certified by the Science Based Targets initiative (“SBTi”). The Investment Manager is comfortable
with the targets set given the nature of the utilities sector, although it continues to engage with the company on the
potential to set short-team emissions targets. Additionally, the Investment Manager has encouraged SSE to disclose its
methodology used to determine the Paris alignment of its capital expenditure.
Hiscox (Improver)
The Investment Manager engaged with Hiscox to gain insight on its approach to sustainability, in particular the
integration of climate-related risks into underwriting. The meeting with Head of the Risk Assets and Chief Underwriting
Office of Hiscox London Market supported the Investment Manager’s view that the company is demonstrating positive
momentum in its management of the key ESG risk and opportunities facing it. The Investment Manager was
encouraged by the company’s open dialogue on the areas of strength and weakness in current data sets and modelling
with respect to climate-related risks and Hiscox’s approach to enhancing its capabilities and generating new
opportunities for products. Hiscox has demonstrated improvements including setting new GHG emission targets, the
introduction of an exclusion policy integrating ESG exposures, becoming a member of the Principles for Responsible
Investment (“PRI”), and the Principles for Sustainable Insurance (“PSI”), and establishing a new Sustainability Steering
Committee, chaired by the Group CEO. Finally, the engagement provided an opportunity for the Investment Manager to
set out several recommendations for how the company can enhance its disclosures on social topics and climate risk
modelling tools used to assess natural catastrophe risk. This research and engagement helped reinforce the Investment
Manager’s positive investment view on the company.
London Stock Exchange (“LSE”) (Improver)
In light of the potential impact on talent attraction and retention amid the Refinitiv acquisition, the Investment Manager
initiated engagement with the Group Head of Talent at LSE to dive more deeply into human capital management in the
context of the acquisition and high demand across the economy for technology talent. While LSE acknowledged these
challenges, the meeting gave the Investment Manager additional comfort on the company’s ability to manage these
factors, such as commentary on improvements in staff turnover and hiring metrics as well as plans to tackle the gender
pay gap. The Investment Manager intends to further monitor LSE’s progress and has encouraged the company to
provide more granular disclosures on human capital management.
34 Dunedin Income Growth Investment Trust PLC
Proxy Voting
Voting policy forms an important part of the Investment Manager’s corporate engagement approach. Every proxy is
voted and, where needed, input sought from the investment and ESG analysts in conjunction with the expertise of the
central voting team. Where direct engagement has not proven effective, the Investment Manager is very prepared to
vote against companies.
Metric Value
Number of meetings held 40
Number of meetings with at least one vote against management 9
Percentage of meetings with at least one vote against management 22.5%
Total number of voteable proposals 770
Number of votes against management 14
Votes against management as a percentage of voteable proposals 1.8%
Number of votes against ISS Policy 17
Votes against ISS Policy as a percentage of voteable proposals 2.2%
Number of votes against policy 23
Votes against policy as a percentage of voteable proposals 3.0%
The Investment Manager voted against management recommendations in 22.5% of the general meetings held by
portfolio companies during the year, which it thinks is the most useful metric for measuring the level of its constructive
engagement. The overall number of votes against was 1.8%. It is important to bear in mind that the Investment Manager
typically begins from a position of support for the select group of companies it invests in.
There is an extensive ongoing programme which allows the Investment Manager to actively engage with investee
companies throughout the year beyond the voting season.
Continued
Investment Process
Dunedin Income Growth Investment Trust PLC 35
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Introduction
For the year ended 31 January 2023, the Company’s net
asset value (“NAV”) total return for the year of 2.4%
compared to a total return of 5.2% from the benchmark
FTSE All-Share Index. Many of the trends that we
highlighted last year continued in 2022/23 and again it
was a period when our style and strategy were out of
favour with investors. The benchmark returns were highly
concentrated in the oil and gas, mining and defence
sectors, where the portfolio is typically underweight due to
the sustainability objectives of the Company. Net income
generated per share hit a new record level of just over 13p
a share.
The economic outlook brings with it a degree of
uncertainty and potential for macro-economic slowdown.
Given this, we consider the portfolio to be in good shape
with our focus on higher quality companies, an emphasis
on investments that can deliver both income and capital
growth whilst also meeting the Company’s sustainable
and responsible investing criteria, positioning the
Company to be able to cope with what may be difficult
market conditions ahead.
The portfolio remains highly differentiated compared to
both peers and its benchmark. It is the only equity income
investment trust with a formal sustainability objective, the
active share of the portfolio increased in the year to 86%
while the number of holdings consolidated to a focussed
group of 36 at the year end. We see attractive
opportunities emerging in domestic-facing and mid-sized
companies - just under half of the portfolio is invested
outside the FTSE 100 Index and almost 20% is held in
companies listed outside the UK as we seek to gain
exposure to innovative and high quality companies listed
in European markets.
The portfolio offers an attractive 4.3% dividend yield, 15%
ahead of the FTSE All -Share Index at the end of 2022. The
free cash flow performance of companies held in the
portfolio has been strong, with many growing their
dividends significantly during the year. As result, income
generation came in well ahead of our initial expectations.
The discount at which the Company’s shares trade ended
the year at 2.9%, narrower than the average of the sector.
Performance
We are pleased with the portfolio’s income progression in
the year. Having started the year expecting net revenue of
around 12p per share, the net income generation of 13.0p
per share exceeded our expectation. This is despite
missing the very substantial contribution from Rio Tinto’s
special dividends and the expected dividend cut at
GlaxoSmithKline given corporate changes. A number of
holdings in the portfolio delivered strong dividend growth,
including Morgan Sindall, ASML, London Stock Exchange,
Pets at Home, Novo-Nordisk and TotalEnergies. We
continued writing options based on our fundamental
analysis of holdings in the portfolio and this has been a
benefit to the Company by diversifying and increasing the
level of income generated.
The portfolio remains highly
differentiated compared to both
peers and its benchmark. It is the only
equity income investment trust with a
formal sustainability objective.
The year under review saw markets digest a number of
extraordinary exogenous shocks. From the tragic war in
Ukraine leading to soaring power prices, the highest level
of inflation since the 1980’s, aggressive central banks
tightening, UK Government leadership change and swings
in consumer confidence. These factors have caused
sharp rotations and shifts in market sentiment towards
many companies that performed well in the preceding
decade. Against this difficult backdrop, the Company
delivered a flat absolute return in the first six months to
July but lagged in the second half when the UK political
environment deteriorated.
There are a number of themes driving markets. The
portfolio’s underperformance relative to the benchmark
was primarily driven by market style rotation and factor
risk, offset by positive stock selection. The Company’s
sustainable and responsible investing approach includes
negative exclusions, alongside the positive allocation to
sustainable leaders and improvers and corporate
engagement. Risk analysis concludes that, this year, the
Company’s negative exclusions, which restrict the
investable universe by approximately 22%, caused a
headwind to performance but that the portfolio
outperformed its investable universe.
Investment Mana
g
er’s Review
36 Dunedin Income Growth Investment Trust PLC
Reassuringly, fundamental analysis and stock selection
contributed positively in the year. The UK market has been
a hunting ground for international buyers looking to take
advantage of discounted valuations and the
underappreciated quality of many companies. Global
investors are looking on the UK market more favourably
than in recent years and we see M&A as a feature of the
market which we expect to continue going forward. A
number of holdings in the portfolio were bid for in the year
as global investors capitalised on the opportunity to
acquire companies with strong business models and
market leadership at attractive valuations, further boosted
by Sterling weakness. The Company’s long-standing
holding in the industrial software company Aveva came to
an end when it was bought by majority shareholder
Schneider Electric, valuing the company at £9.9 billion. In
addition, the events and database business Euromoney
Institutional Investor received a take-over offer from the
private equity sector.
The portfolio’s underperformance
relative to the benchmark was
primarily driven by market style
rotation and factor risk, offset by
positive stock selection.
The portfolio benefited from its overseas exposure.
TotalEnergies’ portfolio of assets delivered strong profit
progression and cash return including a 6% dividend yield
in addition to share buybacks. While near term weakness
in natural gas prices will hold back earnings momentum,
we see the company as well positioned to benefit from
structural under-investment in upstream energy markets
and judge its energy transition strategy as credible. Danish
pharmaceutical company Novo-Nordisk raised guidance
through the year, driven by growth in diabetes therapies
and the positive launch of anti-obesity treatment Wegovy.
The prepaid vouchers and employee benefits solutions
company Edenred out-performed expectations with
growth in its SME business, supporting margins. It remains
at an attractive valuation for the growth we expect the
company to deliver.
After building a position in Games Workshop in the year,
the company issued a surprise announcement that it had
reached an agreement with Amazon to develop Games
Workshop’s intellectual property into exciting film and TV
content. Recent addition to the portfolio Taylor Wimpey
contributed positively with its shares recovering from lows
at the time of the mini budget as the market recognised its
highly discounted valuation.
The FTSE All-Share Index return for the year was highly
concentrated in a narrow set of companies, namely in the
Energy and Basic Materials sectors. Supply constraints due
to the war in Ukraine, coupled with post Covid recovery in
activity led to strong oil price appreciation. As a
consequence, BP and Shell delivered healthy profit
growth, cash generation and shareholder returns over the
period. The Metals and Mining sector also had a strong
year, with the diversified miner Glencore returning over
50% on the back of strong commodity price inflation
including in thermal coal. The Company’s investment
policy leads us to be underweight these sectors due to our
preference for investments with a higher degree of
earnings visibility and stability and more dependable
dividend distribution track records. Not owning large index
constituents such as BP, Shell, Glencore, Rio Tinto and
Anglo American proved a significant relative headwind
over the year.
In addition to the quality focus of the portfolio, the
sustainable and responsible investment approach draws
attention to the long-term risk facing the Energy sector as
global economies transition to low carbon fuels to mitigate
climate change. The policy focuses our efforts on
companies at the forefront of energy transition, with a
material proportion of revenues from transition energies
such as national gas, in addition to renewables. Here we
see Total Energies as a leader in the sector. The decision to
hold back investing in BP and Shell for environmental
reasons has been corroborated this year, with both
companies pulling back on plans to roll out low carbon
energy capex. However, we recognised this was taken
well by the market given the uncertainty of returns in
alternative energy assets.
Investment Mana
g
er’s Review
Continued
Dunedin Income Growth Investment Trust PLC 37
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Political turmoil in UK politics in the second half of the year,
triggered by the government’s ‘mini-budget’, led to a
sharp rise in interest rate expectations, a fall in Sterling and
a sell-off in companies heavily exposed to the UK. 2022
saw the UK domestic focused FTSE 250 Index lag the large
cap FTSE 100 Index, with the quantum of
underperformance greater than during the 2008/09
financial crisis. With 27% of the portfolio invested in UK mid
and small caps, this allocation detracted from
performance with companies such as the housebuilder
Persimmon, online greetings cards company Moonpig,
and
leading high street pet retailer Pets at Home
underperforming in the period. Whilst there are pockets of
weakness, particularly in housing transactions and big
ticket discretionary spend, recent trading has indicated
the UK consumer is holding up. Meanwhile, valuations have
been rebased and we believe the long run track record of
alpha generation from UK mid-caps will return.
There are two stock specific detractors in the year to
highlight. Direct Line Insurance issued a disappointing
profits warning in January 2023 on the back of major
weather losses, claims inflation, delays to motor rate rises
and commercial property investment losses. Pressure on
the company’s balance sheet has meant its dividend has
been suspended as the company looks to rebuild its
capital position. The building materials company Marshalls
lowered forecasts in October following softening
consumer demand in its landscaping business. The
company embarked on a restructuring programme to
manage its cost base and protect profitability and has
subsequently issued a reassuring update to the market.
Portfolio Activity
We continue to concentrate the portfolio in companies
with highly attractive prospects for total returns. We have
recycled the capital from companies held in the portfolio
that have been bid for, including Aveva and Euromoney
Institutional Investor.
We significantly increased the position in Unilever in the
first half of the year. It has been pleasing to see its
investment in brand and product lead to sector leading
pricing power and demand elasticity in what has been a
period of high input cost inflation.
The market volatility around the mini budget led to sharp
share price corrections. This presented an opportunity for
us to buy domestic oriented quality companies facing
near-term uncertainty but where future long-term
prospective returns look attractive. We initiated a position
in the large housebuilder Taylor Wimpey in October 2022,
at a point when mortgage rates spiked and availability
sharply reduced. Whilst the company faces near term
headwinds, the valuation includes a lot of negativity and
does not reflect the strength of the balance sheet and
commitment to its attractive cash returns. We also
topped up the holdings in business materials
manufacturer Marshalls, construction group Morgan
Sindall, and gaming company Games Workshop during
the year.
We introduced several new positions to the portfolio in the
second half of the year. We initiated a holding in Sage,
a
developer of accounting software for small and medium
sized businesses. The company has been through a
significant investment phase over the past few years, and
we believe it is nearing an inflection point for its revenue
growth and margin expansion potential. Together, these
should drive strong increases in cash generation and
dividend payments.
The market volatility around the mini
budget led to sharp share price
corrections. This presented an
opportunity for us to buy domestic
oriented quality companies facing
near-term uncertainty but where
future long-term prospective returns
look attractive.
38 Dunedin Income Growth Investment Trust PLC
We started a position in Hiscox, a specialist insurance
company with units operating in both the retail and
reinsurance markets. Pricing for insurance premiums
looks extremely positive, while new management is
rebuilding credibility after a series of missteps giving the
potential for a rerating of the valuation. We also expect
that distributions to shareholders should accelerate as
profitability comes through. A holding was also started in
Oxford Instruments, a manufacturer of specialist tools for
industrial and academic users. The business has high
levels of intellectual property, attractive long-term growth
prospects, and a strong balance sheet which underpins
the investment case. The holding has been added to since
the year end.
We have implemented a number of strategic actions
through options, most notably writing calls over the
holding in GlaxoSmithKline ahead of its spin-out of Haleon,
generating significant revenue from a position which we
wanted to exit over the medium term.
Outlook
We retain the relatively cautious outlook that we have had
for some time. We remain positive on the potential long-
term returns available from the portfolio and fundamental
company analysis points to attractive opportunities
amongst innovative and resilient mid-sized companies.
The market recovery since the mini budget has been
strong as the political environment stabilised in the UK.
The economic backdrop remains one of high and
potentially persistent inflation plus tightening monetary
policy. We maintain a cautious view of economic activity
and corporate profitability as we go into the next
financial year. In an uncertain environment, we believe
our focus on quality companies provides protection
through a downturn; those companies with strong
pricing power, high margins and resilient balance sheets
are better placed to navigate through a range of
economic scenarios.
We believe our focus on quality
companies provides protection
through a downturn; those companies
with strong pricing power, high
margins and resilient balance sheets
are better placed to navigate through
a range of economic scenarios.
Against this backdrop, we see reasons to be positive. 2022
was a challenging year for the UK domestic focused FTSE
250 Index and, in turn, the portfolio’s overweight exposure
to this index. The mid-cap underperformance relative to
the large cap FTSE 100 Index was worse than during the
2008/09 global financial crisis. Valuations have been
rebased and we believe the long run track record of alpha
generation from UK mid-caps will return. There are signs
that the UK consumer is in a healthier position than feared,
with household wallets benefiting from wage inflation and
lower energy costs. Finally, the UK equity market remains
at a highly attractive valuation on an absolute basis and
relative to global markets. This view is reflected in the bids
for holdings in the portfolio, including Aveva and
Euromoney Institutional Investor, and presents an
opportunity for positive prospective returns.
Overall, we will continue to seek to keep a balance to the
positioning of the portfolio, giving ourselves the potential to
perform in a range of market environments. Our primary
attention remains on seeking long term capital growth, but
we will continue to look to participate in opportunities
where share prices in good companies with attractive
long-term prospects have been oversold and at the same
time focus on those that meet the Company’s sustainable
and responsible investing criteria.
Ben Ritchie and Rebecca Maclean,
abrdn Investments Limited
5 April 2023
Investment Mana
g
er’s Review
Continued
Dunedin Income Growth Investment Trust PLC 39
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
abrdn Investments Limited
The Company’s Investment Manager is abrdn
Investments Limited which is a wholly-owned subsidiary of
abrdn plc. The abrdn Group’s assets under management
and administration were £500 billion as at 31 December
2022, managed for a range of clients including 22 UK-
listed closed end investment companies.
The Investment Team Senior Managers
Ben Ritchie
Head of Developed Markets Equities
Ben Ritchie is Head of Developed Markets Equities at
abrdn. He originally joined abrdn in 2002 as a graduate
trainee and has been co-manager of the Company since
2012. Ben has a BA (Hons) in Modern History and Politics
from Pembroke College, University of Oxford, and is an
alumni of Harvard Business School. He is a certified
CFA Charterholder.
Rebecca Maclean
Investment Director, UK Equities
Rebecca Maclean is an Investment Director in the UK
Equities team at abrdn. She has worked in the responsible
investment industry since 2010 and joined abrdn in 2013
as a Responsible Investment Analyst. She moved to the UK
Equities team in 2016. Rebecca graduated with a BA in
Experimental Psychology from University of Oxford, holds
a MA in International Relations from King’s College London,
and is a CFA Charterholder.
Information About the Investment Mana
g
er
40 Dunedin Income Growth Investment Trust PLC
Portfolio
We continue to concentrate the
portfolio in companies with highly
attractive prospects for total returns.
We have recycled the capital from
companies held in the portfolio that
have been bid for.
Dunedin Income Growth Investment Trust PLC 41
42 Dunedin Income Growth Investment Trust PLC
As at 31 January 2023
AstraZeneca - Solutions
Unilever - Leader
AstraZeneca is a pharmaceutical
company that focuses on the research,
development and manufacture of drugs
in a range of therapeutic areas.
Unilever is a global consumer goods
company, with particularly strong
market positions in emerging markets
and operating in a number of product
areas including Beauty, Personal Care,
Home Care and Nutrition.
TotalEnergies - Improver
Diageo - Leader
TotalEnergies is an energy company
producing and marketing fuels, natural
gas and electricity globally.
Diageo is a global leader in spirits and
liquers with a portfolio of world-
renowned brands.
Relx - Leader
SSE - Solutions
Relx is a global provider of information
and analytics for professionals and
businesses across a number of
industries including scientific, technical,
medical and law.
SSE is a multi-national energy firm
involved in the generation, transmission,
distribution and supply of electricity
through regulated networks and its
renewables portfolio.
Nordea Bank - Improver
Prudential - Solutions
Nordea Bank is a Scandinavian bank
offering banking, asset management
and insurance services across the
Nordic region.
Prudential is a life insurance and savings
company with leading market positions
in Asia and the United States.
Chesnara - Improver Coca-Cola Hellenic Bottling Company -
Improver
Chesnara is an owner and manager of
primarily closed books of life assurance
assets in the UK, Sweden and Holland.
Coca-Cola Hellenic Bottling Company is
a bottler of the Coca-Cola brand
operating plants across Europe, Africa
and Asia.
Ten Lar
g
est Investments
Dunedin Income Growth Investment Trust PLC 43
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
As at 31 January 2023
Valuation Total Valuation
2023 assets 2022
Company Sector £’000 % £’000
AstraZeneca Pharmaceuticals and Biotechnology 38,221 7.8 27,116
Unilever Personal Care, Drug and Grocery Stores 35,175 7.2 8,486
TotalEnergies Oil, Gas and Coal 28,736 5.8 21,177
Diageo Beverages 25,344 5.2 26,809
Relx Media 24,794 5.0 25,378
SSE Electricity 20,814 4.2 25,499
Nordea Bank Banks 20,309 4.1 21,375
Prudential Life Insurance 17,980 3.7 18,542
Chesnara Life Insurance 16,934 3.4 16,756
Coca-Cola Hellenic Bottling Company Beverages 15,617 3.2 15,772
Ten largest investments 243,924 49.6
Volvo Industrial Transportation 14,667 3.0 7,472
London Stock Exchange Finance and Credit Services 13,697 2.8 9,816
Assura Real Estate Investment Trusts 13,327 2.7 13,083
Games Workshop Leisure Goods 12,772 2.6 5,150
Intermediate Capital Investment Banking and Brokerage Services 12,451 2.5 14,438
Taylor Wimpey Household Goods and Home Construction 11,926 2.4 –
Weir Group Industrial Engineering 11,653 2.4 14,717
Pets At Home Retailers 11,329 2.3 13,729
Close Brothers Banks 11,001 2.2 13,127
Hiscox Non-life Insurance 10,869 2.2 –
Twenty largest investments 367,616 74.7
Portfolio
44 Dunedin Income Growth Investment Trust PLC
Portfolio
Continued
As at 31 January 2023
Valuation Total Valuation
2023 assets 2022
Company Sector £’000 % £’000
ASML Technology Hardware and Equipment 10,202 2.1 11,990
Sage Software and Computer Services 10,059 2.0 –
Novo-Nordisk Pharmaceuticals and Biotechnology 9,909 2.0 14,234
Edenred Industrial Support Services 9,319 1.9 8,875
Croda Chemicals 9,297 1.9 10,764
Direct Line Insurance Non-life Insurance 9,180 1.9 15,773
Marshalls Construction and Materials 9,109 1.9 11,612
M&G Investment Banking and Brokerage Services 9,072 1.8 9,683
Morgan Sindall Construction and Materials 8,085 1.6 9,766
Genus Pharmaceuticals and Biotechnology 6,020 1.2 5,082
Thirty largest investments 457,868 93.0
Dechra Pharmaceuticals Pharmaceuticals and Biotechnology 5,803 1.2 5,518
Ashmore Investment Banking and Brokerage Services 5,391 1.1 11,262
Sirius Real Estate Real Estate Investment and Services 4,112 0.9 12,733
Moonpig Retailers 3,551 0.7 4,713
Ubisoft Leisure Goods 2,090 0.4 5,306
Oxford Instruments Electronic and Electrical Equipment 80 – –
Total investments 478,895 97.3
Net current assets
A
13,210 2.7
Total assets less current liabilities
A
492,105 100.0
A
Excluding bank loan of £13,762,000
Dunedin Income Growth Investment Trust PLC 45
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
0% 5% 10% 15% 20 % 25% 30%
Financials
Health Care
Consumer Discretionary
Basic Materials
Consumer Staples
Technology
Industrials
Utilities
Energy
Real Estate
2023
2022
Portfolio Sector Breakdown
46 Dunedin Income Growth Investment Trust PLC
As at 31 January 2023
FTSE All-Share Portfolio Portfolio
Index weighting weighting weighting
2023 2023 2022
% % %
Energy Oil, Gas and Coal 11.0 5.8 4.2
11.0 5.8 4.2
Basic Materials Chemicals 0.7 1.9 2.1
Industrial Metals & Mining
7.9
– –
Precious Metals & Mining
0.3
– –
8.9 1.9 2.1
Industrials Aerospace & Defence 1.7 – –
Construction and Materials 1.5 3.5 4.2
Electronic & Electrical Equipment 1.0 – –
General Industrials 1.8 – –
Industrial Engineering 0.6 2.4 2.9
Industrial Support Services 3.3 1.9 3.5
Industrial Transportation 1.2 3.0 1.5
11.1 10.7 12.1
Consumer Discretionary Consumer Services 1.4 – –
Household Goods and Home Construction 1.1 2.5 2.4
Leisure Goods 0.2 3.0 2.0
Media 3.3 5.0 5.0
Personal Goods 0.5 – –
Retailers 1.6 3.0 3.6
Travel & Leisure 3.0 – –
11.1 13.6 13.0
Health Care Healthcare Providers 0.1 – –
Medical Equipment and Services 0.6 – –
Pharmaceuticals and Biotechnology 10.0 12.2 13.2
10.7 12.2 13.2
Sector Analysis
Dunedin Income Growth Investment Trust PLC 47
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
As at 31 January 2023
FTSE All-Share Portfolio Portfolio
Index weighting weighting weighting
2023 2023 2022
% % %
Consumer Staples Beverages 3.6 8.3 8.4
Food Producers 0.6 – –
Personal Care, Drug and Grocery Stores 7.3 7.1 1.7
Tobacco 3.7 – –
15.2 15.5 10.1
Real Estate Real Estate Investment and Services 0.4 0.8 2.5
Real Estate Investment Trusts 2.2 2.7 2.7
2.6 3.5 5.1
Utilities Electricity 0.9 4.2 5.0
Gas, Water & Multi-utilities 2.5 – –
3.4 4.2 5.0
Financials Banks 9.4 6.3 6.8
Finance and Credit Services 1.3 2.8 1.9
Investment Banking and Brokerage Services 2.6 5.5 7.0
Life Insurance 3.0 7.1 7.0
Non-life Insurance 0.8 4.1 5.3
17.1 25.7 28.0
Investment Companies Equity Investment Instruments 6.2 – –
Technology Software and Computer Services 1.1 2.0 3.8
Technology Hardware and Equipment – 2.1 2.4
1.1 4.1 6.2
Telecommunications Telecommunications Equipment
0.1
– –
Telecommunications Service Providers
1.5
– –
1.6 – –
Total investments 100.0 97.3 99.0
Net current assets before borrowings
A
2.7 1.0
Total assets less current liabilities
A
100.0 100.0
A
Excluding bank loan of £13,762,000
48 Dunedin Income Growth Investment Trust PLC
Unilever (Leader)
Unilever is a personal care company, serving the nutrition,
beauty, home and personal care segments. The company
is geographically diverse with more than 60% of revenues
from emerging markets and particularly strong franchises
in the major growth markets of India and China. The
company has navigated recent cost pressures well and
volume elasticity has been more robust than its peers. This
performance is testament to Unilever’s pricing power and
investment in brand and product.
Unilever demonstrates strong ESG leadership which has
the potential to support pricing and its competitive
positioning as the consumer becomes more
environmentally and socially conscious. The company has
set a range of leading targets to address its own direct
environmental impact and of its supply chain. Mindful of
the production and distribution of plastic packaging in
countries with immature recycling systems, Unilever’s
strategy to cut the amount of virgin plastic in packaging by
half by 2025 is commendable and ambitious. The
Investment Manager has been discussing these
commitments with Unilever and is encouraged by the
investment and work with partners to bolster plastic
packaging collection and processing. As a leading
consumer goods company with an extensive footprint, the
company is in a powerful position to drive positive change
and improve recycling infrastructure on a global basis.
Volvo (Improver)
Volvo manufactures and services commercial trucks and
construction machinery. Whilst the industry presents a
degree of cyclicality, it also offers long term growth and
the company benefits from a robust order book. The
company is increasing its services and repairs offering and
this should support margins and resiliency through the
cycle. Volvo is a high quality business within a cyclical
sector. It has a strong balance sheet and attractive
dividend yield.
From an ESG perspective, the Investment Manager is
monitoring how Volvo will navigate the transition away
from the internal combustion engine and towards
electrification. While battery electric vehicles are a good
solution for city buses and regional haulage, the company
believes hydrogen fuel cell technology presents an
interesting opportunity for trucks travelling longer distance
and carrying heavier loads. Volvo expects electrification of
large trucks to lag those of compact machinery and has
set out ambitions to produce 100% fossil fuel free vehicles
by 2040. Whilst the market for electric trucks is still small,
as of 2022 Volvo is the market leader in heavy electric
trucks with 32% share in Europe and nearly 50% share in
North America.
Investment Case Studies
Dunedin Income Growth Investment Trust PLC 49
AstraZeneca (Solutions)
AstraZeneca is a leading pharmaceutical company
with a focus on oncology, cardiovascular and respiratory
biopharmaceuticals and rare diseases. Headquartered
in Cambridge UK, the company is geographically well
diversified with material exposure to China and emerging
markets alongside the United States. The industry is
complex, highly regulated and with high barriers to entry.
Growth is supported by structural tailwinds of aging
populations and scientific exploration driving levels of
innovation. The company has a strong and diversified
pipeline of early stage drugs, including several potential
blockbusters, which provide an attractive growth
outlook. The company harnesses its distinctive scientific
capabilities and 13,000 strong research and
development employees to deliver a pipeline of
life-changing medicines.
AstraZeneca delivers positive societal impact by
increasing access to life-saving treatments, promoting
prevention and strengthening the resiliency of health
systems. There were almost 20 million people diagnosed
with cancer in 2020 and it remains the second leading
cause of death. One key product, AstraZeneca’s Tagrisso,
improves outcomes for patients diagnosed with lung
cancer and is approved in 99 countries globally. Scientific
innovation in drug development meets a critical unmet
need and drives important social benefits.
50 Dunedin Income Growth Investment Trust PLC
Governance
Dunedin Income Growth Investment Trust PLC 51
The Company is committed to high
standards of corporate governance and
applies the principles identified in the UK
Corporate Governance Code and the AIC
Code of Corporate Governance.
The Directors, all of whom are non-
executive and independent of the
Manager, supervise the management
of the Company and represent the
interests of shareholders.
52 Dunedin Income Growth Investment Trust PLC
David Barron
Independent Non-Executive Chairman
Experience:
David Barron was, until November 2019, Chief Executive of
Miton Group PLC and is currently a non-executive director
of Premier Miton Group PLC. He was, until 2013, Head of
Investment Trusts at JPMorgan Asset Management and,
until 2014, a director of The Association of Investment
Companies. He is also a non-executive director of
BlackRock Sustainable American Income Trust plc and
Fidelity Japan Trust PLC.
Length of service:
7 years, appointed a Director on 1 February 2016 and
Chairman on 23 May 2017
Last re-elected to the Board:
24 May 2022
Committee membership:
Management Engagement Committee and Nomination
and Remuneration Committee
Contribution:
The Nomination and Remuneration Committee has
reviewed the contribution of David Barron in light of his
proposed re-election at the AGM and has concluded that
he has continued to Chair the Company expertly,
fostering a collaborative spirit between the Board and
Manager whilst ensuring that meetings remain focused on
the key areas of stakeholder relevance. In addition, he has
continued to provide significant investment trust expertise
to the Board.
Gay Collins
Independent Non-Executive Director
Experience:
Gay Collins has over 35 years of experience in the
financial services sector and has founded and grown
three PR companies, Montfort Communications, Penrose
Financial (which became MHP) and Ludgate
Communications, and has an executive role at Montfort
where she advises financial services companies on
communications. She is also a non-executive director of
the Association of Investment Companies.
Length of service:
1 year, appointed a Director on 1 July 2021
Elected to the Board:
24 May 2022
Committee membership:
Audit Committee, Management Engagement
Committee and Nomination and Remuneration
Committee
Contribution:
The Nomination and Remuneration Committee has
reviewed the contribution of Gay Collins in light of her
proposed re-election at the AGM and has concluded that
she has continued to provide significant value to the Board
through her knowledge of the financial services sector,
and promotional activities in particular, and knowledge of
the investment trust sector.
Board of Directors
Dunedin Income Growth Investment Trust PLC 53
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Jasper Judd
Independent Non-Executive Director and Chairman of the
Audit Committee
Experience:
Jasper Judd worked for Brambles Limited, a listed
Australian multi-national, where he held a number of
senior executive roles including Global Head of Strategy.
He is also a non-executive director of JPMorgan Indian
Investment Trust plc, Brown Advisory US Smaller
Companies PLC and Schroder Asian Total Return
Investment Company plc. He is a Chartered Accountant.
Length of service:
7 years, appointed a Director on 1 February 2016
Last re-elected to the Board:
24 May 2022
Committee membership:
Audit Committee (Chairman), Management Engagement
Committee and Nomination and Remuneration
Committee
Contribution:
The Nomination and Remuneration Committee has
reviewed the contribution of Jasper Judd in light of his
proposed re-election at the AGM and has concluded that
he has continued to chair the Audit Committee expertly
through the year and provide financial and business
insight to the Board and knowledge of the investment
trust sector.
Christine Montgomery
Independent Non-Executive Director and Chairman of the
Management Engagement Committee
Experience:
Christine Montgomery has over 30 years of investment
management experience, most recently as Head of
Global Equities at AustralianSuper in Melbourne from 2016
until 2019. She previously held roles as a global equities
portfolio manager at Fidelity Worldwide Investments,
Martin Currie and Edinburgh Partners. She is also a non-
executive director of The Scottish American Investment
Company PLC.
Length of service:
3 years, appointed a Director on 1 February 2020
Last re-elected to the Board:
24 May 2022
Committee membership:
Audit Committee, Management Engagement Committee
(Chairman) and Nomination and Remuneration
Committee
Contribution:
The Nomination and Remuneration Committee has
reviewed the contribution of Christine Montgomery in light
of her proposed re-election at the AGM and has
concluded that she has continued to provide significant
investment insight to the Board and knowledge of the
investment management sector.
54 Dunedin Income Growth Investment Trust PLC
Howard Williams
Senior Independent Non-Executive Director
and Chairman of the Nomination and
Remuneration Committee
Experience:
Howard Williams has over 35 years’ of fund management
experience and was, until October 2017, Chief Investment
Officer and Head of the Global Equity Team at JPMorgan
Asset Management. Prior to joining JPMorgan Asset
Management in 1994, he held a number of senior positions
at Shell Pensions and Kleinwort Benson Asset
Management. He started his career at James Capel & Co.
He is also a non-executive director of Strategic Equity
Capital plc, Schroders Unit Trust Limited and
Lifesight Limited.
Length of service:
5 years, appointed a Director on 1 April 2018 and Senior
Independent Director on 16 July 2020
Last re-elected to the Board:
24 May 2022
Committee membership:
Audit Committee, Management Engagement Committee
and Nomination and Remuneration Committee
(Chairman)
Contribution:
The Nomination and Remuneration Committee has
reviewed the contribution of Howard Williams in light of
his proposed re-election at the AGM and has concluded
that he continues to provide significant investment insight
to the Board and knowledge of the investment
management sector.
Board of Directors
Continued
Dunedin Income Growth Investment Trust PLC 55
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
The Directors present their report and the audited
financial statements for the year ended 31 January 2023.
Results and Dividends
The financial statements for the year ended 31 January
2023 are contained on pages 81 to 104. First, second and
third interim dividends, each of 3.00p per Ordinary share,
were paid on 26 August 2022, 25 November 2022 and 24
February 2023 respectively. The Directors recommend a
final dividend of 4.10p per Ordinary share, payable on 30
May 2023 to shareholders on the register on 5 May 2023.
The ex-dividend date is 4 May 2023. A resolution to
approve the final dividend will be proposed at the Annual
General Meeting.
Principal Activity and Status
The Company is registered as a public limited company
(registered in Scotland No. SC000881) and is an
investment company within the meaning of Section 833 of
the Companies Act 2006. The Company has been
approved by HM Revenue & Customs as an investment
trust subject to it continuing to meet the relevant eligibility
conditions of Section 1158 of the Corporation Tax Act
2010 and the ongoing requirements of Part 2 Chapter 3
Statutory Instrument 2011/2999 for all financial years
commencing on or after 1 February 2012. The Directors
are of the opinion that the Company has conducted its
affairs for the year ended 31 January 2023 so as to enable
it to comply with the ongoing requirements for investment
trust status.
Individual Savings Accounts
The Company has conducted its affairs in such a way
as to satisfy the requirements as a qualifying security
for Individual Savings Accounts. The Directors intend
that the Company will continue to conduct its affairs
in this manner.
Donations to Charity
During the year, the Board decided that amounts of
unclaimed dividends greater than 12 years old, which are
returned annually to the Company by the Registrar in
accordance with the Company Articles of Association,
would be donated to charity. Accordingly, the Company
made a donation of £16,000 (2022: £nil) to the abrdn
Charitable Foundation, which directs funding to charities
around the world.
The abrdn Charitable Foundation is a registered charity.
Its board of directors includes independent representation
from the abrdn Group and provides oversight and
guidance for its charitable giving activities.
Capital Structure and Voting Rights
The issued Ordinary share capital at 31 January 2023
consisted of 148,264,670 Ordinary shares of 25p and
5,413,265 Ordinary shares held in treasury.
Each Ordinary share holds one voting right and
shareholders are entitled to vote on all resolutions which
are proposed at general meetings of the Company. The
Ordinary shares, excluding treasury shares, carry a right to
receive dividends. On a winding up or other return of
capital, after meeting the liabilities of the Company, the
surplus assets will be paid to Ordinary shareholders in
proportion to their shareholdings.
There are no restrictions on the transfer of, or voting rights
attaching to, the Ordinary shares in the Company other
than certain restrictions which may from time to time be
imposed by law.
Management Agreement
The Company has appointed abrdn Fund Managers
Limited (“aFML”) (formerly Aberdeen Standard Fund
Managers Limited), a wholly owned subsidiary of abrdn
plc, as its alternative investment fund manager. aFML has
been appointed to provide investment management, risk
management, administration and company secretarial
services and promotional activities to the Company. The
Company's portfolio is managed by abrdn Investments
Limited (“aIL) (formerly Aberdeen Asset Managers
Limited) by way of a group delegation agreement in place
between aFML and aIL. In addition, aFML has sub-
delegated administrative and secretarial services to
abrdn Holdings Limited (formerly Aberdeen Asset
Management PLC) and promotional activities to aIL.
Details of the management fees and fees payable for
promotional activities are shown in notes 4 and 5 to the
financial statements.
The management agreement is terminable on not less
than six months’ notice. In the event of termination by the
Company on less than the agreed notice period,
compensation is payable to the Manager in lieu of the
unexpired notice period.
Directors’ Report
56 Dunedin Income Growth Investment Trust PLC
Substantial Interests
As at 31 January 2023, the following interests in the issued
Ordinary share capital of the Company had been
disclosed in accordance with the requirements of the
FCA’s Disclosure Guidance and Transparency Rules:
Shareholder
Number of
shares held % held
Abrdn Retail Plans
A
34,562,852 23.3
A
Non-beneficial interest
There have been no changes notified to the Company
between the year end and the date of approval of
this Report.
Directors
Throughout the year, the Board comprised five non-
executive Directors, each of which is considered by the
Board to be independent of the Company and the
Manager. David Barron is the Chairman and Howard
Williams is the Senior Independent Director.
The Directors attended scheduled Board and Committee
meetings during the year ended 31 January 2023 as
follows (with their eligibility to attend the relevant
meetings in brackets):
Board
Meetings
Audit
Committee
Meetings
Management
Engagement
Committee
Meetings
Nomination
and
Remuneration
Committee
Meetings
David Barron 6 (6) - (-) 1 (1) 1 (1)
Gay Collins 6 (6) 2 (2) 1 (1) 1 (1)
Jasper Judd 6 (6) 2 (2) 1 (1) 1 (1)
Christine
Montgomery
6 (6) 2 (2) 1 (1) 1 (1)
Howard Williams 6 (6) 2 (2) 1 (1) 1 (1)
The Board meets more frequently when business
needs require.
Under the terms of the Company’s Articles of Association,
Directors are subject to election at the first Annual General
Meeting after their appointment and are required to retire
and be subject to re-election at least every three years
thereafter. However, the Board has decided that all
Directors will retire annually. Accordingly, Gay Collins,
Jasper Judd, Howard Williams, Christine Montgomery and
David Barron will retire at the Annual General Meeting
and,, being eligible, offer themselves for re-election.
The Board believes that all the Directors seeking re-
election remain independent of the Manager and free
from any relationship which could materially interfere with
the exercise of their judgement on issues of strategy,
performance, resources and standards of conduct. The
biographies of each of the Directors are shown on pages
52 to 54, setting out their range of skills and experience as
well as length of service and their contribution to the
Board during the year. The Board believes that each
Director has the requisite high level and range of business,
investment and financial experience which enables the
Board to provide clear and effective leadership and
proper governance of the Company. Following formal
performance evaluations, each Director’s performance
continues to be effective and demonstrates commitment
to the role, and their individual performances contribute to
the long-term sustainable success of the Company. The
Board therefore recommends the re-election of each of
the Directors at the Annual General Meeting.
Board’s Policy on Tenure
In normal circumstances, it is the Board’s expectation that
Directors will not serve beyond the Annual General
Meeting following the ninth anniversary of their
appointment. However, the Board takes the view that
independence of individual Directors is not necessarily
compromised by length of tenure on the Board and that
continuity and experience can add significantly to the
Board’s strength. The Board believes that
recommendation for re-election should be on an
individual basis following a rigorous review which assesses
the contribution made by the Director concerned, but also
taking into account the need for managed succession
and diversity.
It is the Board’s policy that the Chairman of the Board will
not serve as a Director beyond the Annual General
Meeting following the ninth anniversary of his or her
appointment to the Board. However, this may be
extended in exceptional circumstances or to facilitate
effective succession planning and the development of a
diverse Board. In such a situation the reasons for the
extension will be fully explained to shareholders and a
timetable for the departure of the Chairman clearly
set out.
Directors’ Report
Continued
Dunedin Income Growth Investment Trust PLC 57
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
The Role of the Chairman and Senior
Independent Director
The Chairman is responsible for providing effective
leadership of the Board, demonstrating objective
judgement and promoting a culture of openness and
debate. The Chairman facilitates the effective
contribution and encourages active engagement by each
Director. In conjunction with the Company Secretary, the
Chairman ensures that Directors receive accurate, timely
and clear information to assist them with effective
decision-making. The Chairman acts upon the results of
the Board evaluation process by recognising strengths
and addressing any weaknesses and also ensures that the
Board engages with major shareholders and that all
Directors understand shareholder views.
The Senior Independent Director acts as a sounding board
for the Chairman and acts as an intermediary for other
Directors, when necessary. Working closely with the
Nomination and Remuneration Committee, the Senior
Independent Director takes responsibility for an orderly
succession process for the Chairman, and leads the
annual appraisal of the Chairman’s performance. The
Senior Independent Director is also available to
shareholders to discuss any concerns they may have.
Directors’ and Officers’ Liability Insurance
The Company maintains insurance in respect of Directors’
and Officers’ liabilities in relation to their acts on behalf of
the Company. Each Director is entitled to be indemnified
out of the assets of the Company to the extent permitted
by law against any loss or liability incurred by him or her in
the execution of his or her duties in relation to the affairs of
the Company. These rights are included in the Articles of
Association of the Company.
Management of Conflicts of Interest
The Board has a procedure in place to deal with a
situation where a Director has a conflict of interest. As part
of this process, each Director prepares a list of other
positions held and all other conflict situations that may
need to be authorised either in relation to the Director
concerned or his or her connected persons. The Board
considers each Director’s situation and decides whether
to approve any conflict, taking into consideration what is in
the best interests of the Company and whether the
Director’s ability to act in accordance with his or her wider
duties is affected. Each Director is required to notify the
Company Secretary of any potential, or actual, conflict
situations that will need authorising by the Board.
Authorisations given by the Board are reviewed at each
Board meeting.
No Director has a service contract with the Company
although all Directors are issued with letters of
appointment. There were no contracts during, or at the
end of the year, in which any Director was interested.
The Company has a policy of conducting its business in an
honest and ethical manner. The Company takes a zero-
tolerance approach to bribery and corruption and has
procedures in place that are proportionate to the
Company’s circumstances to prevent them. The Manager
also adopts a group-wide zero-tolerance approach and
has its own detailed policy and procedures in place to
prevent bribery and corruption. Copies of the Manager’s
anti-bribery and corruption policies are available on
its website.
In relation to the corporate offence of failing to prevent tax
evasion, it is the Company’s policy to conduct all business
in an honest and ethical manner. The Company takes a
zero-tolerance approach to facilitation of tax evasion
whether under UK law or under the law of any foreign
country and is committed to acting professionally,
fairly and with integrity in all its business dealings
and relationships.
Corporate Governance
The Company is committed to high standards of
corporate governance. The Board is accountable to the
Company’s shareholders for good governance and this
statement describes how the Company has applied the
principles identified in the UK Corporate Governance
Code as published in July 2018 (the “UK Code”), which is
available on the Financial Reporting Council’s (the “FRC”)
website: frc.org.uk.
The Board has also considered the principles and
provisions of the AIC Code of Corporate Governance as
published in February 2019 (the “AIC Code”). The AIC
Code addresses the principles and provisions set out in the
UK Code, as well as setting out additional provisions on
issues that are of specific relevance to the Company. The
AIC Code is available on the AIC’s website: theaic.co.uk.
The Board considers that reporting against the principles
and provisions of the AIC Code, which has been
endorsed by the FRC, provides more relevant information
to shareholders.
58 Dunedin Income Growth Investment Trust PLC
The Board confirms that, during the year, the Company
complied with the principles and provisions of the AIC
Code and the relevant provisions of the UK Code, except
as set out below.
The UK Code includes provisions relating to:
y interaction with the workforce (provisions 2, 5 and 6);
y the role and responsibility of the chief executive
(provisions 9 and 14);
y previous experience of the chairman of a remuneration
committee (provision 32); and
y executive directors’ remuneration (provisions 33 and 36
to 40).
The Board considers that these provisions are not relevant
to the position of the Company, being an externally
managed investment company. In particular, all of the
Company’s day-to-day management and administrative
functions are outsourced to third parties. As a result, the
Company has no executive directors, employees or
internal operations. The Company has therefore not
reported further in respect of these provisions.
Full details of the Company’s compliance with AIC Code
can be found on its website.
Board Committees
The Board has appointed a number of Committees, as set
out below. Copies of their terms of reference, which
clearly define the responsibilities and duties of each
Committee, are available on the Company’s website, or
upon request from the Company. The terms of reference
of each of the Committees are reviewed and re-assessed
by the Board for their adequacy on an ongoing basis.
Audit Committee
The Audit Committee’s Report is contained on pages
66 to 69.
Management Engagement Committee
The Management Engagement Committee consists of all
the Directors and is chaired by Christine Montgomery. The
terms and conditions of the Manager’s appointment,
including an evaluation of performance and fees, are
reviewed by the Committee on an annual basis. The
Committee also keeps the resources of the abrdn Group
under review, together with its commitment to the
Company and its investment trust business. In addition, the
Committee conducts an annual review of the
performance, terms and conditions of the Company’s
main third party suppliers.
The Board remains satisfied with the capability of the
abrdn Group to deliver satisfactory investment
performance, that its investment screening processes are
thorough and robust and that it employs a well-resourced
team of skilled and experienced fund managers. In
addition, the Board is satisfied that the abrdn Group has
the secretarial, administrative and promotional skills
required for the effective operation and administration of
the Company. Accordingly, the Board believes that the
continuing appointment of the Manager on the terms
agreed is in the interests of shareholders as a whole.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee consists of
all the Directors. The Committee is chaired by Howard
Williams who has relevant experience and understanding
of the Company. The Committee reviews the
effectiveness of the Board, succession planning, Board
appointments, appraisals and training, and determines
the Directors’ remuneration policy and level of
remuneration, including for the Chairman. The Committee
also considers the need to appoint an external
remuneration consultant. Further details of the
remuneration policy are provided in the Directors’
Remuneration Report on pages 62 to 65.
During the year, the Committee undertook an annual
appraisal of the Chairman of the Board, individual
Directors and the performance of Committees and the
Board as a whole. This process involved the completion of
questionnaires by each Director and follow-on discussions
between the Chairman and each Director. The appraisal
of the Chairman was undertaken by the Senior
Independent Director. The results of the process were
discussed by the Board following its completion, with
appropriate action points made.
Following the evaluation process, the Board believes that it
continues to operate in an efficient and effective manner
with each Director making a significant contribution to
the Board.
The intention is that the evaluation is externally facilitated
every three years, the next such review to be conducted
during the year ending 31 January 2025.
The Committee considers succession planning on at least
an annual basis. Potential new Directors are identified
against the requirements of the Company’s business and
the need to have a balance of skills, experience,
independence, diversity and knowledge of the Company
within the Board.
Directors’ Report
Continued
Dunedin Income Growth Investment Trust PLC 59
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Going Concern
The Company’s assets consist mainly of equity shares in
companies listed on the London Stock Exchange and in
most circumstances are considered to be realisable within
a short timescale. The Board has set limits for borrowing
and derivative contract positions and regularly reviews
actual exposures, cash flow projections and compliance
with loan covenants. The Directors have considered the
fact that Company’s investments comprise readily
realisable securities which can be sold to meet funding
requirements if necessary. The Directors have also
performed stress testing on the portfolio and the loan
financial covenants.
The Company has borrowings in the form of £30 million
3.99% Loan Notes that mature in December 2045, and a
£30 million multi-currency revolving credit facility with The
Bank of Nova Scotia, London Branch, which matures in
July 2023. The Board has reviewed indicative quotes for
the renewal of the multi-currency revolving credit facility
and expects to be able to renew it upon its maturity with a
similar facility.
Following this assessment, the Directors believe that the
Company has adequate financial resources to continue in
operational existence for the foreseeable future and for at
least twelve months from the date of this Report.
Accordingly, they continue to adopt the going concern
basis of accounting in preparing the financial statements.
Accountability and Audit
The respective responsibilities of the Directors and the
Auditor in connection with the financial statements
appear on pages 72, and 77.
Each Director confirms that, so far as he or she is aware,
there is no relevant audit information of which the
Company’s Auditor is unaware, and they have taken all
the steps that they could reasonably be expected to have
taken as Directors in order to make themselves aware of
any relevant audit information and to establish that the
Company’s Auditor is aware of that information.
Independent Auditor
The Company’s Auditor, Deloitte LLP, has indicated its
willingness to remain in office. The Board will propose
resolutions at the Annual General Meeting to re-appoint
Deloitte LLP as Auditor for the ensuing year and to
authorise the Directors to determine its remuneration.
Relations with Shareholders
The Directors place a great deal of importance on
communications with shareholders. Shareholders and
investors may obtain up to date information on the
Company through its website and the Manager’s
Customer Services Department (see Contact Addresses).
The Board’s policy is to communicate directly with
shareholders and their representative bodies without the
involvement of the management group (including the
Company Secretary or the Manager) in situations where
direct communication is required, and representatives
from the Board and Manager meet with major
shareholders on at least an annual basis in order to gauge
their views.
abrdn Holdings Limited has been appointed Company
Secretary to the Company. Whilst abrdn Holdings Limited
is a wholly owned subsidiary of the abrdn Group, there is a
clear separation of roles between the Manager and
Company Secretary with different board compositions
and different reporting lines in place. The Company
Secretary only acts on behalf of the Board, not the
Manager, and there is no filtering of communication.
At each Board meeting the Board receives full details of
any communication from shareholders to which the
Chairman responds personally as appropriate.
Directors attend meetings with the Company’s largest
shareholders and meet other shareholders at the Annual
General Meeting and, as explained in the Chairman’s
Statement, the Company will hold an online shareholder
presentation in advance of the Annual General Meeting
this year, which will include an interactive question and
answer session.
The notice of the Annual General Meeting is sent out at
least 20 working days in advance of the meeting. All
shareholders have the opportunity to put questions to the
Board and Manager at the meeting.
Disclosures in Strategic Report
In accordance with Section 414 C (11) of the Companies
Act 2006, the following information otherwise required to
be set out in the Directors’ Report has been included in the
Strategic Report: risk management objectives and policies
and likely future developments in the business.
Annual General Meeting
The Annual General Meeting will be held at V&A Dundee, 1
Riverside Esplanade, Dundee DD1 4EZ on Tuesday 16 May
2023 at 12 noon.
The Notice of the Meeting is included on pages
120 to 124. Resolutions including the following business
will be proposed:
60 Dunedin Income Growth Investment Trust PLC
Allotment of Shares
Resolution 12 will be proposed as an ordinary resolution to
confer an authority on the Directors, in substitution for any
existing authority, to allot up to 33.33% of the issued
Ordinary share capital of the Company (excluding
treasury shares) as at the date of the passing of the
resolution (up to a maximum aggregate nominal amount
of £12,354,153 based on the number of Ordinary shares in
issue as at the date of this Report) in accordance with
Section 551 of the Companies Act 2006. The authority
conferred by this resolution will expire at the next Annual
General Meeting of the Company or on 31 July 2024,
whichever is earlier (unless previously revoked, varied or
extended by the Company in general meeting).
The Directors consider that the authority proposed to be
granted by resolution 12 is necessary to retain flexibility,
although they do not at the present time have any
intention of exercising such authority.
Limited Disapplication of Pre-emption Provisions
Resolution 13 will be proposed as a special resolution and
seeks to give the Directors power to allot Ordinary shares
and to sell Ordinary shares held in treasury (see below) (i)
by way of a rights issue (subject to certain exclusions); (ii)
by way of an open offer or other offer of securities (not
being a rights issue) in favour of existing shareholders in
proportion to their shareholdings (subject to certain
exclusions); and (iii) to persons other than existing
shareholders for cash up to a maximum aggregate
nominal amount representing 5% of the Company’s
issued Ordinary share capital as at the date of the passing
of the resolution (up to an aggregate nominal amount of
£1,853,308 based on the number of Ordinary shares in
issue as at the date of this Report), without first being
required to offer such shares to existing shareholders pro
rata to their existing shareholding.
This power will expire at the conclusion of the next Annual
General Meeting of the Company or on 31 July 2024,
whichever is earlier (unless previously revoked, varied or
extended by the Company in general meeting).
The Company may buy back and hold shares in treasury
and then sell them at a later date for cash rather than
cancelling them. Such sales are required to be on a pre-
emptive, pro rata basis to existing shareholders unless
shareholders agree by special resolution to disapply such
pre-emption rights. Accordingly, in addition to giving the
Directors power to allot unissued Ordinary share capital
on a non pre-emptive basis, resolution 13 will also give the
Directors power to sell Ordinary shares held in treasury on
a non pre-emptive basis, subject always in both cases to
the limitations noted above. Pursuant to this power,
Ordinary shares would only be issued for cash, and
treasury shares would only be sold for cash, at a premium
to the net asset value per share (calculated after the
deduction of prior charges at market value). Treasury
shares are explained in more detail under the heading
“Market Purchase of the Company’s own Ordinary
Shares” below.
Market Purchase of the Company’s own Ordinary Shares
Resolution 14 will be proposed as a special resolution to
authorise the Company to make market purchases of its
own Ordinary shares. The Company may do either of the
following things in respect of its own Ordinary shares
which it buys back and does not immediately cancel but,
instead, holds in treasury:
y sell such shares (or any of them) for cash (or its
equivalent); or
y ultimately cancel the shares (or any of them).
Treasury shares may be re-sold quickly and cost
effectively. The Directors therefore intend to continue to
take advantage of this flexibility as they deem
appropriate. Treasury shares also enhance the Directors’
ability to manage the Company’s capital base.
No dividends will be paid on treasury shares and no voting
rights attach to them.
Directors’ Report
Continued
Dunedin Income Growth Investment Trust PLC 61
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
The maximum aggregate number of Ordinary shares
which may be purchased pursuant to the authority is
14.99% of the issued Ordinary share capital of the
Company as at the date of the passing of the resolution
(approximately 22.2 million Ordinary shares). The
minimum price which may be paid for an Ordinary share
is 25p (exclusive of expenses). The maximum price
(exclusive of expenses) which may be paid for the shares
is the higher of a) 5% above the average of the middle
market quotations of the Ordinary shares (as derived
from the Daily Official List of the London Stock Exchange)
for the shares for the five business days immediately
preceding the date of purchase; and b) the higher of the
price of the last independent trade and the highest
current independent bid on the main market for the
Ordinary shares.
This authority, if conferred, will expire at the conclusion of
the next Annual General Meeting of the Company or on
31 July 2024, whichever is earlier (unless previously
revoked, varied or extended by the Company in general
meeting), and will be exercised only if it would result in an
increase in net asset value per Ordinary share for the
remaining shareholders and if it is in the best interests of
shareholders as a whole.
Recommendation
The Directors consider that the resolutions to be proposed
at the Annual General Meeting are in the best interests of
the Company and its shareholders and recommend that
shareholders vote in favour of the resolutions as they
intend to do in respect of their own beneficial
shareholdings, amounting to 47,484 Ordinary shares,
representing 0.03% of the issued share capital.
By order of the Board
abrdn Holdings Limited
Company Secretary
1 George Street
Edinburgh EH2 2LL
5 April 2023
62 Dunedin Income Growth Investment Trust PLC
This Directors’ Remuneration Report comprises
three parts:
1. a Remuneration Policy which is subject to a binding
shareholder vote every three years (or sooner if varied
during this interval) – most recently voted on at the
Annual General Meeting on 16 July 2020;
2. an Implementation Report which is subject to an
advisory vote on the level of remuneration paid during
the year; and
3. an Annual Statement.
Company law requires the Company’s Auditor to audit
certain of the disclosures provided in the Directors’
Remuneration Report. Where disclosures have been
audited, they are indicated as such. The Auditor’s report is
included on pages 73 to 80.
The Director’s Remuneration Policy and level of Directors’
remuneration are determined by the Nomination and
Remuneration Committee, which is chaired by Howard
Williams and comprises all of the Directors.
The Directors’ Remuneration Policy takes into
consideration the principles of the UK Corporate
Governance Code and the AIC’s recommendations
regarding the application of those principles to
investment companies.
No shareholder views have been sought in setting the
remuneration policy although any comments received
from shareholders are considered.
Remuneration Policy
The Board’s policy is that the remuneration of non-
executive Directors should be sufficient to attract
Directors of the quality required to run the Company
successfully. The remuneration should also reflect the
nature of the Directors’ duties, responsibilities, the value of
their time spent and be fair and comparable to that of
other investment trusts that are similar in size, and have
similar capital structures and similar investment objectives.
Appointment
y The Company only intends to appoint non-executive
Directors.
y All the Directors are non-executive and are appointed
under the terms of letters of appointment.
y Under the terms of the Company’s Articles of
Association, Directors are subject to election at the first
Annual General Meeting after their appointment and
are required to retire and be subject to re-election at
least every three years thereafter. However, the Board
has decided that all Directors will retire annually.
y 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.
y No incentive or introductory fees will be paid to
encourage a person to become a Director.
y Directors are not eligible for bonuses, pension
benefits, share options, long term incentive schemes
or other benefits.
y Directors are entitled to re-imbursement of out-of-
pocket expenses incurred in connection with the
performance of their duties, including travel expenses.
y The Company indemnifies its Directors for all costs,
charges, losses, expenses and liabilities which may be
incurred in the discharge of duties as a Director of
the Company.
Performance, Service Contracts, Compensation
and Loss of Office
y Directors’ remuneration is not subject to any
performance related fee.
y No Director has a service contract.
y No Director was interested in contracts with the
Company during the period or subsequently.
y The terms of appointment provide that a Director may
be removed without notice.
y Compensation will not be due upon leaving office.
y No Director is entitled to any other monetary payment
or any assets of the Company.
Directors’ Remuneration Report
Dunedin Income Growth Investment Trust PLC 63
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Directors’ & Officers’ liability insurance cover is maintained
by the Company on behalf of the Directors.
There were no changes to the Directors’ Remuneration
Policy during the year nor are there any proposals for
changes in the foreseeable future.
Approval of Remuneration Policy and Statement of Voting
at Annual General Meeting
The Remuneration Policy was last approved by
shareholders at the Annual General Meeting on 16 July
2020. 97.4% of proxy votes were in favour of the resolution,
1.7% were against and 0.9% abstained A resolution to
approve the Remuneration Policy will be proposed at the
Annual General Meeting to be held on 16 May 2023.
The Remuneration policy is reviewed by the Board on an
annual basis and it is the Board’s intention that this
Remuneration Policy will apply for the three year period
ending 31 January 2026.
Implementation Report
Limit on Directors’ Fees
Directors’ fees are set within the limits of the Company’s
Articles of Association which limit the aggregate fees
payable to the Board of Directors per annum. The current
limit is £200,000 per annum and may only be increased by
shareholder resolution.
Review of Directors’ Fees
The levels of fees at the year end are set out in the table
below. Fees are reviewed annually and were most
recently changed with effect from 1 February 2022.
31 January
2023
£
31 January
2022
£
Chairman 40,000 38,000
Chairman of Audit Committee 31,500 29,500
Director 26,500 24,750
An additional fee of £2,000 per annum is payable to the
Senior Independent Director.
The Nomination and Remuneration Committee carried
out a review of the level of Directors’ fees during the year,
which included consideration of fees paid by comparable
investment trusts and the sector as a whole. Following this
review, the Committee concluded that, with effect from 1
February 2023, fees should be increased to £42,000 for the
Chairman, £33,000 for the Audit Committee Chairman
and £28,000 for the other Directors. It was also agreed that
an additional fee of £2,000 per annum should continue to
be payable to the Senior Independent Director. There are
no further fees to disclose as the Company has no
employees, chief executive or executive directors.
Company Performance
The graph below shows the share price and NAV total
returns (assuming all dividends are reinvested) to
Ordinary shareholders compared to the total return from
the FTSE All-Share Index for the ten year period to 31
January 2023 (rebased to 100 at 31 January 2013). This
Index was chosen for comparison purposes as it is the
Company’s benchmark used for investment performance
measurement purposes.
100
120
140
160
180
200
13 14 15 16 17 18 19 20 21 22 23
Share price total return
NAV total return with debt at market value
FTSE All-Share Index total re turn
64 Dunedin Income Growth Investment Trust PLC
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.
Fees Payable (Audited Information)
The Directors who served during the year received the
following emoluments in the form of fees.
Director 2023
£
2022
£
David Barron 40,000 38,000
Gay Collins
A
26,500 14,438
Jasper Judd 31,500 29,500
Christine Montgomery 26,500 24,750
Elisabeth Scott
B
- 8,937
Howard Williams 28,500 26,750
Total 153,000 142,375
A
Appointed on 1 July 2021
B
Retired on 10 June 2021
The above amounts exclude any employers’ national
insurance contributions. All fees are at a fixed rate and
there is no variable remuneration. Fees are pro-rated
where a change takes place during a financial year. There
were no payments to third parties included in the fees
referred to in the table above.
Annual Percentage Change in Directors’ Remuneration
The table below sets out the annual percentage change in
Directors’ fees for the past two years.
Year ended
31 January
2023
Year ended
31 January
2022
Year ended
31 January
2021
Director % % %
David Barron 5.3 2.7 5.7
Gay Collins
A
n/a n/a n/a
Jasper Judd 6.8 3.5 5.6
Christine
Montgomery
B
7.1 3.1 n/a
Howard
Williams
C
6.5 8.1 7.6
A
Appointed on 1 July 2021
B
Appointed on 1 February 2020
C
Appointed Senior Independent Director on 16 July 2020
Directors’ Interests in the Company
The Directors are not required to have a shareholding in
the Company. The Directors (including their connected
persons) at 31 January 2023 and 31 January 2022 had no
interest in the share capital of the Company other than
those interests, all of which are beneficial, shown in the
following table.
31 January
2023
31 January
2022
Ordinary
shares
Ordinary
shares
David Barron 21,977 21,977
Gay Collins 3,032 3,032
Jasper Judd 5,000 5,000
Christine Montgomery 5,000 5,000
Howard Williams 12,358 11,843
Since the year end Howard Williams has acquired an
additional 117 Ordinary shares through a dividend re-
investment plan. There have been no other changes to the
Directors’ interests in the share capital of the Company
since the year end up to the date of approval of
this Report.
Directors’ Remuneration Report
Continued
Dunedin Income Growth Investment Trust PLC 65
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Statement of Voting at Annual General Meeting
At the Company’s last Annual General Meeting, held on 24
May 2022, shareholders approved the Directors’
Remuneration Report (excluding the Directors’
Remuneration Policy) in respect of the year ended 31
January 2022. 96.7% of proxy votes were in favour of the
resolution, 2.1% were against and 1.2% abstained.
A resolution to receive and adopt the Directors’
Remuneration Report (excluding the Directors’
Remuneration Policy) in respect of the year ended
31 January 2023 will be proposed at the Annual
General Meeting.
Annual Statement
On behalf of the Board and in accordance with Part 2 of
Schedule 8 of the Large and Medium-sized Companies
and Groups (Accounts and Reports) (Amendment)
Regulations 2013, it is confirmed that the above
Remuneration Report summarises, as applicable, for the
year to 31 January 2023:
y the major decisions on Directors’ remuneration;
y any substantial changes relating to Directors’
remuneration made during the year; and
y the context in which the changes occurred and
decisions have been taken.
On behalf of the Board
David Barron
Chairman
5 April 2023
66 Dunedin Income Growth Investment Trust PLC
The Audit Committee presents its Report for the year
ended 31 January 2023.
Committee Composition
Throughout the year the Audit Committee consisted of all
the Directors except for the Chairman of the Board, David
Barron. The Committee is chaired by Jasper Judd who is a
Chartered Accountant and has recent and relevant
financial experience. The Board is satisfied that the
Committee as a whole has competence relevant to the
investment trust sector.
Functions of the Audit Committee
The principal role of the Audit Committee is to assist the
Board in relation to the reporting of financial information,
the review of financial controls and the management of
risk. The Committee has defined terms of reference which
are reviewed and re-assessed for their adequacy on at
least an annual basis. Copies of the terms of reference are
published on the Company’s website and are available
from the Company on request.
The Committee’s main functions are listed below:
y 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);
y to consider whether there is a need for the Company to
have its own internal audit function;
y 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;
y to review, and report to the Board on, the significant
financial reporting issues and judgements made in
connection with the preparation of the Company’s
financial statements, half-yearly financial reports,
announcements and related formal statements;
y 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;
y to meet with the Auditor to review the proposed audit
programme of work and the findings of the Auditor. The
Committee shall also use this as an opportunity to
assess the effectiveness of the audit process;
y to develop and implement policy on the engagement of
the Auditor to supply non-audit services. Non-audit fees
paid to the Auditor during the year under review
amounted to £7,000 (2022: £7,000), representing the
review of the Half-Yearly Financial Report. 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;
y to review a statement from the abrdn Group detailing
the arrangements in place within the group whereby
staff may, in confidence, escalate concerns about
possible improprieties in matters of financial reporting or
other matters;
y to make recommendations in relation to the
appointment of the Auditor and to approve the
remuneration and terms of engagement of the
Auditor; and
y to monitor and review the Auditor’s independence,
objectivity, effectiveness, resources and qualification.
Activities During the Year
The Audit Committee met twice during the year when,
amongst other things, it considered the Annual Report and
the Half-Yearly Financial Report in detail. Representatives
of the abrdn Group’s internal audit, risk and compliance
departments reported to the Committee at these
meetings on matters such as internal control systems, risk
management and the conduct of the business in the
context of its regulatory environment.
Audit Committee’s Report
Dunedin Income Growth Investment Trust PLC 67
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Internal Controls and Risk Management
There is an ongoing process for identifying, evaluating and
managing the Company’s significant business and
operational risks, that has been in place for the year
ended 31 January 2023 and up to the date of approval of
the Annual Report, is regularly reviewed by the Board and
accords with the FRC’s guidance on internal controls.
The Board has overall responsibility for ensuring that there
is a system of internal controls in place and a process for
reviewing its effectiveness. Any system of internal control
is designed to manage rather than eliminate the risk of
failure to achieve business objectives and can only provide
reasonable and not absolute assurance against material
misstatement or loss.
The design, implementation and maintenance of controls
and procedures to safeguard the assets of the Company
and to manage its affairs properly extends to operational
and compliance controls and risk management. The
Board, through the Audit Committee, has prepared its
own risk register which lists potential risks as set out in the
Strategic Report on pages 15 to 17. The Board considers
the potential cause and possible effect of these risks as
well as reviewing the controls in place to mitigate them.
Clear lines of accountability have been established
between the Board and the Manager. The Board receives
regular reports covering key performance and risk
indicators and considers control and compliance issues
brought to its attention. In carrying out its review, the
Board has had regard to the activities of the abrdn Group,
including its internal audit and compliance functions, and
the Auditor.
The Board has reviewed the abrdn Group’s process for
identifying and evaluating the significant risks faced by the
Company and the policies and procedures by which these
risks are managed. The Board has also reviewed the
effectiveness of the abrdn Group’s system of internal
control including its annual internal controls report
prepared in accordance with the International Auditing
and Assurance Standards Board’s International Standard
on Assurances Engagements (“ISAE”) 3402, “Assurance
Reports on Controls at a Service Organization”.
Risks are identified and documented through a risk
management framework by each function within the
abrdn Group’s activities. Risk is considered in the context
of the FRC’s guidance on internal controls and includes
financial, regulatory, market, operational and reputational
risk. This helps the internal audit risk assessment model
identify those functions for review. Any weaknesses
identified are reported to the Board and timetables are
agreed for implementing improvements to systems. The
implementation of any remedial action required is
monitored and feedback provided to the Board.
The key components designed to provide effective
internal control are outlined below:
y written agreements are in place which specifically
define the roles and responsibilities of the Manager and
other third party service providers;
y 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;
y 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;
y as a matter of course the abrdn Group’s compliance
department continually reviews the Company’s
operations; and
y at its meeting in March 2023, the Audit Committee
carried out an annual assessment of internal controls for
the year ended 31 January 2023 by considering
documentation from the abrdn Group, including the
internal audit and compliance functions and taking
account of events since 31 January 2023.
68 Dunedin Income Growth Investment Trust PLC
The Board has considered the need for an internal audit
function. However, the Company has no employees and
the day-to-day management of the Company’s assets
has been delegated to the abrdn Group which has its own
compliance and internal control systems. The Board has
therefore decided to place reliance on those systems
and internal audit procedures and has concluded that it is
not necessary for the Company to have its own internal
audit function.
Financial Statements and Significant Issues
During its review of the Company’s financial statements
for the year ended 31 January 2023, the Audit Committee
considered the following significant issues, in particular
those communicated by the Auditor during its planning
and reporting of the year-end audit:
Valuation and Existence of Investments
How the issue was addressed
- The Company’s
investments have been valued in accordance with the
accounting policies, as disclosed in note 2 c) to the
financial statements. All investments are in quoted
securities in active markets, are considered to be liquid
and have been categorised as Level 1 within the FRS102
fair value hierarchy. The portfolio holdings and their pricing
is reviewed and verified by the Manager on a regular basis
and management accounts, including a full portfolio
listing, are prepared for each Board meeting. The
Company uses the services of an independent Depositary
(The Bank of New York Mellon (International) Limited) to
hold the assets of the Company. The Depositary checks
the consistency of its records with those of the Manager
on a monthly basis and reports to the Board on an
annual basis.
Recognition of Investment Income
How the issue was addressed
- The recognition of
investment income is undertaken in accordance with the
stated accounting policies. In addition, the Directors
review the Company’s income, revenue forecasts and
dividend comparisons at each Board meeting.
Maintenance of Investment Trust Status
How the issue was addressed
- The Company has been
approved as an investment trust under Sections 1158 and
1159 of the Corporation Tax Act 2010. Ongoing
compliance with the eligibility criteria is monitored on a
regular basis by the Manager and reported at each
Board meeting.
Review of the Auditor
The Audit Committee has reviewed the effectiveness of
the Auditor, Deloitte LLP (“Deloitte”), including:
y 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.
y Quality of audit work - including the ability to resolve
issues in a timely manner (identified issues are
satisfactorily and promptly resolved), its
communications/presentation of outputs (the
explanation of the audit plan, any deviations from it and
the subsequent audit findings are comprehensive and
comprehensible), and working relationship with
management (the Auditor has a constructive working
relationship with the Manager).
y Quality of people and service - including continuity and
succession plans (the audit team is made up of
sufficient, suitably experienced staff with provision
made for knowledge of the investment trust sector and
retention on rotation of the audit partner).
In reviewing the Auditor, the Committee also took
into account the FRC’s Audit Quality Inspection Report
for Deloitte.
Audit Committee’s Report
Continued
Dunedin Income Growth Investment Trust PLC 69
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Tenure of the Auditor
Deloitte was initially appointed as the Company’s Auditor
at the Annual General Meeting on 23 May 2017. In
accordance with present professional guidelines the audit
partner is rotated after no more than five years and the
year ended 31 January 2023 is the first year for which the
present audit partner, Michael Caullay, has served.
In compliance with the appropriate regulations, the next
audit tender of the Company is due to take place by 2027.
The Audit Committee is satisfied that Deloitte is
independent and therefore supports the
recommendation to the Board that the re-appointment of
Deloitte be put to shareholders for approval at the Annual
General Meeting.
Jasper Judd
Chairman of the Audit Committee
5 April 2023
70 Dunedin Income Growth Investment Trust PLC
Financial
Statements
The Company’s net asset value
(“NAV”) increased by 2.4% on a total
return basis, underperforming the
FTSE All-Share Index which produced
a total return of 5.2%. The share price
total return for the year was 0.9%.
2.4% of the Company’s total assets are invested in
the Industrial Engineering sub-sector.
Dunedin Income Growth Investment Trust PLC 71
72 Dunedin Income Growth Investment Trust PLC
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulations. Company law requires
the Directors to prepare financial statements for each
financial year. Under that law the Directors have elected
to prepare the financial statements in accordance with UK
Accounting Standards, including FRS 102 ‘The Financial
Reporting Standard Applicable in the UK and Republic
of Ireland’.
Under Company law the Directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for
that period.
In preparing these financial statements, the Directors are
required to:
y select suitable accounting policies and then apply
them consistently;
y make judgments and estimates that are reasonable
and prudent;
y state whether applicable UK Accounting Standards
have been followed, subject to any material departures
disclosed and explained in the financial statements; and
y prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Company will continue in business.
The Directors are responsible for keeping proper
accounting records that disclose with reasonable
accuracy at any time the financial position of the
Company and enable them to ensure that the financial
statements comply with the Companies Act 2006. They
have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of
the Company and to prevent and detect fraud and
other irregularities.
Under applicable law and regulations, the Directors are
also responsible for preparing a Strategic Report,
Directors’ Report, Directors’ Remuneration Report and
Statement of Corporate Governance that comply with
that law and those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information
included on the Company’s website, but not for the
content of any information included on the website that
has been prepared or issued by third parties. Legislation in
the UK governing the preparation and dissemination of
financial statements may differ from legislation in
other jurisdictions.
The Directors confirm that to the best of their knowledge:
y the financial statements have been prepared in
accordance with applicable accounting standards and
give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company; and
y 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
y the Strategic Report and Directors’ Report include a fair
review of the development and performance of the
business and the position of the Company, together with
a description of the principal risks and uncertainties that
the Company faces.
On behalf of the Board
David Barron
Chairman
5 April 2023
Statement of Directors’ Responsibilities
Dunedin Income Growth Investment Trust PLC 73
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Report on the Financial Statements
1. Opinion
In our opinion the financial statements of Dunedin Income Growth Investment Trust PLC (the “Company”):
y give a true and fair view of the state of the Company’s affairs as at 31 January 2023 and of its return for the year
then ended;
y have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including
Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ and
the Statement of Recommended Practice issued by the Association of Investment Companies in July 2022 ‘Financial
Statements of Investment Trust Companies and Venture Capital Trusts’; and
y have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
y the Statement of Comprehensive Income;
y the Statement of Financial Position;
y the Statement of Changes in Equity;
y the Statement of Cash Flows; and
y the related notes 1 to 22.
The financial reporting framework that has been applied in their preparation is applicable law, United Kingdom
Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK
and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice)’ (“FRS 102”) and the Statement of
Recommended Practice issued by the Association of Investment Companies in July 2022 ‘Financial Statements of
Investment Trust Companies and Venture Capital Trusts’ (“SORP”).
2. Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Statements section of our report.
We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the Financial Reporting Council’s (the “FRC’s”) Ethical Standard as applied to
listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. The non-audit services provided to the Company for the year are disclosed in note 5 to the financial
statements. We confirm that we have not provided any non-audit services prohibited by the FRC’s Ethical Standard to
the Company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
3. Summary of Our Audit Approach
Key audit matters The key audit matter that we identified in the current year was valuation and ownership of
investments.
Materiality The materiality that we used in the current year was £4.5 million (2022: £4.6 million) which was
determined on the basis of 1% of net assets.
Scoping Audit work to respond to the risks of material misstatement was performed directly by the
audit engagement team.
Independent Auditor’s Report to Dunedin
Income Growth Investment Trust PLC
74 Dunedin Income Growth Investment Trust PLC
Significant changes in our
approach
There were no significant changes in our approach in the current year.
4. Conclusions Relating to Going Concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Company’s ability to continue to adopt the going concern basis of
accounting included:
y assessing liquidity and the ability of the Investment Manager to trade in the investment portfolio in order to cover
operational expenditure as it falls due;
y assessing whether the Company has complied with the covenant tests for its borrowing facilities to assess the
continued availability of the borrowing facilities; and
y assessing the appropriateness of the going concern disclosures included within the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a
period of at least twelve months from when the financial statements are authorised for issue.
In relation to the reporting on how the Company has applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether the
Directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sections of this report.
5. Key Audit 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 forming our
opinion thereon, and we do not provide a separate opinion on these matters.
5.1 Valuation and Ownership of Quoted Investments
Key audit matter description As an investment entity, the Company holds quoted investments which are valued at fair value of
£478.9 million as at 31 January 2023 (2022: £502.4 million) in accordance with FRS102 and the SORP,
which have decreased by 4.7% from the prior year-end. These represent the most quantitatively
significant financial statement line on the Statement of Financial Position, hence alteration of
investment quantity and/or prices is deemed more susceptible to manipulation by fraud.
The activities of the Company’s operations are outsourced to the administrator, BNP Paribas, and
investments are held by the Depositary, The Bank of New York Mellon (International) Limited.
Refer to note 2 (c) to the financial statements for the accounting policy on investments and details of
the investments are disclosed in note 10 to the financial statements.
Independent Auditor’s Report to Dunedin
Income Growth Investment Trust PLC
Continued
Dunedin Income Growth Investment Trust PLC 75
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
How the scope of our audit
responded to the key audit
matter
We performed the following procedures to address the valuation and ownership of the
investment portfolio:
y obtained an understanding of relevant controls at the administrator, BNP Paribas, over the
ownership and valuation of quoted investments and tested relevant controls;
y agreed 100% of the Company’s investment portfolio at the year end to confirmations received
directly from the Depositary,
The Bank of New York Mellon (International) Limited; and
y agreed 100% of the bid prices of quoted investments on the investment listing at the year end to
closing bid prices published by an independent pricing source.
In addition, we performed the following procedures:
y tested the accuracy of a sample of purchases and sales of investments; and
y assessed the completeness and appropriateness of disclosures in relation to fair value
measurements and liquidity risk.
Key observations Based on the work performed, we concluded that the valuation and ownership of investments
was appropriate.
6. Our Application of Materiality
6.1 Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the
economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in
planning the scope of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Materiality £4.5 million (2022: £4.6 million)
Basis for determining materiality 1% (2022: 1%) of net assets
Rationale for the benchmark applied Net assets has been chosen as it is considered the most relevant benchmark for
investors and is a key driver of shareholder value
76 Dunedin Income Growth Investment Trust PLC
6.2 Performance Materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate,
uncorrected and undetected misstatements exceed the materiality for the financial statements as a whole.
Performance materiality was set at 70% of materiality for the 2023 audit (2022: 70%). In determining performance
materiality, we considered the following factors:
a) our risk assessment, including our assessment of the Company’s overall control environment; and
b) our experience from previous audits has indicated a low number of corrected and uncorrected misstatements
identified in prior periods.
6.3 Error Reporting Threshold
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of
£0.2 million (2022: £0.2 million), as well as differences below that threshold that, in our view, warranted reporting on
qualitative grounds.
We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation
of the financial statements.
7. An Overview of the Scope of our Audit
7.1 Scoping
Our audit was scoped by obtaining an understanding of the Company and its environment, including internal control and
assessing the risks of material misstatement through quantitative and qualitative factors relating to each account
balance, class of transactions and disclosure. Audit work to respond to the risks of material misstatement was
performed directly by the audit engagement team.
7.2 Our Consideration of the Control Environment
The administrator of the Company, BNP Paribas, provides day to day administration of the Company and is also
responsible for the Company’s general administrative functions, including the calculation and publication of the net
asset value and maintenance of the Company’s accounting and statutory records.
As part of our risk assessment, we assessed the control environment in place at the administrator, to the extent relevant
to our audit. As part of this, we relied upon the external assurance report over controls report at the administrator and
adopted a controls reliance approach with respect to valuation and ownership of investments.
7.3 Our Consideration of Climate-Related Risks
In planning our audit, we have considered the potential impact of climate change on the Company’s business and its
financial statements. The Company continues to develop its assessment of the potential impacts of environmental,
social and governance (“ESG”) related risks, including climate change, as outlined on page 19.
As a part of our audit, we held discussions to understand the process of identifying climate-related risks, the
determination of mitigating actions and the impact on the Company’s financial statements. We performed our own
qualitative risk assessment of the potential impact of climate change on the Company’s financial stratements.
We have read the disclosures in relation to climate change made in the other information within the Annual Report
and ascertain whether the disclosures are materially consistent with the financial statements and our knowledge
from our audit.
Independent Auditor’s Report to Dunedin
Income Growth Investment Trust PLC
Continued
Dunedin Income Growth Investment Trust PLC 77
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
8. Other Information
The other information comprises the information included in the Annual Report, other than the financial statements and
our Auditor’s report thereon. The Directors are responsible for the other information contained within the Annual Report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to
be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether
this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
9. Responsibilities of the Directors
As explained more fully in the Directors’ Responsibilities Statement, the Directors are responsible for the preparation of
the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the
Directors determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue as a
going concern, disclosing as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic
alternative but to do so.
10. Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor’s report.
11. Extent to which the Audit was Considered Capable of Detecting Irregularities,
Including Fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The
extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
78 Dunedin Income Growth Investment Trust PLC
11.1 Identifying and Assessing Potential Risks Related to Irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-
compliance with laws and regulations, we considered the following:
y the nature of the industry and sector, control environment and business performance including the design of the
Company’s remuneration policies, key drivers for remuneration, bonus levels and performance targets;
y results of our enquiries of management and the Audit Committee about their own identification and assessment of the
risks of irregularities;
y any matters we identified having obtained and reviewed the Company’s documentation of its policies and procedures
relating to:
y identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of
non-compliance;
y detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or
alleged fraud;
y the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
y the matters discussed among the audit engagement team regarding how and where fraud might occur in the
financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for
fraud and identified the greatest potential for fraud in the following area: valuation and ownership of investments. In
common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of
management override.
We also obtained an understanding of the legal and regulatory framework that the Company operates in, focusing on
provisions of those laws and regulations that had a direct effect on the determination of material amounts and
disclosures in the financial statements. The key laws and regulations we considered in this context included the UK
Companies Act, the Listing Rules and UK tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial
statements but compliance with which may be fundamental to the Company’s ability to operate or to avoid a material
penalty. This included the requirements of the United Kingdom’s Financial Conduct Authority (“FCA”).
11.2 Audit Response to Risks Identified
As a result of performing the above, we identified valuation and ownership of investments as a key audit matter related
to the potential risk of fraud. The key audit matters section of our report explains the matters in more detail and also
describes the specific procedures we performed in response to that key audit matter.
In addition to the above, our procedures to respond to risks identified included the following:
y reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with
provisions of relevant laws and regulations described as having a direct effect on the financial statements;
y enquiring of management and the Audit Committee concerning actual and potential litigation and claims;
y performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of
material misstatement due to fraud;
y reading minutes of meetings of those charged with governance; and
y in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries
and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a
potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the
normal course of business.
Independent Auditor’s Report to Dunedin
Income Growth Investment Trust PLC
Continued
Dunedin Income Growth Investment Trust PLC 79
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team
members, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout
the audit.
Report on Other Legal and Regulatory Requirements
12. Opinions on Other Matters Prescribed by the Companies Act 2006
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance
with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
y 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
y the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit,
we have not identified any material misstatements in the Strategic Report or the Directors’ Report.
13. Corporate Governance Statement
The Listing Rules require us to review the Directors' statement in relation to going concern, longer-term viability and that
part of the Corporate Governance Statement relating to the Company’s compliance with the provisions of the UK
Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with the financial statements and our knowledge obtained
during the audit:
y the Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and
any material uncertainties identified set out on page 59;
y the Directors’ explanation as to its assessment of the Company’s prospects, the period this assessment covers and
why the period is appropriate set out on page 19;
y the Directors' statement on fair, balanced and understandable set out on page 72;
y the Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on
page 15;
y the section of the Annual Report that describes the review of effectiveness of risk management and internal control
systems set out on pages 67 to 68; and
y the section describing the work of the Audit Committee set out on pages 66 to 69.
14. Matters on Which we are Required to Report by Exception
14.1 Adequacy of Explanations Received and Accounting Records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
y we have not received all the information and explanations we require for our audit; or
y adequate accounting records have not been kept, or returns adequate for our audit have not been received from
branches not visited by us; or
y the financial statements are not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
80 Dunedin Income Growth Investment Trust PLC
14.2 Directors’ Remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of Directors’
remuneration have not been made or the part of the Directors’ Remuneration Report to be audited is not in agreement
with the accounting records and returns.
We have nothing to report in respect of these matters.
15. Other Matters Which we Are Required to Address
15.1 Auditor Tenure
Following the recommendation of the Audit Committee, we were appointed by shareholders at the Annual General
Meeting on 23 May 2017 to audit the financial statements for the period ending 31 January 2018 and subsequent
financial periods. The period of total uninterrupted engagement including previous renewals and reappointments of the
firm is six years, covering the years ending 31 January 2018 to 31 January 2023.
15.2 Consistency of the Audit Report with the Additional Report to the Audit Committee
Our audit opinion is consistent with the additional report to the Audit Committee we are required to provide in
accordance with ISAs (UK).
16. Use of Our Report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as
a body, for our audit work, for this report, or for the opinions we have formed.
Michael Caullay (Senior Statutory Auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
Glasgow, United Kingdom
5 April 2023
Independent Auditor’s Report to Dunedin
Income Growth Investment Trust PLC
Continued
Dunedin Income Growth Investment Trust PLC 81
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Year ended 31 January 2023 Year ended 31 January 2022
Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
(Losses)/gains on investments 10 – (13,996) (13,996) – 17,551 17,551
Currency (loss)/profit – (558) (558) – 525 525
Income 3 21,950 – 21,950 21,518 – 21,518
Investment management fee 4 (682) (1,022) (1,704) (727) (1,091) (1,818)
Administrative expenses 5 (951) – (951) (882) – (882)
Net return before finance costs and taxation 20,317 (15,576) 4,741 19,909 16,985 36,894
Finance costs 6 (597) (888) (1,485) (569) (824) (1,393)
Return before taxation 19,720 (16,464) 3,256 19,340 16,161 35,501
Taxation 7 (412) – (412) (267) – (267)
Return after taxation 19,308 (16,464) 2,844 19,073 16,161 35,234
Return per Ordinary share (pence) 9 13.02 (11.10) 1.92 12.87 10.91 23.78
The column of this statement headed “Total” represents the profit and loss account of the Company.
All revenue and capital items in the above statement derive from continuing operations.
The accompanying notes are an integral part of the financial statements.
Statement of Comprehensive Income
82 Dunedin Income Growth Investment Trust PLC
As at As at
31 January 2023 31 January 2022
Notes £’000 £’000
Non-current assets
Investments at fair value through profit or loss 10 478,895 502,423
Current assets
Debtors 11 2,452 2,672
Cash and cash equivalents 12,267 2,855
14,719 5,527
Creditors: amounts falling due within one year
Bank loan 12 (13,762) (13,034)
Other creditors 12 (1,509) (606)
(15,271) (13,640)
Net current liabilities (552) (8,113)
Total assets less current liabilities 478,343 494,310
Creditors: amounts falling due after more than one year 13 (29,738) (29,731)
Net assets 448,605 464,579
Capital and reserves
Called-up share capital 14 38,419 38,419
Share premium account 4,908 4,619
Capital redemption reserve 1,606 1,606
Capital reserve 379,839 396,303
Revenue reserve 16 23,833 23,632
Equity shareholders’ funds 448,605 464,579
Net asset value per Ordinary share (pence) 17 302.57 313.56
The financial statements were approved and authorised for issue by the Board of Directors on 5 April 2023 and were signed on its
behalf by:
David Barron
Director
The accompanying notes are an integral part of the financial statements.
Statement of Financial Position
Dunedin Income Growth Investment Trust PLC 83
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
For the year ended 31 January 2023
Share Capital
Share premium redemption Capital Revenue
capital account reserve reserve reserve Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
Balance at 31 January 2022 38,419 4,619 1,606 396,303 23,632 464,579
Return after taxation - - - (16,464) 19,308 2,844
Issue of shares from Treasury - 289 - - - 289
Dividends paid 8 - - - - (19,107) (19,107)
Balance at 31 January 2023 38,419 4,908 1,606 379,839 23,833 448,605
For the year ended 31 January 2022
Share Capital
Share premium redemption Capital Revenue
capital account reserve reserve reserve Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
Balance at 31 January 2021 38,419 4,619 1,606 380,142 23,507 448,293
Return after taxation - - - 16,161 19,073 35,234
Dividends paid 8 - - - - (18,948) (18,948)
Balance at 31 January 2022 38,419 4,619 1,606 396,303 23,632 464,579
The Revenue reserve and the part of the Capital reserve represented by realised capital gains represent the amount of the
Company’s reserves distributable by way of dividend.
The accompanying notes are an integral part of the financial statements.
Statement of Chan
g
es in Equity
84 Dunedin Income Growth Investment Trust PLC
Year ended Year ended
31 January 2023 31 January 2022
Notes £’000 £’000
Operating activities
Net return before finance costs and taxation 4,741 36,894
Adjustment for:
Losses/(gains) on investments 13,996 (17,551)
Currency losses/(gains) 558 (525)
Decrease/(increase) in accrued dividend income 18 (223)
Stock dividends included in dividend income – (1,333)
(Increase)/decrease in other debtors excluding tax (16) 5
Increase/(decrease) in other creditors 186 (66)
Overseas withholding tax (1,052) (811)
Net cash flow from operating activities 18,431 16,390
Investing activities
Purchases of investments (109,784) (142,812)
Sales of investments 120,822 145,846
Net cash from investing activities 11,038 3,034
Financing activities
Interest paid (1,409) (1,380)
Dividends paid 8 (19,107) (18,948)
Issue of shares from treasury 289 –
Loan repayment – (13,323)
Loan drawdowns – 13,323
Net cash used in financing activities (20,227) (20,328)
Increase/(decrease) in cash and cash equivalents 9,242 (904)
Analysis of changes in cash and cash equivalents during the year
Opening balance 2,855 4,002
Effect of exchange rate fluctuations on cash held 170 (243)
Increase/(decrease) in cash as above 9,242 (904)
Closing balance 12,267 2,855
The accompanying notes are an integral part of the financial statements. A reconciliation of the changes in net debt can be found in
note 18 on page 96.
Statement of Cash Flows
Dunedin Income Growth Investment Trust PLC 85
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
1. Principal activity
The Company is a closed-end investment company, registered in Scotland No. SC000881, with its Ordinary shares being listed
on the London Stock Exchange.
2. Accounting policies
(a) Basis of preparation and going concern. The financial statements have been prepared in accordance with Financial
Reporting Standard 102, the requirements of the Companies Act 2006 and with the AIC (“Association of Investment
Companies”) Statement of Recommended Practice ‘Financial Statements of Investment Trust Companies and Venture
Capital Trusts’ issued in July 2022. The financial statements are prepared in sterling which is the functional currency of
the Company and rounded to the nearest £’000. They have also been prepared on the assumption that approval as an
investment trust will continue to be granted.
The Company’s assets consist mainly of equity shares in companies listed on the London Stock Exchange
and in most circumstances are considered to be realisable within a short timescale. The Board has set
limits for borrowing and derivative contract positions and regularly reviews actual exposures, cash flow
projections and compliance with loan covenants. The Directors have considered the fact that Company’s
investments comprise readily realisable securities which can be sold to meet funding requirements if
necessary. The Directors have also performed stress testing on the portfolio and the loan financial
covenants.
The Company has borrowings in the form of £30 million 3.99% Loan Notes that mature in December 2045, and a £30
million multi-currency revolving credit facility with The Bank of Nova Scotia, London Branch, which matures in July 2023.
The Board has reviewed indicative quotes for the renewal of the multi-currency revolving credit facility and expects to
be able to renew it upon its maturity with a similar facility.
Following this assessment, the Directors believe that the Company has adequate financial resources to continue in
operational existence for the foreseeable future and for at least twelve months from the date of this Report.
Accordingly, they continue to adopt the going concern basis of accounting in preparing the financial statements.
Critical accounting judgements and key sources of estimation uncertainty. The preparation of financial statements
requires the use of certain significant accounting judgements, estimates and assumptions which requires
management to exercise its judgement in the process of applying the accounting policies which are continually
evaluated. The Board considers that there are no accounting judgements, estimates and assumptions which would
significantly impact the financial statements.
(b) Revenue, expenses and interest payable. Income from equity investments (other than special dividends), including taxes
deducted at source, is included in revenue by reference to the date on which the investment is quoted ex-dividend.
Special dividends are credited to revenue or capital according to the circumstances. Foreign income is converted at
the exchange rate applicable at the time of receipt. Interest receivable on short term deposits and expenses are
accounted for on an accruals basis. Income from underwriting commission is recognised as earned. Interest payable is
calculated on an effective yield basis. Stock lending income is recognised on an accruals basis.
Underwriting commission is taken to revenue, unless any shares underwritten are required to be taken up, in which case
the proportionate commission received is deducted from the cost of the investment.
Expenses are charged to capital when they are incurred in connection with the maintenance or enhancement of the
value of investments. In this respect, the investment management fee and relevant finance costs, including the
amortisation of expenses, are allocated between revenue and capital in line with the Board’s expectation of returns
from the Company’s investments over the long-term of 40% to revenue and 60% to capital.
Notes to the Financial Statements
For the year ended 31 January 2023
86 Dunedin Income Growth Investment Trust PLC
(c) Investments. Investments have been designated upon initial recognition as fair value through profit or loss. Investments
are recognised and de-recognised at trade date where a purchase or sale is under a contract whose terms require
delivery within the timeframe established by the market concerned, and are measured initially at fair value.
Subsequent to initial recognition, investments are recognised at fair value through profit or loss. For listed investments,
this is deemed to be bid market prices or closing prices for SETS stocks sourced from the London Stock Exchange. SETS
is the London Stock Exchange electronic trading service covering most of the market including all FTSE All-Share and
the most liquid AIM constituents. Gains or losses arising from changes in fair value are included in net profit or loss for
the period as a capital item in the Statement of Comprehensive Income.
(d) Dividends payable. Final dividends payable to equity shareholders are recognised in the financial statements when they
have been approved by Shareholders and become a liability of the Company. Interim dividends are recognised in the
financial statements in the period in which they are paid.
(e) Nature and purpose of reserves
Called-up share capital. The Ordinary share capital on the Statement of Financial Position relates to the number of
shares in issue and in treasury. Only when the shares are cancelled, either from treasury or directly, is a transfer made
to the capital redemption reserve.
Share premium account. The balance classified as share premium includes the premium above the nominal value from
the proceeds on issue of any equity share capital comprising Ordinary shares of 25p.
Capital redemption reserve. The capital redemption reserve is used to record the amount equivalent to the nominal
value of any of the Company’s own shares purchased and cancelled in order to maintain the Company’s capital.
Capital reserve. Gains or losses on the disposal of investments and changes in the fair values of investments are
transferred to the capital reserve. The capital element of the management fee and relevant finance costs are charged
to this reserve. Any associated tax relief is also credited to this reserve. Certain other items including gains or losses on
foreign currency and special dividends are also allocated to this reserve as appropriate. The part of this reserve
represented by realised capital gains is available for distribution by way of dividend.
The costs of share buybacks to be held in treasury are also deducted from this reserve.
Revenue reserve. Income and expenses which are recognised in the revenue column of the Statement of
Comprehensive Income are transferred to the revenue reserve. The revenue reserve is available for distribution by way
of dividend.
(f) Taxation. The charge for taxation is based on the profit for the year and takes into account taxation deferred because
of timing differences between the treatment of certain items for taxation and accounting purposes.
Owing to the Company’s status as an investment trust, and the intention to continue meeting the conditions required to
obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses
arising on the revaluation or disposal of investments.
(g) Foreign currency. Monetary assets and liabilities and non-monetary assets held at fair value denominated in foreign
currencies are converted into sterling at the rate of exchange ruling at the reporting date. Transactions during the year
involving foreign currencies are converted at the rate of exchange ruling at the transaction date. Gains or losses arising
from a change in exchange rates subsequent to the date of a transaction are included as a currency gain or loss in
revenue or capital in the Statement of Comprehensive Income, depending on whether the gain or loss is of a revenue
or capital nature. The Company receives a proportion of its investment income in foreign currency. These amounts are
translated at the rate ruling on the date of receipt.
Notes to the Financial Statements
Continued
Dunedin Income Growth Investment Trust PLC 87
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
(h) Traded options. The Company may enter into certain derivative contracts (e.g. options). Option contracts are
accounted for as separate derivative contracts and are therefore shown in other assets or other liabilities at their fair
value. The initial fair value is based on the initial premium, which is recognised upfront. The premium received and fair
value changes in the open position which occur due to the movement in underlying securities are recognised in the
revenue column, losses realised on the exercise of the contracts are recorded in the capital column of the Statement of
Comprehensive Income.
In addition, the Company may enter into derivative contracts to manage market risk and gains or losses arising on such
contracts are recorded in the capital column of the Statement of Comprehensive Income.
(i) Borrowings. Borrowings are measured initially at the fair value of the consideration received, net of any issue expenses,
and subsequently at amortised cost using the effective interest method. The finance costs of such borrowings are
accounted for on an accruals basis using the effective interest rate method and are charged 40% to revenue and 60%
to capital in the Statement of Comprehensive Income to reflect the Company’s investment policy and prospective
income and capital growth.
(j) Treasury shares. When the Company purchases the Company’s equity share capital to be held as treasury shares, the
amount of the consideration paid, which includes directly attributable costs, is net of any tax effects, and is recognised
as a deduction from the capital reserve. When these shares are sold subsequently, the amount received is recognised
as an increase in equity, and any resulting surplus on the transaction is transferred to the share premium account and
any resulting deficit is transferred from the capital reserve.
3. Income
2023 2022
£’000 £’000
Income from investments
UK dividend income 13,643 14,463
Overseas dividends 6,262 3,895
Stock dividends - 1,333
19,905 19,691
Other income
Income on derivatives 2,007 1,826
Deposit interest -
Interest received on withholding tax refunds 38 1
2,045 1,827
Total income 21,950 21,518
During the year, the Company earned premiums totalling £2,007,000 (2022 - £1,826,000) in exchange for entering into
derivative transactions. The Company had no open positions in derivative contracts at 31 January 2023 (2022 - no open
positions). Losses realised on the exercise of derivative transactions are disclosed in note 10.
88 Dunedin Income Growth Investment Trust PLC
4. Management fee
2023 2022
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Management fee 682 1,022 1,704 727 1,091 1,818
The Company has an agreement with abrdn Fund Managers Limited (“aFML”) for the provision of investment management,
risk management, accounting, administrative and secretarial services. The management fee is calculated and charged, on a
monthly basis, at 0.45% per annum on the first £225 million, 0.35% per annum on the next £200 million and 0.25% per annum on
amounts over £425 million of the net assets of the Company, with debt at par and excluding commonly managed funds. The
balance due at the year end was £286,000 (2022 – £154,000). The management fee is allocated 40% to revenue and 60% to
capital. There were no commonly managed funds held in the portfolio during the year to 31 January 2023 (2022 – none).
The management agreement may be terminated by either party on six months’ written notice.
5. Administrative expenses
2023 2022
£’000 £’000
Directors’ fees 153 142
Auditor’s remuneration (excluding VAT):
– fees payable to the Company’s Auditor for the audit of the Company’s
annual accounts
30 23
– fees payable to the Company’s Auditor for other services:
– interim review 7 7
Irrecoverable VAT 61 98
Promotional activities 243 189
Registrar’s fees 43 43
Share plan fees 120 85
Printing and postage 65 48
Other expenses 229 247
951 882
Expenses of £243,000 (2022 – £189,000) were paid to aFML in respect of the promotional activities of the Company. The
balance outstanding at the year end was £81,000 (2022 – £24,000).
The Company was granted VAT registered status during the year, backdated to 1 January 2021. As a result the above current
year expenses, where applicable, are disclosed net of VAT.
Notes to the Financial Statements
Continued
Dunedin Income Growth Investment Trust PLC 89
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
6. Finance costs
2023 2022
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Bank loan 110 166 276 68 102 170
Loan Notes - repayable after more than five years 479 718 1,197 479 718 1,197
Amortised Loan Notes issue expenses 3 4 7 3 4 7
Bank overdraft 5 - 5 19 - 19
597 888 1,485 569 824 1,393
Finance costs (excluding bank overdraft interest) are allocated 40% to revenue and 60% to capital.
7. Taxation
2023 2022
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
(a) Analysis of charge for the year
Overseas tax suffered 1,154 – 1,154 961 – 961
Overseas tax reclaimable (742) – (742) (694) – (694)
Total tax charge for the year 412 – 412 267 – 267
90 Dunedin Income Growth Investment Trust PLC
(b) Factors affecting the tax charge for the year. The UK corporation tax rate is 19% (2022 – 19%). The tax assessed for the
year is lower than the rate of corporation tax. The differences are explained below:
2023 2022
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Return before taxation 19,720 (16,464) 3,256 19,340 16,161 35,501
Corporation tax at 19% (2022 – 19%) 3,747 (3,128) 619 3,675 3,071 6,746
Effects of: –
Non-taxable UK dividend income (2,628) – (2,628) (2,748) – (2,748)
Non-taxable stock dividends – – (254) – (254)
Capital losses/(gains) on investments not
taxable
– 2,659 2,659 – (3,335) (3,335)
Expenses not deductible for tax purposes 1 – 1 1 – 1
Currency (gains)/losses not taxable – 106 106 – (99) (99)
Overseas taxes 412 – 412 267 – 267
Non-taxable overseas dividends (1,050) – (1,050) (687) – (687)
Excess management expenses (70) 363 293 13 363 376
Total tax charge 412 – 412 267 – 267
(c) Factors that may affect future tax charges. At the year end, the Company has, for taxation purposes only, accumulated
unrelieved management expenses and loan relationship deficits of £133,906,000 (2022 – £132,362,000). A deferred tax
asset in respect of this has not been recognised and these unrelieved expenses will only be utilised if the Company has
profits chargeable to corporation tax in the future.
The UK corporation tax rate will increase to 25% with effect from 1 April 2023. This will impact, where appropriate, the
value of UK deferred tax balances and the tax charged on future UK profits.
Notes to the Financial Statements
Continued
Dunedin Income Growth Investment Trust PLC 91
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
8. Ordinary dividends on equity shares
2023 2022
£’000 £’000
Amounts recognised as distributions paid during the year:
Third interim dividend for 2022 – 3.00p (2021 – 3.00p) 4,445 4,445
Final dividend for 2022 – 3.90p (2021 – fourth interim – 3.80p) 5,782 5,630
First interim dividend for 2023 – 3.00p (2022 – 3.00p) 4,448 4,445
Second interim dividend for 2023 – 3.00p (2022 – 3.00p) 4,448 4,445
Return of unclaimed dividends
A
(16) (17)
19,107 18,948
A
Unclaimed dividends returned to the Company during the year ended 31 January 2023 have been donated to charity (see note 22).
A third interim dividend of 3.00p per Ordinary share was declared on 6 December 2022, payable on 24 February 2023 to
shareholders on the register on 3 February 2023 and has not been included as a liability in these financial statements. The final
dividend of 4.10p per Ordinary share was approved by the Board on 5 April 2023, payable on 30 May 2023 to shareholders on
the register on 5 May 2023 and has not been included as a liability in the financial statements.
The table below sets out the total dividends paid and proposed in respect of the financial year, which is the basis upon which
the requirements of Sections 1158–1159 of the Corporation Tax Act 2010 are considered. The net revenue available for
distribution by way of dividend for the year is £19,308,000 (2022 – £19,073,000).
2023 2022
£’000 £’000
First interim dividend for 2023 – 3.00p (2022 – 3.00p) 4,448 4,445
Second interim dividend for 2023 – 3.00p (2022 – 3.00p) 4,448 4,445
Third interim dividend for 2023 – 3.00p (2022 – 3.00p) 4,448 4,445
Final dividend for 2023 – 4.10p (2022 – 3.90p) 6,079 5,782
19,423 19,117
The final dividend is based on the latest share capital of 148,264,670 Ordinary shares excluding those held in treasury.
9. Return
p
er Ordinar
y
share
2023 2022
£’000 p £’000 p
Revenue return 19,308 13.02 19,073 12.87
Capital return (16,464) (11.10) 16,161 10.91
Total return 2,844 1.92 35,234 23.78
Weighted average number of Ordinary shares in issue 148,256,451 148,164,670
92 Dunedin Income Growth Investment Trust PLC
10. Investments at fair value through profit or loss
2023 2022
£’000 £’000
Opening book cost 428,488 410,222
Investment holdings gains 73,935 77,208
Opening fair value 502,423 487,430
Analysis of transactions made during the year
Purchases 110,433 144,145
Sales – proceeds (119,965) (146,703)
(Losses)/gains on investments (13,996) 17,551
Closing fair value 478,895 502,423
Closing book cost 424,815 428,488
Closing investment holdings gains 54,080 73,935
Closing fair value 478,895 502,423
The Company received £119,965,000 (2022 – £146,703,000) from investments sold in the year. The book cost of these
investments when they were purchased was £114,106,000 (2022 – £125,879,000). These investments have been revalued
over time and until they were sold any unrealised gains/losses were included in the fair value of the investments.
The realised gains figure above includes losses realised on the exercise of traded options of £625,000 (2022 – £971,000).
Premiums received of £2,007,000 (2022 – £1,826,000) are included within income per note 3.
Transaction costs. During the year expenses were incurred in acquiring or disposing of investments classified as fair value
through profit or loss. These have been expensed through capital and are included within gains/(losses) on investments in
the Statement of Comprehensive Income. The total costs were as follows:
2023 2022
£’000 £’000
Purchases 506 592
Sales 76 79
582 671
The above transaction costs are calculated in line with the AIC SORP. The transaction costs in the Company’s Key
Information Document are calculated on a different basis and in line with the PRIIPs regulations.
Notes to the Financial Statements
Continued
Dunedin Income Growth Investment Trust PLC 93
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
11. Debtors: amounts falling due within one year
2023 2022
£’000 £’000
Net dividends and interest receivable 763 781
Tax recoverable 1,657 1,017
Amounts due from brokers - 857
Other loans and receivables 32 17
2,452 2,672
12. Creditors: amounts falling due within one year
2023 2022
(a) Bank loan £’000 £’000
EUR 15,600,000 – 11 February 2022 – 13,034
EUR 15,600,000 – 11 February 2023 13,762 –
13,762 13,034
The Company has a £30,000,000 multi–currency revolving credit facility with The Bank of Nova Scotia, London Branch
committed until 13 July 2023. Under the terms of the facility, subject to the lender’s credit approval, the Company has
the option to increase the level of the facility from £30,000,000 to £40,000,000 at any time, should further investment
opportunities be identified. As at 31 January 2023 €15,600,000 had been drawn down at a rate of 3.618% (2022 –
€15,600,000 at a rate of 1.0%), which matured on 7 February 2023. At the date this Report was approved €15,600,000
had been drawn down at a rate of 3.551%, maturing on 6 April 2023. The terms of the loan facility contain covenants
that the adjusted asset coverage is not be less than 4.00 to 1.00 and that the minimum net assets of the Company are
£200 million.
2023 2022
(b) Other creditors £’000 £’000
Loan Notes and bank loan interest 257 189
Amount due to brokers 649 –
Sundry creditors 603 417
1,509 606
94 Dunedin Income Growth Investment Trust PLC
13. Creditors: amounts falling due after more than one year
2023 2022
£’000 £’000
3.99% Loan Notes 2045 30,000 30,000
Unamortised Loan Note issue expenses (262) (269)
29,738 29,731
The 3.99% Loan Notes were issued in December 2015 and are due to be redeemed at par on 8 December 2045. Interest is
payable in half-yearly instalments in June and December. The Loan Notes are secured by a floating charge over the whole
of the assets of the Company. The Company has complied with the Loan Note Trust Deed covenant that total net
borrowings (ie. after the deduction of cash balances) should not exceed 33% of the Company’s net asset value and that the
Company’s net asset value should not be less than £200 million.
The fair value of the Loan Notes as at 31 January 2023 was £29,393,000 (2022 - £36,441,000), the value being calculated per
the disclosure in note 19. The effect on the net asset value of deducting the Loan Notes at fair value rather than at par is
disclosed in note 17.
14. Called-up share capital
2023 2022
£’000 £’000
Allotted, called up and fully paid:
148,264,670 (2022 - 148,164,670) Ordinary shares of 25p each - equity 37,066 37,041
Treasury shares:
5,413,265 (2022 - 5,513,265) Ordinary shares of 25p each - equity 1,353 1,378
38,419 38,419
The Ordinary share capital on the Statement of Financial Position relates to the number of shares in issue and in treasury.
Only when the shares are cancelled, either from treasury or directly, is a transfer made to the capital redemption reserve.
During the year the Company issued 100,000 Ordinary shares at a price of 290p per share (2022 - no shares issued or
repurchased). All of these shares were released from treasury.
Notes to the Financial Statements
Continued
Dunedin Income Growth Investment Trust PLC 95
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
15. Analysis of changes in financing during the year
2023 2022
Equity Equity
share capital share capital
(including Loan (including Loan
premium) Notes premium) Notes
£’000 £’000 £’000 £’000
Opening balance at 31 January 2022 43,038 29,731 43,038 29,724
Issue of shares from Treasury 289 - - -
Movement in unamortised Loan Notes issue expenses - 7 - 7
Closing balance at 31 January 2023 43,327 29,738 43,038 29,731
16. Revenue reserve per share
The following information is presented supplemental to the financial statements to show the Companies Act position at the
year end.
2023 2022
Revenue reserve (£’000) 23,833 23,632
Number of Ordinary shares in issue at year end 148,264,670 148,164,670
Revenue reserve per Ordinary share (p) 16.07 15.95
Less: – third interim dividend (p) (3.00) (3.00)
– final dividend (p) (4.10) (3.90)
Revenue reserve per Ordinary share (p) 8.97 9.05
17. Net asset value per share
Equity shareholders’ funds have been calculated in accordance with the provisions of FRS 102. The analysis of equity
shareholders’ funds on the face of the Statement of Financial Position does not reflect the rights under the Articles of
Association of the Ordinary shareholders on a return of assets. These rights are reflected in the net asset value and the net
asset value per share attributable to Ordinary shareholders at the year end, adjusted to reflect the deduction of the Loan
Notes at par. A reconciliation between the two sets of figures is as follows:
2023 2022
Net assets attributable (£’000) 448,605 464,579
Number of Ordinary shares in issue at year end
A
148,264,670 148,164,670
Net asset value per Ordinary share 302.57p 313.56p
A
Excluding shares held in treasury.
96 Dunedin Income Growth Investment Trust PLC
Adjusted net assets 2023 2022
Net assets attributable (£’000) as above 448,605 464,579
Unamortised Loan Note issue expenses (note 13) (262) (269)
Adjusted net assets attributable (£’000) 448,343 464,310
Number of Ordinary shares in issue at year end
A
148,264,670 148,164,670
Adjusted net asset value per Ordinary share 302.39p 313.37p
A
Excluding shares held in treasury.
Net assets – debt at fair value £’000 £’000
Net assets attributable 448,605 464,579
Amortised cost Loan Notes 29,738 29,731
Market value Loan Notes (29,393) (36,441)
Net assets attributable 448,950 457,869
Number of Ordinary shares in issue at the period end
A
148,264,670 148,164,670
Net asset value per Ordinary share (debt at fair value) 302.80p 309.03p
A
Excluding shares held in treasury.
18. Analysis of changes in net debt
At Currency Non-cash At
31 January 2022 differences Cash flows movements 31 January 2023
£’000 £’000 £’000 £’000 £’000
Cash and cash equivalents 2,855 170 9,242 - 12,267
Debt due within one year (13,034) (728) - - (13,762)
Debt due after more than one year (29,731) - - (7) (29,738)
(39,910) (558) 9,242 (7) (31,233)
Notes to the Financial Statements
Continued
Dunedin Income Growth Investment Trust PLC 97
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
At Currency Non-cash At
31 January 2021 differences Cash flows movements 31 January 2022
£’000 £’000 £’000 £’000 £’000
Cash and cash equivalents 4,002 (243) (904) - 2,855
Debt due within one year (13,802) 768 - - (13,034)
Debt due after more than one year (29,724) - - (7) (29,731)
(39,524) 525 (904) (7) (39,910)
A statement reconciling the movement in net funds to the net cash flow has not been presented as there are no differences
from the above analysis.
19. Financial instruments and risk management
The Company’s investment activities expose it to various types of financial risk associated with the financial instruments and
markets in which it invests. The Company’s financial instruments comprise securities and other investments, cash balances,
loans and debtors and creditors that arise directly from its operations; for example, in respect of sales and purchases
awaiting settlement, and debtors for accrued income. The Company also has the ability to enter into derivative transactions
in the form of option contracts for the purpose of generating income and futures/options for hedging market exposures.
During the year, the Company entered into certain options contracts for the purpose of generating income. Positions closed
during the year realised a loss of £625,000 (2022 - £971,000). As disclosed in note 3, the premium received and fair value
changes in respect of options written in the year was £2,007,000 (2022 - £1,826,000). The largest position in derivative
contracts held during the year at any given time was £889,000 (2022 - £558,000). The Company had no open positions in
derivative contracts at 31 January 2023 (2022 - none).
The Board relies on abrdn Fund Managers Limited (“aFML” or the “Manager”) for the provision of risk management activities
under the terms of its management agreement with aFML (further details of which are included under note 4). The Board
regularly reviews and agrees policies for managing each of the key financial risks identified with the Manager. The types of
risk and the Manager’s approach to the management of each type of risk, are summarised below. Such approach has been
applied throughout the year and has not changed since the previous accounting period. The numerical disclosures exclude
short-term debtors and creditors on the grounds that they are not considered to be material.
The Company’s Manager has an independent Investment Risk department for reviewing the investment risk parameters of
all core equity, fixed income and alternative asset classes on a regular basis. The department reports to the Manager’s
Performance Review Committee which is chaired by the Manager’s Chief Investment Officer. The department’s
responsibility is to review and monitor ex-ante (predicted) portfolio risk and style characteristics using best practice, industry
standard multi-factor models.
Risk management framework. The directors of aFML collectively assume responsibility for aFML’s obligations under the
AIFMD including reviewing investment performance and monitoring the Company’s risk profile during the year.
98 Dunedin Income Growth Investment Trust PLC
aFML is a fully integrated member of the abrdn Group (the “Group”) which provides a variety of services and support to
aFML in the conduct of its business activities, including in the oversight of the risk management framework for the Company.
aFML has delegated the day to day administration of the investment policy to abrdn Limited, which is responsible for
ensuring that the Company is managed within the terms of its investment guidelines and the limits set out in its pre-
investment disclosures to investors (details of which can be found on the Company’s website). aFML has retained
responsibility for monitoring and oversight of investment performance, product risk and regulatory and operational risk for
the Company.
The Manager conducts its risk oversight function through the operation of the Group’s risk management processes and
systems which are embedded within the Group’s operations. The Group’s Risk Division supports management in the
identification and mitigation of risks and provides independent monitoring of the business. The Division includes Compliance,
Business Risk, Market Risk, Risk Management and Legal. The team is headed up by the Group’s Chief Risk Officer, who reports
to the Chief Executive Officers of the Group. The Risk Division achieves its objective through embedding the Risk
Management Framework throughout the organisation using the Group’s operational risk management system (“SHIELD”).
The Group’s Internal Audit Department is independent of the Risk Division and reports directly to the Group’s Chief Executive
Officers and to the Audit Committee of the Group’s Board of Directors. The Internal Audit Department is responsible for
providing an independent assessment of the Group’s control environment.
The Group’s corporate governance structure is supported by several committees to assist the board of directors of abrdn, its
subsidiaries and the Company to fulfil their roles and responsibilities. The Group’s Risk Division is represented on all
committees, with the exception of those committees that deal with investment recommendations. The specific goals and
guidelines on the functioning of those committees are described on the committees’ terms of reference.
Risk Management. The main risks the Company faces from its financial instruments are (i) market risk (comprising interest
rate risk, currency risk and other price risk), (ii) liquidity risk and (iii) credit risk.
The Board regularly reviews and agrees policies for managing each of these risks. The Group’s policies for managing these
risks are summarised below and have been applied throughout the year. The numerical disclosures exclude short-term
debtors and creditors, other than for currency disclosures.
(i) Market risk. Market risk comprises three elements - interest rate risk, currency risk and price risk.
(a) Interest rate risk. Interest rate movements may affect:
- the fair value of the investments in fixed interest rate securities;
- the level of income receivable on cash deposits; and
- interest payable on the Company’s variable rate borrowings.
Management of the risk. The possible effects on fair value and cash flows that could arise as a result of changes in
interest rates are taken into account when making investment and borrowing decisions.
The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these
on a regular basis. Borrowings comprise fixed rate, revolving, and uncommitted facilities. Details of borrowings at 31
January 2023 are shown in notes 12 and 13.
Notes to the Financial Statements
Continued
Dunedin Income Growth Investment Trust PLC 99
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Interest risk profile. The interest rate risk profile of the portfolio of financial assets and liabilities at the Statement of
Financial Position date was as follows:
Weighted
average Weighted
period for average
which interest Fixed Floating
rate is fixed rate rate rate
At 31 January 2023 Years % £’000 £’000
Assets
Sterling – – – 12,267
Total assets – – – 12,267
Liabilities
Bank loans 0.17 3.62 (13,762) –
Loan Notes 22.87 3.99 (29,738) –
Total liabilities – – (43,500) –
Weighted
average Weighted
period for average
which interest Fixed Floating
rate is fixed rate rate rate
At 31 January 2022 Years % £’000 £’000
Assets
Sterling – – – 2,855
Total assets – – – 2,855
Liabilities
Bank loans 0.08 1.00 (13,034) –
Loan Notes 23.87 3.99 (29,731) –
Total liabilities – – (42,765) –
The weighted average interest rate is based on the current yield of each asset, weighted by its market value. The
weighted average interest rate on bank loans is based on the interest rate payable, weighted by the total value of the
loans. The maturity dates of the Company’s borrowings are shown in notes 12 and 13 to the financial statements.
The floating rate assets consist of cash deposits all earning interest at prevailing market rates.
100 Dunedin Income Growth Investment Trust PLC
The Company’s equity portfolio and short-term debtors and creditors (excluding bank loans) have been excluded
from the above tables. All financial liabilities are measured at amortised cost.
Interest rate sensitivity. Movements in interest rates would not significantly affect net assets attributable to the
Company’s shareholders and total profit.
(b) Foreign currency risk. A proportion of the Company’s investment portfolio is invested in overseas securities whose
values are subject to fluctuation due to changes in exchange rates. In addition, the impact of changes in foreign
exchange rates upon the profits of investee companies can result, indirectly, in changes in their valuations.
Consequently the Statement of Financial Position can be affected by movements in exchange rates.
Management of the risk. It is not the Company’s policy to hedge this risk on a continuing basis but the Company may,
from time to time, match specific overseas investment with foreign currency borrowings. A proportion of the
Company’s borrowings, as detailed in note 12, is in foreign currency as at 31 January 2023. The revenue account is
subject to currency fluctuations arising on dividends received in foreign currencies and, indirectly, due to the impact of
foreign exchange rates upon the profits of investee companies. The Company does not hedge this currency risk.
Foreign currency risk exposure by currency of denomination:
31 January 2023 31 January 2022
Net Total Net Total
monetary currency monetary currency
Investments assets exposure Investments assets exposure
£’000 £’000 £’000 £’000 £’000 £’000
Euro 44,258 (12,391) 31,867 63,632 (12,098) 51,534
Swiss Francs 15,617 90 15,707 – 216 216
Danish Krone 9,909 114 10,023 14,234 94 14,328
Norwegian Krone 10,202 12 10,214 – 13 13
Swedish Krona 34,976 1 34,977 28,847 – 28,847
Sterling 363,933 (18,116) 345,817 395,710 (26,069) 369,641
Total 478,895 (30,290) 448,605 502,423 (37,844) 464,579
The asset allocation between specific markets can vary from time to time based on the Manager’s opinion of the
attractiveness of the individual stocks in these markets.
Foreign currency sensitivity. There is no sensitivity analysis included as the Board believes the amount exposed to
foreign currency denominated monetary assets to be immaterial. Where the Company’s equity investments (which
are non-monetary items) are priced in a foreign currency, they have been included within the other price risk sensitivity
analysis so as to show the overall level of exposure.
(c) Price risk. Price risks (i.e. changes in market prices other than those arising from interest rate or currency risk) may
affect the value of the quoted investments and traded options.
Notes to the Financial Statements
Continued
Dunedin Income Growth Investment Trust PLC 101
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Management of the risk. It is the Board’s policy to hold an appropriate spread of investments in the portfolio in order to
reduce the risk arising from factors specific to a particular company or sector. Both the allocation of assets and the
stock selection process, as detailed on page 27 to 34, act to reduce market risk. The Manager actively monitors market
prices throughout the year and reports to the Board, which meets regularly in order to review investment strategy. The
investments held by the Company are listed on various stock exchanges in the UK and Europe.
Price risk sensitivity. If market prices at the Statement of Financial Position date had been 10% higher while all other
variables remained constant, the return attributable to Ordinary shareholders for the year ended 31 January 2023
would have increased by £47,890,000 (2022 – increase of £50,242,000) and equity reserves would have increased by
the same amount. Had market prices been 10% lower the converse would apply.
(ii) Liquidity risk. This is the risk that the Company will encounter difficulty in meeting obligations associated with financial
liabilities as they fall due in line with the maturity profile analysed below.
More
Within Within Within Within Within than
1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years Total
At 31 January 2023 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Bank loans 13,762 – – – – – 13,762
Loan Notes – – – – – 30,000 30,000
Interest cash flows on bank loans
and loan notes
1,281 1,197 1,197 1,197 1,197 21,546 27,615
Cash flows on other creditors 1,252 – – – – – 1,252
16,295 1,197 1,197 1,197 1,197 51,546 72,629
More
Within Within Within Within Within than
1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years Total
At 31 January 2022 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Bank loans 13,034 – – – – – 13,034
Loan Notes – – – – – 30,000 30,000
Interest cash flows on bank loans
and loan notes
1,207 1,197 1,197 1,197 1,197 22,743 28,738
Cash flows on other creditors 417 – – – – – 417
14,658 1,197 1,197 1,197 1,197 52,743 72,189
Management of the risk. The Board imposes borrowing limits to ensure gearing levels are appropriate to market
conditions and reviews these on a regular basis. Borrowings comprise Loan Notes and a revolving facility. The Loan
Notes provide secure long-term funding while short term flexibility is achieved through the borrowing facility. It is the
Board’s policy to maintain a gearing level, measured on the most stringent basis of calculation after netting off cash
equivalents, of less than 30% at all times. Details of borrowings at 31 January 2023 are shown in notes 12 and 13.
102 Dunedin Income Growth Investment Trust PLC
Liquidity risk is not considered to be significant as the Company’s assets comprise mainly cash and listed securities,
which can be sold to meet funding commitments if necessary. Short-term flexibility is achieved through the use of loan
and overdraft facilities, details of which can be found in note 12. Under the terms of the loan facility, the Manager
provides the lender with loan covenant reports on a monthly basis, to provide the lender with assurance that the terms
of the facility are not being breached. The Manager will also review the credit rating of a lender on a regular basis.
Details of the Board’s policy on gearing are shown in the interest rate risk section of this note.
Liquidity risk exposure. At 31 January 2023 and 31 January 2022 the amortised cost of the Company’s Loan Notes was
£29,738,000 and £29,731,000 respectively. At 31 January 2023 and 31 January 2022 the Company’s bank loans
amounted to £13,762,000 and £13,034,000 respectively. The facility is committed until 13 July 2023.
(iii) Credit risk. This is failure of the counterparty to a transaction to discharge its obligations under that transaction that
could result in the Company suffering a loss.
Management of the risk. Investment transactions are carried out with a large number of brokers, whose credit standing
is reviewed periodically by the Manager, and limits are set on the amount that may be due from any one broker;
– the risk of counterparty exposure due to failed trades causing a loss to the Company is mitigated by the review of
failed trade reports on a daily basis. In addition, both stock and cash reconciliations to the Custodians’ records are
performed on a daily basis to ensure discrepancies are investigated on a timely basis. The Group’s Compliance
department carries out periodic reviews of the custodian’s operations and reports its finding to the abrdn Group’s Risk
Management Committee. This review will also include checks on the maintenance and security of investments held;
– cash is held only with reputable banks whose credit ratings are monitored on a regular basis.
There are internal exposure limits to cash balances placed with counterparties. The credit worthiness of counterparties
is also reviewed on a regular basis.
None of the Company’s financial assets are secured by collateral or other credit enhancements.
Credit risk exposure. In summary, compared to the amounts in the Statement of Financial Position, the maximum
exposure to credit risk at 31 January was as follows:
2023 2022
Balance Maximum Balance Maximum
Sheet exposure Sheet exposure
£’000 £’000 £’000 £’000
Non-current assets
Investments at fair value through profit or loss 478,895 – 502,423 –
Current assets
Cash and short term deposits 12,267 12,267 2,855 2,855
491,162 12,267 505,278 2,855
None of the Company’s financial assets is past due or impaired.
Notes to the Financial Statements
Continued
Dunedin Income Growth Investment Trust PLC 103
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Fair values of financial assets and financial liabilities. The fair value of borrowings has been calculated at £43,155,000 as
at 31 January 2023 (2022 – £49,475,000) compared to an accounts value in the financial statements of £43,500,000
(2022 – £42,765,000) (notes 12 and 13). The fair value of each loan is determined by aggregating the expected future
cash flows for that loan discounted at a rate comprising the borrower’s margin plus an average of market rates
applicable to loans of a similar period of time and currency. All other assets and liabilities of the Company are included
in the Statement of Financial Position at fair value.
20. Fair value hierarchy
FRS 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the
inputs used in making the measurements. The fair value hierarchy has the following classifications:
Level 1: unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at the
measurement date.
Level 2: inputs other than quoted prices included within Level 1 that are observable (ie developed using market data) for the
asset or liability, either directly or indirectly.
Level 3: inputs are unobservable (ie for which market data is unavailable) for the asset or liability.
The financial assets and liabilities measured at fair value in the Statement of Financial Position are grouped into the fair value
hierarchy at the reporting date as follows:
Level 1 Level 2 Level 3 Total
As at 31 January 2023 Note £’000 £’000 £’000 £’000
Financial assets at fair value through profit or loss
Quoted equities a) 478,895 - - 478,895
Total 478,895 - - 478,895
Level 1 Level 2 Level 3 Total
As at 31 January 2022 £’000 £’000 £’000 £’000
Financial assets at fair value through profit or loss
Quoted equities a) 502,423 - - 502,423
Total 502,423 - - 502,423
a) Quoted equities. The fair value of the Company’s investments in quoted equities has been determined by reference to
their quoted bid prices at the reporting date. Quoted equities included in Fair Value Level 1 are actively traded on
recognised stock exchanges.
104 Dunedin Income Growth Investment Trust PLC
21. Capital management policies and procedures
The Company’s capital management objectives are:
- to ensure that the Company will be able to continue as a going concern; and
- to maximise the return to its equity shareholders through an appropriate balance of equity capital and debt.
The capital of the Company consists of equity, comprising issued capital, reserves and retained earnings.
The Board monitors and reviews the broad structure of the Company’s capital. This review includes the nature and planned
level of gearing, which takes account of the Manager’s views on future expected returns and the extent to which revenue in
excess of that which is required to be distributed should be retained. The Company is not subject to any externally imposed
capital requirements.
22. Related party transactions and transactions with the Manager
Directors’ fees and interests. Fees payable during the year to the Directors and their interests in the shares of the Company
are disclosed within the Directors’ Remuneration Report on page 64.
Transactions with the Manager. The Company has an agreement with the abrdn Group for the provision of management,
secretarial, accounting and administration services and also for the provision of promotional activities. Details of transactions
during the year and balances outstanding at the year end are disclosed in notes 4 and 5.
During the year, the Company received £16,000 in respect of returned, unclaimed dividends accumulated over a number of
years. The Board took the decision to donate these monies to the abrdn Charitable Foundation. The abrdn Charitable
Foundation is a registered charity. Its board of directors includes independent representation from the abrdn Group and
provides oversight and guidance for its charitable giving activities.
Notes to the Financial Statements
Continued
Dunedin Income Growth Investment Trust PLC 105
Other Information
Investors can buy and sell shares
in the Company directly through a
stockbroker or, for retail clients,
shares can be bought directly
through the abrdn Investment
Plan for Children, Investment
Trust Share Plan or Investment
Trust ISA, or through the many
stockbroker platforms which
offer the opportunity to acquire
shares in investment companies.
106 Dunedin Income Growth Investment Trust PLC
Alternative Investment Fund Managers
Directive (“AIFMD”) and Pre-Investment
Disclosure Document (“PIDD”)
The Company has appointed abrdn Fund Managers
Limited as its alternative investment fund manager and
The Bank of New York Mellon (International) Limited as its
depositary under the AIFMD.
The AIFMD requires abrdn Fund Managers Limited, as the
Company’s AIFM, to make available to investors certain
information prior to such investors’ investment in the
Company. Details of the leverage and risk policies which
the Company is required to have in place under the AIFMD
are published in the Company’s PIDD which can be found
on its website: dunedinincomegrowth.co.uk. The periodic
disclosures required to be made by the AIFM under the
AIFMD are set out on page 115.
Investor Warning: Be alert to share
fraud and boiler room scams
abrdn has been contacted by investors informing us that
they have received telephone calls and emails from
people who have offered to buy their investment
company shares, purporting to work for abrdn or for third
party firms. abrdn has also been notified of emails
claiming that certain investment companies under our
management have issued claims in the courts against
individuals. These may be scams which attempt to gain
your personal information with which to commit identity
fraud or could be ‘boiler room’ scams where a payment
from you is required to release the supposed payment for
your shares. These callers/senders do not work for abrdn
and any third party making such offers/claims has no link
with abrdn.
abrdn does not ‘cold-call’ investors in this way. If you have
any doubt over the veracity of a caller, do not offer any
personal information, end the call and contact our
Customer Services Department.
The Financial Conduct Authority provides advice with
respect to share fraud and boiler room scams at:
fca.org.uk/consumers/scams
Shareholder Enquiries
For queries regarding shareholdings, lost certificates,
dividend payments, registered details and related
matters, shareholders holding their shares directly in the
Company are advised to contact the Registrar (see
Contact Addresses). Changes of address must be notified
to the Registrar in writing.
Any general queries about the Company should be
directed to the Company Secretary in writing (see
Contact Addresses) or by email to: CEF.CoSec@abrdn.com
For questions about an investment held through the abrdn
Investment Plan for Children, Investment Trust Share Plan
or Investment Trust ISA, please telephone the Manager’s
Customer Services Department on 0808 500 0040, email
inv.trusts@abrdn.com or write to:
abrdn Investment Trusts
PO Box 11020
Chelmsford
Essex CM99 2DB
Dividend Tax Allowance
The annual tax-free personal allowance for dividend
income for UK investors is £1,000 for the 2023/24 tax year.
Above this amount, individuals pay tax on their dividend
income at a rate dependent on their income tax bracket
and personal circumstances. The Company provides
registered shareholders with a confirmation of dividends
paid and this should be included with any other dividend
income received when calculating and reporting to HMRC
total dividend income received. It is the shareholder’s
responsibility to include all dividend income when
calculating any tax liability.
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
retail clients, shares can be bought directly through the
abrdn Investment Plan for Children, Investment Trust
Share Plan or Investment Trust ISA, or through the many
stockbroker platforms which offer the opportunity to
acquire shares in investment companies.
Investor Information
Dunedin Income Growth Investment Trust PLC 107
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
abrdn Investment Plan for Children
abrdn operates an Investment Plan for Children (the
“Children’s Plan”) which covers a number of investment
companies under its management, including the
Company. Anyone can invest in the Children’s Plan
(subject to the eligibility criteria as stated within the terms
and conditions), including parents, grandparents and
family friends. All investments are free of dealing charges
on the initial purchase of shares, although investors will
suffer the bid-offer spread, which can, on some occasions,
be a significant amount. Lump sum investments start at
£150 per trust, while regular savers may invest from £30
per month. Investors only pay Government Stamp Duty
(currently 0.5%) on entry where applicable. Selling costs
are £10 + VAT. There is no restriction on how long an
investor need invest in the Children’s Plan, and regular
savers can stop or suspend participation by instructing
abrdn in writing at any time.
abrdn Investment Trust Share Plan
abrdn operates an Investment Trust Share Plan (the
“Plan”) through which shares in the Company can be
purchased. There are no dealing charges on the initial
purchase of shares, although investors will suffer the bid-
offer spread, which can, on some occasions, be a
significant amount. Lump sum investments start at £250,
while regular savers may invest from £100 per month.
Investors only pay Government Stamp Duty (currently
0.5%) on entry where applicable. Selling costs are £10 +
VAT. There is no restriction on how long an investor need
invest in a Plan, and regular savers can stop or suspend
participation by instructing abrdn in writing at any time.
abrdn Investment Trust ISA
abrdn operates an Investment Trust ISA (“ISA”) through
which an investment may be made of up to £20,000 in the
2023/24 tax year.
There are no brokerage or initial charges for the ISA,
although investors will suffer the bid-offer spread, which
can, on some occasions, be a significant amount. Investors
only pay Government Stamp Duty (currently 0.5%) on
purchases where applicable. Selling costs are £15 + VAT.
The annual ISA administration charge is £24 + VAT,
calculated annually and applied on 31 March (or the last
business day in March) and collected soon thereafter
either by direct debit or, if there is no valid direct debit
mandate in place, from the available cash in the ISA prior
to the distribution or reinvestment of any income, or,
where there is insufficient cash in the ISA, from the sale of
investments held in the ISA. Under current legislation,
investments in ISAs can grow free of capital gains tax.
ISA Transfer
Investors can choose to transfer previous tax year
investments to abrdn, which can be invested in the
Company while retaining their ISA wrapper. The minimum
lump sum for an ISA transfer is £1,000 and is subject to a
minimum per trust of £250.
Nominee Accounts and Voting Rights
All investments in the abrdn Investment Plan for Children,
Investment Trust Share Plan and Investment Trust ISA
are held in nominee accounts and investors are
provided with the equivalent of full voting and other
rights of share ownership.
How to Attend and Vote at Company
Meetings
Investors who hold their shares in the Company via the
abrdn Investment Plan for Children, Investment Trust
Share Plan and Investment Trust ISA and who would like to
attend and vote at Company meetings (including AGMs)
will be sent for completion and return a Letter of Direction
in connection with the relevant meeting.
Investors who hold their shares via another 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.
108 Dunedin Income Growth Investment Trust PLC
Keeping You Informed
Information about the Company can be found on its
website: dunedinincomegrowth.co.uk, including share price
and performance data as well as London Stock Exchange
announcements, current and historic Annual and Half-
Yearly Reports, and the latest monthly factsheet on the
Company issued by the Manager. Investors can receive
updates via email by registering on the home page of
the website.
The Company’s Ordinary share price appears under the
heading ‘Investment Companies’ in the Financial Times.
Details are also available at: invtrusts.co.uk
Twitter:
@abrdnTrusts
LinkedIn:
abrdn Investment Trusts
Key Information Document (“KID”)
The KID relating to the Company and published by the
Manager can be found on the Company’s website.
Literature Request Service
For literature and application forms for abrdn’s investment
trust products, please contact us through: invtrusts.co.uk,
telephone 0808 500 4000, or write to:
abrdn Investment Trusts
PO Box 11020
Chelmsford
Essex CM99 2DB
Terms and Conditions
Terms and conditions for abrdn-managed savings
products can also be found on the Manager’s website at:
invtrusts.co.uk
Suitable for Retail/NMPI Status
The Company’s shares are intended for investors,
primarily in the UK, including retail investors, professionally-
advised private clients and institutional investors who are
seeking growth of income and capital from a portfolio
invested mainly in companies listed or quoted in the United
Kingdom, and who understand and are willing to accept
the risks of exposure to equities.
Investors should consider consulting a financial adviser
who specialises in advising on the acquisition of shares
and other securities before acquiring shares. Investors
should be capable of evaluating the risks and merits of
such an investment and should have sufficient resources
to bear any loss that may result.
The Company currently conducts its affairs so that its
securities can be recommended by a financial adviser to
ordinary retail investors in accordance with the Financial
Conduct Authority’s rules in relation to non-mainstream
pooled investments (“NMPIs”) and intends to continue to
do so for the foreseeable future. The Company’s securities
are excluded from the Financial Conduct Authority’s
restrictions which apply to NMPIs because they are
securities issued by an investment trust.
Online Dealing
There are a number of online dealing platforms for private
investors that offer share dealing, ISAs and other means to
invest in the Company. Real-time execution-only
stockbroking services allow you to trade online, manage
your portfolio and buy UK listed shares. These sites do not
give advice. Some comparison websites also look at
dealing rates and terms.
Discretionary Private Client Stockbrokers
If you have a large sum to invest, you may wish to contact
a discretionary private client stockbroker. They can
manage your entire portfolio of shares and will advise you
on your investments. To find a private client stockbroker
visit The Personal Investment Management and Financial
Advice Association at: pimfa.co.uk
Investor Information
Continued
Dunedin Income Growth Investment Trust PLC 109
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Financial Advisers
To find an adviser who recommends on investment trusts,
visit: unbiased.co.uk
Regulation of Stockbrokers
Before approaching a stockbroker, always check that
they are regulated by the Financial Conduct Authority at:
fca.org.uk/firms/financial-services-register
Note
Please remember that past performance is not a guide to
the future. Stock market and currency movements may
cause the value of shares and the income from them to
fall as well as rise and investors may not get back the
amount they originally invested.
As with all equity investments, the value of investment
trust shares purchased will immediately be reduced by
the difference between the buying and selling prices of
the shares, known as the market maker’s spread.
Investors should further bear in mind that the value of
any tax relief will depend on the individual
circumstances of the investor and that tax rates and
reliefs, as well as the tax treatment of ISAs, may be
changed by future legislation.
The information on page 105 and pages 106 to 109 has
been approved for the purposes of Section 21 of the
Financial Services and Markets Act 2000 (as amended by
the Financial Services Act 2012) by abrdn Investments
Limited which is authorised and regulated by the Financial
Conduct Authority in the United Kingdom.
110 Dunedin Income Growth Investment Trust PLC
abrdn Group or abrdn
The abrdn plc group of companies. abrdn is the brand of
abrdn plc.
AIC
The Association of Investment Companies.
AIFMD
The UK version of the Alternative Investment Fund
Managers Directive and all implementing and delegating
legislation thereunder, as it forms part of UK law following
the UK’s departure from the EU. The AIFMD was originally
European legislation which created a European-wide
framework for regulating managers of ‘alternative
investment funds’ (“AIFs”). It is designed to regulate any
fund which is not a UCITS fund and which is managed
and/or marketed in the EU (and, now separately, the UK).
The Company has been designated as an AIF.
Benchmark
This is a measure against which an Investment Trust’s
performance is compared. The Company’s benchmark is
the FTSE All-Share Index. The index averages the
performance of a defined selection of listed companies
over specific time periods.
Call Option
An option contract which gives the buyer the right, but not
the obligation, to purchase a specified amount of an asset
at the strike price by a future specified date.
Carbon Emissions
Carbon emissions is used as a generic term for the main
greenhouse gas (“GHG”) emissions (carbon dioxide,
methane, nitrous oxide, F-gases).
Carbon Emissions – Scope 1
Greenhouse gas emissions generated from burning fossil
fuels and production processes which are owned or
controlled by a company.
Carbon Emissions – Scope 2
Greenhouse gas emissions generated from the
consumption of purchased electricity, heat or steam
by a company.
Carbon Emissions – Scope 3
Other upstream and downstream indirect greenhouse
gas emissions such as the extraction and production of
purchased materials and fuels, transport-related activities
in vehicles not owned or controlled by a reporting entity,
electricity related activities (egT&D losses) not covered in
Scope 2.
Carbon Intensity
Carbon emissions relative to a specific activity. For
company carbon footprinting, the carbon intensity
reflects the CO2e emissions divided by revenue in million
US$. For countries, the standard intensity metric is the ratio
of greenhouse gas emissions produced to gross domestic
product.
Closed-End Fund
A collective investment scheme which has a fixed number
of shares which are not redeemable from the fund itself.
Unlike open-ended funds, new shares/units are not
created by managers to meet demand from investors;
instead, shares are purchased (or sold) only in the market.
Closed-end funds are normally listed on a recognised
stock exchange, such as the London Stock Exchange, and
shares can be bought and sold on that exchange.
Discount
The amount by which the market price per share of an
Investment Trust is lower than the Net Asset Value per
share. The discount is normally expressed as a
percentage of the Net Asset Value per share.
Dividend Cover
Revenue return 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.
FCA
Financial Conduct Authority.
Glossary of Terms
Dunedin Income Growth Investment Trust PLC 111
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Gearing
Net gearing is calculated by dividing total borrowings less
cash and cash equivalents by shareholders’ funds,
expressed as a percentage.
Investment Manager
abrdn Investments Limited is a wholly owned subsidiary of
abrdn plc and acts as the Company’s investment
manager. It is authorised and regulated by the FCA.
Investment Trust
A type of Closed-End Fund which invests in other
securities, allowing shareholders to share the risks, and
returns, of collective investment.
Key Information Document or KID
The UK version of the Packaged Retail and Insurance-
based Investment Products (“PRIIPS”) Regulation (as it
forms part of UK law following the UK’s departure from the
EU) requires the Manager, as the Company’s PRIIP
‘manufacturer’, to prepare a Key Information Document
(“KID”) in respect of the Company. This KID must be made
available by the Manager to retail investors prior to them
making any investment decision and is available via the
Company’s website. The Company is not responsible for
the information contained in the KID and investors should
note that the procedures for calculating the risks, costs
and potential returns are prescribed by law. The figures in
the KID may not reflect the expected returns for the
Company and anticipated performance returns cannot
be guaranteed.
Leverage
For the purposes of the AIFMD, leverage is any method
which increases the Company’s exposure, including the
borrowing of cash and the use of derivatives. It is
expressed as a ratio between the Company’s exposure
and its Net Asset Value and can be calculated on a gross
and a commitment method. Under the gross method,
exposure represents the sum of the Company’s positions
after the deduction of sterling cash balances, without
taking into account any hedging and netting
arrangements. Under the commitment method, exposure
is calculated without the deduction of sterling cash
balances and after certain hedging and netting positions
are offset against each other.
Manager, AIFM or aFML
abrdn Fund Managers Limited is a wholly owned
subsidiary of abrdn plc and acts as the Company’s
Alternative Investment Fund Manager. It is authorised and
regulated by the FCA.
Net Asset Value or NAV
The value of total assets less liabilities. Liabilities for this
purpose include current and long-term liabilities. The Net
Asset Value divided by the number of shares in issue
produces the Net Asset Value per Ordinary share.
NAV with debt at fair value
The Net Asset Value with debt valued divided by the
number of shares in issue where the Company’s
borrowings are valued using the discounted cash
flow basis.
Ongoing Charges
Ratio of expenses as a percentage of average daily
shareholders’ funds calculated as per the AIC’s industry
standard method.
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.
112 Dunedin Income Growth Investment Trust PLC
Prior Charges
The name given to all borrowings including debentures,
loans and overdrafts that are to be used for investment
purposes, reciprocal foreign currency loans, currency
facilities to the extent that they are drawn down, index-
linked securities, and all types of preference or preferred
capital, irrespective of the time until repayment.
Total Assets
Total assets less current liabilities (before deducting Prior
Charge as defined above), as per the Statement of
Financial Position.
Total Return
Total Return involves reinvesting the net dividend in the
month that the share price goes ex-dividend. The NAV
Total Return involves investing the same net dividend in the
NAV of the Company on the date to which that dividend
was earned.
UN Global Compact
A global corporate sustainability initiative, calling on
companies, investors and other participants to align
their strategies and operations with universal principles
on human rights, labour, the environment and
anti-corruption.
UN Sustainable Development Goals
The Sustainable Development Goals (“SDGs”) or Global
Goals are a collection of 17 interlinked global goals
designed to be a "blueprint to achieve a better and more
sustainable future for all". The SDGs were set in 2015 by
the United Nations General Assembly and are intended to
be achieved by 2030.
Weighted Average Carbon Intensity
Average carbon intensity of the portfolio weighted by the
weight of the company in the portfolio.
Glossary of Terms
Continued
Dunedin Income Growth Investment Trust PLC 113
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
The provenance of Dunedin Income Growth Investment
Trust PLC goes back to 1873 and to the origins of the
investment trust industry in Scotland. In 1873, a 28 year old
Robert Fleming (sometimes dubbed the “father of the
investment trust industry”), persuaded a group of
Dundee’s wealthiest investors to back his idea of forming
“the first Association in Scotland for investments in
American railroad bonds, carefully selected and widely
distributed, and where investments would not exceed
one-tenth of the capital in any one security”. Fleming, who
was later founder of the merchant bank that bore this
name, showed extraordinary commercial acumen at a
very young age. He was born in modest circumstances in
Dundee and was first apprenticed as office boy at 13, then
rose to become, at 21, book-keeper with the exporting
arm of Dundee’s largest textile merchant, Edward
Baxter & Son.
In 1870, the elderly Mr Baxter sent Robert Fleming to the
United States to represent him on business. Fleming
returned enthused about the investment opportunities
offered by the States, despite the country still suffering
from the aftermath of the American Civil War. The
“association” proved to be an attractive means for
investors to pool their resources, spread risk and put their
investments under full-time management. The new fund,
then known as The Scottish American Investment Trust,
was launched on 1 February 1873. The Scottish American
Investment Trust was partly modelled on the Foreign &
Colonial Government Trust that was launched in 1868.
Unlike Foreign & Colonial, which purchased overseas
government stocks, the new trust would invest in “The
Bonds of States, cities, railroads and other corporations in
the US, but chiefly in the mortgage bonds of railroads”.
John Guild, one of the chairmen, reported “while in this
country you could not lend money on first-class railway
debentures at over 4% or 4.5%, in America you could get
7% with the best security of this description”. Coupled with
the fact that railway infrastructure development in the UK
had by then become relatively mature, it was for this
reason that the United States was an attractive
destination for Scottish funds.
The original prospectus described the intended issue of
£150,000 in certificates of £100 each, paying interest of 6%
per annum. Such was the level of demand that the original
prospectus was withdrawn and a new one was printed
with a capital issue of £300,000. The trust started out with
30 stocks, each comprising no more than 10% of the
portfolio. Confusingly, a similar sounding investment trust
company, launched in Edinburgh, The Scottish American
Investment Company was formed in April 1873, just a few
months after Fleming’s launch in February 1873. In
Dundee, two almost identical issues were made in the
following two years, described as the “Second Issue” and
“Third Issue”. The three issues became three separate
trust companies, under the Joint Stock Companies Act, in
1879 – the First, Second and Third Scottish American Trust
Companies Ltd, but merged into a single trust company in
1969 as The First Scottish American Trust Company Ltd.
In 1984, The First Scottish American Trust Company Ltd
became part of the Dunedin Fund Managers’ stable of
trusts and was subsequently renamed in 1990 as Dunedin
Income Growth Investment Trust. Dunedin Fund
Managers merged with Edinburgh Fund Managers in
1996, which was then acquired by Aberdeen Asset
Management in 2003. Aberdeen Asset Management
merged with Standard Life in 2017 to form what is now the
abrdn Group.
The book entitled “The History of Dunedin Income
Growth Investment Trust PLC” is available on the
Company’s website.
Your Company’s History
114 Dunedin Income Growth Investment Trust PLC
Issued Share Capital at 31 January 2023
148,264,670 Ordinary shares of 25p (153,677,935 including treasury shares)
Treasury Shares at 31 January 2023
5,413,265 Ordinary shares
Name Change
April 1990 Company name changed from “The First Scottish American Trust PLC” to Dunedin Income
Growth Investment Trust PLC
Share Capital History
April 1997 Capitalisation issue of four Ordinary shares of 25p issued for each existing Ordinary share
April 1999 Reduction of share capital by way of repayment of £840,000 of 3 ½% Preference stock
Year ended 31 January 2004 50,000 Ordinary shares purchased for cancellation
Year ended 31 January 2005 1,950,000 Ordinary shares purchased for cancellation
Year ended 31 January 2006 450,000 Ordinary shares purchased for cancellation and 450,000 Ordinary shares
purchased to hold in treasury
Year ended 31 January 2007 3,231,101 Ordinary shares purchased to hold in treasury
Year ended 31 January 2008 2,237,440 Ordinary shares purchased to hold in treasury, 1,972,800 treasury shares cancelled
Year ended 31 January 2009 1,026,007 Ordinary shares purchased to hold in treasury, 2,000,000 treasury shares cancelled
Year ended 31 January 2010 No shares purchased, cancelled or issued
Year ended 31 January 2011 No shares purchased, cancelled or issued
Year ended 31 January 2012 No shares purchased, cancelled or issued
Year ended 31 January 2013 No shares purchased, cancelled or issued
Year ended 31 January 2014 300,000 Ordinary shares sold from treasury
Year ended 31 January 2015 No shares purchased, cancelled or issued
Year ended 31 January 2016 No shares purchased, cancelled or issued
Year ended 31 January 2017 493,500 Ordinary shares purchased to hold in treasury
Year ended 31 January 2018 833,000 Ordinary shares purchased to hold in treasury
Year ended 31 January 2019 1,387,018 Ordinary shares purchased to hold in treasury
Year ended 31 January 2020 105,550 Ordinary shares purchased to hold in treasury
Year ended 31 January 2021 22,449 Ordinary shares purchased to hold in treasury
Year ended 31 January 2022 No shares purchased, cancelled or issued
Year ended 31 January 2023 100,000 Ordinary shares sold from treasury
Share Capital History
Dunedin Income Growth Investment Trust PLC 115
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
abrdn Fund Managers Limited and the Company are required to make certain disclosures available to investors in
accordance with the Alternative Investment Fund Managers Directive (“AIFMD”). Those disclosures that are required to
be made pre-investment are included within a pre-investment disclosure document (“PIDD”) which can be found on the
Company’s website.
There have been no material changes to the disclosures contained within the PIDD since its most recent update
in April 2022.
The periodic disclosures as required under the AIFMD to investors are made below:
y information on the investment strategy, geographic and sector investment focus and principal stock exposures is
included in the Strategic Report;
y none of the Company’s assets are subject to special arrangements arising from their illiquid nature;
y the Strategic Report, note 19 to the financial statements and the PIDD together set out the risk profile and risk
management systems in place. There have been no changes to the risk management systems in place in the period
under review and no breaches of any of the risk limits set, with no breach expected;
y 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
y 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 2022 are available on the Company’s website.
Leverage
The table below sets out the current maximum permitted limit and actual level of leverage for the Company:
Gross Method Commitment Method
Maximum level of leverage 2.50 2.00
Actual level at 31 January 2023 1.16 1.19
There have been no breaches of the maximum level during the period and no changes to the maximum level of
leverage employed by the Company. There have been no changes to the circumstances in which the Company may
be required to post assets as collateral and no guarantees granted under the leveraging arrangement. Changes to the
information contained either within this Annual Report or the PIDD in relation to any special arrangements in place, the
maximum level of leverage which aFML may employ on behalf of the Company, the right of use of collateral or any
guarantee granted under any leveraging arrangement, or any change to the position in relation to any discharge of
liability by the Depositary will be notified via a regulatory news service without undue delay in accordance with
the AIFMD.
The information on this page has been approved for the purposes of Section 21 of the Financial Services and Markets Act
2000 (as amended by the Financial Services Act 2012) by abrdn Fund Managers Limited which is authorised and
regulated by the Financial Conduct Authority in the United Kingdom.
AIFMD Disclosures
(
Unaudited
)
116 Dunedin Income Growth Investment Trust PLC
Alternative performance measures are numerical measures of the Company’s current, historical or future performance, financial
position or cash flows, other than financial measures defined or specified in the applicable financial framework. The Company’s
applicable financial framework includes FRS 102 and the AIC SORP. The Directors assess the Company’s performance against a
range of criteria which are viewed as particularly relevant for closed-end investment companies.
Dividend cover
Dividend cover measures the revenue return per share divided by total dividends per share, expressed as a ratio.
2023 2022
Revenue return per share a 13.02p 12.87p
Dividends per share b 13.10p 12.90p
Dividend cover a/b 0.99 1.00
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.
2023 2022
Borrowings (£’000) a 43,500 42,765
Cash (£’000) b 12,267 2,855
Amounts due to brokers (£’000) c 649 –
Amounts due from brokers (£’000) d – 857
Shareholders’ funds (£’000) e 448,605 464,579
Net gearing (a-b+c-d)/e 7.11% 8.41%
Alternative Performance Measures
Dunedin Income Growth Investment Trust PLC 117
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
Premium/(discount) to net asset value per share with debt at fair value
The premium/(discount) is the amount by which the share price is higher/(lower) than the net asset value per share with debt at fair
value, expressed as a percentage of the net asset value with debt at fair value.
2023 2022
Share price (p) a 294.00p 310.00p
NAV per Ordinary share (p) (see note 17) b 302.80p 309.03p
Discount (a-b)/b (2.91%) 0.31%
Ongoing charges
The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC as the total of investment
management fees and administrative expenses less non-recurring charges, expressed as a percentage of the average net asset
values with debt at fair value throughout the year.
2023 2022
Investment management fees (£’000) 1,704 1,818
Administrative expenses (£’000) 951 882
Less: non-recurring charges (£’000) – (57)
Ongoing charges (£’000) 2,655 2,643
Average net assets (£’000) 430,038 472,893
Ongoing charges ratio (excluding look-through costs) 0.62% 0.56%
Look-through costs
AB
0.02% 0.03%
Ongoing charges ratio (including look-through costs) 0.64% 0.59%
A
Professional services comprising new Director recruitment costs and legal fees considered unlikely to recur.
B
Calculated in accordance with AIC guidance issued in October 2020 to include the Company’s share of costs of holdings in investment companies on a look-through basis.
The ongoing charges ratio provided in the Company’s Key Information Document is calculated in line with the PRIIPs regulations which
amongst other things, includes the cost of borrowings and transaction costs.
118 Dunedin Income Growth Investment Trust PLC
Total return
NAV and share price total returns show how the NAV and share price has performed over a period of time in percentage terms, taking
into account both capital returns and dividends paid to shareholders. Share price and NAV total returns are monitored against open-
ended and closed-ended competitors, and the Reference Index, respectively.
Share
Year ended 31 January 2023 NAV Price
Opening at 1 February 2022 a 309.0p 310.0p
Closing at 31 January 2023 b 302.8p 294.0p
Price movements c=(b/a)-1 –2.0% –5.2%
Dividend reinvestment
A
d 4.4% 4.3%
Total return c+d +2.4% (0.9%)
Share
Year ended 31 January 2022 NAV Price
Opening at 1 February 2021 a 297.6p 287.0p
Closing at 31 January 2022 b 309.0p 310.0p
Price movements c=(b/a)-1 +3.8% +8.0%
Dividend reinvestment
A
d 4.3% 4.5%
Total return c+d +8.1% +12.5%
A
NAV total return involves investing the net dividend in the NAV of the Company with debt at fair value on the date on which that dividend goes ex-dividend. Share price total
return involves reinvesting the net dividend in the share price of the Company on the date on which that dividend goes ex-dividend.
Alternative Performance Measures
Continued
Dunedin Income Growth Investment Trust PLC 119
General
The Annual General Meeting will be held at V&A
Dundee, 1 Riverside Esplanade, Dundee DD1 4EZ on
Tuesday 16 May 2023 at 12 noon.
The Company will also be hosting an online
shareholder presentation, which will be held at
11.00am on Wednesday 3 May 2023. Full details on
how to register for the online event can be found at:
https://bit.ly/abrdn-dunedin-income
120 Dunedin Income Growth Investment Trust PLC
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Dunedin Income Growth Investment Trust PLC
(the “Company”) will be held at V&A Dundee, 1 Riverside Esplanade, Dundee DD1 4EZ on Tuesday 16 May 2023 at 12
noon, for the following purposes:
Ordinary Business
To consider and, if thought fit, pass the following as ordinary resolutions:
1. To receive the reports of the Directors and Auditor and the financial statements for the year ended
31 January 2023.
2. To receive and adopt the Directors’ Remuneration Report (excluding the Directors’ Remuneration Policy) for the
year ended 31 January 2023.
3. To approve the Directors’ Remuneration Policy.
4. To approve a final dividend of 4.10p per Ordinary share.
5. To re-elect Mr Jasper Judd as a Director of the Company.
6. To re-elect Mr Howard Williams as a Director of the Company.
7. To re-elect Mr David Barron as a Director of the Company.
8. To re-elect Ms Christine Montgomery as a Director of the Company.
9. To re-elect Ms Gay Collins as a Director of the Company.
10. To re-appoint Deloitte LLP as Auditor of the Company.
11. To authorise the Directors to determine the remuneration of the Auditor for the year to 31 January 2024.
12. That, in substitution for any existing authority under Section 551 of the Companies Act 2006 (the “Act”), but without
prejudice to the exercise of any such authority prior to the passing of this resolution, the Directors be and are hereby
generally and unconditionally authorised, pursuant to and in accordance with Section 551 of the Act, to exercise all
the powers of the Company to allot shares in the Company and to grant rights to subscribe for or to convert any
security into shares in the Company (such shares and rights together being “relevant securities”) up to an aggregate
nominal amount of £12,354,153 or, if less, the number representing 33.33% of the issued Ordinary share capital of
the Company (excluding treasury shares) as at the date of the passing of this resolution provided that such
authorisation expires (unless previously renewed, varied or revoked by the Company in general meeting) at the
conclusion of the next Annual General Meeting of the Company or on 31 July 2024 (whichever is earlier) save that
the Company may, at any time prior to the expiry of such authority, make offers or agreements which would or
might require such relevant securities to be allotted after such expiry and the Directors may make such offers or
agreements as if such expiry had not occurred.
To consider and, if thought fit, pass the following as special resolutions:
13. That, subject to the passing of resolution number 12 set out above and in substitution for any existing power under
Sections 570 and 573 of the Companies Act 2006 (the “Act”) but without prejudice to the exercise of any such
authority prior to the passing of this resolution, the Directors be and are hereby generally empowered, pursuant to
Sections 570 and 573 of the Act, to allot equity securities (as defined in Section 560 of the Act) pursuant to the
authority conferred on them by resolution number 12 or by way of a sale of treasury shares (within the meaning of
Section 560(3) of the Act), in each case for cash and as if Section 561(1) of the Act did not apply to any such
allotment or sale provided that this power shall be limited to:
i. the allotment of equity securities or sale of treasury shares (otherwise than pursuant to sub-paragraph (ii)
below) up to an aggregate nominal value of £1,853,308 or, if less, the number representing 5% of the issued
Ordinary share capital of the Company (excluding treasury shares) as at the date of the passing of this
Notice of Annual General Meetin
g
Dunedin Income Growth Investment Trust PLC 121
Strategic Report Governance Overview General Portfolio Other Information Financial Statements
resolution, at a price representing a premium to the net asset value per share at allotment or sale, as
determined by the Directors; and
ii. the allotment of equity securities by way of rights issue, open offer or other pre-emptive offer in favour of all
holders of Ordinary shares where the equity securities respectively attributable to the interests of all such
holders are either proportionate (as nearly as may be) to the respective number of Ordinary shares held by
them on a record date fixed by the Directors (subject to such exclusions, limitations, restrictions or other
arrangements as the Directors consider necessary or appropriate to deal with treasury shares, fractional
entitlements, record dates, legal, regulatory or practical problems in or under the laws of, or requirements of,
any regulatory body or any stock exchange in any territory or otherwise howsoever);
and shall expire (unless previously renewed, varied or revoked by the Company in general meeting) at the conclusion of
the next Annual General Meeting of the Company or on 31 July 2024 (whichever is earlier), save that the Company may,
at any time prior to the expiry of such authority, make offers or agreements before such expiry which would or might
require equity securities to be allotted after such expiry and the Directors may make such offers or agreements as if
such expiry had not occurred.
14. That, in substitution for any existing authority under Section 701 of the Companies Act 2006 (the “Act”), but without
prejudice to the exercise of any such authority prior to the passing of this resolution, the Company be and is hereby
generally and unconditionally authorised, for the purposes of Section 701 of the Act, to make one or more market
purchases (within the meaning of Section 693(4) of the Act) of fully paid Ordinary shares of 25p each in the capital
of the Company (“Ordinary shares”) on such terms as the Directors of the Company think fit and to cancel or hold in
treasury such shares provided that:
i. the maximum aggregate number of Ordinary shares hereby authorised to be purchased shall be 22,224,874
Ordinary shares or, if less, the number representing 14.99% of the issued Ordinary share capital of the Company
(excluding treasury shares) as at the date of the passing of this resolution;
ii. the minimum price which may be paid for an Ordinary share shall be 25p (exclusive of expenses);
iii. the maximum price (exclusive of expenses) which may be paid for an Ordinary share shall be the higher of:
a. 5% above the average of the middle market quotations of the Ordinary shares (as derived from the Daily
Official List of the London Stock Exchange) for the five business days immediately preceding the date of
purchase; and
b. the higher of the price of the last independent trade in Ordinary shares and the highest current
independent bid for Ordinary shares on the London Stock Exchange; and
iv. unless previously varied, revoked or renewed, the authority hereby conferred shall expire at the conclusion of
the next Annual General Meeting of the Company or on 31 July 2024 (whichever is the earlier) save that the
Company may at any time prior to such expiry, enter into a contract or arrangement to purchase Ordinary
shares under this authority which will or might be completed or executed wholly or partly after the expiration of
this authority and may make a purchase of shares pursuant to any such contract or arrangement.
By order of the Board Registered Office:
abrdn Holdings Limited 1 George Street
Company Secretary Edinburgh EH2 2LL
5 April 2023
122 Dunedin Income Growth Investment Trust PLC
Notes
i. A member entitled to attend and vote at the meeting may appoint a proxy or proxies to exercise all or any of his/her
rights to attend, speak and vote on his/her behalf at the meeting. A proxy need not be a member of the Company.
A member may appoint more than one proxy provided each proxy is appointed to exercise rights attached to
different shares. A member may not appoint more than one proxy to exercise the rights attached to any one share.
If you wish your proxy to speak on your behalf at the meeting you will need to appoint your own choice of proxy (not
the Chairman of the meeting) and give your instructions directly to them. A proxy form which may be used to make
such appointment and give proxy instructions accompanies this notice. If you do not have a proxy form and believe
that you should have one, or if you require additional forms or would like to appoint more than one proxy, please
contact the Company's Registrar, Equiniti Limited on +44 (0)371 384 2441 (charges for calling this number are
determined by the caller’s service provider. Lines open 8.30 a.m. to 5.30 p.m., Monday to Friday, excluding bank
holidays in England and Wales). If calling from overseas, please ensure the country code is used. In the case of joint
holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by
the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders
appear in the Company's Register of Members in respect of the joint holding (the first-named being the most
senior). A member present in person or by proxy shall have one vote on a show of hands and on a poll every
member present in person or by proxy shall have one vote for every Ordinary share of which he/she is the holder.
ii. A form of proxy is enclosed. To be valid, any proxy form or other instrument of proxy and any power of attorney or
other authority, if any, under which they are signed or a notarially certified copy of that power of attorney or
authority should be sent to the Company’s Registrar, Equiniti Limited, Aspect House, Spencer Road, Lancing, West
Sussex BN99 6DA so as to arrive not less than 48 hours (excluding non-working days) before the time fixed for
the meeting.
iii. The return of a completed proxy form or other such instrument of proxy will not prevent a member attending the
Annual General Meeting and voting in person if he/she wishes to do so.
iv. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service
may do so for the meeting and any adjournment(s) thereof by using the procedures described in the CREST Manual
and by logging on to the website euroclear.com. CREST personal members or other CREST sponsored members,
and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or
voting service provider(s), who will be able to take the appropriate action on their behalf.
v. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST
message (a “CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK & 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) no later than 48 hours (excluding non-working days) before the time of the
meeting or any adjournment. For this purpose, the time of receipt will be taken to be the time (as determined by the
timestamp applied to the message by the CREST Application Host) from which the Company’s Registrar is able to
retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of
instructions to proxies appointed through 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.
Notice of Annual General Meetin
g
Continued
Dunedin Income Growth Investment Trust PLC 123
Strategic Report Governance Overview General Portfolio Other 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 12 May 2023 in order to be
considered valid. Before you can appoint a proxy via this process you will need to have agreed to Proxymity’s
associated terms and conditions. It is important that you read these carefully as you will be bound by them and they
will govern the electronic appointment of your proxy.
ix. The “vote withheld” option on the proxy form is provided to enable a member to abstain on any particular resolution.
It should be noted that an abstention is not a vote in law and will not be counted in the calculation of the proportion
of votes “for” or “against” a particular resolution.
x. The right to vote at the meeting is determined by reference to the Company’s register of members as at 6.30 p.m.
on 12 May 2023 or, if the meeting is adjourned, at 6.30 p.m. on the day two days (excluding non-working days) prior
to the adjourned meeting. Changes to entries on that register after that time shall be disregarded in determining
the rights of any member to attend and vote at the meeting.
xi. As at 5 April 2023 (being the latest practicable date prior to the publication of this document) the Company’s issued
share capital comprised 148,264,670 Ordinary shares of 25p each and 5,413,265 treasury shares. Each Ordinary
share carries the right to one vote at a general meeting of the Company and, therefore, the total number of voting
rights in the Company as at 5 April 2023 was 148,264,670.
xii. Any person holding 3% or more of the total voting rights of the Company who appoints a person other than the
Chairman of the meeting as his/her proxy will need to ensure that both he/she and his/her proxy complies with their
respective disclosure obligations under the UK Disclosure Guidance and Transparency Rules.
xiii. A person to whom this notice is sent who is a person nominated under Section 146 of the Companies Act 2006 to
enjoy information rights (a “Nominated Person”) may, under an agreement between him/her and the shareholder
by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for
the meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may,
under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.
The statements of the rights of members in relation to the appointment of proxies in notes (i) to (iii) above do not
apply to a Nominated Person. The rights described in those notes can only be exercised by registered members of
the Company.
xiv. Biographical details of the Directors standing for election and re-election are set out on pages 52 to 54 of this report.
xv. Members who have general queries about the Annual General Meeting should contact the Company Secretary in
writing. Members are advised that any telephone number, website or email address which may be set out in this
notice of Annual General Meeting or in any related documents (including the proxy form) is not to be used for the
purposes of serving information or documents on, or otherwise communicating with, the Company for any
purposes other than those expressly stated.
124 Dunedin Income Growth Investment Trust PLC
xvi. Members should note that, it is possible that, pursuant to requests made by members of the Company under
Section 527 of the Companies Act 2006, the Company may be required to publish on a website a statement setting
out any matter relating to the audit of the Company’s accounts (including the Auditor’s report and the conduct of
the audit) that are to be laid before the meeting or any circumstances connected with an auditor of the Company
ceasing to hold office since the previous meeting at which annual accounts and reports were laid in accordance
with Section 437 of the Companies Act 2006. The Company may not require the members requesting any such
website publication to pay its expenses in complying with Sections 527 or 528 of the Companies Act 2006. Where
the Company is required to place a statement on a website under Section 527 of the Companies Act 2006, it must
forward the statement to the Company’s Auditor no later than the time when it makes the statement available on
the website. The business which may be dealt with at the meeting includes any statement that the Company has
been required under Section 527 of the Companies Act 2006 to publish on a website.
xvii. No Director has a service contract with the Company. Copies of the Directors’ letters of appointment are available
for inspection on any day (except Saturdays, Sundays and public holidays in England and Wales) from the date of
this notice until the date of the meeting during usual business hours at the Company’s registered office and for 15
minutes prior to, and at, the meeting.
xviii.Information regarding the Annual General Meeting is available from the Company’s website:
dunedinincomegrowth.co.uk
xix. Pursuant to Section 319A of the Companies Act 2006, any shareholder has the right to put questions at the meeting
relating to business being dealt with at the meeting.
Notice of Annual General Meetin
g
Continued
Dunedin Income Growth Investment Trust PLC 125
Directors
David Barron (Chairman)
Gay Collins
Jasper Judd
Christine Montgomery
Howard Williams
Registered Office & Company Secretary
abrdn Holdings Limited
1 George Street
Edinburgh EH2 2LL
Email: CEF.CoSec@abrdn.com
Alternative Investment Fund Manager
abrdn Fund Managers Limited
280 Bishopsgate
London EC2M 4AG
Investment Manager
abrdn Investments Limited
1 George Street
Edinburgh EH2 2LL
abrdn Customer Services Department,
Investment Plan for Children, Investment
Trust Share Plan and ISA Enquiries
abrdn Investment Trusts
PO Box 11020
Chelmsford
Essex CM99 2DB
Freephone: 0808 500 0040
(open Monday to Friday, 9.00 a.m. to 5.00 p.m., excluding
public holidays in England and Wales)
Email: inv.trusts@abrdn.com
Company Registration Number
SC000881 (Scotland)
Website
dunedinincomegrowth.co.uk
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Shareholder help can be found at shareview.co.uk.
Alternatively, you can contact the Shareholder Helpline:
+44 (0)371 384 2441*
(*Lines open 8.30 a.m. to 5.30 p.m., Monday to Friday
excluding public holidays in England and Wales. Charges
for calling telephone numbers starting with ‘03’ are
determined by the caller’s service provider.)
If calling from overseas, please ensure the country code
is used.
Depositary
The Bank of New York Mellon (International) Limited
160 Queen Victoria Street
London EC4V 4LA
Stockbroker
JPMorgan Cazenove
25 Bank Street
Canary Wharf
London E14 5JP
Auditor
Deloitte LLP
110 Queen Street
Glasgow G1 3BX
United States Internal Revenue Service
FATCA Registration Number (“GIIN”)
CJ1DH9.99999.SL.826
Legal Entity Identifier (“LEI”)
549300PPXLZPR5JTL763
Contact Addresses
For more information visit dunedinincomegrowth.co.uk
abrdn.com