National Storage Mechanism | Additional information

RNS Number : 7410R

Murray International Trust PLC

03 March 2023

MURRAY INTERNATIONAL TRUST PLC

Legal Entity Identifier (LEI): 549300BP77JO5Y8LM553

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2022

Performance Highlights


Net asset value total returnAB - 2022		Share price total returnAB - 2022
+8.8%		+20.6%
2021	+14.1%	2021	+7.2%

Reference Index total returnBC - 2022		Premium/(discount) to net asset valueAD - 2022
-7.3%		+3.1%
2021	+20.0%	2021	-6.8%

Dividends per shareBE - 2022		Revenue return per shareB - 2022
56.0p		60.1p
2021	55.0p	2021	51.7p

Retail Price IndexB - 2022		Ongoing charges ratioAD
+13.4%		0.52%
2021	7.5%	2021	0.59%
A Alternative Performance Measure
B For the year to 31 December.
C Reference Index is FTSE All World TR Index.
D As at 31 December.
E Dividends declared for the year to which they relate.

Financial Calendar


Payment dates of future quarterly dividends	5 May 2023 16 August 2023 17 November 2023 16 February 2024
Financial year end	31 December
Online Shareholder Presentation	Monday 3 April 2023 at 11.00 a.m.
Annual General Meeting (Glasgow)	Friday 21 April 2023 at 12:30 p.m.
Record date for the Share Split and disablement in CREST of the existing ISIN for settlement	6:00 p.m. on 21 April 2023
Listing and Admission of the New Ordinary Shares expected to commence	8:00 a.m. on 24 April 2023
Expected date for crediting CREST accounts with New Ordinary Shares (where applicable)	24 April 2023
Expected date by which certificates in respect of New Ordinary Shares are to be dispatched to certificated shareholders	By 5 May 2023

Dividends


	Rate	Ex-dividend date	Record date	Payment date
1st interim	12.0p	7 July 2022	8 July 2022	16 August 2022
2nd interim	12.0p	6 October 2022	7 October 2022	18 November 2022
3rd interim	12.0p	5 January 2023	6 January 2023	17 February 2023
Proposed final	20.0p	6 April 2023	11 April 2023	5 May 2023
Total dividends	56.0p

Financial Highlights


	31 December 2022	31 December 2021	% change
Total assetsA	£1,816.6m	£1,760.9m	+3.2
Net assets	£1,616.8m	£1,561.1m	+3.6
Market capitalisation	£1,667.7m	£1,455.0m	+14.6
Net Asset Value per Ordinary shareB	1,293.3p	1,240.3p	+4.3
Share price per Ordinary share (mid market)B	1,334.0p	1,156.0p	+15.4
Premium/(discount) to Net Asset Value per Ordinary shareC	3.1%	-6.8%
Net gearingC	11.2%	12.2%
Revenue return per share	60.1p	51.7p	+16.3
Dividends per shareD	56.0p	55.0p	+1.8
Dividend cover (including proposed final dividend)C	1.07x	0.94x
Dividend yieldC	4.2%	4.8%
Revenue reservesE	£69.2m	£63.0m
Ongoing charges ratioC	0.52%	0.59%
A The total assets less current liabilities as shown in the balance sheet with the addition of prior charges.
B Capital values.
C Considered to be an Alternative Performance Measure
D The figure for dividends per share reflects the years to which their declaration relates (see note 8) and assuming approval of the final dividend of 20.0p (2021 - final dividend of 19.0p).
E The revenue reserve figure does not take account of the third interim and final dividends amounting to £15,002,000 and £25,003,000 respectively (2021 - third interim dividend of £15,103,000 and final dividend of £23,813,000).

STRATEGIC REPORT

Chairman's Statement

Performance

I am pleased to report that, despite the well-reported and widespread turbulence of global financial markets during 2022, the Company's net asset value ("NAV") posted a total return for the year ended 31 December 2022 (i.e. with net income reinvested) of +8.8%. The Company has no benchmark but this performance compares favourably with a total return for the Reference Index, the FSTE ALL World TR Index, of -7.3%. However, the Company's performance could not match an abnormal rise over the same period of +13.4% for the UK Retail Price Index (RPI). The share price posted a higher total return of +20.6%. Increased income per share amounted to 60.1p for the year (2021: 51.7p), enabling an ongoing improvement in the level of dividend and a return to a fully covered dividend.

It is also satisfying to note that the longer-term picture has improved. Over three years, RPI has increased +23.5%, the Reference Index has returned +19.0% and the Company's NAV total return stands at +25.3%.

The Manager's investment focus continues to emphasise both geographical and sector diversification across a broad range of quality companies as we continue to seek both long-term income and capital growth. Such characteristics tend not to be represented in the more concentrated Reference Index where a small number of growth stocks have tended to dominate in recent years. For this reason, relative performance in any shorter time period can, and does, deviate significantly on a comparative basis.

Dividends

Three interim dividends of 12.0p per share (2021: three interims of 12.0p) have been declared during the year. Your Board is now recommending an increased final dividend of 20.0p per Ordinary 25p share (2021: final dividend of 19.0p). If approved at the Annual General Meeting, this final dividend will be paid on 5 May 2023 to holders of Ordinary 25p shares on the register on 11 April 2023 (ex dividend 6 April 2023). If the final dividend is approved, total Ordinary dividends for the year will amount to 56.0p (2021: 55.0p), an increase over the previous year of 1.8%. The level of increase reflects the fact that the Company already pays a competitively high dividend yield which stood at 4.2% at year end. This represents the 18th year of dividend increases for the Company, which remains an AIC 'Next Generation Dividend Hero'.

As a long-established investment trust, the Company had the benefit of £69.2 million of distributable reserves on its balance sheet at 31 December 2022, which have been accumulated by the Company over many years from retained earnings. The payment of the final dividend, if approved, will result in the movement of £5.2 million to the revenue reserves to strengthen them for the future. The dividend cover at year end was 1.07x (2021: 0.94x). The replenishment of reserves this year is in line with the policy that we have highlighted to shareholders in previous years. The Board intends to maintain the Company's progressive dividend policy. This means that, in some years, revenue will be added to reserves while, in others, some revenue may be taken from reserves to supplement revenue earned during that year, in order to pay the annual dividend. Shareholders should not be surprised or concerned by either outcome as, over time, the Company will aim to pay out what the underlying portfolio earns in sterling terms.

Currency fluctuations may also have an impact on income and therefore the level of dividend. The Board, however, is maintaining the present policy not to hedge the sterling translation risk of revenue arising from non-UK assets.

Gearing

At the year end, total borrowings amounted to £200 million, representing net gearing (calculated by dividing the total borrowings less cash by shareholders' funds) of 11.2% (2021: 12.2%), all of which is drawn in sterling. In May 2022, the Company utilised part of its £200m Loan Note Shelf Facility, of which £50m had already been drawn down, through the issuance of a £60 million 15 year Senior Unsecured Loan Note at an all-in-rate of 2.83%. The proceeds of the issue were used to repay the Company's £60 million fixed rate loan that matured at that time. Under the terms of the Loan Note Agreement, dated May 2021, up to an additional £90 million will also be available for drawdown by the Company until May 2026. The Board's current intention is to only use this additional amount to repay the Company's existing debt as it falls due over the coming years.

The Company is now considering options to replace the next fixed rate loan which amounts to £60m and is due to expire in May 2023. The Company will update shareholders in due course.

Ongoing Charges Ratio ("OCR")

The Board remains focused on controlling costs and on delivering value to shareholders. The OCR for 2022 has continued to trend downwards ending the year on 0.52% (2021: 0.59%). The continued improvement reflects the benefit of the reduction in management fee agreed with effect from 1 January 2022.

Online Presentation and Annual General Meeting ("AGM")

In 2022 the Board for the second time held an online shareholder presentation in advance of the AGM. It was very well attended again and we hope that shareholders found it informative. It also provided a useful opportunity for the Board to receive feedback and views from shareholders and to answer your questions. Given the success of the online event, the Board has decided to repeat the exercise again in 2023. We will hold another interactive online shareholder presentation at 11.00 a.m. on Monday 3 April 2023. This is in addition to the in-person AGM. At the online presentation, shareholders will receive updates from me, as Chairman, and the Investment Manager, and there will be an interactive question and answer session. Full details on how to join the online shareholder presentation can be found in my accompanying letter and further information on how to register for the event can be found at https://www.workcast.com/register?cpak=4678784364872362.

Following the online presentation, shareholders will still have almost three weeks during which to submit their proxy votes prior to the AGM and I would encourage all shareholders (whether or not they intend to attend the AGM in person) to lodge their votes in advance in this manner.

The AGM has been convened for 12:30 p.m. on 21 April 2023, at the Glasgow Royal Concert Hall, and will be followed by light refreshments and an opportunity to meet the Board and the investment management team.

Ahead of the online presentation and AGM, I would encourage shareholders to send in any questions that they may have for either forum to: [email protected].

Management of Discount and Premium

At the AGM held in April 2022, shareholders renewed the annual authorities to issue up to 10% of the Company's issued share capital for cash at a premium and to buy back up to 14.99% of the issued share capital at a discount to the prevailing NAV. During the year, 848,963 Ordinary shares were purchased for Treasury, representing 0.7% of the issued share capital. The Board will be seeking approval from shareholders to renew the buyback authority together with the authority to allot new shares or sell shares from Treasury at the AGM in 2023. As in previous years, new or Treasury shares will only be issued or sold at a premium to NAV and shares will only be bought back at a discount to NAV. Resolutions to this effect will be proposed at the AGM and the Directors strongly encourage shareholders to support these proposals.

Your Board continues to believe that it is appropriate to seek to address temporary imbalances of supply and demand for the Company's shares which might otherwise result in a recurring material discount or premium. The Board believes that this process is in all shareholders' interests as it seeks to reduce volatility in the discount or premium to underlying NAV whilst also making a small positive contribution to the NAV. At the latest practicable date, the NAV (excluding income) per share was 1339.0p and the share price was 1339.0p, equating to a discount of 0.1% per Ordinary share compared to a premium of 3.1% per Ordinary share at the year end.

Proposed Sub-division of Ordinary Shares

The market price of the Company's existing Ordinary shares ("existing Ordinary shares") has increased in recent years to the point where the Ordinary shares regularly trade at a market price of over 1300 pence. In order to assist monthly savers, those who reinvest their dividends and those who are looking to invest smaller amounts such as younger investors, the Directors believe that it is appropriate to propose the sub-division of each of the existing Ordinary shares of 25 pence each into five new Ordinary shares of 5 pence each (the 'new Ordinary shares') (the "Sub-division"), thereby resulting in a lower market price per Ordinary share. The Sub-division will not itself affect the overall value of any shareholder's holding in the Company. The Directors believe the Sub-division may also improve the liquidity in and marketability of the Company's Ordinary shares, which will benefit all shareholders.

There will be no interruption to trading in the Ordinary shares on the London Stock Exchange when the Sub-division takes place. The new Ordinary shares will rank equally with each other and will carry the same rights and be subject to the same restrictions (save as to nominal value) as the existing Ordinary shares, including the same rights to participate in dividends paid by the Company.

The Sub-division requires the approval of shareholders and, accordingly, Resolution 12 in the Notice of AGM seeks this approval. The Sub-division is conditional on the new Ordinary shares being admitted to the Official List of the Financial Conduct Authority and to trading on the London Stock Exchange's main market for listed securities. If Resolution 12 is passed, the Sub-division will become effective on admission. Further details of the proposed Sub-division are set out in the Directors' Report on pages 61 and 62 of the published Annual Report and financial statements for the year ended 31 December 2022.

Environmental, Social and Governance ("ESG") and Climate Change

The Company is not an ESG fund. However, as part of its responsible stewardship of shareholders' assets, your Board continues to engage actively with the Manager with regard to the ongoing assessment and further integration of ESG factors into the Manager's investment process. The Board receives regular assessments of the Company's holdings and portfolio, including a MSCI fund ratings report which currently gives the Company's portfolio a rating of 'AA' (2021: 'AA'). Further information on the important work undertaken on ESG and climate change by the Manager is provided in the 'Information About the Manager' section on pages 113 to 115 of the published Annual Report for the year ended 31 December 2022.

Without becoming prescriptive on specific investment criteria, the Board's desire is for the Manager to continue to incrementally improve the portfolio's ESG credentials and to seek to exploit opportunities arising from a net zero economy, in so far as this is consistent with the Company's investment objective. A key ingredient in building such a portfolio is meaningful, regular and continuing dialogue between the Manager and investee companies, with a view not only to understanding the risk exposure and evolving business models better but also to influencing corporate behaviour.

Succession Planning

In June 2022, we welcomed Virginia Holmes to the Board as an independent non-executive Director following the culmination of an extensive search process using the services of an independent recruitment consultant. Virginia is the former CEO of AXA Investment Managers Limited and has brought significant senior asset management expertise and experience to the Board. She is currently Chair of Trustees at the Unilever UK Pension Fund, Senior Independent Director at both Syncona and European Opportunities Trust and Chair of the Remuneration Committee at Intermediate Capital Group plc. She was previously Chair of USS Investment Management and of BA Pension Trustees, a founder Director of the Investor Forum, Non Executive Director of Standard Life Investments plc and Chair of the Investment Committee at Alberta Investment Management Corporation.

This year marks the completion of my period of tenure on the Board following my appointment as a Director in 2014 and subsequent selection as Chairman in 2021, after the sad and untimely death of Simon Fraser. At the time of the AGM, I will have been on the Board of the Company for almost 9 years and the Board has asked me to remain as Chairman for a short while in order to complete the Board's succession planning exercise.

Excellent progress has been made and we expect to announce two new appointments to the Board over the coming months. I shall be standing down from the Board on 31 December 2023 and I am delighted to report that Virginia Holmes will take on the Chair role from that date. Following these changes, the Board is expected to return to its previous complement of six and is expected to be in compliance with the recommendations of the Parker Review on diversity in the UK boardroom.

abrdn Name Changes

In line with the Manager's ongoing rebranding exercise, during the year our Alternative Investment Fund Manager changed its name from Aberdeen Standard Fund Managers Limited to abrdn Fund Managers Limited, our Investment Manager became abrdn Investments Limited (from Aberdeen Asset Managers Limited) and our Company Secretary changed its name from Aberdeen Asset Management PLC to abrdn Holdings Limited. There is no intention to change the name of the Company.

Outlook

Looking forward, deep-rooted macroeconomic difficulties are likely to continue to impact the direction of financial markets. Seldom has the economic outlook seemed so uncertain. Numerous heavily indebted nations and corporates are confronted with significantly higher borrowing costs that will ultimately constrain future growth. The task of controlling inflation may exert significant damage on already fragile economies, suggesting that policymakers negotiating the treacherous tightrope between recovery and recession have little room for error. Whilst prices of goods and services should moderate as supply / demand dynamics normalise, wage inflation may prove more problematic. Meanwhile, businesses must quickly adapt to the unfolding backdrop of higher input, labour and capital costs occurring simultaneously with softening consumer demand and changes to global supply chains.

From a portfolio perspective, the Company's unconstrained global mandate continues to enable great investment flexibility under constantly changing circumstances. The past twelve months bears testimony to that. The re-emergence of inflation that unleashed a raft of negative surprises on so many unprepared companies in the West is not so unfamiliar elsewhere in the world. Inevitably attractive investment opportunities will emerge as asset prices readjust. Identifying companies that can exert some degree of pricing power, have favourable industry dynamics and seasoned management familiar with evolving realities will be key. Strict adherence to tried and trusted investment principles as always gives a degree of comfort during periods of such investment flux. The Manager believes strongly in its disciplined investment process as a means by which to identify appropriate opportunities to deliver the capital and income strategies of our mandate. Current portfolio positioning reflects this, with high conviction, diversified exposures designed to deliver the Company's long-term objectives.

Finally, as I wrote last year, your views matter. Your Board greatly values shareholder comments and I encourage you to email me with your views at: [email protected].

David Hardie

Chairman

2 March 2023

Investment Manager's Review

Background

Thrift and abstinence are rarely recognised as advantageous attributes of contemporary investment management. In the current dynamic, digital world of conspicuous consumption and instant gratification, such pragmatic peculiarities regularly attract sanctimonious scorn from those at the vanguard of innovation and change. Incompatible with justifying the unjustifiable, such 'constraining characteristics' invariably attract maximum vitriol during periods of excessive exuberance when prevailing valuations reach unwarranted levels. Irrational expectations simply cannot entertain the reality of common sense when the next new investment paradigm is being unequivocally venerated. Yet thrift and abstinence feature prominently in long-term sustainable wealth creation. Perhaps even more so in wealth preservation! The sobering reality of the past twelve months simply reinforced that yet again "it's not different this time". Economics, commerce, business, social interaction and lifestyles constantly change and adapt but, when reflected in valuations of equities and bonds, what consistently matters most are ultimately profits, cash flows and interest rates. Unfolding financial events throughout 2022 looked no further than the past for vindication. Anyone remotely familiar with previous periods of inflation-induced policy tightening understands the consequences such actions have on prevailing market insanities. For seasoned investors well versed in macroeconomic history, the song remained very much the same.

With prices rising at the fastest pace in forty years, inflationary pressures were already well established long before the Russian invasion of Ukraine in late February 2022. Escalating conflict between two key global commodity producers undoubtably poured fresh fuel on the fire of soaring food and energy prices, but the Developed World's mutating inflation problem harboured deeper historical heritage. Twenty years of Central Bank-orchestrated financial repression was about to be exposed as the untenable sham it always was. For centuries, printing money bequeaths inflation. Two decades spent doing exactly that, appeasing financial markets, inflating asset prices and abdicating responsibility for managing long-term price stability defines the incompetent legacy of recent Central Bank custodians. Throughout the period, excessive unconventional monetary policy postponed painful adjustment, providing superficial respite from harsh realities. But, having effectively monetised each and every financial crisis of the current century, huge unsustainable debt legacies were about to become increasingly scrutinised through the lens of rising bond yields. With spiralling debt-servicing costs inherent in higher interest rate and inflationary conditions, spending without restraint comes with serious economic and financial consequences. As the penny dropped, the retrospective wisdom of policymakers and politicians alike proved deafening.

Experiencing an epiphany of belated inflation realisation, consensus opinion abruptly disposed of 'temporary' and 'transitory' from the popular lexicon. Hitherto transient inflation was allegedly now in danger of becoming entrenched, so drastic action ensued. As policymakers embarked on the most brutal series of interest-rate hikes for fifty years, it was hardly surprising significant wealth destruction occurred. Both fixed income and equity markets endured a torrid twelve months. Without their buyers of last resort (Governments), bond markets plunged. Investors, fearful of nominal fixed returns being eroded in an inflationary world, exited at seemingly any price. Beyond bond markets, the myth of non-profitable growth companies constantly performing in a rising yield environment crumbled in the face of such adversity. Having boomed for over a decade, speculative asset classes such as unlisted securities, private equity and cash-burning business models of the so-called 'new economy' were confronted with the new reality. The price of money was going up. For those followers of fashion, to whom present valuation is ignored in favour of future growth potential, the crushing weight of history was closing in. When liquidity contracts, such unproven investment requires strong stomachs. We are yet to find out just how strong.

Refusal to recognise macroeconomic realities and Covid induced distortions remained noticeably absent from progressive policies being pursed elsewhere in the world. Here fiscal and monetary restraint generally prevailed. Indeed the stark contrast between reactive interest rate rises throughout 2022 in the debt dependent Developed World and proactive monetary tightening enacted twelve months previously in 2021 across the Developing World couldn't have been more pronounced. With local interest rates free to price risk accordingly, pre-emptive policy actions in Asia and Latin America prevented undue inflationary concerns, providing a platform for imminent monetary easing. Out-with the arguably over-valued technology sectors in China and Taiwan, most Emerging Markets trod water over the period. International risk appetite remained unsurprisingly paralysed given events unfolding elsewhere, but subdued sentiment can rapidly change. China's year-end U turn on Covid policy undoubtably enhances prospects for the country and region, should consumer demand accelerate and domestic property markets stabilise. Unburdened by punitive debt obligations and free from unrealistic expectations, Asia and Latin America emerged relatively unscathed from the financial havoc unfolding elsewhere.

Nurturing high hopes of post Covid normalisation, the year began with investor optimism over promises, progress and prosperity. By period end, conventional wisdom had been battered, bruised and burned by the all too familiar investment bogeymen of inflation, rates and recession. Having been brought back to economic and financial sobriety, investor focus once again recalibrated from tomorrow's possibilities to today's profits. Given evolving global macroeconomic issues and rising geo-political uncertainty, such pragmatism is welcomed.

Portfolio Activity

Portfolio turnover was 11% of gross assets relative to 12% in 2021 and reflects a continuing decline to more normal levels over the twelve month period. Although market volatility occasionally spiked higher, most notably during the Russian invasion of Ukraine and the UK's politically induced meltdown of late September, periods of extended price distortions seldom prevailed. That said, the former presented opportunities to increase exposure to European equities, the latter to reflect on the beauty of the Trust's unconstrained, globally diversified mandate!

Exposure to Emerging Market Bonds continued to be reduced, thereby increasing overall equity exposure by year end to 103.1% compared to 102.5% at financial year-end 2021.

North American exposure decreased by the greatest amount on selective divestment of three established positions which had performed extremely well and were deemed to be fully valued. Consequently Nutrien, Pepsico and Schlumberger were sold outright, with a new purchase of leading global pharmaceutical company Merck slightly offsetting overall regional reduction.

Latin American exposure once again witnessed significant profit taking purely for reasons of valuation and strong performance. The reduction of Chilean lithium producer Sociedad Quimica (SQM) and Mexican airport operator Grupo Asur echoed similar capital re-allocation trades made last year, but large residual positions remain reflecting positive, long-term prospects for both companies.

Overall Asian exposure slightly declined on a net basis, with outright sales of Castrol India and Indocement. Profit taking in Taiwan Semiconductor and GlobalWafers also raised cash which was partially offset by additional investment in existing holdings of Hon Hai Precision and Samsung Electronics plus a newly established position in Woodside Energy in Australia.

European exposure increased significantly with the lion's share of re-cycled profits invested in the region. New positions were established in Dutch technology company BE Semiconductor, in leading global industrial conglomerate Siemens of Germany and in worldwide food processing company, Danone in France. Various existing holdings, such as Nordea, Zurich Insurance and Enel were added to during periods of weakness. Over the period there were no transactions within UK equities. Two bond holdings were fully divested, namely Mexican communications company America Movil and the shorter-dated Indian corporate ICICI Bank, taking the total number of equity and bond holdings at year end to 51 and 18 respectively.

From an overall investment perspective, the emphasis continues to favour diversified asset exposures in companies deemed beneficiaries of the evolving backdrop, maintaining a "barbell" strategy of owning both growth and cyclical stocks. Structurally higher inflation is supportive of companies owning real assets and those possessing pricing power, whilst selective growth companies should benefit from accelerating trends in industrial automation, semiconductor miniaturisation and digital communications. The greatest potential for positive cyclical momentum upside surprises can still be identified in Asia and other countries where substantial pent up demand from prolonged Covid effects still exists. Corporate earnings may be under recessionary threat elsewhere, but scope exists for upwards earnings and dividends revisions in Latin America and Asia. In such regions, sectors and businesses the portfolio remains meaningfully invested.

Performance

The NAV total return for the year to 31 December 2022 with net dividends reinvested was +8.8%. This compared favourably with the Reference Index (FTSE All World) total return of -7.3%. The top five and bottom five stock contributors are detailed below:


Top Five Stock Contributors	%*	Bottom Five Stock Contributors	%*
SQM	1.8	GlobalWafers	-1.8
Grupo Asur	1.7	Taiwan Semiconductor	-0.5
AbbVie	1.0	Samsung Electronic	-0.4
Schlumberger	0.9	Telenor	-0.2
Vale	0.9	CME Group	-0.2
* % relates to the percentage contribution to return relative to the Reference Index (FTSE All World TR Index)

Over the full financial year, the high single-digit total return on gross assets was welcomed although, in real terms the exceptionally high 13.4% rate of UK Retail Price Inflation proved a tough hurdle to match. Overall global equity market weakness was not reflected in the total gross asset return primarily due to broad portfolio diversification and strong defensive stock performance. In capital terms, Latin America delivered by far the strongest regional index returns in what proved to be a very tough year for capital growth. This was very much reflected in portfolio returns with a +38% contribution to overall performance from the Latin American region. Although the UK equity market proved to be the only other 'region' to deliver a positive return over the twelve month period, the portfolio's regional exposures faired much better with positive contributions recorded from five of the six regional asset areas. Strong stock selection prevailed in most areas, with only Asian holdings marginally declining in absolute terms. Sterling weakness against most portfolio currencies was modestly supportive, most noticeably against the US Dollar. European markets suffered the negative ripple effect consequences of war in Ukraine and Russian energy dependency, whilst Asia also declined in Sterling terms as China's zero Covid policy kept most investors cautious on equity markets. North America witnessed its weakest market returns for over a decade, with the Technology heavy Nasdaq declining -25.0% in Sterling terms. A positive North American portfolio return of +13.9% was achieved through high quality, defensive stock selection. Despite significant reductions to Emerging Market Bond exposures since the outbreak of Covid, portfolio returns in Sterling terms also continued to be positive. In what proved a particularly, problematic period for over-extended markets and growth stocks, it was gratifying to record robust individual stock performance across a variety of sectors and industries. Companies operating in Basic Materials, Energy, Healthcare, Consumer Staples, Real Estate and Financials all contributed to overall positive returns, once again emphasising the importance of the diversified, quality-focused strategy.

Predicting dividend income over the financial year proved slightly more straight-forward than in the preceding two Covid-infected financial periods. As supply-side interruptions waned, some semblance of corporate normality was restored, albeit with business conditions constantly being impacted by higher wage and input costs plus growing fears over recession. Positive cash flows became an increasingly precious commodity, particularly when faced by equity markets beginning to be squeezed by tighter liquidity. Currency movements against Sterling experienced relatively normal volatility within an historical context (outwith the farcical forty-four days of the Truss Premiership), with the usual unpredictability of magnitude and direction. Sterling weakness against practically all portfolio currencies over the period proved modestly positive in translation of dividend income accrued from the portfolio's diversified global holdings. Dividend increases from portfolio companies generally exceeded conservative estimates, with 80% falling into this category. Whilst notoriously difficult to predict, sectors such as Basic Materials and Energy experienced familiar fluctuating income expectations, yet over the financial period the net effect from positive and negative "surprises" was negligible. Overall gross income accrued increased +12.8% year-on-year, with earnings per share growth of +16.3% reflecting the positive impact of share buybacks during the period.

Attribution Analysis

The attribution analysis below details the various influences on portfolio performance. In summary, of the 1650 basis points (before expenses) of performance above the Reference Index, asset allocation added 410 basis points and stock selection contributed 1240 basis points. Structural effects, relating to the fixed income portfolio and gearing net of borrowing costs, added 40 basis points of relative performance.


	Company		Reference indexA		Contribution from:
					Asset	Stock
	Weight	Return	Weight	Return	Allocation	Selection	Total
	%	%	%	%	%	%	%
UK	7.7	36.6	3.8	5.3	-0.1	0.9	0.8
Europe ex UK	25.6	5.2	13.0	-9.6	0.1	3.4	3.5
North America	28.2	13.9	61.4	-8.8	0.5	6.7	7.2
Japan	-	-	6.3	-4.8	-0.2	-	-0.2
Asia Pacific ex Japan	24.6	-5.1	12.8	-5.9	0.4	0.2	0.6
Other International	13.9	18.0	2.7	30.4	3.4	1.2	4.6
Gross equity portfolio return	100.0	9.2	100.0	-7.3	4.1	12.4	16.5
Fixed income		0.6
Gross portfolio return		9.8
Management fees and admin expenses.		-0.6
Tax charge		-0.6
Finance costs		-0.2
Technical differences		0.4
Total return		8.8		-7.3
A Reference Index - FTSE All World TR Index
Notes to Performance Analysis
Asset Allocation effect - measures the impact of over or underweighting each asset category, relative to the benchmark weights.
Stock Selection effect - measures the effect of security selection within each category.
Technical differences - the impact of different return calculation methods used for NAV and portfolio performance
Source: abrdn & BNP Paribas Securities Services Limited. Figures may appear not to add up due to rounding.

Global Review

The deeply distorted business backdrop that greeted the onset of 2022 concealed the chasm of macroeconomic honesty and integrity that exists throughout the world. The transparent monetary orthodoxy prevailing in Developing economies versus the opaque policy unorthodoxy complicit with persistent profligacy in the so-called Developed World. Unrepentantly pursuing interest-rate policy inertia to cover up the cracks of unsustainable debt dependency, unjustified prosperity entitlement and widespread structural demise, a rude awakening belatedly descended on policymakers in the Developed World. Inflation was alive, well and most definitely unwelcome to Wall Street and those with their heads firmly in the sand.

What transpired in the United States exemplified yet again the financial pain that accompanies disrobing of delusions. The largest annual upward move in the US Federal Reserve's benchmark lending rate since 1973 caused US mortgage rates to soar. Widespread bond market weakness proved an inevitable consequence. Both domestic equity and bond markets sharply declined, the first such 'in tandem' occurrence for fifty years. Sanctuaries of capital preservation were unsurprisingly few and far between. The plunge caused significant value destruction to technology titans of the past decade, the new economy stocks of the Covid lockdowns, cryptocurrencies and numerous other unproven business concepts that so often characterise the final stages of a speculative bull market. Yet most events that defined 2022 in the United States came straight out of a macro-economic textbook! Unfortunately for bruised and battered investors the logical progression from here makes uncomfortable reading. Higher bond yields, a collapse in money supply, tightening affordability in the housing market and contracting manufacturing all point to at best recession, at worst, stagflation. Longer-term, financial markets still have many problems to digest. Corporate earnings expectations remain totally detached from reality; asset quality is likely to deteriorate as economic growth contracts; poor risk management, over-optimism and incompetence has led to the usual gross mis-allocation of capital into non-profitable, liquidity dependent businesses unlikely to survive in a higher interest rate environment. Irresponsible Federal Reserve policy directed at managing asset prices rather than price stability has created an enormous debt legacy needing to be addressed; in doing so, upward pressure on bond yields may constrain growth and prosperity beyond the confines of any normal business cycle. With US equity and bond markets increasingly expecting policymakers to once again capitulate and do "whatever it takes" to appease short-term interests, great scope for disappointment exists in the medium-term outlook for US financial assets.

The UK and European financial markets faced similar issues related to belatedly recognising resurgent inflation and its accompanying consequences. Desperately detached from economic realities, The Bank of England and European Central Bank proved powerless to maintain their veneer of credibility. Frantically hiking interest rates retrospectively in response to spiralling prices fooled no one - bond markets sold off sharply and equities struggled to preserve capital. Whilst the narrow UK FTSE 100 ended in positive territory, broader indices of UK companies endured double-digit declines. The perceived "defensive" nature of the UK equity market primarily equates to significant index presence of Consumer Staples and Healthcare companies and their dividend paying culture. Yet globally such opportunities can increasingly be found elsewhere, often with higher growth characteristics and superior dividend potential. Historically the UK's energy and commodity sectors that remain over-represented in the market have tended not to provide robust downside protection when recession strikes. Consequently the current low portfolio weighting to the UK is unlikely to change. Perhaps somewhat paradoxically, given the ongoing war in Ukraine and evidence of increasingly strained EU political dynamics, the investment outlook for portfolio holdings in Europe is arguably more transparent. European Industrials such as Epiroc, Atlas Copco, Siemens and BE Semiconductor endured an extremely tough 2022. Constant downward earnings revisions, contracting equity price-earnings multiples and cautious trading statements prevailed throughout. But, at current valuations, future risk-reward prospects are undoubtably compelling, especially with sentiment being ubiquitously negative. Shunned by global investors in a world until recently infatuated with US Technology stocks, Europe offers intriguing opportunities against the current backdrop of higher interest rates and uncertainty.

Unburdened by systemic vulnerability and unfettered by secular, short-term interests, policy directives in the Developing World remained appropriate and prudent. All too familiar with how high inflation disproportionally decimates the purchasing power of low-income earners, policymakers throughout Asia and Latin America had anticipated the majority of 2022 developments. Significant proactive interest rate hikes in 2021 prepared the economic landscape for escalating inflationary pressures witnessed in 2022, consequently such foresight had prices controlled and declining by period end. Having anchored expectations, bond markets remained sanguine over future prospects and equity markets weathered storms raging elsewhere. The one noticeable exception was China. Strict adherence to a zero Covid policy constrained Chinese economic growth for most of the period. Geo-political tensions with the United States also materially escalated at times and for the most part international investors divested Chinese assets amidst ongoing uncertainties. Yet by period end the outlook had materially changed. China's abrupt U turn on its zero Covid policy in December arguably enhances the outlook significantly, presenting numerous potential growth benefits for the country, region and beyond. Amongst potential beneficiaries are global commodity markets, Taiwanese manufacturers of semiconductors and electronic components, not to mention exporters of consumer goods desired by China's rapidly expanding middle income population. Whilst improvement is unlikely to be instantaneous, the direction of travel looks encouraging.

For Latin America, where significant capital and income returns continue to contribute greatly to portfolio performance, the outlook remains as interesting as ever. The region delivered the best performance in Sterling terms in 2022 of any global geographical region, the ninth time this has happened in the past twenty years. Business prospects continue to flourish, whilst investment opportunities prosper often at discounted valuations given Mexico, Brazil and Chile unjustly remain ignored in an increasingly passive-investment obsessed world. With sustainable declining inflation in sight, let the monetary easing begin.

Summary of Investment Changes During the Year


	Valuation		Appreciation/		Valuation
	31 December 2021		(depreciation)	Transactions	31 December 2022
	£'000	%	£'000	£'000	£'000	%
Equities
UK	85,872	5.0	14,533	(31,634)	68,771	3.9
Europe ex UK	304,887	17.5	(1,512)	144,960	448,335	25.1
North America	496,896	28.6	44,285	(72,697)	468,484	26.2
Asia Pacific ex Japan	503,319	28.9	(41,459)	(17,557)	444,303	24.9
Latin America	184,065	10.6	57,512	(22,777)	218,800	12.3
Africa	15,794	0.9	(3,355)	-	12,439	0.7
	1,590,833	91.5	70,004	295	1,661,132	93.1
Preference shares
UK	7,637	0.4	(1,368)	-	6,269	0.3
	7,637	0.4	(1,368)	-	6,269	0.3
Bonds
Europe ex UK	6,023	0.4	737	11	6,71	0.4
Asia Pacific ex Japan	52,526	3.0	(1,173)	(4,274)	47,079	2.6
Latin America	66,703	3.8	(1,806)	(17,107)	47,790	2.7
Africa	15,590	0.9	7	182	15,779	0.9
	140,842	8.1	(2,235)	(21,188)	117,419	6.6
Total Investments	1,739,312	100.0	66,401	(20,893)	1,784,820	100.0

Outlook

For disciples of pragmatic financial fundamentalism, forecasting future prospects remain anchored in well-trodden historical paths. Whilst innovation, invention and change will always dictate improvement, advancement and growth, the investment valuations ascribed along the way invariably reflect the bi-polar extremes of human emotions. Therein lies the most toxic cocktail within investment management. When feelings and finance entwine, poor judgement tends to prevail. Endemic to each and every mania, panic and financial crash throughout the course of history is irrational valuation based ultimately on emotion. Having recently endured yet another prolonged period of such eccentric absurdity, some financial markets remain bloated with unsustainable excess. Through the unprejudiced prism of the past it is possible to assess some possible prospects for the future

In simplistic terms, what to avoid, and what to assert? Assuming inflation, recession and interest rates remain as influential as ever, some observations are worth emphasising. Global commodity prices are as unpredictable as they are volatile, so projecting peaks and troughs is futile. Such "cyclical" inflation comes and goes, but structural inflation found in wages, rents and index-linked government spending seldom subsides painlessly. Increasingly vulnerable to the latter, the debt-laden Developed World is perilously close to being deeply infected by such intransigence. Stronger inflation-fighting credentials by Central Banks in the Developing World suggest less ambiguity ahead. Similarly, sharply higher interest rates carry acutely divergent consequences for respective economies. Where there are deficits, debt and distrust, the odds of avoiding recession are slim. Paralysis of purchasing power and collapsing consumer confidence see to that. Where savings culture prevails and favourable demographics fuel growth, temporary tighter monetary policies prove less disruptive. Focusing on businesses in countries with such characteristics remains forefront to the Company's investment strategy.

Finally, the question of legacy must be addressed in any projected outlook. It would be naïve to ignore the past when considering the future. From the vast library of financial mistakes made throughout history, certain trends are clearly apparent. Acute equity market shocks tend to repair quickly when only one specific sector was excessively valued. Previous Energy and Consumer Staples-led dislocations are examples of this. Considerably more time is required to emerge from financial market crises related to systemic failures such as Asia in the late 1990s and the banking failures of 2007/08. Most ominously, recession-linked asset bubbles fuelled by artificially manipulated interest rates and fixed income markets require long, slow and painful readjustment to cleanse the system of financial excess. Current evidence suggests the Developed World is descending towards the latter. With global Central Banks increasingly devoid of policy options and tarnished by diminishing credibility, the outlook has rarely been so opaque. The Company's high conviction investment strategy will remain focused on avoiding the pitfalls of previous valuation excesses and emphasising unaffected opportunities where realistic growth and income prevails.

Bruce Stout

Senior Investment Director

Martin Connaghan, Investment Director

Samantha Fitzpatrick, Investment Director

abrdn Investments Limited

2 March 2023

The Manager's Investment Process Including ESG

The Company's Alternative Investment Fund Manager is abrdn Fund Managers Limited ("aFML") which is authorised and regulated by the Financial Conduct Authority. Day-to-day management of the portfolio is delegated to abrdn Investments Limited ("aIL"). aIL and aFML are collectively referred to as the "Investment Manager" or the "Manager". The ultimate parent of aIL and aFML is abrdn plc.

The Manager believes that deep fundamental research into companies, mediated through team debate and a rigorous stock selection process, is the key to unlocking investment insight and driving investment returns for clients such as the Company. The Manager utilises a truly bottom-up, fundamental stock-picking approach, where sector, regional and country allocations are a consequence of the bottom-up stock selection decisions, constrained by appropriate risk controls. The Manager operates a comprehensive risk system with tools that provide better insights for its individual fund managers and a more complete understanding of all risk exposures in the portfolios to ensure that the managers only take the sort of risk that the Manager is comfortable with and can back with insight from extensive first hand research.

The Manager takes a long-term quality approach by focusing on companies that the research analysts identify as high quality. This involves assessing each company on five key factors, namely the durability of the business model and moat, the attractiveness of the industry, the strength of the financials, the capability of management, and assessment of the company's ESG credentials. In the assessment of what is an appropriate valuation for a company, the Manager focuses primarily on earnings yields, free cashflow yields and dividend yields, set against expected long-term growth rates for those elements. The Manager targets a double digit implied annual return.

The Investment Process, Philosophy and Style

Idea Generation

The Manager's scale affords coverage of a wide and dynamic universe, with in-depth, locally-sourced insights with over 1,000 investment professionals across the world supporting fundamental stock research and insight generation. Research coverage is organised by region and on a sector basis, with analysts developing deep expertise which enables them to identify investment opportunities through fundamental knowledge at both the sector and stock level. The Manager has excellent access to the companies which it researches, through structured meetings and regular conversations with key decision-makers and conducts several thousand company meetings per year, in addition to the many ESG engagements undertaken with companies. The Manager conducts over 6,000 company meetings each year and maintains a global coverage list of over 2,000 stocks.

Research

The Manager has developed a proprietary research platform used by all its equity, credit and ESG teams, giving instant access to research globally. The research is focused on four key areas:

- Foundations - the Manager analyses how the company makes money, the attractiveness and characteristics of its industry, and the strength and sustainability of the economic 'moat'. This includes a thorough evaluation of the ESG risks and opportunities of the company. Face-to-face meetings anchor how the Manager understands and challenges the key elements of a company's fundamentals: the evolution and growth of the business; the sustainable competitive advantage; management's track record of execution and managing risk; past treatment of minority shareholders; the balance sheet and financials; and ESG risks and opportunities of the company in question.

- Dynamics - the shorter- and longer-term dynamics of the business that will be the key determinants of its corporate value over time. Specifically the Manager looks for changes in the factors driving the market price of a stock, identifying the drivers that the wider market may not be pricing in. Understanding the dynamics behind these drivers allows the Manager to focus on the factors that will drive shareholder returns from a particular stock.

- Financials and Valuation - the Manager examines the strengths and weaknesses of the company's financials including a thorough analysis of the balance sheet, cash flow and accounting, the market's perception of the company's future prospects and value, and its own forecasts of future financials and how the stock should be priced. This includes significant focus on the dividend paying capability of each business, the potential for dividend growth and the sustainability of the payout.

- Investment insight and risk - the Manager articulates its investment thesis, explaining how it views a stock differently from the market consensus and how the Manager expects to crystallise value from the holding over time.

Integrated ESG and Climate Change Analysis

Whilst ESG factors are not the over-riding criteria in relation to the investment decisions taken by the Manager for the Company, significant attention is given to ESG and climate related factors throughout the Manager's investment process. The Manager gives particular weight to ESG factors when they are material to the investment case being made for an investee company.

In the Manager's view, companies that successfully manage climate change risks will perform better in the long term. It is important that the Manager assesses the financial implications of material climate change risks across all asset classes, including real assets, to make portfolios more resilient to climate risk.

The detailed analysis of the Manager's embedded ESG process is contained on pages 113 to 115 of the published Annual Report for the year ended 31 December 2022.

Idea Capture

To ensure that the Manager captures the best ideas from the global research platform, the Global Equity Team is fully integrated into the regional research process. The Team mirrors the sector specialisms across the various regional desks and they contribute to, and participate in, the investment debate of the stocks in their sector. Being fully integrated allows the Team to be present at all stages along the investment journey and build their own conviction into the underlying investment cases.

The Team attends company meetings as well as the regional teams' sector review meetings, facilitating deep knowledge of the companies and the degree of conviction underpinning the investment insights. This allows the Team to capture effectively the highest conviction ideas and the most important news flow across the research platform.

Peer Review

Having a common investment language facilitates effective communication and comparison of investment ideas through peer review which is a critical part of the process. All investment ideas are subject to rigorous peer review, both at regular meetings and on an ad hoc basis - and all team members debate stocks, meet companies from all industries, and given their dual fund manager / analyst role are incentivised to fully participate in the entire process.

Portfolio Construction/Risk Controls

Portfolios are built from the bottom up, prioritising high conviction stock ideas in a risk aware framework, giving clients access to the best investment ideas. Portfolio risk budgets are derived from clients' investment objectives and required outcomes. Peer review is an essential component of the construction process with dedicated portfolio construction pods (smaller dedicated groups of senior team members that have clear accountability for the strategy) debating stock holdings, portfolio structure and risk profiles.

As an active equity investor the Manager has adopted a principled portfolio construction process which actively takes appropriate and intentional risk to drive return. The largest component of the active risk will be stock-specific risk, along with appropriate levels of diversification. Risk systems monitor and analyse risk exposures across multiple perspectives breaking down the risk within the portfolio by industry and country factors, by currency and macro factors, and by other fundamental factors (quality, momentum, etc.). Consideration of risk starts at the stock level with the rigorous company research helping the Manager to avoid stock specific errors. The Manager ensures that any sector or country risk is appropriately sized and managed relative to the overall objectives of the Company.

Operational Risk and Independent Governance Oversight

Risk management is an integral part of the Manager's management process and portfolios are formally reviewed on a regular basis with the Manager's Global Head of Equities, the Portfolio Managers, the Manager's Investment Governance & Oversight Team (IGO) and members of the Manager's Investment Risk Team. This third party oversight both monitors portfolio risk and also oversees operational risk to ensure client objectives are met.

Delivering the Investment Policy

Day-to-day management of the Company's assets has been delegated to the Manager. The Manager invests in a diversified range of international companies and securities in accordance with the investment objective.

The team is led by Bruce Stout with dedicated support from Martin Connaghan and Samantha Fitzpatrick. The management team utilises a "Global Coverage List" which is constructed by each of the specialist country management teams. This list contains all buy (and hold) recommendations for each management team, which are then used by the portfolio manager as the Company's investment universe. From this pool of companies the Manager looks to construct a focused portfolio of 40 - 60 companies, selecting those companies that have the most attractive quality and valuation characteristics, offering the best expected risk adjusted returns, within a diversified portfolio. Position sizes typically range from 1% to 5% of the portfolio and are considered on an absolute, rather than benchmark relative basis. Stock selection is the major source of added value over time.

Top-down investment factors are secondary in the Manager's portfolio construction, with stock diversification rather than formal controls guiding stock and sector weights. Market capitalisation is not a primary concern.

In addition to equity exposures, the investment mandate provides the flexibility to invest in fixed income securities. The process of identifying, selecting and monitoring both sovereign and corporate bonds follows exactly the same structure and methodology as that for equity investment, fully utilising the global investment resources of the Manager. As in the case of equity exposure, the total amount, geographical preference, sector bias and specific securities will ultimately depend upon relative valuation and future prospects.

At the year end, the Company's portfolio consisted of 51 equity and 18 bond holdings. The Manager is authorised by the Board to hold between 45 and 150 holdings in the portfolio.

A comprehensive analysis of the Company's portfolio is disclosed on pages 41 to 43 of the published Annual Report for the year ended 31 December 2022 including a description of the ten largest investments, the portfolio of investments by value and a sector and geographical analysis of investments. The portfolio attribution analysis is contained in the Manager's Review.

abrdn Investments Limited

2 March 2023

Key Performance Indicators (KPIs)

The Board uses a number of financial and operating performance measures to assess the Company's success in achieving its investment objective and to determine the progress of the Company in pursuing its investment policy. The main KPIs identified by the Board in relation to the Company which are considered at each Board meeting are as follows:


KPI	Description
Dividend	Absolute Growth: The Board's aim is to seek to increase the Company's revenues over time in order to maintain an above average dividend yield. Dividends paid over the past 10 years are set out on page 26 with a graph showing dividend growth against inflation on page 27 of the published Annual Report for the year ended 31 December 2022. Relative Yield: The Board also measures NAV total return performance against the Reference Index and performance relative to investment trusts within the Company's peer group over a range of time periods, taking into consideration the differing investment policies and objectives employed by those companies.
NAV Performance	Absolute Performance: The Board considers the Company's NAV total return figures to be the best indicators of performance over time and these are therefore the main indicators of performance used by the Board. Relative Performance: The Board also measures NAV total return performance against the Reference Index and performance relative to investment trusts within the Company's peer group over a range of time periods, taking into consideration the differing investment policies and objectives employed by those companies. A graph showing the NAV and Reference Index total returns is shown on page 27 of the published Annual Report for the year ended 31 December 2022.
Share Price Performance	Absolute Performance: The Board monitors the share price absolute return. Relative Performance: The Board also monitors the price at which the Company's shares trade relative to the Reference Index on a total return basis over time A graph showing absolute, relative and share price performance is shown on page 27 of the published Annual Report for the year ended 31 December 2022 and further commentary on the performance of the Company is contained in the Chairman's Statement and Investment Manager's Review.
Share Price Discount/ Premium to NAV	The discount/premium relative to the NAV per share represented by the share price is closely monitored by the Board. The objective is to avoid large fluctuations in the discount/premium by the use of share buybacks and the issuance of new shares or the sale of Treasury shares, subject to market conditions. A graph showing the share price premium/(discount) relative to the NAV is shown on page 27 of the published Annual Report for the year ended 31 December 2022.
Gearing	The Board's aim is to ensure that gearing as a percentage of NAV is kept within the Board's guidelines issued to the Manager as disclosed on page 28 of the published Annual Report for the year ended 31 December 2022.
Competitive Ongoing Charges Ratio	Absolute Performance: The Board monitors the longer-term trend of the Company's OCR in absolute terms. Relative Performance: the Board also monitors the relative trend of the OCR versus the Company's peer group, taking into consideration the differing investment policies and objectives employed by those companies. Details of the annual OCR trend are disclosed on page 26 of the published Annual Report for the year ended 31 December 2022.

Performance Track Record

In accordance with the investment objective, the Company's performance is measured over the long term and annualised data covering the last ten years is presented below.

Total Return


	1 year	3 year	5 year	10 year
	% return	% return	% return	% return
Share priceAB	+20.6	+22.5	+33.0	+99.6
Net asset value per Ordinary shareA	+8.8	+25.3	+30.2	+108.1
UK RPI	+13.4	+23.5	+29.6	+46.0
Reference IndexC	-7.3	+19.0	+36.6	+158.9
A Considered to be an Alternative Performance Measure.
B Mid to mid.
C Reference Index comprising 60% FTSE World ex UK Index/40% FTSE World UK Index up to April 2020 and 100% FTSE All World TR Index from May 2020.
Source: abrdn, Morningstar & Lipper

Ten Year Financial Record


Year end	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022
Total revenue (£'000)	63,717	62,609	67,020	77,333	79,471	77,105	82,417	68,918	78,737	88,745
Per Ordinary share (p):
Net asset value	981.0	966.6	849.0	1,135.7	1,251.4	1,107.8	1,190.0	1,138.2	1,240.3	1,293.3
Share price	1,052.0	1,026.0	829.5	1,188.0	1,268.0	1,132.0	1,260.0	1,130.0	1,156.0	1,334.0
Net revenue returnA	43.8	40.8	45.7	51.2	51.8	49.6	54.1	46.6	51.7	60.1
DividendsB	43.0	45.0	46.5	47.5	50.0	51.5	53.5	54.5	55.0	56.0
Dividend cover	1.03x	0.91x	0.99x	1.08x	1.04x	0.96x	1.01x	0.86x	0.94x	1.07x
Revenue reserves (£'000)	68,120	64,690	64,767	70,963	75,252	73,563	75,747	66,764	62,967	69,239
Shareholders' funds (£'000)	1,236,718	1,240,537	1,091,019	1,447,879	1,599,129	1,419,588	1,539,055	1,461,827	1,561,066	1,616,750
Ongoing charges ratio(%)C	0.66	0.73	0.75	0.68	0.64	0.69	0.65	0.68	0.59	0.52
A Net revenue return per Ordinary share has been based on the average Ordinary share capital during each year (see note 9 ).
B The figure for dividends per share reflects the years to which their declaration relates and not the years they were paid.
C Considered to be an Alternative Performance Measure.

Investment Objective and Investment Policy

Investment trusts, such as the Company, are long-term investment vehicles. Typically, investment trusts are externally managed, have no employees, and are overseen by an independent non-executive board of directors. Your Company's Board of Directors sets the investment mandate, monitors the performance of all service providers (including the Manager) and is responsible for reviewing strategy on a regular basis. All this is done with the aim of preserving and enhancing shareholder value over the longer-term.

Reference Index

The Company does not have a Benchmark. However, performance is measured against a number of measures including a Reference Index, the FTSE All World TR Index, which was adopted in April 2020. Given the composition of the portfolio and the Manager's investment process, it is likely that the Company's investment performance may diverge, possibly significantly, from this Reference Index. Performance prior to April 2020 is measured against a blend of the old composite Benchmark (40% of the FTSE World UK Index and 60% of the FTSE World ex-UK Index) up to 27 April 2020 and the FTSE All World TR Index thereafter.

Investment Objective

The aim of the Company is to achieve an above average dividend yield, with long-term growth in dividends and capital ahead of inflation, by investing principally in global equities.

Investment Policy

There are a number of elements set out in the investment policy delegated to the Manager which are set out below:

Asset Allocation

The Company's assets are currently invested in a diversified portfolio of international equities and fixed income securities spread across a range of industries and economies. The Company's investment policy is flexible and it may, from time to time, hold other securities including (but not limited to) index-linked securities, convertible securities, preference shares, unlisted securities, depositary receipts and other equity-related securities. The Company may invest in derivatives for the purposes of efficient portfolio management in the furtherance of its investment objective. The Company's investment policy does not impose any geographical, sectoral or industrial constraints upon the Manager. The Board has set guidelines which the Manager is required to work within. It is the investment policy of the Company to invest no more than 15% of its gross assets in other listed investment companies (including listed investment trusts), at the time of purchase. The Company currently does not have any investments in other investment companies. The Manager is authorised to enter into stocklending contracts and the Company plans to undertake limited stocklending activity in the future following the completion of the administrative set-up process.

Risk Diversification

The Manager actively monitors the Company's portfolio and attempts to mitigate risk primarily through diversification. The Company is permitted to invest up to 15% of its investments by value in any single holding (at the time of purchase) although, typically, individual investments do not exceed 5% of the total portfolio.

Gearing

The Board considers that returns to shareholders can be enhanced by the judicious use of borrowing. The Board is responsible for the level of gearing in the Company and reviews the position on a regular basis. Any borrowing, except for short-term liquidity purposes, is used for investment purposes or to fund the purchase of the Company's own shares.

Total gearing will not in normal circumstances exceed 30% of net assets with cash deposits netted against the level of borrowings. At the year end, there was net gearing of 11.2% (calculated in accordance with Association of Investment Companies guidance). Particular care is taken to ensure that any bank covenants permit maximum flexibility in investment policy.

Changes to Investment Policy

Any material change to the investment policy will require the approval of the shareholders by way of an ordinary resolution at a general meeting.

Ten Largest Investments

As at 31 December 2022


Aeroporto del Sureste		AbbVie
Holding: 4.4%		Holding: 3.3%
Grupo Aeroporto del Sureste operates airports in Mexico. The company holds long-term concessions to manage airports in leading tourist resorts and major cities.		AbbVie Inc is a global pharmaceutical company, producing a broad range of drugs for use in speciality therapeutic areas such as immunology, chronic kidney disease, oncology and neuroscience.

Philip Morris International		Broadcom Corporation
Holding: 3.2%		Holding: 3.1%
Spun out from the Altria Group in 2008, Philip Morris International is one of the world's leading global tobacco companies. It manufactures and sells leading recognisable brands such as Marlboro, Parliament and Virginia Slims.		Broadcom designs, develops and markets digital and analogue semiconductors worldwide. The company offers wireless components, storage adaptors, networking processors, switches, fibre optic modules and optical sensors.

Taiwan Semiconductor Manufacturing		TotalEnergies
Holding: 3.0%		Holding: 2.9%
Taiwan Semiconductor Manufacturing is one of the largest integrated circuit manufacturers in the world. The company is involved in component design, manufacturing, assembly, testing and mass production of integrated circuits.		The Company produces, transports and supplies crude oil, natural gas and low carbon electricity as well as refining petrochemical products. TotalEnergies also owns and manages gasoline filling stations worldwide.

Unilever		Oversea-Chinese Bank
Holding: 2.6%		Holding: 2.5%
Unilever is a multinational consumer goods group which is focused in the areas of home care, beauty & personal care and food products.		Oversea-Chinese Banking Corporation offers a comprehensive range of financial services spread across four main business segments. These include Global Consumer/Private Banking: Global Wholesale Banking; Global Treasury & Markets; plus Insurance.

CME Group		Samsung Electronics
Holding: 2.3%		Holding: 2.2%
Based in Chicago, USA CME Group operates a derivatives exchange that trades futures contracts and options, interest rates, stock indexes, foreign exchange and commodities.		Korean based Samsung Electronics manufactures a wide range of consumer and industrial electronic equipment and products such as semiconductors, computers, monitors, peripherals, televisions and home appliances. The company also has significant global market share of mobile phone handsets.

List of Investments

		Valuation	Total	Valuation
		2022	assetsA	2021B
---	---	---	---	---
Company	Country	£'000	%	£'000
---	---	---	---	---
Aeroporto del Sureste	Mexico	79,049	4.4	70,058
AbbVie	USA	60,465	3.3	44,985
Philip Morris International	USA	58,914	3.2	49,097
Broadcom Corporation	USA	55,777	3.1	58,956
Taiwan Semiconductor Manufacturing	Taiwan	54,589	3.0	82,058
TotalEnergies	France	52,036	2.9	37,471
UnileverC	UK	47,964	2.6	45,390
Oversea-Chinese Bank	Singapore	45,297	2.5	37,459
CME Group	USA	41,931	2.3	57,349
Samsung Electronics	Korea	40,735	2.2	44,298
Top ten investments		536,757	29.5
Sociedad Quimica Y Minera de Chile	Chile	39,819	2.2	29,780
Zurich Insurance	Switzerland	39,743	2.2	25,956
Bristol-Myers Squibb	USA	38,868	2.1	29,922
Tryg	Denmark	38,504	2.1	35,496
Vale do Rio Doce	Brazil	37,561	2.1	27,540
Johnson & Johnson	USA	36,277	2.0	25,254
British American Tobacco	UK	36,097	2.0	30,041
BHP Group	Australia	35,980	2.0	30,786
Verizon Communications	USA	32,754	1.8	38,362
Hon Hai Precision Industry	Taiwan	32,425	1.8	27,753
Top twenty investments		904,785	49.8
Merck	USA	32,279	1.8	-
Telus	Canada	32,040	1.8	34,824
Siemens	Germany	31,792	1.8	-
Cisco Systems	USA	31,683	1.7	37,423
Shell	Netherlands	31,634	1.7	22,065
BE Semiconductor	Netherlands	31,001	1.7	-
Taiwan Mobile	Taiwan	29,425	1.6	30,688
Danone	France	29,090	1.6	-
GlobalWafers	Taiwan	28,907	1.6	71,090
Singapore Telecommunications	Singapore	28,673	1.6	22,870
Top thirty investments		1,211,309	66.7
Kimberly Clark de Mexico	Mexico	28,164	1.6	22,331
Woodside Energy	Australia	27,948	1.5	-
Sanofi	France	27,898	1.5	26,027
Nordea Bank	Sweden	26,750	1.5	22,552
Epiroc	Sweden	26,728	1.5	31,306
China Resources Land	China	26,655	1.5	21,743
Atlas Copco	Sweden	26,578	1.5	32,574
Roche Holdings	Switzerland	26,098	1.4	30,719
Enel	Italy	26,018	1.4	23,660
Enbridge	Canada	24,347	1.3	21,651
Top forty investments		1,478,493	81.4
Telkom Indonesia	Indonesia	24,031	1.3	25,114
TC Energy	Canada	23,149	1.3	24,029
SCB X	Thailand	23,114	1.3	25,262
Banco Bradesco	Brazil	20,714	1.1	19,859
Ping An Insurance	China	19,805	1.1	19,143
China Vanke	China	18,512	1.0	18,875
Republic of South Africa 7% 28/02/31D	South Africa	15,779	0.9	15,590
Republic of Indonesia 6.125% 15/05/28D	Indonesia	15,670	0.9	15,799
United Mexican States 5.75% 05/03/26D	Mexico	15,422	0.8	13,601
Telefonica Brasil	Brazil	13,493	0.7	14,497
Top fifty investments		1,668,182	91.8
MTN	South Africa	12,439	0.7	15,794
Republic of Indonesia 8.375% 15/03/34D	Indonesia	11,709	0.7	11,618
Telenor	Norway	11,593	0.6	17,406
Republic of Dominica 6.85% 27/01/45D	Dominican Republic	10,777	0.6	12,191
Petroleos Mexicanos 6.75% 21/09/47D	Mexico	10,589	0.6	13,031
Lotus Retail Growth	Thailand	8,173	0.5	16,687
HDFC Bank 7.95% 21/09/26D	India	7,603	0.4	7,928
Vodafone Group	UK	7,582	0.4	10,096
Power Finance Corp 7.63% 14/08/26D	India	7,529	0.4	7,825
Petroleos Mexicanos 5.5% 27/06/44D	Mexico	5,786	0.3	7,275
Top sixty investments		1,761,962	97.0
Republic of Indonesia 10% 15/02/28D	Indonesia	4,568	0.2	4,710
Republic of Turkey 8% 12/03/25D	Turkey	3,460	0.2	2,962
Republic of Turkey 9% 24/07/24D	Turkey	3,311	0.2	3,061
General Accident 7.875% Cum Irred PrefD	UK	3,164	0.2	3,612
Santander 10.375% Non Cum PrefD	UK	3,105	0.2	4,025
Republic of Ecuador 0.5% 31/07/35D	Ecuador	2,448	0.1	3,101
Republic of Ecuador 0.5% 31/07/30D	Ecuador	2,062	0.1	2,372
Republic of Ecuador 0.5% 31/07/40D	Ecuador	508	-	644
Republic of Ecuador 0.0% 31/07/30D	Ecuador	198	-	253
Indocement Tunggal Prakarsa	Indonesia	34	-	12,432
Top seventy investments		1,784,820	98.2
Total investments		1,784,820	98.2
Net current assetsA		31,796	1.8
Total assets		1,816,616	100.0
A Excluding bank loans.
B The 2021 column denotes the Company's holding at 31 December 2021.
C The 2021 holding comprises UK and Netherlands securities, split £23,670,000 and £21,720,000 respectively.
D Quoted preference share or bond.

Summary of Net Assets


	Valuation		Valuation
	31 December 2022		31 December 2021
	£'000	%	£'000	%
Equities	1,661,132	102.7	1,590,833	101.9
Preference shares	6,269	0.4	7,637	0.5
Bonds	117,419	7.3	140,842	9.0
Total investments	1,784,820	110.4	1,739,312	111.4
Net current assets	31,796	2.0	21,568	1.4
Total assets	1,816,616	112.4	1,760,880	112.8
Prior charges	(199,866)	(12.4)	(199,814)	(12.8)
Net assets	1,616,750	100.0	1,561,066	100.0

Sector/Geographical Analysis

					Asia
	United		North	Europe	Pacific	Latin		2022	2021
---	---	---	---	---	---	---	---	---	---
	Kingdom		America	ex UK	ex Japan	America	Africa	Total	Total
---	---	---	---	---	---	---	---	---	---
Sector/Geographical Analysis	%		%	%	%	%	%	%	%
---	---	---	---	---	---	---	---	---	---
Energy	-		2.6	4.6	1.5	-	-	8.7	7.0
Oil Gas and Coal	-		2.6	4.6	1.5	-	-	8.7	7.0
Basic Materials	-		-	-	2.0	4.3	-	6.3	7.4
Chemicals	-		-	-	-	2.2	-	2.2	4.1
Industrial Metals and Mining	-		-	-	2.0	2.1	-	4.1	3.3
Industrials	-		-	4.8	-	4.4	-	9.2	8.4
Construction & Materials	-		-	-	-	-	-	-	0.7
General industrials	-		-	1.8	-	-	-	1.8	-
Industrial Engineering	-		-	3.0	-	-	-	3.0	3.7
Industrial Transportation	-		-	-	-	4.4	-	4.4	4.0
Consumer Staples	4.6		3.2	1.6	-	1.6	-	11.0	10.1
Beverages	-		-	-	-	-	-	-	1.8
Food Producers	-		-	1.6	-	-	-	1.6	-
Personal Care Drug and Grocery Stores	2.6		-	-	-	1.6	-	4.2	3.8
Tobacco	2.0		3.2	-	-	-	-	5.2	4.5
Health Care	-		9.2	2.9	-	-	-	12.1	8.9
Pharmaceuticals & Biotechnology	-		9.2	2.9	-	-	-	12.1	8.9
Telecommunications	0.4		5.3	0.6	4.5	0.7	0.7	12.2	14.0
Telecommunications Service Providers	0.4		3.6	0.6	4.5	0.7	0.7	10.5	11.9
Telecommunications Equipment	-		1.7	-	-	-	-	1.7	2.1
Utilities	-		-	1.4	-	-	-	1.4	1.3
Electricity	-		-	1.4	-	-	-	1.4	1.3
Financials	-		2.3	5.8	4.9	1.1	-	14.1	13.8
Banks	-		-	1.5	3.8	1.1	-	6.4	5.9
Investment Banking and Brokerage Services		-	2.3	-	-	-	-	2.3	3.3
Life Insurance	-		-	-	1.1	-	-	1.1	1.1
Nonlife Insurance	-		-	4.3	-	-	-	4.3	3.5
Real Estate	-		-	-	3.0	-	-	3.0	3.2
Real Estate Investment and Services	-		-	-	3.0	-	-	3.0	2.3
Real Estate Investment Trusts	-		-	-	-	-	-	-	0.9
Technology	-		3.1	1.7	8.6	-	-	13.4	16.2
Technology Hardware & Equipment	-		3.1	1.7	8.6	-	-	13.4	16.2
Total equities	5.0		25.7	23.4	24.5	12.1	0.7	91.4	90.3
Preference shares and bonds	0.4		-	0.4	2.6	2.5	0.9	6.8	8.5
Total investments	5.4		25.7	23.8	27.1	14.6	1.6	98.2	98.8
Net current assets								1.8	1.2
Total assets								100.0	100.0

Directors' Report

The Directors present their report and the audited financial statements for the year ended 31 December 2022.

Results and Dividends

Details of the Company's results and proposed dividends are shown above.

Investment Trust Status

The Company is registered as a public limited company (registered in Scotland No. SC006705) and has been accepted by HM Revenue & Customs as an investment trust subject to the Company 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 January 2012. The Directors are of the opinion that the Company has conducted its affairs for the year ended 31 December 2022 so as to enable it to comply with the ongoing requirements for investment trust status.

Individual Savings Accounts

The Company has conducted its affairs so 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.

Share Capital

The Company's capital structure is summarised in note 14 to the financial statements. At 31 December 2022, there were 125,012,893 fully paid Ordinary shares of 25p each (2021 - 125,861,856 Ordinary shares) in issue. At the year end there were 4,399,110 Ordinary shares held in Treasury (2021 - 3,550,147).

During the year 848,963 Ordinary shares were bought back for Treasury representing 0.6% of the Company's total issued share capital (2021 - 2,576,806 representing 2.0% of the Company's total issued share capital). Further details on buybacks are provided in note 14 to the financial statements.

Share Rights

Ordinary shareholders are entitled to vote on all resolutions which are proposed at general meetings of the Company. The Ordinary shares carry a right to receive dividends and, on a winding up, after meeting the liabilities of the Company, the surplus assets will be paid to Ordinary shareholders in proportion to their shareholdings.

Management and Secretarial Arrangements

The Company has appointed abrdn Fund Managers Limited ("aFML"), a wholly owned subsidiary of abrdn plc, as its alternative investment fund manager under the terms of an investment management agreement dated 14 July 2014 (as amended). Under the terms of the agreement, the Company's portfolio is managed by abrdn Investments Limited ("aIL") by way of a group delegation agreement in place between aFML and aIL. Investment management services are provided to the Company by aFML. Company secretarial, accounting and administrative services have been delegated by aFML to abrdn Holdings Limited.

Up to 31 December 2021, the annual management fee was charged on net assets (ie excluding borrowings for investment purposes), averaged over the six previous quarters ("Net Assets") on the following tiered basis: 0.5% of Net Assets up to £1,200m and 0.425% of Net Assets above £1,200m.

With effect from 1 January 2022, the management fee has been charged at the rate of 0.5% per annum of Net Assets up to £500m and 0.4% per annum of Net Assets above £500m. Save for the aforementioned changes, all other terms and conditions contained in the Company's Management Agreement dated 14 July 2014 (as amended) remain unaltered.

A fee of 1.5% per annum remains chargeable on the value of any unlisted investments. The investment management fee is chargeable 30% against revenue and 70% against realised capital reserves in line with the Board's long-term expectation of returns from revenue and capital. No fees are charged in the case of investments managed or advised by the abrdn Group.

The management agreement may be terminated by either party on the expiry of six months' written notice. On termination, the Manager would be entitled to receive fees which would otherwise have been due up to that date.

The Board considers the continued appointment of the Manager on the terms agreed to be in the interests of the shareholders as a whole because the abrdn Group has the investment management, secretarial, promotional and administrative skills and expertise required for the effective operation of the Company.

The Board

The Board currently consists of five non-executive Directors.

The names and biographies of the current Directors are disclosed on pages 50 to 52 of the published Annual Report for the year ended 31 December 2022 indicating their range of experience as well as length of service. Ms Holmes was appointed to the Board on 22 June 2022.

The Directors will retire at the AGM in April 2023 and, with the exception of Ms Holmes, each Director will stand for re-election (with Ms Holmes standing for election).

The Board considers that there is a balance of skills and experience within the Board relevant to the leadership and direction of the Company and that all the Directors contribute effectively. The reasons for the re-election, where relevant, of the individual Directors are set out on pages 50 to 52 of the published Annual Report for the year ended 31 December 2022.

In common with most investment trusts, the Company has no employees. Directors' & Officers' liability insurance cover has been maintained throughout the year at the expense of the Company. The Company's Articles of Association provide an indemnity to the Directors out of the assets of the Company against any liability incurred in defending proceedings or in connection with any application to the Court in which relief is granted.

Board Diversity

As indicated in the Strategic Report, the Board recognises the importance of having a range of skilled, experienced individuals with the right knowledge represented on the Board in order to allow it to fulfil its obligations. The Board also recognises the benefits and is supportive of, and will give due regard to, the principle of diversity in its recruitment of new Board members. The Board will not display any bias for age, gender, race, sexual orientation, socio-economic background, religion, ethnic or national origins or disability in considering the appointment of Directors. The Board will continue to ensure that all appointments are made on the basis of merit against the specification prepared for each appointment. The Board takes account of the targets set out in the FCA's Listing Rules, which are set out below.

As an externally managed investment company, the Board employs no executive staff, and therefore does not have a chief executive officer (CEO) or a chief financial officer (CFO)- both of which are deemed senior board positions by the FCA. However, the Board considers the Chair of the Audit and Risk Committee to be a senior board position and the following disclosure is made on this basis. Other senior board positions recognised by the FCA are chair of the board and senior independent director (SID). In addition, the Board has resolved that the Company's year end date be the most appropriate date for disclosure purposes.

The following information has been voluntarily disclosed by each Director and is correct as at 31 December 2022. The Board expects the Company to be in compliance with the recommendations of the Parker Review on diversity in the UK boardroom by the end of the current financial year.

Board as at 31 December 2022


	Number of Board Members	Percentage of the Board	Number of Senior Positions on the Board
Men	2	40%	1
Women	3	60%	2
Prefer not to say	-	-	-

White British or other White (including minority-white groups)	5	100%	3
Minority Ethnic	0	0	0
Prefer not to say	-	-	-

The Role of the Chairman and Senior Independent Director

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

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

Management of Conflicts of Interest

No Director has a service contract with the Company although Directors are issued with letters of appointment upon appointment. The Directors' interests in contractual arrangements with the Company are as shown in note 21 to the financial statements and the Directors' Remuneration Report. No Directors had any other interest in contracts with the Company during the period or subsequently.

The Board has a procedure in place to deal with a situation where a Director has a conflict of interest, as required by the Companies Act 2006. As part of this process, the Directors are required to disclose 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 their 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. All proposed significant external appointments are also required to be approved, in advance, by the Chairman and then communicated to other Directors for information.

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

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

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

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

The UK Code includes provisions relating to:

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

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

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

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

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

The full text of the Company's Corporate Governance Statement can be found on the Company's website, murray-intl.co.uk.

The table below details Directors' attendance at scheduled Board and Committee meetings held during the year ended 31 December 2022 (with eligibility to attend the relevant meeting in brackets). In addition there were a number of other ad hoc Board meetings held during the year.

Statement of Directors' Responsibilities

Directors' Responsibilities

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice, the requirements of the Companies Act 2006 and 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) 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 for the Company for that period.

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

- select suitable accounting policies and then apply them consistently;

- make judgements and accounting estimates that are reasonable and prudent;

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

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

- prepare a director's report, a strategic report and director's remuneration report which comply with the requirements of the Companies Act 2006.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006.

They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. In accordance with their responsibilities, the Directors confirm that, to the best of their knowledge, the Annual Report and financial statements, taken as a whole, is fair, balanced, and understandable and provides the information necessary for shareholders to assess the position, performance, business model and strategy.

Website Publication

The Directors are responsible for ensuring the Annual Report and the financial statements are made available on a website. Financial statements are published on murray-intl.co.uk, the Company's website, in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

Directors' Responsibilities Pursuant to DTR4

The Directors confirm to the best of their knowledge:

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

- The Annual Report includes a fair review of the development and performance of the business and the financial position of the company, together with a description of the principal risks and uncertainties that they face.

For Murray International Trust PLC

David Hardie

Chairman

2 March 2023

Statement of Comprehensive Income


		Year ended 31 December 2022			Year ended 31 December 2021
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Gains on investments	10	-	66,401	66,401	-	139,637	139,637
Income	3	88,745	-	88,745	78,737	-	78,737
Investment management fees	4	(2,024)	(4,724)	(6,748)	(2,086)	(4,867)	(6,953)
Currency gains/(losses)		-	84	84	-	(745)	(745)
Administrative expenses	5	(1,651)	-	(1,651)	(1,752)	-	(1,752)
Net return before finance costs and taxation		85,070	61,761	146,831	74,899	134,025	208,924
Finance costs	6	(1,409)	(3,286)	(4,695)	(1,216)	(2,838)	(4,054)
Return before taxation		83,661	58,475	142,136	73,683	131,187	204,870
Taxation	7	(8,405)	990	(7,415)	(7,554)	798	(6,756)
Return attributable to equity shareholders		75,256	59,465	134,721	66,129	131,985	198,114

Return per Ordinary share (pence)	9	60.1	47.4	107.5	51.7	103.1	154.8

The "Total" column of this statement represents the profit and loss account of the Company. There is no other comprehensive income and therefore the return after taxation is also the total comprehensive income for the year. The 'Revenue' and 'Capital' columns represent supplementary information prepared under guidance issued by the Association of Investment Companies.
All revenue and capital items in the above statement derive from continuing operations.
The accompanying notes are an integral part of these financial statements.

Statement of Financial Position


		As at	As at
		31 December 2022	31 December 2021
	Notes	£'000	£'000
Non-current assets
Investments at fair value through profit or loss	10	1,784,820	1,739,312

Current assets
Prepayments and accrued income	11	7,195	8,475
Other debtors	11	9,306	6,902
Cash and short-term deposits		18,131	8,705
		34,632	24,082

Creditors: amounts falling due within one year
Bank loans	12,13	(59,989)	(59,975)
Other creditors	12	(2,836)	(2,514)
		(62,825)	(62,489)
Net current liabilities		(28,193)	(38,407)
Total assets less current liabilities		1,756,627	1,700,905

Creditors: amounts falling due after more than one year
Bank loans	12,13	(29,982)	(89,930)
Loan Notes	12,13	(109,895)	(49,909)
Net assets		1,616,750	1,561,066

Capital and reserves
Called-up share capital	14	32,353	32,353
Share premium account		362,967	362,967
Capital redemption reserve		8,230	8,230
Capital reserve	15	1,143,961	1,094,549
Revenue reserve		69,239	62,967
Equity shareholders' funds		1,616,750	1,561,066

Net asset value per Ordinary share (pence)	16	1,293.3	1,240.3

The financial statements were approved and authorised for issue by the Board of Directors on 2 March 2023 and were signed on its behalf by:
David Hardie
Director
The accompanying notes are an integral part of these financial statements.

Statement of Changes in Equity


For the year ended 31 December 2022
			Share	Capital
		Share	premium	redemption	Capital	Revenue
		capital	account	reserve	reserve	reserve	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2021		32,353	362,967	8,230	1,094,549	62,967	1,561,066
Return after taxation		-	-	-	59,465	75,256	134,721
Dividends paid	8	-	-	-	-	(68,984)	(68,984)
Buy back of shares to Treasury	14	-	-	-	(10,053)	-	(10,053)
Balance at 31 December 2022		32,353	362,967	8,230	1,143,961	69,239	1,616,750


For the year ended 31 December 2021
			Share	Capital
		Share	premium	redemption	Capital	Revenue
		capital	account	reserve	reserve	reserve	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2020		32,353	362,967	8,230	991,513	66,764	1,461,827
Return after taxation		-	-	-	131,985	66,129	198,114
Dividends paid	8	-	-	-	-	(69,926)	(69,926)
Buy back of shares to Treasury	14	-	-	-	(28,949)	-	(28,949)
Balance at 31 December 2021		32,353	362,967	8,230	1,094,549	62,967	1,561,066

The accompanying notes are an integral part of these financial statements.

Statement of Cash Flows


		Year ended	Year ended
		31 December 2022	31 December 2021
	Notes	£'000	£'000
Net return before finance costs and taxation		146,831	208,924
Increase/(decrease) in accrued expenses		265	(8)
Overseas withholding tax		(9,945)	(9,123)
Decrease in accrued income		1,401	706
Interest paid		(4,562)	(3,818)
Gains on investments		(66,401)	(139,637)
Currency (gains)/losses		(84)	745
Decrease in other debtors		(29)	22
Corporation tax received		-	321
Net cash inflow from operating activities		67,476	58,132

Investing activities
Purchases of investments		(187,490)	(177,090)
Sales of investments		208,417	224,171
Net cash from investing activities		20,927	47,081

Financing activities
Equity dividends paid	8	(68,984)	(69,926)
Ordinary shares bought back to Treasury	14	(10,053)	(28,949)
Issue of Loan Notes		59,976	49,904
Loan repayment		(60,000)	(50,000)
Net cash used in financing activities		(79,061)	(98,971)
Increase in cash		9,342	6,242

Analysis of changes in cash during the year
Opening balance		8,705	3,208
Effect of exchange rate fluctuations on cash held		84	(745)
Increase in cash as above		9,342	6,242
Closing balances		18,131	8,705

The accompanying notes are an integral part of these financial statements.

Notes to the Financial Statements

For the year ended 31 December 2022


1.	Principal activity
	The Company is a closed-end investment company, registered in Scotland No SC006705, with its Ordinary shares being listed on the London Stock Exchange.


2.	Accounting policies
	(a)	Basis of preparation. The financial statements have been prepared in accordance with Financial Reporting Standard 102 and with the AIC's Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ("AIC SORP") 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 Directors have undertaken a robust review of the Company's viability (refer to statement on page 37 of the published Annual Report for the year ended 31 December 2022) and ability to continue as a going concern. The Company's assets consist of a diverse portfolio of listed equity shares and bonds. The equities and a majority of the bond portfolio are, in most circumstances, realisable within a very short timescale.
		The Company has a £60 million loan facility which is due to mature in May 2023. The Directors are currently reviewing options to replace the facility including the use of the Loan Note Shelf Facility. Should the Board decide not to replace the facility any maturing debt would be repaid through the proceeds of equity and/or bond sales.
		The Directors are mindful of the principal risks and uncertainties disclosed on pages 35 and 36 of the published Annual Report for the year ended 31 December 2022 including the continuing global economic disruption caused by the uncertainty from the Russian invasion of Ukraine and have reviewed forecasts detailing revenue and liabilities. Notwithstanding the continuing uncertain economic environment, the Directors believe that the Company has adequate financial resources to continue its operational existence for the foreseeable future and at least 12 months from the date of this Annual Report. Accordingly, the Directors continue to adopt the going concern basis in preparing these financial statements.
		Significant accounting judgements, estimates and assumptions. The preparation of financial statements requires the use of certain significant accounting judgements, estimates and assumptions which requires management to exercise its judgement in the process of applying the accounting policies and are continually evaluated. The areas requiring most significant judgement and assumption in the financial statements are: the determination of the fair value hierarchy classification of quoted preference shares and bonds which have been assessed as being Level 2 as they are not considered to trade in active markets; and also the determination of whether special dividends received are considered to be revenue or capital in nature on a case by case basis. The Directors do not consider there to be any significant estimates within the financial statements.
	(b)	Income. Dividends receivable on equity shares are treated as revenue for the year on an ex-dividend basis. Where no ex-dividend date is available dividends are recognised on their due date. Provision is made for any dividends not expected to be received. Special dividends are credited to capital or revenue, according to their circumstances.
		In some jurisdictions, investment income and capital gains are subject to withholding tax deducted at the source of the income. The Company presents the withholding tax separately from the gross investment income in the Statement of Comprehensive Income under taxation.
		The fixed returns on debt securities are recognised on a time apportionment basis so as to reflect the effective yield on the debt securities.
		Interest receivable from cash and short-term deposits is accrued to the end of the year.
	(c)	Expenses. All expenses are accounted for on an accruals basis and are charged to the Statement of Comprehensive Income. Expenses are charged against revenue except as follows:
		- transaction costs on the acquisition or disposal of investments are charged against capital in the Statement of Comprehensive Income; and
		- expenses are treated as a capital item in the Statement of Comprehensive Income and ultimately recognised in the capital reserve where a connection with the maintenance or enhancement of the value of the investments can be demonstrated. In this respect the investment management fee has been allocated 30% to revenue and 70% to the capital reserve to reflect the Company's investment policy and prospective income and capital growth.


	(d)	Taxation. The tax expense represents the sum of tax currently payable and deferred tax. Any tax payable is based on the taxable profit for the year. Taxable profit differs from net return as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that were applicable at the Statement of Financial Position date.
		Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the Statement of Financial Position date, where transactions or events that result in an obligation to pay more tax in the future or right to pay less tax in the future have occurred at the Statement of Financial Position date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted. Timing differences are differences arising between the Company's taxable profits and its results as stated in the financial statements which are capable of reversal in one or more subsequent periods. Deferred tax is measured on a non-discounted basis at the tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws enacted or substantively enacted at the Statement of Financial Position date.
		Due to the Company's status as an investment trust company 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.
		The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue within the Statement of Comprehensive Income on the same basis as the particular item to which it relates using the Company's effective rate of tax for the year, based on the marginal basis.
	(e)	Investments. The Company has chosen to apply the recognition and measurement provisions of IAS 39 Financial Instruments: Recognition and Measurement and investments have been designated upon initial recognition at fair value through profit or loss. This is done because all investments are considered to form part of a group of financial assets which is evaluated on a fair value basis, in accordance with the Company's documented investment strategy, and information about the grouping is provided internally on that basis.
		Investments are recognised and de-recognised at trade date where a purchase or sale is under a contract whose terms require delivery within the timeframe established by the market concerned, and are measured at fair value. For listed investments, the valuation of investments at the year end is deemed to be bid market prices or closing prices on recognised stock exchanges.
		Gains and losses arising from changes in fair value are treated in net profit or loss for the period as a capital item in the Statement of Comprehensive Income and are ultimately recognised in the capital reserve.
	(f)	Cash and cash equivalents. Cash comprises cash in hand and demand deposits. Cash equivalents includes short-term, highly liquid investments, that are readily convertible to known amounts of cash and that are subject to an insignificant risk of change in value.
	(g)	Short-term debtors and creditors. Both short-term debtors and creditors are measured at amortised cost and not subject to interest charges.
	(h)	Borrowings. Borrowings, which comprise interest bearing bank loans and unsecured loan notes are recognised 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 30% to revenue and 70% to capital in the Statement of Comprehensive Income to reflect the Company's investment policy and prospective income and capital growth.


	(i)	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. This reserve is not distributable.
		Share premium account. The balance classified as share premium includes the premium above nominal value from the proceeds on issue of any equity share capital comprising Ordinary shares of 25p and the proceeds of sales of shares held in Treasury in excess of the weighted average purchase price paid by the Company to repurchase the shares. This reserve is not distributable.
		Capital redemption reserve. The capital redemption reserve arose when Ordinary shares were cancelled, at which point an amount equal to the par value of the Ordinary share capital was transferred from the share capital account to the capital redemption reserve. This reserve is not distributable.
		Capital reserve. This reserve reflects any gains or losses on investments realised in the period along with any movement in the fair value of investments held that have been recognised in the Statement of Comprehensive Income. These include gains and losses from foreign currency exchange differences. Additionally, expenses, including finance costs, are charged to this reserve in accordance with (c) and (h) above. This reserve is distributable for the purpose of funding share buybacks and paying dividends to the extent that gains are deemed realised.
		When the Company purchases its Ordinary shares to be held in Treasury, the amount of the consideration paid, which includes directly attributable costs, is recognised as a deduction from the capital reserve.
		Revenue reserve. This reserve reflects all income and costs which are recognised in the revenue column of the Statement of Comprehensive Income. The revenue reserve represents the amount of the Company's reserves distributable by way of dividend.


	(j)	Foreign currency. Assets and liabilities in foreign currencies are translated at the rates of exchange ruling on the Statement of Financial Position date. Transactions involving foreign currencies are converted at the rate ruling on the date of the transaction. Gains and losses on dividends receivable are recognised in the Statement of Comprehensive Income and are reflected in the revenue reserve. Gains and losses on the realisation of foreign currencies are recognised in the Statement of Comprehensive Income and are then transferred to the capital reserve.
	(k)	Segmental reporting. The Directors are of the opinion that the Company is engaged in a single segment of business activity, being investment business. Consequently, no business segmental analysis is provided.
	(l)	Dividends payable. Dividends payable to equity shareholders are recognised in the financial statements when they have been approved by shareholders and become a liability of the Company. Interim dividends are recognised in the financial statements in the period in which they are paid.


3.	Income
		2022	2021
		£'000	£'000
	Income from investments (all listed)
	UK dividend income	10,607	8,547
	Overseas dividends	66,536	58,240
	Overseas interest	11,417	11,945
		88,560	78,732

	Other income
	Deposit interest	49	1
	Stock lending income	136	-
	Interest on corporation tax reclaim	-	4
	Total income	88,745	78,737


4.	Investment management fees
		2022			2021
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
	Investment management fees	2,024	4,724	6,748	2,086	4,867	6,953

	The Company has an agreement with abrdn Fund Managers Limited ("aFML") for the provision of investment management, secretarial, accounting and administration and promotional activity services.
	With effect from 1 January 2022, the management fee has been charged on net assets (i.e. excluding borrowings for investment purposes) averaged over the six previous quarters at a rate of 0.5% per annum up to £500 million and 0.4% per annum thereafter. Prior to this, the management fee has been charged on net assets (i.e. excluding borrowings for investment purposes) averaged over the six previous quarters at a rate of 0.5% per annum up to £1,200 million and 0.425% per annum thereafter. A fee of 1.5% per annum is chargeable on the value of any unlisted investments. The investment management fee is chargeable 30% against revenue and 70% against realised capital reserves. During the year £6,748,000 (2021 - £6,953,000) of investment management fees was payable to the Manager, with a balance of £1,704,000 (2021 - £1,797,000) being due at the year end.
	No fees are charged in the case of investments managed or advised by the abrdn Group. The management agreement may be terminated by either party on the expiry of six months' written notice. On termination the Manager is entitled to receive fees which would otherwise have been due up to that date.


5.	Administrative expenses
		2022	2021
		£'000	£'000
	Promotional activitiesA	400	400
	Registrars' fees	147	133
	Directors' remuneration	157	167
	Bank charges and custody fees	411	606
	Depositary fees	157	149
	Stock exchange fees	97	86
	Printing and postage	59	60
	Irrecoverable VAT	-	14
	Auditor's fees for:
	- Statutory Audit	44	32
	- Other assurance services	3	3
	Other expenses	176	102
		1,651	1,752
	A In 2022 £400,000 (2021 - £400,000) was payable to aFML to cover promotional activities during the year. At the year end £100,000 (2021 - £100,000) was due to aFML.


6.	Finance costs
		2022			2021
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
	Bank loans and overdraft interest	815	1,901	2,716	1,002	2,339	3,341
	Loan Notes	594	1,385	1,979	214	499	713
		1,409	3,286	4,695	1,216	2,838	4,054


7.	Taxation
				2022			2021
			Revenue	Capital	Total	Revenue	Capital	Total
			£'000	£'000	£'000	£'000	£'000	£'000
	(a)	Total tax charge
		Analysis for the year
		Current UK tax	195	-	195	163	-	163
		Double taxation relief	(195)	-	(195)	(163)	-	(163)
		Tax relief to capital	1,082	(1,082)	-	920	(920)	-
		Irrecoverable overseas tax suffered	10,605	92	10,697	9,081	122	9,203
		Overseas tax reclaimable	(3,282)	-	(3,282)	(2,447)	-	(2,447)
		Total tax charge for the year	8,405	(990)	7,415	7,554	(798)	6,756

	(b)	Factors affecting the tax charge for the year. The UK corporation tax rate is 19% (2021 - 19%). The tax assessed for the year is lower than the corporation tax rate. The differences are explained below:

				2022			2021
			Revenue	Capital	Total	Revenue	Capital	Total
			£'000	£'000	£'000	£'000	£'000	£'000
		Return before taxation	83,661	58,475	142,136	73,683	131,187	204,870

		Return multiplied by the effective standard rate of corporation tax of 19% (2021 - 19%)	15,896	11,110	27,006	14,000	24,925	38,925
		Effects of:
		Non taxable UK dividend income	(2,015)	-	(2,015)	(1,624)	-	(1,624)
		Gains on investments not taxable	-	(12,616)	(12,616)	-	(26,531)	(26,531)
		Currency (gains)/losses not taxable	-	(16)	(16)	-	142	142
		Non taxable overseas dividends	(12,164)	-	(12,164)	(10,750)	-	(10,750)
		Irrecoverable overseas tax suffered	10,605	92	10,697	9,081	122	9,203
		Overseas tax reclaimable	(3,282)	-	(3,282)	(2,447)	-	(2,447)
		Double taxation relief	(195)	-	(195)	(163)	-	(163)
		Marginal tax relief	(440)	440	-	(544)	544	-
		Expenses not deductible for tax purposes	-	-	-	1	-	1
		Total tax charge for the year	8,405	(990)	7,415	7,554	(798)	6,756

		The Company has not provided for deferred tax on chargeable gains or losses arising on the revaluation or disposal of investments as it is exempt from corporation tax on these items because of its status as an investment trust company.
		The Company has not recognised a deferred tax asset (2021 - same) arising as a result of there being no excess management expense to be utilised in future periods.
		With effect from 1 April 2023 the standard rate of UK corporation tax will change from 19% to 25%.


8.	Ordinary dividends on equity shares
		2022	2021
		£'000	£'000
	Amounts recognised as distributions paid during the year:
	Third interim for 2021 of 12.0p (2020 - 12.0p)	15,103	15,413
	Final dividend for 2021 of 19.0p (2020 - 18.5p)	23,813	23,748
	First interim for 2022 of 12.0p (2021 - 12.0p)	15,040	15,404
	Second interim for 2022 of 12.0p (2021 - 12.0p)	15,028	15,361
		68,984	69,926

	A third interim dividend was declared on 2 December 2022 with an ex date of 5 January 2023. This dividend of 12.0p was paid on 17 February 2023 and has not been included as a liability in these financial statements. The proposed final dividend for 2022 is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.
	Set out below are the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of Sections 1158-1159 of the Corporation Tax Act 2010 are considered. The revenue available for distribution by way of dividend for the year is £75,256,000 (2021 - £66,129,000).

		2022	2021
		£'000	£'000
	Three interim dividends for 2022 of 12.0p (2021 - 12.0p)	45,070	45,868
	Proposed final dividend for 2022 of 20.0p (2021 - final dividend of 19.0p)	25,003	23,813
		70,073	69,681

	The amount reflected above for the cost of the proposed final dividend for 2022 is based on 125,012,893 Ordinary shares, being the number of Ordinary shares in issue excluding those held in Treasury at the date of this Report.


9.	Return per Ordinary share
			2022		2021
		£'000	p	£'000	p
	Returns are based on the following figures:
	Revenue return	75,256	60.1	66,129	51.7
	Capital return	59,465	47.4	131,985	103.1
	Total return	134,721	107.5	198,114	154.8

	Weighted average number of Ordinary shares		125,306,203		127,971,051


10.	Investments at fair value through profit or loss
		2022	2021
		£'000	£'000
	Opening book cost	1,330,337	1,324,155
	Opening investment holdings gains	408,975	322,250
	Opening fair value	1,739,312	1,646,405

	Analysis of transactions made during the year
	Purchases at cost	187,490	177,090
	Sales proceeds received	(208,590)	(224,171)
	Gains on investments	66,401	139,637
	Accretion of fixed income book cost	207	351
	Closing fair value	1,784,820	1,739,312

	Closing book cost	1,363,483	1,330,337
	Closing investment gains	421,337	408,975
	Closing fair value	1,784,820	1,739,312

	The Company received £208,590,000 (2021 - £224,171,000) from investments sold in the period. The book cost of these investments when they were purchased was £154,551,000 (2021 - £171,259,000). 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.

		2022	2021
	The portfolio valuation	£'000	£'000
	Listed on stock exchanges:
	United Kingdom:
	- equities	100,405	85,872
	- preference shares	6,269	7,637
	Overseas:
	- equities	1,560,727	1,504,961
	- fixed income	117,419	140,842
	Total	1,784,820	1,739,312

	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 on investments in the Statement of Comprehensive Income. The total costs were as follows:

		2022	2021
		£'000	£'000
	Purchases	199	322
	Sales	198	185
		397	507

	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.

		2022	2021
	Stock Lending	£'000	£'000
	Aggregate value of securities on loan at the year end	-	N/A
	Maximum aggregate value of securities on loan during the year	81,723	N/A
	Fee income from stock lending	136	N/A

	During the year to 31 December 2022, the Company commenced stock lending. Stock lending is the temporary transfer of securities by a lender to a borrower, with an agreement by the borrower to return equivalent securities to the lender at an agreed date. Fee income is received for making the investments available to the borrower. The principal risks and rewards of holding the investments, namely the market movements in share prices and dividend income, are retained by the Company. In all cases the securities lent continue to be recognised on the Statement of Financial Position.
	All stocks lent under these arrangements are fully secured by collateral. The value of the collateral held at 31 December 2022 was £nil.


11.	Debtors: amounts falling due within one year
		2022	2021
		£'000	£'000
	Amounts due from brokers	173	-
	Corporation tax refund	136	136
	Overseas withholding tax	8,965	6,722
	Prepayments	84	43
	Other debtors	32	44
	Accrued income	7,111	8,432
		16,501	15,377

	None of the above amounts is overdue or impaired.


12.	Creditors
		2022	2021
		£'000	£'000
	Amounts falling due within one year:
	Bank loans (note 13)	59,989	59,975
	Investment management fees	1,704	1,797
	Administrative expenses	639	280
	Interest on bank loans and loan notes	493	437
		62,825	62,489

		2022	2021
		£'000	£'000
	Amounts falling due after more than one year:
	Bank loans (note 13)	29,982	89,930
	Loan notes (note 13)	109,895	49,909
		139,877	139,839

	All financial liabilities are measured at amortised cost.


13.	Borrowings
			2022	2021
			£'000	£'000
	Unsecured bank loans repayable within one year:
	Fixed rate term loan facilities
	-	£60,000,000 at 1.714% - 31 May 2022	-	59,975
	-	£60,000,000 at 2.328% - 31 May 2023	59,989	-
	Unsecured bank loans repayable in more than one year but less than five years:
	Fixed rate term loan facilities
	-	£60,000,000 at 2.328% - 31 May 2023	-	59,962
	-	£30,000,000 at 2.25% - 16 May 2024	29,982	29,968
	Unsecured loan notes repayable in more than five years:
	-	£50,000,000 at 2.24% - 13 May 2031	49,918	49,909
	-	£60,000,000 at 2.83% - 31 May 2037	59,977	-
			199,866	199,814

	The terms of these loans and loan notes permit early repayment at the borrower's option which may give rise to additional amounts being either payable or repayable in respect of fluctuations in interest rates since drawdown. Since the Directors currently have no intention of repaying the loans and loan notes early, then no such charges are included in the cash flows used to determine their effective interest rate.
	In May 2022, the Company utilised part of its £200m Shelf Facility, of which £50m had already been drawn down, through the issuance of a £60 million 15 year Senior Unsecured Loan Note at an all-in-rate of 2.83%. The proceeds of the issue were used to repay the Company's £60 million fixed rate loan with the Royal Bank of Scotland International Limited, London Branch "RBSI" that matured at that time. Under the terms of the Loan Note Agreement, dated May 2021, up to an additional £90 million will also be available for drawdown by the Company for a five year period and the Board's current intention is to only use this additional amount to repay the Company's existing RBSI debt as it falls due over the coming years. Financial covenants contained within the loan note agreement provide, inter alia, that borrowings shall at no time exceed 35% of net assets, that the Company must hold 40 investments or more and that the net assets must exceed £650 million. At 31 December 2022 the Company held 71 investments, net assets were £1,616,750,000 and borrowings were 12.4% thereof. The Company has complied with all financial covenants throughout the year.
	The Company also has two fixed rate term loan facilities with RBSI, both of which are fully drawn down and have maturity dates of 31 May 2023 and 16 May 2024 respectively. Financial covenants contained within the relevant loan agreements provide, inter alia, that borrowings shall at no time exceed 40% of net assets and that the net assets must exceed £650 million. At 31 December 2022 net assets were £1,616,750,000, and borrowings were 12.4% thereof. The Company has complied with all financial covenants throughout the year.


14.	Share capital
		2022		2021
		Number	£'000	Number	£'000
	Allotted, called up and fully paid Ordinary shares of 25p each:
	Balance brought forward	125,861,856	31,466	128,438,662	32,110
	Ordinary shares bought back to Treasury in the year	(848,963)	(212)	(2,576,806)	(644)
	Balance carried forward	125,012,893	31,254	125,861,856	31,466

	Treasury shares:
	Balance brought forward	3,550,147	887	973,341	243
	Ordinary shares bought back to Treasury in the year	848,963	212	2,576,806	644
	Balance carried forward	4,399,110	1,099	3,550,147	887

	At 31 December 2022, shares held in Treasury represented 3.5% (2021 - 2.8%) of the Company's total issued share capital.
	During the year 848,963 Ordinary shares were bought back to Treasury representing 0.6% of the Company's total issued share capital (2021 - 2,576,806 representing 2.0% of the Company's total issued share capital) at a total cost of £10,053,000 (2021 - £28,949,000) net of expenses. Subsequent to the year end there have been no further issues or buybacks of Ordinary shares.
	On a winding up of the Company, any surplus assets available after payment of all debts and satisfaction of all liabilities of the Company shall be applied in repaying the Ordinary shareholders the amounts paid up on such shares. Any surplus shall be divided among the holders of Ordinary shares according to the amount paid up on such shares respectively.
	Voting rights. In accordance with the Articles of Association of the Company, on a show of hands, every member (or duly appointed proxy) present at a general meeting of the Company has one vote; and, on a poll, every member present in person or by proxy shall have one vote for every 25p nominal amount of Ordinary shares held.


15.	Capital reserve
		2022	2021
		£'000	£'000
	At 31 December 2021	1,094,549	991,513
	Movement in fair value gains	66,401	139,637
	Capital expenses (including taxation)	(7,020)	(6,907)
	Buy back of shares to Treasury	(10,053)	(28,949)
	Currency gains/(losses)	84	(745)
	At 31 December 2022	1,143,961	1,094,549

	Included in the total above are investment holdings gains at the year end of £421,337,000 (2021 - £408,975,000).


16.	Net asset value per share
	The net asset value per share and the net asset value attributable to the Ordinary shares at the year end, calculated in accordance with the Articles of Association and FRS 102, were as follows:

		As at	As at
		31 December 2022	31 December 2021
	Attributable net assets (£'000)	1,616,750	1,561,066
	Number of Ordinary shares in issue (excluding Treasury)	125,012,893	125,861,856
	Net asset value per share (pence)	1,293.3	1,240.3


17.	Analysis of changes in net debt
		At				At
		31 December	Currency	Cash	Non-cash	31 December
		2021	differences	flows	movementsA	2022
		£'000	£'000	£'000	£'000	£'000
	Cash and short-term deposits	8,705	84	9,383	-	18,172
	Debt due within one year	(59,975)	-	60,000	(60,014)	(59,989)
	Debt due after more than one year	(139,839)	-	(59,976)	59,938	(139,877)
		(191,109)	84	9,407	(76)	(181,694)

		At				At
		31 December	Currency	Cash	Non-cash	31 December
		2020	differences	flows	movementsA	2021
·		£'000	£'000	£'000	£'000	£'000
	Cash and short-term deposits	3,208	(745)	6,242	-	8,705
	Debt due within one year	(50,000)	-	50,000	(59,975)	(59,975)
	Debt due after more than one year	(149,805)	-	(49,904)	59,870	(139,839)
		(196,597)	(745)	6,338	(105)	(191,109)
	A Figures reflect a movement in maturity dates and amortisation of finance costs.

	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.


18.	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 listed equities and debt securities, cash balances, loans and debtors and creditors that arise directly from its operations; for example, in respect of sales and purchases awaiting settlement, and debtors for accrued income. The Company may enter into derivative transactions for the purpose of managing market risks arising from the Company's activities in the form of swap contracts, forward foreign currency contracts, futures and options.
	The Board has delegated the risk management function to abrdn Fund Managers Limited ("aFML") under the terms of its management agreement with aFML (further details of which are included in the Directors' Report). 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.
	Risk management framework. The directors of aFML collectively assume responsibility for aFML's obligations under the AIFMD including reviewing investment performance and monitoring the Company's risk profile during the year.
	aFML is a fully integrated member of the abrdn Group ("the Group"), which provides a variety of services and support to aFML in the conduct of its business activities, including in the oversight of the risk management framework for the Company. The AIFM 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). The AIFM 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 Officer of the Group. The Risk Division achieves its objective through embedding the Risk Management Framework throughout the organisation using the Group's operational risk management system ("SHIELD").
	The Group's Internal Audit Department is independent of the Risk Division and reports directly to the Group's Chief Executive Officer 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 plc, 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, foreign currency risk and price risk), (ii) liquidity risk and (iii) credit risk.
	(i)	Market risk. The fair value and future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements - interest rate risk, foreign currency risk and price risk.
(i)(a)		Interest rate risk. Interest rate risk is the risk that interest rate movements will affect:
		- the fair value of the investments in fixed interest rate securities; and
		- the level of income receivable on cash deposits.
		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 reviews the values of the fixed interest rate securities on a regular basis.
		The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a regular basis. Borrowings comprise fixed rate facilities, which are used to finance opportunities at low rates. Current bank covenant guidelines are detailed in note 13.
		Interest rate 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
			period for	Weighted			Non-
			which	average	Fixed	Floating	interest
			rate is fixed	interest rate	rate	rate	bearing
		At 31 December 2022	Years	%	£'000	£'000	£'000
		Assets
		Sterling	-	-	6,269	17,090	136,385
		US Dollar	21.05	5.55	32,368	759	541,270
		Indian Rupee	3.67	7.79	15,132	-	-
		Indonesian Rupiah	7.48	7.50	31,947	-	24,065
		Mexican Peso	3.18	5.75	15,422	-	107,213
		South African Rand	8.17	7.00	15,779	-	12,439
		Turkish Lira	1.89	8.49	6,771	-	-
		Other	-	-	-	282	839,760
		Total assets			123,688	18,131	1,661,132

		Liabilities
		Bank loans	0.74	2.30	(89,971)	-	-
		Loan Notes	11.67	2.56	(109,895)	-	-
		Total liabilities			(199,866)	-	-

			Weighted
			average
			period for	Weighted			Non-
			which	average	Fixed	Floating	interest
			rate is fixed	interest rate	rate	rate	bearing
		At 31 December 2021	Years	%	£'000	£'000	£'000
		Assets
		Sterling	-	-	7,637	8,143	116,658
		US Dollar	22.06	5.52	38,866	267	527,077
		Indian Rupee	4.18	7.71	20,399	2	17,061
		Indonesian Rupiah	8.45	7.51	32,128	-	37,546
		Mexican Peso	2.52	6.11	27,836	-	92,390
		South African Rand	9.17	7.00	15,590	-	15,794
		Turkish Lira	2.88	8.51	6,023	-	-
		Other	-	-	-	293	784,307
		Total assets			148,479	8,705	1,590,833

		Liabilities
		Bank loans	1.22	2.07	(149,905)	-	-
		Loan Notes	9.37	2.24	(49,909)	-	-
		Total liabilities			(199,814)	-	-
		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 and loan notes are based on the interest rate payable, weighted by the total value of the bank loans and loan notes. The maturity dates of the Company's bank loans and loan notes are shown in note 13 to the financial statements.
		The fixed rate assets represents quoted preference shares and bonds.
		The floating rate assets consist of cash deposits on call earning interest at prevailing market rates.
		The non-interest bearing assets represent the equity element of the portfolio.
		Short-term debtors and creditors have been excluded from the above tables as they are not considered to be exposed to interest rate risk.


		Interest rate sensitivity. The sensitivity analyses below have been determined based on the exposure to interest rates for non-derivative instruments at the Statement of Financial Position date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in the case of instruments that have floating rates.
		If interest rates had been 100 basis points higher or lower (based on the current parameter used by the Manager's Investment Risk Department on risk assessment) and all other variables were held constant, the Company's revenue return for the year ended 31 December 2022 would increase/decrease by £181,000 (2021 - increase/decrease by £87,000). This is mainly attributable to the Company's exposure to interest rates on its floating rate cash balances. These figures have been calculated based on cash positions at each year end.
		The capital return would decrease/increase by £5,183,000 (2021 - increase/decrease by £6,830,000) using VaR ("Value at Risk") analysis based on 100 observations of weekly VaR computations of fixed interest portfolio positions at each year end.
	(i)(b)	Foreign currency risk. A significant proportion of the Company's investment portfolio is invested overseas whose values are subject to fluctuation due to changes in foreign exchange rates. In addition, the impact of changes in foreign exchange rates upon the profits of investment holdings 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. The Manager seeks, when deemed appropriate, to manage exposure to currency movements on borrowings by using forward foreign currency contracts as a hedge against potential foreign currency movements. At 31 December 2022 the Company did not have any forward foreign currency contracts (2021 - none).
		The revenue account is subject to currency fluctuation arising on overseas income. The Company does not hedge this currency risk.


Currency risk exposure. Currency risk exposure (excluding fixed interest securities) by currency of denomination:

	31 December 2022			31 December 2021
	UK and			UK and
	overseas	Net	Total	overseas	Net	Total
	equity	monetary	currency	equity	monetary	currency
	investments	assetsA	exposure	investments	assetsA	exposure
	£'000	£'000	£'000	£'000	£'000	£'000
US Dollar	541,270	759	542,029	527,077	267	527,344
Euro	220,707	9	220,716	108,878	12	108,890
Taiwan Dollar	145,346	310	145,656	211,589	281	211,870
Mexican Peso	107,213	-	107,213	92,390	-	92,390
Swedish Krone	80,056	-	80,056	86,431	-	86,431
Canadian Dollar	79,536	(37)	79,499	105,794	-	105,794
Singapore Dollar	73,970	-	73,970	60,329	-	60,329
Swiss Franc	65,841	-	65,841	56,674	-	56,674
Hong Kong Dollar	64,972	-	64,972	59,761	-	59,761
Danish Krone	38,504	-	38,504	35,496	-	35,496
Thailand Baht	31,287	-	31,287	41,949	-	41,949
Australian Dollar	27,948	-	27,948	-	-	-
Indonesian Rupiah	24,065	-	24,065	37,546	-	37,546
South African Rand	12,439	-	12,439	15,794	-	15,794
Norwegian Krone	11,593	-	11,593	17,406	-	17,406
Indian Rupee	-	-	-	17,061	2	17,063
	1,524,747	1,041	1,525,788	1,474,175	562	1,474,737
Sterling	136,385	(182,776)	(46,391)	116,658	(191,671)	(75,013)
Total	1,661,132	(181,735)	1,479,397	1,590,833	(191,109)	1,399,724
A Reflects cash, short-term deposits and bank borrowings.

The asset allocation between specific markets can vary from time to time based on the Manager's opinion of the attractiveness of the individual markets.
Foreign currency sensitivity. The following table details the Company's sensitivity to a 10% decrease (in the context of a 10% increase the figures below should all be read as negative) in sterling against the major foreign currencies in which the Company has exposure (based on exposure >5% of total exposure). The sensitivity analysis includes foreign currency denominated monetary items and adjusts their translation at the year end for a 10% change in foreign currency rates, being a reasonable range of fluctuations for the period.

					2022	2021
					CapitalA	CapitalA
					£'000	£'000
US Dollar					54,203	52,734
Euro					22,072	10,889
Taiwan Dollar					14,566	21,187
Mexican Peso					10,721	9,239
Swedish Krone					8,006	8,643
Canadian Dollar					7,950	10,579
Total					117,518	113,271
A Represents equity exposures to the relevant currencies.


	(i)(c)	Price risk. Other price risks (ie changes in market prices other than those arising from interest rate or currency risk) may affect the value of the quoted investments. The Company's stated objective is to achieve an above average dividend yield, with long-term growth in dividends and capital ahead of inflation by investing principally in global equities.
		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 country or sector. The allocation of assets to international markets and the stock selection process, as detailed on pages 19 to 21 of the published Annual Report for the year ended 31 December 2022, both act to reduce market risk. The Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to review investment strategy. The investments held by the Company are listed on various stock exchanges worldwide.
		Price risk sensitivity. If market prices at the Statement of Financial Position date had been 10% higher or lower, which is a reasonable range of annual price fluctuations, while all other variables remained constant, the return attributable to Ordinary shareholders for the year ended 31 December 2022 would have increased/decreased by £166,113,000 (2021 - increase/decrease of £159,083,000) and equity would have increased/decreased by the same amount.


(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.

		Within	Within	Within	Within	Within	More than
		1 year	1-2 years	2-3 years	3-4 years	4-5 years	5 years	Total
	At 31 December 2022	£'000	£'000	£'000	£'000	£'000	£'000	£'000
	Bank loans	60,000	30,000	-	-	-	-	90,000
	Loan Notes	-	-	-	-	-	110,000	110,000
	Interest cash flows on bank loans	1,371	337	-	-	-	-	1,708
	Interest cash flows on Loan Notes	2,818	2,818	2,818	2,818	2,818	20,051	34,141
	Cash flows on other creditors	2,343	-	-	-	-	-	2,343
		66,532	33,155	2,818	2,818	2,818	130,051	238,192

		Within	Within	Within	Within	Within	More than
		1 year	1-2 years	2-3 years	3-4 years	4-5 years	5 years	Total
	At 31 December 2021	£'000	£'000	£'000	£'000	£'000	£'000	£'000
	Bank loans	60,000	60,000	30,000	-	-	-	150,000
	Loan Notes	-	-	-	-	-	50,000	50,000
	Interest cash flows on bank loans	2,585	1,371	337	-	-	-	4,293
	Interest cash flows on Loan Notes	1,120	1,120	1,120	1,120	1,120	5,040	10,640
	Cash flows on other creditors	2,077	-	-	-	-	-	2,077
		65,782	62,491	31,457	1,120	1,120	55,040	217,010

	Management of the risk. Liquidity risk is not considered to be significant as the Company's assets comprise mainly readily realisable securities, which can be sold to meet funding commitments if necessary. Short-term flexibility is achieved through the use of loan and overdraft facilities (note 13).
(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
	- where the Manager makes an investment in a bond, corporate or otherwise, the credit ratings of the issuer are taken into account so as to manage the risk to the Company of default;
	- investments in quoted bonds are made across a variety of industry sectors and geographic markets so as to avoid concentrations of credit risk;
	- transactions involving derivatives are entered into only with investment banks, the credit rating of which is taken into account so as to minimise the risk to the Company of default;
	- investment transactions are carried out with a 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 daily review of failed trade reports. In addition, both stock and cash reconciliations to the custodian's records are performed daily to ensure discrepancies are investigated in a timely manner. The Manager's Compliance department carries out periodic reviews of the custodian's operations and reports its finding to the Manager's Risk Management Committee;
	- cash is held only with reputable banks with acceptable credit quality. It is the Manager's policy to trade only with A- and above (Long-term rated) and A-1/P-1 (Short-term rated) counterparties.


Credit risk exposure. In summary, compared to the amounts in the Statement of Financial Position, the maximum exposure to credit risk at 31 December 2022 was as follows:

	2022		2021
	Balance	Maximum	Balance	Maximum
	Sheet	exposure	Sheet	exposure
	£'000	£'000	£'000	£'000
Non-current assets
Quoted preference shares and bonds at fair value through profit or loss	123,688	123,688	148,479	148,479

Current assets
Amounts due from brokers	173	173	-	-
Other debtors	32	32	44	44
Accrued income	7,111	7,111	8,432	8,432
Cash and short-term deposits	18,131	18,131	8,705	8,705
	149,135	149,135	165,660	165,660
		·
None of the Company's financial assets is secured by collateral or other credit enhancements.
Credit ratings. The table below provides a credit rating profile using Moodys credit ratings for the quoted preference shares and bonds at 31 December 2022 and 31 December 2021:

			2022	2021
			£'000	£'000
A3			-	14,235
Ba1			3,105	4,025
Baa1			-	13,601
Ba2			15,779	15,590
Baa2			47,369	32,127
Ba3			10,777	32,497
B1			16,375	-
Non-rated			30,283	36,404
			123,688	148,479

Whilst a substantial proportion of the fixed interest portfolio does not have a rating provided by Moodys, the Manager undertakes an ongoing review of their suitability for inclusion within the portfolio as set out in "Investment Process" and "Delivering the Investment Policy" on page 21 of the published Annual Report for the year ended 31 December 2022. At 31 December 2022 Moodys credit ratings agency did not provide a rating for Ecuador bonds, Indian bonds, Turkish bonds and Irredeemable preference shares (2021 - Ecuador bonds, Indian bonds, Turkish bonds and Irredeemable preference shares) held by the Company and were accordingly categorised as non-rated in the table above. It was noted however that Fitch credit ratings agency does provide a B- rating for Ecuador bonds with a value of £5,216,000 (2021 - £6,370,000 with a B- rating) and a B rating for Turkish bonds with a value of £6,771,000 (2021 - £6,023,000 with a BB- rating).
Fair values of financial assets and financial liabilities. The fair value of borrowings has been calculated at £175,464,000 as at 31 December 2022 (2021 - £201,783,000) compared to a carrying amount in the financial statements of £199,866,000 (2021 - £199,814,000) (note 13). The fair value of each loan is determined by aggregating the expected future cash flows for that loan discounted at a rate comprising the borrower's margin plus an average of market rates applicable to loans of a similar period of time and currency. The carrying value of all other assets and liabilities is an approximation of fair value.


19.	Fair value hierarchy
	FRS 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy shall have 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 in 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 December 2022		Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities		a)	1,661,132	-	-	1,661,132
	Quoted preference shares		b)	-	6,269	-	6,269
	Quoted bonds		b)	-	117,419	-	117,419
	Total			1,661,132	123,688	-	1,784,820

				Level 1	Level 2	Level 3	Total
	As at 31 December 2021		Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities		a)	1,590,833	-	-	1,590,833
	Quoted preference shares		b)	-	7,637	-	7,637
	Quoted bonds		b)	-	140,842	-	140,842
	Total			1,590,833	148,479	-	1,739,312

	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.
	b)	Quoted preference shares and bonds. The fair value of the Company's investments in quoted preference shares and bonds has been determined by reference to their quoted bid prices at the reporting date. Investments categorised as Level 2 are not considered to trade in active markets.


20.	Capital management policies and procedures
	The investment objective of the Company is to achieve an above average dividend yield, with long-term growth in dividends and capital ahead of inflation by investing principally in global equities.
	The capital of the Company consists of bank borrowings and equity, comprising issued capital, reserves and retained earnings. The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance.
	The Board monitors and reviews the broad structure of the Company's capital on an ongoing basis. This review includes:
	- the planned level of gearing which takes into account the Investment Manager's views on the market;
	- the level of equity shares in issue; and
	- the extent to which revenue in excess of that which is required to be distributed should be retained.
	The Company's objectives, policies and processes for managing capital are unchanged from the preceding accounting period.
	Details of the Company's gearing facilities and financial covenants are detailed in note 13 of the financial statements. The Company does not have any other externally imposed capital requirements.


21.	Related party transactions and transactions with the Manager
	Directors' fees and interests. Fees payable during the year to the Directors and their interests in shares of the Company are disclosed within the Directors' Remuneration Report on page 65 of the published Annual Report for the year ended 31 December 2022.
	Transactions with the Manager. The Company has agreements with aFML for the provision of management, accounting and administration services and promotional activities. Details of transactions during the year and balances outstanding at the year end are disclosed in notes 4 and 5.
	In the opinion of the Directors on the basis of shareholdings advised to them, the Company has no immediate or ultimate controlling party.

The Annual Financial Report Announcement is not the Company's statutory accounts. The above results for the year ended 31 December 2022 are an abridged version of the Company's full Annual Report and financial statements, which have been approved and audited with an unqualified report. The 2021 and 2022 statutory accounts received unqualified reports from the Company's auditors and did not include any reference to matters to which the auditor drew attention by way of emphasis without qualifying the reports, and did not contain a statement under s.498 of the Companies Act 2006. The financial information for 2022 is derived from the statutory accounts for 2022 which have been delivered to the Registrar of Companies. The 2022 financial statements will be filed with the Registrar of Companies in due course.

The Annual Report will be posted to shareholders in March 2023 and additional copies will be available from the registered office of the Company and on the Company's website, murray-intl.co.uk*

Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise and may be affected by exchange rate movements. Investors may not get back the amount they originally invested.

*Neither the content of the Company's website nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.

For Murray International Trust PLC

Abrdn Holdings Limited, Company Secretary

2 March 2023

Securities Financing Transactions Disclosure (unaudited)


The Company engages in Securities Financing Transactions (SFTs) (as defined in Article 3 of Regulation (EU) 2015/2365, SFTs include repurchase transactions, securities or commodities lending and securities or commodities borrowing, buy-sell back transactions or sell-buy back transactions and margin lending transactions). In accordance with Article 13 of the Regulation, the Company's involvement in and exposures related to securities lending for the accounting period are detailed below:

					% of			% of
Absolute value of assets engaged in SFTs			£'000		lendable assets			net assets
31 December 2022
Securities lending			-		-			-

31 December 2021
Securities lending			N/A		N/A			N/A

Top ten collateral issuers and collateral received
Based on market value of collateral received.
For all issuers, only equity securities with a main market listing were lent and the custodian was BNY Mellon.

2022	£'000				2021			£'000
None	-				N/A			N/A

	-							N/A

		2022			2021
			Proportion held					Proportion held
		Market value	in segregated		Market value			in segregated
		of collateral held	accounts		of collateral held			accounts
Collateral held per custodian		£'000	%		£'000			%
BNY Mellon		-	-		N/A			N/A
One custodian is used to hold the collateral, which is in a segregated account.

					Market value
					of collateral received
					2022			2021
Collateral analysed by currency					£'000			£'000
None					-			N/A

Total collateral received					-			N/A

			Market value		Countries of
Securities lending			of securities lending		counterparty			Settlement
Top Ten Counterparties per type of SFTA			£'000		establishment			and clearing
31 December 2022
None			-		-			-
Total market value of securities lending			-					-

31 December 2021
N/A			N/A		N/A			N/A
Total market value of securities lending			N/A
A All counterparties are shown

Maturity Tenor of SFTs (remaining period to maturity)
31 December 2022
Securities lending
The lending and collateral transactions are on an open basis and can be recalled on demand. As at 31 December 2022 there were no securities on loan (31 December 2021 - N/A).
The Company does not engage in any re-use of collateral.

						2022			2021
Return and cost per type of SFT				£'000		%	£'000		%
Securities lending
Gross return				160		115	N/A		N/A
Direct operational costs (securities lending agent costs)B				(24)		(15)	N/A		N/A
Total costs				(24)		(15)	N/A		N/A
Net return				136		100	N/A		N/A
B The unrounded direct operational costs and fees incurred for securities lending for the 12 months to 31 December 2022 is £23,993.

Alternative Performance Measures


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.

Discount to net asset value per Ordinary share
The premium/(discount) is the amount by which the share price is higher or lower than the net asset value per share at the year end, expressed as a percentage of the net asset value.

		2022	2021
NAV per Ordinary share (p)	a	1,293.3	1,240.3
Share price (p)	b	1,334.0	1,156.0
Discount	(b-a)/a	3.1%	-6.8%

Dividend cover
Dividend cover measures the revenue return per share divided by total dividends per share, expressed as a ratio.

		2022	2021
Revenue return per share (p)	a	60.1	51.7
Dividends per share (p)	b	56.0	55.0
Dividend cover	a/b	1.07x	0.94x

Dividend yield
The annual dividend per Ordinary share divided by the share price at the year end, expressed as a percentage.

		2022	2021
Dividends per share (p)	a	56.0	55.0
Share price (p)	b	1,334.0	1,156.0
Dividend yield	a/b	· 4.2%	4.8%

Net gearing
Net gearing measures the total borrowings less cash and cash equivalents divided by shareholders' funds, expressed as a percentage. Under AIC reporting guidance cash and cash equivalents includes amounts due to and from brokers at the year end as well as cash and cash equivalents.

		2022	2021
Borrowings (£'000)	a	199,866	199,814
Cash (£'000)	b	18,131	8,705
Amounts due from brokers (£'000)	c	(173)	-
Shareholders' funds (£'000)	d	1,616,750	1,561,066
Net gearing	(a-b+c)/d	11.2%	12.2%

Ongoing charges ratio (OCR)
The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC as the total of investment management fees and recurring administrative expenses, expressed as a percentage of the average daily net asset values with debt at fair value published throughout the year.

		2022	2021
Investment management fees (£'000)		6,748	6,953
Administrative expenses (£'000)		1,651	1,752
Less: non-recurring chargesA (£'000)		(72)	(74)
Ongoing charges (£'000)		8,327	8,631
Average net assets (£'000)		1,604,867	1,510,301
Ongoing charges ratio (excluding look-through costs)		0.52%	0.57%
Look-through costsB		-	0.02%
Ongoing charges ratio (including look-through costs)		0.52%	0.59%
A Professional services comprising new Director recruitment costs and legal fees considered unlikely to recur.
BCalculated in accordance with AIC guidance issued in October 2020 to include the Company's share of costs of holdings in investment companies on a look-through basis.

The ongoing charges ratio provided in the Company's Key Information Document is calculated in line with the PRIIPs regulations, which includes amongst other things, the cost of borrowings and transaction costs.
Total return
NAV and share price total returns show how the NAV and share price have 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 December 2022		NAV	Price
Opening at 1 January 2022	a	1,240.3p	1,156.0p
Closing at 31 December 2022	b	1,293.3p	1,334.0p
Price movements	c=(b/a)-1	4.3%	15.4%
Dividend reinvestmentA	d	4.5%	5.2%
Total return	c+d	+8.8%	+20.6%

			Share
Year ended 31 December 2021		NAV	Price
Opening at 1 January 2021	a	1,138.2p	1,130.0p
Closing at 31 December 2021	b	1,240.3p	1,156.0p
Price movements	c=(b/a)-1	9.0%	2.3%
Dividend reinvestmentA	d	5.1%	4.9%
Total return	c+d	+14.1%	+7.2%
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.

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Murray International Trust PLC

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Financial Calendar

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Ten Largest Investments

Directors' Report

Statement of Directors' Responsibilities

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