Annual Financial Report, 7 Apr 2022 07:00

07 April 2022, 07:00

Source - LSE Regulatory

RNS Number : 5442H

North American Income Trust (The)

07 April 2022

THE NORTH AMERICAN INCOME TRUST PLC

ANNUAL FINANCIAL REPORT ANNOUNCEMENT FOR THE YEAR ENDED
31 JANUARY 2022

Investment Objective

To provide investors with above average dividend income and long-term capital growth through active management of a portfolio consisting predominately of S&P 500 US equities.

Financial Results and Performance

Financial Headlines

	Net asset value total return^AB		Share price total return^AB
	+25.7%		+25.6%
	2021	-5.7%	2021	-16.5%

	Revenue return per share		Dividends per share
	10.28p		10.30p
	2021	11.79p	2021	10.00p

	Net asset value per Ordinary share		Total assets
	318.79p		£485.65m
2021		262.48p	2021	£411.75m

	Dividend yield ^AC		Ongoing charges^A
	3.6%		0.95%
	2021	4.3%	2021	1.01%

	^A Considered to be an Alternative Performance Measure. See pages 88 to 90 of the 2022 Annual Report for more information.
	^B Includes dividends reinvested.
	^C Calculated as the dividend for the year divided by the year end share price.

Financial Calendar, Dividends and Highlights

Annual General Meeting (Edinburgh)

8 June 2022

Payment dates of quarterly dividends for financial year ending 31 January 2023

August 2022
October 2022
February 2023

June 2023

Financial year end

31 January 2023

Dividends

	Rate	xd date	Record date	Payment date
1st Interim dividend 2022	1.90p	22 July 2021	23 July 2021	6 August 2021
2nd Interim dividend 2022	1.90p	7 October 2021	8 October 2021	29 October 2021
3rd Interim dividend 2022	2.50p	3 February 2022	4 February 2022	25 February 2022
Proposed final dividend 2022	4.00p	5 May 2022	6 May 2022	13 June 2022
Total dividends 2022	10.30p
1st Interim dividend 2021	1.80p	16 July 2020	17 July 2020	7 August 2020
2nd Interim dividend 2021	1.80p	1 October 2020	2 October 2020	30 October 2020
3rd Interim dividend 2021	1.90p	4 February 2021	5 February 2021	26 February 2021
Proposed final dividend 2021	4.50p	6 May 2021	7 May 2021	4 June 2021
Total dividends 2021	10.00p

Highlights

	31 January 2022	31 January 2021	% change
Total assets (as defined on page 99)	£485.65m	£411.75m	+17.9
Equity shareholders' funds	£448.46m	£375.42m	+19.5
Share price (mid market)	283.00p	234.00p	+20.9
Net asset value per Ordinary share	318.79p	262.48p	+21.5
Discount (difference between share price and net asset value)^AB	(11.2%)	(10.9)%
Net gearing ^A	(4.9%)	(7.4)%

Dividends and earnings
Revenue return per share	10.28p	11.79p	-12.8
Dividends per share	10.30p	10.00p	+3.0
Dividend yield (based on year end share price)^A	3.6%	4.3%
Dividend cover^A	1.00	1.18
Revenue reserves per share
Prior to payment of third interim and final dividends	16.81p	16.49p
After payment of third interim and final dividends	10.31p	10.09p

Operating costs
Ongoing charges^A	0.95%	1.01%
^A Considered to be an Alternative Performance Measure. See pages 88 and 89 of the 2022 Annual Report for further information.
^B Including undistributed revenue.

Chair's Statement

It gives me great pleasure to present the results of the Company for the first time as Chair, succeeding former Chairman, James Ferguson, who retired on 31 December 2021, after nearly 20 years on the Board. I would like to pay a large tribute to all that James has accomplished for the Company during his long tenure.

Performance

Over the year ended 31 January 2022, the Company's net asset value ("NAV") total return per share was 25.7% in sterling terms. This slightly underperformed the 26.3% total return for the Russell 1000 Value Index, the Company's reference index. The underperformance was attributable mainly to overall positioning in the technology sector and stock selection in consumer staples. The Company's performance relative to the reference index was hampered by stock selection in the energy, real estate and financial sectors. Further details on the performance of the portfolio can be found in the Investment Manager's Review on pages 21 to 24 of the 2022 Annual Report.

Revenue Account

Total revenue from portfolio equity holdings over the period under review was £15.0 million (2021 - £15.6 million). While revenue in Sterling was down by 3.8%, this was largely driven by the weakening of the average US Dollar/GB Sterling foreign exchange rate, by nearly 7%, in the current year as compared to the prior year, reducing the Sterling equivalent value of the US Dollar dividend receipts. This was against the background which saw that most of the Company's equity holdings continued their established record of dividend growth. Over 84% of the equity holdings raised their dividends over the past twelve months, with a weighted average increase of approximately 7.1%.

During the year ended 31 January 2022, the Company received premiums totalling £3.9m million (2021 - £5.4 million) in exchange for entering into stock option transactions. This option income, the generation of which remains consistent with the Manager's company-focused investment process, represented 19.8% of total income (2021 - 25.0%). As the Company's exposure to corporate bonds has decreased over recent years, interest income from investments was lower and represented 0.6% of total income (2021 - 2.5%). Bond coupons and option premiums will remain secondary sources of income in the belief that dividends must remain the overwhelming source of income available for distribution. Further details of the portfolio are shown on pages 32 to 36 of the 2022 Annual Report.

Dividend

The revenue return per Ordinary share fell by 12.8% to 10.28p from 11.79p at 31 January 2022. This comprised a decrease in the dividend income of 2.7% and a decrease in option income of over 27%, partly as a result of the exceptional level of option income received in 2020. Option premiums received in 2021 are closer to the levels received in 2019.

In light of the above, the Board has declared a final dividend of 4.0p per share, resulting in total dividends for the year to 31 January 2022 of 10.3p (2021 - 10.0p) - a 3.0%% increase. The proposed final dividend is payable on 13 June 2022 to shareholders on the register on 6 May 2022.

Management of Premium and Discount

The Company's share price rose by 25.6% to 283p and ended the year at a 11.2% discount to total NAV, compared with a 10.9% discount at the end of the 2021 financial year. The Board continues to work with the Manager in both promoting the Company's benefits to a wider audience and providing liquidity to the market through the use of share buybacks.

Over the course of the year, the Company's shares mainly traded at discounts ranging between 7.0% and 11.0%.

During the year, 2,353,212 shares were bought back and cancelled at a weighted average price of 266.91p and a weighted average discount of 9.6%. The total cost was £6.35 million. Since 31 January 2022, the Company has bought back a further 440,036 Ordinary shares, at a weighted average discount to the underlying NAV of 11.7%.

Gearing

The Board believes that sensible use of gearing should enhance returns to our shareholders over the longer term. In December 2020, the Company entered into a long-term financing agreement for US$50 million with MetLife comprising two loans of US$25 million with terms of 10 and 15 years. As a result, net gearing at 31 January 2022 stood at 4.9% (2021: 7.4%).

Board

James Ferguson retired from the Board on 31 December 2021, after almost 20 years of service. During his tenure, he successfully steered the Board through a merger and a change of mandate and on behalf of the Board, I wish him well in his other ventures. In view of his retirement, the Board reviewed its succession planning and has undertaken a search for an additional independent Non-Executive Director and an announcement will be made in due course. On 1 January 2022, I stepped up to the role of Chair and relinquished the role of Senior Independent Director; I am delighted to report that Charles Park has agreed to take on this responsibility.

Outlook

Russia's invasion of Ukraine has dominated the headlines in recent months and caused widespread concern on personal, economic and environmental levels. The Company has no material exposure to Russia or Ukraine, although the conflict indirectly has the potential to fuel global inflation through commodity-flow disruptions.

Ramifications from the conflict have only exacerbated existing concerns of rising inflation, a key issue for the Board and the Manager. Inflation has been at the heart of many investors' concerns due to its anticipated impact on the US Federal Reserve's (the "Fed") policy and corporate outlooks, which has further increased market angst. At the same time, coming out of the pandemic lockdowns, demand for most goods and services surged thanks to the general reopening of economies globally, supplemented by healthy consumer spending following multiple rounds of stimulus. However, supplies of key raw materials remain limited because of COVID-19-induced supply-chain disruptions and/or capacity retirements implemented during the pandemic. This combination of strong consumer demand, restricted supply, and congested supply chains has pushed inflation to its highest level in over 40 years. As a result, the Fed will have to tighten monetary policy through interest-rate hikes and balance-sheet reduction more quickly than originally expected. Investors historically have experienced anxiety during the early stages of a rate-hike cycle because of the potential for a policy mistake.

The US equity market got off to a rocky start in 2022 as investors became more concerned about inflation, looming interest-rate hikes by the Fed, corporate profitability headwinds, and geopolitical tensions. At the same time, there was a significant rotation out of growth stocks into more value-orientated companies. The investment approach of the Company focuses on delivering an above-average income. It is reassuring to note that the majority of its investee companies continue to announce significant increases in the rates of dividend they will pay as this permits the Board to have a high degree of confidence in its ability to target dividend increases to the Company's shareholders. We have experienced a prolonged period where investors have focused on capital growth and income investing has taken a back seat. Our focus on value-orientated companies that are likely to be better able to cope against such a macro-economic backdrop is coming back into favour and the Board is pleased to note the improvement in relative performance that has developed and expects that market conditions are liable to remain favourable for the Company for the immediate future.

Annual General Meeting ("AGM") and Online Shareholder Presentation

AGM

The AGM will be held on 8 June 2022 at the offices of abrdn at 1 George Street, Edinburgh, EH2 2LL. We encourage all shareholders to complete and return the form of proxy enclosed with the Annual Report to ensure that your votes are represented at the meeting (whether or not you intend to attend in person). If you hold your shares in the Company via a share plan or a platform, and would like to attend and/or vote at the AGM, then you will need to make arrangements with the administrator of your share plan or platform. For this purpose, investors who hold their shares in the Company via the abrdn Investment Plan for Children, Share Plan or ISA will find a Letter of Direction enclosed. Shareholders are encouraged to complete and return the Letter of Direction in accordance with the instructions.

The Notice of the Meeting is contained on pages 100 to 104 of the 2022 Annual Report.

Online Shareholder Presentation

In order to encourage as much interaction as possible with our shareholders, there will also be an Online Shareholder Presentation, which will be held at 4:30 pm on 23 May 2022. At this event, you will receive a presentation from the Investment Manager and have the opportunity to ask questions of the Chairman and the Investment Manager. The online presentation is being held ahead of the AGM to allow shareholders to submit their proxy votes prior to the meeting.

Full details on how to register for the online event will be available on the Company's website. Shareholders are also encouraged to submit questions in advance of the Online Shareholder Presentation and the AGM at the following email address: northamericanincome@abrdn.com.

If you are unable to attend the online event, the Investment Manager's presentation will be available on the Company's website shortly after the presentation.

In the interim, the Board strongly encourages all shareholders to exercise their votes in respect of the AGM in advance of the meeting, and to appoint the Chair of the meeting as their proxy, by completing the enclosed Form of Proxy (or Letter of Direction for those who hold shares through the abrdn savings plans).

Dame Susan Rice
Chair
6 April 2022

Overview of Strategy

Introduction

The Company is an investment trust and its Ordinary shares are listed on the premium segment of the London Stock Exchange. The Company aims to attract long-term private and institutional investors wanting to benefit from the income and growth prospects of North American companies. The Board does not envisage any change in the Company's activity in the foreseeable future.

Investment Objective and Purpose

To provide investors with above average dividend income and long-term capital growth through active management of a portfolio consisting predominately of S&P 500 US equities.

Reference Index

The Board reviews performance against relevant factors, including the Russell Value Index 1000 (in sterling terms) and the S&P 500 Index (in sterling terms) as well as peer group comparisons. The aim is to provide investors with above average dividend income from predominantly US equities which means that investment performance can diverge, possibly quite materially in either direction, from these indices.

Investment Policy

The Company invests in a portfolio predominantly comprised of S&P 500 constituents. The Company may also invest in Canadian stocks and US mid and small capitalisation companies to provide for diversified sources of income. The Company may invest up to 20% of its gross assets in fixed income investments, which may include non-investment grade debt. The Company's investment policy is flexible, enabling it to invest in all types of securities, including (but not limited to) equities, preference shares, debt, convertible securities, warrants, depositary receipts and other equity-related securities.

The maximum single investment will not exceed 10% of gross assets at the time of investment and it is expected that the portfolio will contain around 50 holdings (including fixed income investments), with an absolute minimum of 35 holdings. The composition of the Company's portfolio is not restricted by minimum or maximum market capitalisation, sector or country weightings.

The Company may borrow up to an amount equal to 20% of its net assets.

Subject to the prior approval of the Board, the Company may also use derivative instruments for efficient portfolio management, hedging and investment purposes. The Company's aggregate exposure to such instruments for investment purposes (excluding collateral held in respect of any such derivatives) will not exceed 20% of the Company's net assets at the time of the relevant acquisition, trade or borrowing.

The Company does not generally intend to hedge its exposure to foreign currency. The Company will not acquire securities that are unlisted or unquoted at the time of investment (with the exception of securities which are about to be listed or traded on a stock exchange). However, the Company may continue to hold securities that cease to be listed or quoted, if appropriate.

The Company may participate in the underwriting or sub-underwriting of investments where appropriate to do so.

The Company may invest in open-ended collective investment schemes and closed-ended funds that invest in the North American region. However, the Company will not invest more than 10%, in aggregate, of the value of its gross assets in other listed investment companies (including listed investment trusts), provided that this restriction does not apply to investments in any such investment companies which themselves have stated investment policies to invest no more than 15% of their gross assets in other listed investment companies.

The Company will normally be substantially fully invested in accordance with its investment objective but, during periods in which changes in economic conditions or other factors so warrant, the Company may reduce its exposure to securities and increase its position in cash and money market instruments.

Management

The Board has appointed Aberdeen Standard Fund Managers Limited ("ASFML") to act as the alternative investment fund manager ("AIFM" or the "Manager").

The Directors are responsible for determining the investment policy and the investment objective of the Company. The Company's portfolio is managed on a day-to-day basis by abrdn Inc. (the "Investment Manager") by way of a delegation agreement in place between ASFML and abrdn Inc.

The Investment Manager invests in a range of North American companies, following a bottom-up investment process based on a disciplined evaluation of companies through direct visits by its fund managers. Stock selection is the major source of added value, concentrating on quality first, then price. Top-down investment factors are secondary in the Investment Manager's portfolio construction, with diversification rather than formal controls guiding stock and sector weights.

Key Performance Indicators ("KPIs")

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

KPI	Description
Net asset value and share price performance against the reference indices	The Board reviews the Company's NAV and share price total return performance against the reference indices, the Russell 1000 Value and the S&P 500 (both in sterling terms). Performance graphs and tables are provided on pages 18 to 20 of the 2022 Annual Report. The Board also reviews the performance of the Company against its peer group of investment trusts with similar investment objectives.
Revenue return and dividend yield ^A	The Board monitors the Company's net revenue return and dividend yield through the receipt of detailed income forecasts. A graph showing the dividends and yields over 5 years is provided on page 19 of the 2022 Annual Report.
Share price discount/Premium to net asset value ^A	The discount/premium relative to the net asset value per share is closely monitored by the Board. A graph showing the share price discount/premium relative to the net asset value is shown on page 20 of the 2022 Annual Report.
Ongoing charges ratio ("OCR") ^A	The Board reviews the Company's operating costs carefully against its peer group of investment trusts with similar investment objectives. The Company's OCR is provided on page 5 of the 2022 Annual Report.

A Considered to be an Alternative Performance Measure. See pages 88 to 90 of the 2022 Annual Report for more information^.

Principal Risks and Uncertainties

There are a number of risks which, if realised, could have a material adverse effect on the Company and its business model, financial position, performance and prospects. The Board has in place a robust process to identify, assess and monitor the principal risks and uncertainties facing the Company and to identify and evaluate newly emerging risks, such as climate change and geopolitical developments. This process is supported by a risk matrix which identifies the key risks for the Company, including emerging risks, and covers strategy, investment management, operations, shareholders, regulatory and financial obligations and third party service providers. This risk matrix is reviewed on a regular basis. A summary of the principal risks and uncertainties facing the Company, which have been identified by the Board, is set out in the following table, together with a description of the mitigating actions it has taken.

The principal risks associated with an investment in the Company's shares are published monthly in the Company's factsheet or they can be found in the pre-investment disclosure document ("PIDD") published by the Manager, both of which are on the Company's website.

Description

Mitigating Action

Market Risk

The risks facing the Company relate to the Company's investment activities and include market risk (comprising interest rate risk and other price risk), liquidity risk and credit risk. The Company is exposed to the effect of variations in share prices and movements in the US$/£ exchange rate due to the nature of its business. A fall in the market value of its portfolio would have an adverse effect on shareholders' funds. Any debt securities that may be held by the Company will be affected by general changes in interest rates that will in turn result in increases or decreases in the market value of those instruments.

The day-to-day management of the Company's assets has been delegated to the Manager under investment guidelines determined by the Board. The Board monitors these guidelines and receives regular reports from the Manager which include performance reporting. The Board regularly reviews these guidelines to ensure they remain appropriate.

Details on financial risks, including market price, liquidity and foreign currency risks and the controls in place to manage these risks are provided in note 18 to the 2022 financial statements.

Pandemic or Systemic shock

The Company is exposed to stockmarket volatility or illiquidity as a result of major market shock due to a national or global crisis such as a pandemic, war, natural disaster, geopolitical developments or similar. The resulting impact of disruption on the operations of the Company and its service providers, temporarily or for prolonged duration.

The Board is cognisant of the risks arising from the pandemic and geopolitical developments (such as Russia's invasion of Ukraine), including stockmarket instability and longer term economic effects and the potential impact on the operations of the third-party suppliers, including the Manager.

The Manager assesses and reviews the investment risks arising from the pandemic or geopolitical developments on the companies in the portfolio, including but not limited to: employee absence, reduced demand, supply chain breakdown, balance sheet strength, ability to pay dividends, and takes the necessary investment decisions. The Manager has regular communications with the underlying investee companies in order to navigate and guide the company through the current challenges.

The Manager has business continuity procedures and contingency arrangements in place to ensure that they are able to continue to service their clients, including investment trusts. The services from third parties, including the Manager, have continued to be supplied effectively during the current market environment and the Board will continue to monitor services through regular updates from the Manager.

Income and Dividend Risk

The ability of the Company to pay dividends and any future dividend growth will depend primarily on the level of income received from its investments (which may be affected by currency movements, exchange controls or withholding taxes imposed by jurisdictions in which the Company invests) and the timing of receipt of such income by the Company. Accordingly, there is no guarantee that the Company's dividend income objective will continue to be met and the amount of the dividends paid to Ordinary shareholders may fluctuate and may go down as well as up.

The Board monitors this risk through the regular review of detailed revenue forecasts and considers the level of income at each meeting.

The Company has built up its revenue reserves over recent years which provides flexibility in future years, should the dividend environment become challenging.

Operational

The Company is reliant on services provided by third parties (in particular those of the Manager). Failure by any service provider to carry out its contractual obligations could expose the Company to loss or damage and have a detrimental impact on the Company operations.

Written agreements are in place defining the roles and responsibilities of all third party service providers. The Board reviews reports on the operation and efficacy of the Manager's risk management and control systems, including those relating to cyber-crime, and its internal audit and compliance functions.

The Manager monitors the control environment and quality of services provided by other third party service providers through due diligence reviews, service level agreements, regular meetings and key performance indicators. The Board review reports on the Manager's monitoring of third party service providers on a periodic basis.

Regulatory Risk

Changes to, or failure to comply with, relevant regulations (including the Companies Act, The Financial Services and Markets Act, The Alternative Investment Fund Managers Directive, accounting standards, investment trust regulations, the Listing Rules, Disclosure Guidance and Transparency Rules and Prospectus Rules) could result in fines, loss of reputation, reduced demand for the Company's shares and potentially loss of an advantageous tax regime.

The Directors have an awareness of the relevant regulations and are provided with information on changes by the Association of Investment Companies, as well as the Manager.

The Manager provides six-monthly reports to the Audit Committee on its internal control systems, which monitors compliance with relevant regulations. In addition, the Board, when necessary will use the services of its professional advisers to monitor compliance with regulatory requirements.

The Manager and depositary provide reports to the Audit Committee on their operations to ensure that the regulations under the AIFM are complied with.

The Manager has implemented procedures to ensure that the provisions of the Corporation Tax Act 2010 are not breached and the results are reported to the Board.

Gearing Risk

Gearing is used to leverage the Company's portfolio in order to enhance returns where and to the extent this is considered appropriate to do so. Gearing has the effect of accentuating market falls and market gains. The ability of the Company to meet its financial obligations, or an increase in the level of gearing, could result in the Company becoming over-geared or unable to take advantage of potential opportunities and result in a loss of value to the Company's shares.

In order to manage the level of gearing, the Board has set a maximum gearing ratio of 20% of net assets. The Board receives regular updates from the Manager on the Company's net gearing levels and its compliance with loan covenants. As at 31 January 2022 the Company had £37.2 million of borrowings and net gearing was 4.9% at the year end.

Discount volatility

Investment company shares can trade at discounts to their underlying net asset values, although they can also trade at premia.

In order to seek to minimise the impact of share price volatility, where the shares are trading at a significant discount, the Company has operated a share buyback programme for a number of years. The Board monitors the discount level of the Company's shares and will exercise discretion to undertake share buybacks.

Derivatives

The Company uses derivatives primarily to enhance the income generation of the Company. Derivatives are difficult to value and exposed to counterparty risk.

The risks associated with derivatives contracts are managed within guidelines and limits set by the Board.

Potential Impact of Environmental, Social and Governance ("ESG") Investment Principles

Applying ESG and sustainability criteria in the investment process may result in the exclusion of assets in which the Company might otherwise invest. The Manager also monitors and responds to ESG and sustainability risks at portfolio companies as they evolve over time. This may have a positive or negative impact on performance.

The Board supports and encourages the ESG analysis incorporated by the Manager as part of its investment decision making process and understands that over the short-term companies with weak ESG compliance may appear to perform strongly. Over the long term the board believes companies that carefully understand and proactively manage the ESG issues relevant to their businesses will prove more resilient and capture emerging opportunities for growth. The Manager also actively engages with investee companies in relation to ESG and sustainability issues that it deems material.

In addition to these risks, the Company is exposed to the effects of recent geopolitical instability or changes which could have an adverse impact on stockmarkets and the Company's portfolio. The Board is also mindful of the continuance of the global pandemic and any longer term impact arising from the uncertainty it creates.

In all other respects, the Company's principal risks and uncertainties have not changed materially since the
year end.

Promoting the Success of the Company

The Board is required to report on how it has discharged its duties and responsibilities under section 172 of the Companies Act 2006 (the "s172 Statement"). Under section 172, the Directors have a duty to promote the success of the Company for the benefit of its members as a whole, taking into account the likely long-term consequences of decisions, the need to foster relationships with the Company's stakeholders and the impact of the Company's operations on the environment.

The Company consists of four Directors at the time of writing this report and has no employees or customers in the traditional sense. As the Company has no employees, the culture of the Company is embodied in the Board of Directors. The Board seeks to promote a culture of strong governance and to challenge, in a constructive and respectful way, the Company's advisers and other stakeholders.

The Board's principal concern has been, and continues to be, the interests of the Company's shareholders and potential investors. The Manager undertakes an annual programme of meetings with the largest shareholders and investors and reports back to the Board on issues raised at these meetings. The Investment Manager, who is based in the Manager's Philadelphia office, will attend such meetings. The Board encourages all shareholders to attend and participate in the Company's AGM in normal circumstances and can contact the Directors via the

Company Secretary. Shareholders and investors can obtain up-to-date information on the Company through its website and the Manager's information services and have direct access to the Company through the Manager's customer services team or the Company Secretary. As the normal format of the 2021 AGM was not able to take place due to the government restrictions in place as a result of Covid-19, a number of podcasts by the Investment Manager were made available on the Company's website for shareholders to access.

As an investment trust, a number of the Company's functions are outsourced to third parties. The key outsourced function is the provision of investment management services to the Manager and other stakeholders support the Company by providing secretarial, administration, depositary, custodial, banking and audit services.

The Board undertakes a robust evaluation of the Manager, including investment performance and responsible ownership, to ensure that the Company's objective of providing sustainable income and capital growth for its investors is met. The Board typically visits the Manager's offices in the US on a bi-annual basis. This enables the Board to conduct due diligence of the fund management and research teams. The portfolio activities undertaken by the Investment Manager on behalf of the Company can be found on page 22 to 23 of the 2022 Annual Report and details of the Board's relationship with the Manager and other third party providers, including oversight, is provided in the Statement of Corporate Governance.

Key decisions and actions during the year to 31 January 2022, which required the Directors to have greater focus on stakeholders included:

Directorate

The Board's succession and refreshment policies were reviewed during the year. The stability of a Board during one of the most challenging periods was considered an important factor and, as such, no changes were made to the Board composition during the financial year. The Board is, however, mindful of the importance of having a suitable succession plan. James Ferguson retired from the Board on 31 December 2021 and was succeeded by Dame Susan Rice, who has served on the Board since 2015. Charles Park was appointed the Senior Independent Director in January 2022. The search for a new independent Non-Executive Director has progressed well and an announcement will be released in due course.

Dividends paid to shareholders

During the year, the Board reviewed the dividend payment policy. It concluded that, as the primary objective of the Company is to deliver income to shareholders, it should focus on matching payments to shareholders more closely with the income received by the portfolio. Consequently, the Board moved to a payment structure whereby the first three interim dividends in the year represent a greater proportion of the expected annual dividend than had been the case in the past. Subject to shareholder approval of the proposed final dividend, the Company paid a total dividend of 10.3p for the financial year, representing an increase of 3.0% compared to the previous year (2021: 10.0p). The Board recognises the importance of dividends to shareholders and after careful review of the Company's revenue forecasts and the investment outlook with the Manager, the dividend was increased in line with the Company's objective of above average income growth as well as reflecting the Company's financial position.

Management of the portfolio

As in previous years, the Board focused on the performance of the Manager in achieving the Company's investment objective within an appropriate risk framework. Since the outbreak of the Covid-19 pandemic in 2020, with many people working from home, the Board has liaised closely with the Manager to receive assurances (including portfolio activity, risks and opportunities, gearing, revenue forecasts and the operations of third party providers) that the Company had sufficient resilience in its portfolio and operational structure to meet the challenged circumstances.

As explained in more detail on page 47 of the 2022 Annual Report, during the year, the Management Engagement Committee decided that the continuing appointment of the Manager was in the best interests of shareholders

Duration

The Company does not have a fixed winding-up date; however, shareholders are given the opportunity to vote on the continuation of the Company every three years at the AGM. The Company's continuation vote held in 2021 was supported by shareholders and the next continuation vote is scheduled at the AGM in June 2024.

Board Diversity

The Board recognises the importance of having a range of skilled, experienced individuals with the appropriate knowledge in order to allow the Board to fulfil its obligations. At 31 January 2022 the Board consisted of one man and three women with diverse and relevant expertise and perspectives.

Environmental, Social and Human Rights Issues

The Company has no employees as the Board has delegated day to day management and administrative functions to ASFML. There are therefore no disclosures to be made in respect of employees. Further information on socially responsible investment can be found on pages 25 to 29 of the 2022 Annual Report.

Global Greenhouse Gas Emissions
and Streamlined Energy and Carbon Reporting ("SECR")

All of the Company's activities are outsourced to third parties. The Company therefore has no greenhouse gas emissions to report from the operations of its business, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013. For the same reasons as set out above, the Company considers itself to be a low energy user under the SECR regulations and therefore is not required to disclose energy and carbon information.

The Manager has access to a range of ESG tools, two of which are climate-related. These tools allow fund managers to look at the overall carbon footprint of their portfolios and compare with the benchmark. It also allows them to identify the highest carbon emissions stocks across portfolios. Furthermore, the carbon footprint tool has been used to help further guide the Manager's engagement with companies (for example, including the top three carbon-emitting stocks in the priority engagement process).

Viability Statement

The Company does not have a formal fixed period strategic plan but the Board does formally consider risks and strategy on at least an annual basis. The Board considers the Company to be a long-term investment vehicle but for the purposes of this Viability Statement has decided that a period of three years is an appropriate period over which to report. The Board considers that this period reflects a balance between looking out over a long-term horizon and the inherent uncertainties of looking out further than three years.

In assessing the viability of the Company over the review period the Directors have focused upon the following factors:

· The ongoing relevance of the Company's investment objective in the current environment and recent feedback from the Company's brokers and shareholders, where available;

· A resolution for the continuation of the Company was passed at the AGM in June 2021 showing ongoing support from shareholders for the Company's mandate;

· The principal risks detailed in the strategic report on pages 12 to 15 and the steps taken to mitigate these risks. In particular, the Board has considered the operational ability of the Company to continue in the current environment, which has been impacted by the global pandemic and geopolitical developments, and the ability of the key third party suppliers to continue to provide essential services to the Company. Third party services have continued to be provided effectively;

· The Company is invested in readily realisable listed securities; recent stress testing has confirmed that shares can be easily liquidated, despite the more uncertain and volatile economic environment;

· The level of revenue surplus generated by the Company and its ability to achieve the dividend policy. The Company has continued to deliver dividend growth whilst building up revenue reserves (see pages 2 and 4 of the 2022 Annual Report) which can be used to top up the dividend in tougher times;

· The level of gearing is closely monitored by the Board and the Manager. Covenants are actively monitored and there is adequate headroom in place; and

· The availability of long-term gearing facilities. The Company's gearing comprises $25 million 10 year loan notes (until December 2030) and $25 million 15 year loan notes (until December 2035).

Accordingly, taking into account the Company's current position and the potential impact of its principal risks and uncertainties, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due for a period of three years from the date of this Report. In making this assessment, the Board has considered that matters such as significant economic or stockmarket volatility (including those as a result of a greater than anticipated economic impact of the spread of the Covid-19, its variants and the re-introduction of government restrictions), a substantial reduction in the liquidity of the portfolio, or changes in investor sentiment could have an impact on its assessment of the Company's prospects and viability in the future.

Dame Susan Rice
Chair
6 April 2022

Results

Performance (total return)

	1 year return	3 year return^A	5 year return^A
Total return (Capital return plus dividends reinvested)	%	%	%
Share price^B	+25.6	+17.0	+35.3
Net asset value per share^B	+25.7	+25.1	+40.4
Russell 1000 Value Index (in sterling terms)	+26.3	+44.7	+54.4
S&P 500 Index (in sterling terms)	+26.2	+72.5	+103.7
^A Cumulative return
^B Considered to be an Alternative Performance Measure. See page 90 of the 2022 Annual Report for more information.

Ten Year Financial Record

Year to 31 January	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022
Per share (p)
Net revenue return^A	3.94	5.96	6.54	7.15	7.98	8.42	10.04	11.42	11.79	10.28
Dividends^A	3.90	5.40	6.00	6.60	7.20	7.80	8.50	9.50	10.00	10.30
As at 31 January
Net asset value per share^A (p)	153.8	163.1	187.8	187.1	264.7	275.5	280.4	288.9	262.5	318.8
Shareholders' funds (£'000)	242,069	271,952	309,273	280,644	379,101	391,649	398,657	413,948	375,416	448,463
^A Comparative figures have been restated due to the sub-division of each existing Ordinary share of 25p into five Ordinary shares of 5p each on 10 June 2019.

Investment Manager's Review

Market review

North American equity market indices moved sharply higher during the year ended 31 January 2022, despite weathering numerous periods of volatility. Markets had a strong start in 2021, following the rollout of COVID-19 vaccines and optimism over additional US government stimulus spending under President Joe Biden. The markets extended gains as economies re-opened globally and commodity prices rallied. However, investors' risk aversion resurfaced in the second half of the year as the emergence of two COVID-19 variants, Delta and Omicron, prompted renewed lockdowns and travel restrictions. This increased concerns about further supply-chain disruptions. Subsequently, geopolitical tensions combined with talk of accelerated monetary tightening amid rising inflation resulted in a sharp and swift rotation towards value-centric areas of the market and commodities towards the end of the year. The energy, financials and real estate sectors were the strongest performers within the Russell 1000 Value Index (the Company's reference index), while the communication services, the information technology and utilities sectors were the primary market laggards for the period.

The Fed became more "hawkish" following its meeting in mid-December 2021. The market is now pricing in at least six interest-rate hikes in 2022. Jerome Powell, Chairman of the Federal Reserve, signalled that its focus has shifted from supporting the economy to tackling inflation, particularly given the low US unemployment rate
and hourly earnings rising to 5.7% year-over-year in January 2022.

In economic news, US gross domestic product ("GDP") grew at an annualised rate of 5.7% over 2021, compared to a 3.4% decrease in the previous calendar year. The increase in GDP for 2021 was attributable mainly to upturns in consumer spending, non-residential fixed investment and exports. The Department of Labor reported that US payrolls expanded by a total of 6.6 million over the year ended 31 January 2022, and the unemployment rate declined by 2.4 percentage points to 4.0%. The leisure and hospitality industry led the job gains for the period; however, employment in the sector was still down more than 10% from its pre-pandemic level in February 2020. Inflation surged over the review period as the US Consumer Price Index was up 7.5% year-over-year in January 2022 - the largest annual increase in 40 years.

Performance

The Company returned 25.7% on a net asset value total return basis in sterling terms for year ended 31 January 2022, modestly underperforming the 26.3% total return of its reference index, the Russell 1000 Value Index. The revenue account remained in a healthy position, building upon the record established in prior years. The decline in the revenue account was largely attributable to the exceptional level of option income received in 2020. Furthermore, while many holdings raised their dividend payments in 2021, they did it on a delayed basis instead of annually. The result was flat dividend payments for several holdings for five, six or seven quarters. Fortunately, most holdings that deferred raising their dividend payments did so by the end of 2021 such that dividend income growth should improve in 2022.

The Company's performance relative to the reference index for the period benefited from overall positioning in the technology sector and stock selection in consumer staples. The main individual stock contributors to performance included holdings in alternative asset manager Blackstone and pharmaceutical firm Abbvie.

Blackstone saw healthy revenue and earnings growth with notable strength in its Private Equity and Real Estate segments. Abbvie saw healthy year-over-year revenue and EPS growth as they benefited from healthy revenue growth in its Global Botox Therapeutic business.

Investment performance was hampered by stock selection in the energy, real estate and financials sectors. The largest individual stock detractors from performance were Omega Healthcare Investors, a REIT with exposure to nursing homes and assisted living facilities, and medical device maker Medtronic.

The share price of Omega Healthcare Investors fell as demand for skilled nursing facilities waned, given the decline in elective procedures that help drive demand in this industry. Shares of Medtronic declined late in the period as the surge in COVID-19 variants dampened the outlook for performed medical procedures in addition to lost sales related to the discontinuation of the company's older diabetes pump model. The Company's lack of a holding in Exxon Mobil weighed on performance as the stock price rose sharply as crude oil prices rose.

Portfolio activity

The Company's investments remained consistent with our high-quality, cash-generative stock selection process, however, market volatility created opportunities to add quality companies into the portfolio at attractive prices. During the review period, we initiated an equity position in Hannon Armstrong Sustainable Infrastructure Capital, a provider of financing solutions to companies in the renewable energy space. We believe that the company will benefit from an acceleration in climate-change-related projects, by leveraging its expertise and relationships within the industry. This will result in better than anticipated balance sheet and earnings growth. The management of Broadcom, a supplier of semiconductor and infrastructure software solutions, has a strong history of creating value. We are comfortable with the company's approach to mergers and acquisitions given a proven history of high returns on equity ("ROE"), best-in-class margins, and free cash flow ("FCF")/dividend growth. MetLife, a provider of insurance, employee benefits, and other financial services, currently has a collection of businesses (International Life, Group Insurance, and Institutional) that generate higher growth and superior returns relative to most US peers following the divestiture of lower-value segments and the spin-off of Brighthouse Financial.

Shares in Baker Hughes, one of the world's largest providers of equipment and services to the energy sector, were purchased. The company is in a unique position within the energy complex because beyond its exposure to traditional oil field services markets, it has a near-monopolistic position within liquefied natural gas equipment, and a diverse set of solutions that will help to accelerate the energy transition. This combination of an attractive fundamental backdrop, healthy financial profile, and strong dividend yield creates an opportunity which we believe the market isn't fully appreciating.

VF Corp. is a global footwear and apparel company focused on outdoor and lifestyle activities with popular brands, including The North Face, Vans, Timberland, Dickies and Supreme. The management team has repositioned and reshaped the company's portfolio of brands which in our view will yield faster and more profitable growth coming out of the global pandemic. We are confident in management's ability to execute on this improving growth strategy, while the market appears more sceptical.

CI Financial is a wealth management firm that has an investment management arm and a fledgling Registered Investment Advisor (RIA) business. The company has experienced continued organic and inorganic growth as it expands into US wealth management, and the launch of new products in asset management is driving revenue growth and improved profitability. It is believed that the market is not currently pricing in this future growth and improved mix to the RIA business, and further multiple expansion is warranted as the quality of the earnings stream improves.

A position in OneMain Financial, which provides credit to near-prime consumers, was initiated. Apollo Group (which the Company does not hold) took a majority control position within OneMain Financial and helped to improve the company's balance sheet, cost of funding, and risk profile by focusing more on secured lending and optimised pricing. In our view, these changes have resulted in a much higher-quality company with scope for both earnings growth and sizable return of capital in the coming years via dividends (a yield in excess of 5%), special dividends, and share buybacks.

Other initiated holdings during the review period included Emerson Electric (EMR), a provider of engineering services for industrial, commercial, and consumer markets. We believe that its leading position in automation for certain end markets such as energy and chemicals should benefit from the economic recovery and from longer-term tailwinds related to clean energy. Furthermore, it is believed that EMR's more consumer-oriented businesses are positioned well within the strong residential and housing environment, with cost reductions supporting margins over the medium term.

Analog Devices (ADI) is an analog semiconductor vendor that sells into a wide range of global end-markets, most notably industrial, automotive and communications. The company has gained significant scale through organic growth and acquisitions and is now the second-largest analog semiconductor supplier globally. The ADI management team has a strong execution track record and company financials have improved significantly over time. ADI generates high margins and strong free cash flow, and a 100% return policy supports ongoing dividend growth making it an attractive growth and income story, in our view.

Positions that the Company sold during the period included healthcare services provider UnitedHealth Group, following the announcement of a sudden change in the company's Chief Executive Officer ("CEO"). We believe that the new CEO is highly qualified; however, investors may need to see a period of consistent execution before gaining confidence in the strategy of UnitedHealth Group's management.

The Company's shares of telecommunications company Verizon Communications were sold as wireless carriers are heading into an increasingly capital expenditure-intensive and competitive period as the US adopts 5G technology. The Company's shares in ConocoPhillips were also sold in order to initiate a position in Baker Hughes. ConocoPhillips has benefited from the rally in oil prices, however, the risk/reward in the stock was considered much more balanced than it had been previously. Additionally, the position in Blackstone was sold following a period of strong share-price performance coming out of the pandemic, which resulted in nearly 100% multiple expansion on a peak earnings stream. The position in data centre REIT Digital Realty Trust after the stock price staged a rally and reached what was believed to be fair value relative to the near-term growth prospects for the business. Despite our belief that demand for data centre space remains quite high, new supply entering the market, particularly for commodity hyperscale space, is putting downward pressure on rental rates and development yields, which could slow the pace of value creation in the near term.

The position in Regions Financial was sold when the stock's upside was considered to be limited, with the valuation reflecting the level of returns that we expected the bank to generate over the next few years. Similarly, the Company's shares in Lockheed Martin, a leading prime defence contractor for countries around the globe, were also sold. While the company has achieved success with its latest generation of aircraft, missile defence, and other platforms, its earnings have become increasingly concentrated in a small number of programs. Additionally, these programs are decreasing in priority in terms of defence budget spending as broader fiscal constraints and the current general peacetime create a greater focus on military modernisation. With more attractively positioned defence companies, we decided to exit the position.

We also sold the Company's shares in home improvement retailer The Home Depot, which we had initiated in the depths of the COVID-19 uncertainty in March 2020. The company, which was deemed an essential retailer, benefited from the pandemic lockdowns, which confined consumers to their homes, leaving them with significant time on their hands to initiate numerous home-related upgrades. Demand remained strong for at least the following 20 months, which most investors generally had not expected; secular demand drivers supported the shares through 2021. The Company's position in The Home Depot was sold as we considered forward earnings expectations for the company to be appropriately captured in the share price.

The position in industrial conglomerate Honeywell International was sold as the highly diversified nature of this business has led to a relatively lower earnings growth outlook in the current macro-economic environment. The Honeywell International businesses that were most challenged by the pandemic continue to recover; however, this is offset by the slowdown in those businesses that performed relatively well over the last two years. Furthermore, we think that the company's hesitance to deploy capital towards new and existing businesses has eroded its potential earnings upside related to use of its balance sheet. Consequently, we decided to exit the position in the stock in favour of better investment opportunities elsewhere.

Finally, the Company's shares in the world's largest consumer products company Procter & Gamble (P&G) were sold after the strong run-up in the stock price. P&G benefited as consumers increasingly relied on the company's products during the COVID-19 pandemic, however, many of these tailwinds are fading while the world "normalises." In our view, P&G's management has done well investing to extend the company's earnings growth, while also remaining committed to returning cash to shareholders; however, these factors are already appropriately priced into the stock.

A sector analysis chart of the portfolio can be found on page 35 of the 2022 Annual Report.

Within the Company's corporate bond portfolio over the review period, we initiated a position in Goodyear Tire & Rubber 5% 2029. Given the dramatic spread-tightening that the US high-yield corporate bond market experienced in the first three months of the period, the positions in the Company's corporate bond portfolio were exited where valuations were trading through their fair values. We preferred to re-invest the sales proceeds into what we believed to be more attractive opportunities in the equity market. Consequently, the Company's positions in Diamond 1 Fin Diamond 2 6.02% 2026; CCO Holdings 5.5% 2026; HCA 5.875% 2026; NRG Energy 5.25% 2029; Six Flags 7% 2025; and Rattler Midstream 5.625% 2025 were all exited. We continue to work closely with abrdn's fixed income specialists to monitor credits and market conditions.

Dividend growth

The Company's holdings continued to build upon an established track record of dividend growth during the review period, with several companies announcing double-digit increases. Aerospace and defence contractor L3Harris Technologies boosted its payout by 20%, resulting in a 1.9% annualised yield. Broadcom, a provider of semi-conductor and infrastructure software services, increased its dividend by 14%, representing a 2.8% annualised yield. Semi-conductor manufacturer Texas Instruments boosted its quarterly payout by 12.7%, equivalent to a 2.6% yield. Diversified financial services company JPMorgan raised its quarterly payout by 11%, representing a yield of 2.7%. Pharmaceutical firm Bristol-Myers raised its quarterly dividend by 10.2%, equivalent to an annualised yield of 3.3%. Railroad operator Union Pacific boosted its quarterly payout by 10%, representing a 1.9% annualised yield.

Additionally, two holdings announced special payments to shareholders during the review period. Derivatives exchange operator CME Group declared an annual variable dividend of US$3.25 per share in December 2021. The company uses this approach to facilitate paying out all cash that it generates over the year beyond a minimum threshold. Gaming-focused REIT, Gaming and Leisure Properties Inc. declared a special earnings and profits cash dividend of $0.24 per share.

Outlook

Russia's invasion of Ukraine has introduced greater uncertainty to global markets in recent months. We believe that the conflict presents risks of higher global inflation and the potential for downside economic forecasts. Nonetheless, the baseline view remains that US economic growth will remain healthy and the Fed will focus on raising interest rates, albeit potentially less swiftly than prior to the outbreak of hostilities in Eastern Europe. As such, we are paying close attention to the oil and gas markets and the ability of the US to increase production to ease potential supply constraints that the US market may experience.

Fran Radano
abrdn Inc.
6 April 2022

Ten Largest Investments

As at 31 January 2022

Abbvie		Bristol-Myers Squibb
AbbVie Inc. researches and develops pharmaceutical products. The company produces pharmaceutical drugs for speciality therapeutic areas such as immunology, chronic kidney disease, hepatitis C, woman's health, oncology and neuroscience.		Bristol-Myers Squibb Company is a global biopharmaceutical company. The Company develops, licenses, manufactures, markets, and sells pharmaceutical and nutritional products.

Comcast		Citigroup
Comcast Corporation provides media and television broadcasting services. The company offers video streaming, television programming, high-speed Internet, cable television and communication services. Comcast serves customers worldwide.		Citigroup Inc. is a diversified financial services holding company that provides a broad range of financial services to consumer and corporate customers.

Philip Morris		Gaming & Leisure Properties
Philip Morris International Inc., through its subsidiaries, manufactures and sells cigarettes and other tobacco products.		Gaming and Leisure Properties, Inc. owns and leases casinos and other entertainment facilities.

Phillips 66		Medtronic
Phillips 66 is a downstream energy company. The Company's operations include oil refining, marketing, and transportation.		Medtronic, plc develops therapeutic and diagnostic medical products for a wide range of conditions, diseases and disorders.

TC Energy		MetLife
TC Energy Corp is the parent company of TransCanada PipeLines Limited. The Company is focused on natural gas transmission and power services.		MetLife, Inc. provides individual insurance, employee benefits, and financial services with operations throughout the United States and the regions of Latin America, Europe, and Asia Pacific.

List of Investments

As at 31 January 2022
		Valuation	Total	Valuation
		2022	assets	2021
Company	Industry classification	£'000	%	£'000
Abbvie	Biotechnology	25,508	5.2	22,389
Bristol-Myers Squib	Pharmaceuticals	20,797	4.3	17,894
Comcast	Media	19,561	4.0	10,107
Citigroup	Banks	19,415	4.0	16,892
Philip Morris	Tobacco	19,165	3.9	17,401
Gaming & Leisure Properties	Equity Real Estate Investment Trusts (REITs)	16,837	3.5	7,978
Phillips 66	Oil, Gas & Consumable Fuels	15,800	3.3	8,887
Medtronic	Health Care Equipment & Supplies	15,427	3.2	14,593
TC Energy	Oil, Gas & Consumable Fuels	15,388	3.2	14,060
MetLife	Insurance	14,995	3.1	-
Ten largest investments		182,893	37.7
Huntington Bancshares	Banks	14,592	3.0	6,742
Cisco Systems	Communications Equipment	14,523	3.0	12,986
Omega Healthcare Investors	Equity Real Estate Investment Trusts (REITs)	14,078	2.9	13,188
Gilead Sciences	Biotechnology	13,822	2.9	13,376
Hanesbrands	Textiles, Apparel & Luxury Goods	13,800	2.8	8,908
Emerson Electric	Electrical Equipment	13,707	2.8	-
Baker Hughes	Energy Equipment & Services	13,294	2.7	-
American International	Insurance	12,913	2.7	8,179
L3 Harris Technologies	Aerospace & Defense	12,480	2.6	8,118
FMC	Chemicals	12,340	2.5	5,914
Twenty largest investments		318,442	65.6
CMS Energy	Multi-Utilities	11,996	2.5	16,569
Cogent Communications	Diversified Telecommunication	11,853	2.4	8,295
Union Pacific	Road and Rail	11,848	2.4	5,752
VF	Textiles, Apparel & Luxury Goods	11,665	2.4	-
Air Products & Chemicals	Chemicals	10,514	2.2	7,770
OneMain	Consumer Finance	9,626	2.0	-
JPMorgan Chase & Co.	Banks	8,861	1.8	14,992
Restaurant Brands International	Hotels, Restaurants & Leisure	8,344	1.7	8,404
CI Financial USD	Capital Markets	8,318	1.7	-
Coca-Cola	Beverages	8,185	1.7	7,013
Thirty largest investments		419,652	86.4
Royal Bank of Canada	Banks	7,645	1.6	5,900
CME Group	Capital Markets	6,842	1.4	7,279
Broadcom	Semiconductors & Semiconductor Equipment	6,550	1.3	-
Hannon Armstrong Sustainable	Mortgage Real Estate Investment Trusts (REITs)	6,183	1.3	-
Texas Instruments	Semiconductors & Semiconductor Equipment	6,020	1.2	4,826
Nutrien	Chemicals	5,203	1.1	5,371
Genuine Parts	Distributors	4,965	1.0	6,837
Analog Devices	Semiconductors & Semiconductor Equipment	4,889	1.0	-
CI Financial CAD	Capital Markets	1,383	0.3	-
Qwest Cap Funding 7.75% 15/02/31	Telecommunications	897	0.2	905
Forty largest investments		470,229	96.8
Goodyear Tire & Rubber 5% 15/07/29	Consumer Durables	745	0.2	-
Total investments		470,974	97.0
Net current assets		14,680	3.0
Total assets		485,654	100.0

Geographical/Sector Analysis

Geographic Analysis

As at 31 January

		2022			2021
	Equity	Fixed interest	Total	Equity	Fixed interest	Total
Country	%	%	%	%	%	%
Canada	9.8	-	9.8	8.3	-	8.3
USA	89.8	0.4	90.2	90.0	1.7	91.7
	99.6	0.4	100.0	98.3	1.7	100.0

Directors' Report

The Company, which was incorporated in 1902, is registered as a public limited company and is an investment company within the meaning of Section 833 of the Companies Act 2006. The Company's registration number is SC005218.

The Company 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 February 2012. The Directors are of the opinion that the Company has conducted its affairs for the year ended 31 January 2022 so as to enable it to comply with the ongoing requirements for investment trust status.

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.

Results and Dividends

The audited financial statements for the year ended 31 January 2022 are contained on pages 66 to 87 of the 2022 Annual Report. Details of dividends for the year to 31 January 2022 can be found on page 2 of the 2022 Annual Report.

Share Capital and Rights attaching to the Company's Shares

At 31 January 2022, the Company's capital structure consisted of 140,675,934 Ordinary shares of 5p each (2021 - 143,029,146 Ordinary shares of 5p each). During the year to 31 January 2022, the Company bought back 2,353,212 Ordinary shares for cancellation. Subsequent to the year end, a further 440,036 Ordinary shares were repurchased for cancellation.

The Ordinary shares carry a right to receive dividends which are declared from time to time by an ordinary resolution of the Company (up to the amount recommended by the Board) and to receive any interim dividends which the Company may resolve to pay. 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. On a show of hands, every shareholder present in person, or by proxy, has one vote and, on a poll, every Ordinary shareholder present in person has one vote for each share held and a proxy has one vote for every share represented.

There are no restrictions concerning the holding or transfer of the Company's shares and there are no special rights attached to any of the shares. The Company is not aware of any agreements between shareholders which may result in restriction on the transfer of shares or the voting rights. The rules concerning amendments to the Articles of Association and powers to issue or buyback the Company's shares are contained in the Articles of Association of the Company and the Companies Act 2006.

Significant Agreements

The Company is not aware of any significant agreements to which it is a party that take effect, alter or terminate upon a change of control of the Company following a takeover and there are no agreements between the Company and its Directors concerning compensation for loss of office. Other than the management agreement with the Manager and the depositary agreement, further details of which are set out below, the Company is not aware of any contractual or other agreements which are essential to its business which ought to be disclosed in the Directors' Report.

Directors

Details of the Directors of the Company who were in office during the year and up to the date of this report are shown on pages 40 to 41 of the 2022 Annual Report. James Ferguson retired on 31 December 2021.

No contract or arrangement existed during the period in which any of the Directors was materially interested. No Director has a service contract with the Company.

Directors' & Officers' Liability Insurance

The Company maintains insurance in respect of Directors' and Officers' liabilities in relation to their acts on behalf of the Company for the year to 31 January 2022 and up to the date of this report. Each Director of the Company shall be entitled to be indemnified out of the assets of the Company to the extent permitted by law against any loss or liability incurred by him in the execution of his duties in relation to the affairs of the Company. These rights are included in the Articles of Association of the Company.

Corporate Governance

The Statement of Corporate Governance, which forms part of the Directors' Report, is shown on pages 45 to 46 of the 2022 Annual Report.

Principal Agreements

Management Agreement

The Company has appointed Aberdeen Standard Fund Managers Limited ("ASFML" or the "Manager"), a wholly owned subsidiary of abrdn plc, as its alternative investment fund manager ("AIFM"). ASFML has been appointed to provide the Company with investment management, risk management, administration and company secretarial services as well as promotional activities. The Company's portfolio is managed by abrdn Inc. (the "Investment Manager") by way of a group delegation agreement in place between ASFML and abrdn Inc. In addition, ASFML has sub-delegated promotional activities to Aberdeen Asset Managers Limited and administrative and secretarial services to Aberdeen Asset Management PLC. Details of the management agreement, including notice period and fees paid during the year ended 31 January 2022 are shown in note 5 to the financial statements.

Depositary Agreement

The Company has appointed BNP Paribas Securities Services, London Branch as its depositary.

Loan Note Agreement

In December 2020, the Company entered into a long-term financing agreement for US$50 million with MetLife comprising two loans of US$25 million with terms of 10 and 15 years at an all in cost of 2.70% and 2.96% respectively, giving a blended rate for 10 years of 2.83% (the "Long-Term Financing Agreement").

Substantial Interests

As at 31 January 2022 the Company had received notification or was aware of the following interests in its Ordinary shares:

Shareholder	Number of shares held	% held
Rathbone Brothers	15,996,550	11.4
Brewin Dolphin	12,882,538	9.2
abrdn Retail Plans	10,337,396	7.3
1607 Capital Partners	7,262,484	5.2
Interactive Investor	6,461,166	4.6
Hargreaves Lansdown	6,019,914	4.3
Charles Stanley	5,155,241	3.7
Canaccord Genuity Wealth Management	4,637,222	3.3
EFG Harris Allday	4,347,969	3.1

As at the date of this Report, no changes to the above interests had been notified to the Company.

Accountability and Audit

The Directors who held office at the date of approval of this Directors' Report confirm that, so far as they are each aware, there is no relevant audit information of which the Company's auditor is unaware; and each Director has taken all the steps that he/she could reasonably be expected to have taken as a Director in order to make himself/herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

The Audit Committee has reviewed the services provided by the auditor during the year, together with the auditor's fees and procedures in connection with the provision of non-audit services. There were no non-audit service fees paid during the year. The Board remains satisfied that PricewaterhouseCoopers LLP's objectivity and independence is being safeguarded.

Going Concern

The Company's assets consist substantially of securities in companies listed on recognised stock exchanges and in normal circumstances are realisable within a short timescale and which can be sold to meet funding commitments if necessary.

The Board has set gearing limits and regularly reviews actual exposures, cash flow projections and compliance with banking covenants. The Company replaced its Long-Term Financing Agreement in December 2020.

The Company undertakes a continuation vote every three years. The last continuation vote was passed at the AGM held in June 2021 with 98.6% of votes in favour.

The Board has considered the impact of COVID-19 and recent geopolitical developments and believes that there will be a limited resulting financial impact on the Company's operational resources and existence. Given that the Company's portfolio comprises primarily "Level One" assets (listed on a recognisable exchange and realisable within a short timescale), and the Company's relatively low level of gearing, the Company has the ability to raise sufficient funds so as to remain within its debt covenants and pay expenses.

Taking the above factors into consideration, the Directors have a reasonable expectation that the Company has adequate financial resources to continue in operational existence for the foreseeable future and for at least twelve months from the date of this Report. Accordingly, the Board continues to adopt the going concern basis in preparing the financial statements.

Annual General Meeting

Among the resolutions being put at the Annual General Meeting ("AGM") of the Company to be held on 8 June 2022, the following resolutions will be proposed as special business:

(i) Section 551 Authority to Allot Shares

Resolution 10, which is an ordinary resolution, seeks to renew the Directors' authority under section 551 of the Companies Act to allot shares (excluding treasury shares) up to an aggregate nominal amount of £2,337,031 or, if less, the number representing 33.33% of the issued Ordinary share capital of the Company as at the date of the passing of the resolution. This authority will expire on 31 July 2023 or, if earlier, at the conclusion of the AGM to be held in 2023 (unless previously revoked, varied or extended). The Directors will only exercise this authority if they believe it is advantageous and in the best interests of shareholders. There are no treasury shares in issue.

(ii) Dis-application of Pre-emption Provisions

Resolution 11, which is a special resolution, seeks to renew the dis-application of statutory pre-emption rights in relation to the issue of shares (or sale of shares out of treasury) up to an aggregate nominal amount of £701,179 or, if less, the number representing 10% of the issued Ordinary share capital of the Company as at the date of the passing of the resolution. This authority will expire on 31 July 2023 or, if earlier, at the conclusion of the AGM to be held in 2023. The Directors will only exercise this authority if they believe it is advantageous and in the best interests of shareholders.

(iii) Share Repurchases

Resolution 12, which is a special resolution, seeks to renew the Company's authority for the Company to make market purchases of its own Ordinary shares, up to a maximum of 14.99% of the issued Ordinary share capital of the Company as at the date of the passing of the resolution. Shares so repurchased will be cancelled or held in treasury. The principal reasons for share buybacks are:

- to enhance net asset value for continuing shareholders by purchasing shares at a discount to the prevailing net asset value; and

- to address any imbalance between the supply of and demand for the Company's shares that results in a discount of the quoted market price to the published net asset value per share.

Recommendation

The Directors believe that the resolutions to be proposed at the AGM are in the best interests of the Company and its shareholders as a whole, and recommend that shareholders vote in favour of the resolutions, as the Directors intend to do in respect of their own beneficial shareholdings totalling, in aggregate, 14,718 Ordinary shares, and representing 0.01% of the existing issued Ordinary share capital of the Company.

By order of the Board
Aberdeen Asset Management PLC
Secretary, Edinburgh
6 April 2022

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law they are required to prepare the financial statements in accordance with UK accounting standards, including FRS 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland.

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of its profit or loss 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 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;

- assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

- use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

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 its financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Responsibility statement of the Directors in respect of the annual financial report

We confirm that to the best of our knowledge:

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

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

We consider this Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

For and on behalf of The North American Income Trust plc
Dame Susan Rice
Chair
6 April 2022

Statement of Comprehensive Income

		Year ended 31 January 2022			Year ended 31 January 2021
		Revenue	Capital	Total	Revenue	Capital	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000
Net gains/(losses) on investments	11	-	81,766	81,766	-	(40,080)	(40,080)
Net currency (losses)/gains	3	-	(558)	(558)	-	825	825
Income	4	19,040	604	19,644	21,469	101	21,570
Investment management fee	5	(910)	(2,123)	(3,033)	(804)	(1,877)	(2,681)
Administrative expenses	7	(735)	-	(735)	(753)	-	(753)
Return before finance costs and taxation		17,395	79,689	97,084	19,912	(41,031)	(21,119)

Finance costs	6	(316)	(737)	(1,053)	(145)	(337)	(482)
Return before taxation		17,079	78,952	96,031	19,767	(41,368)	(21,601)

Taxation	8	(2,522)	363	(2,159)	(2,882)	408	(2,474)
Return after taxation		14,557	79,315	93,872	16,885	(40,960)	(24,075)

Return per Ordinary share (pence)	10	10.28	56.00	66.28	11.79	(28.60)	(16.81)

The total column of this statement represents the profit and loss account of the Company.
All revenue and capital items in the above statement derive from continuing operations.
The accompanying notes on pages 70 to 87 of the 2022 Annual Report are an integral part of the financial statements.
Proposed final dividend. The Board is proposing a final dividend of 4.00p per share (£5,609,000), making a total dividend of 10.30p per share (£14,495,000) for the year to 31 January 2022 which, if approved, will be payable on 1 June 2022 (see note 9). For the year ended 31 January 2021, a final dividend of 4.50p per share was paid (£6,408,000) making a total dividend of 10.0p per share (£14,283,000).

Statement of Financial Position

		As at	As at
		31 January 2022	31 January 2021
	Note	£'000	£'000
Non-current assets
Investments at fair value through profit or loss	11	470,974	404,261

Current assets
Debtors and prepayments	12	5,712	2,575
Cash and short term deposits		13,875	9,239
		19,587	11,814

Creditors: amounts falling due within one year
Other creditors	13	(4,907)	(4,323)
		(4,907)	(4,323)
Net current assets		14,680	7,491
Total assets less current liabilities		485,654	411,752

Creditors: amounts falling due after more than one year
Senior Loan Notes	14	(37,191)	(36,336)
Net assets		448,463	375,416

Capital and reserves
Called-up share capital	15	7,034	7,151
Share premium account		51,806	51,806
Capital redemption reserve		15,582	15,465
Capital reserve		350,388	277,403
Revenue reserve		23,653	23,591
Total shareholders' funds		448,463	375,416

Net asset value per Ordinary share (pence)	16	318.79	262.48

The financial statements on pages 66 to 87 of the 2022 Annual Report were approved and authorised for issue by the Board on 6 April 2022 and were signed on its behalf by:
Dame Susan Rice
Director
The accompanying notes on pages 70 to 87 of the 2022 Annual Report are an integral part of the financial statements.

Statement of Changes in Equity

For the year ended 31 January 2022
		Share	Capital
	Share	premium	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 February 2021	7,151	51,806	15,465	277,403	23,591	375,416
Buyback of Ordinary shares	(117)	-	117	(6,330)	-	(6,330)
Return after taxation	-	-	-	79,315	14,557	93,872
Dividends paid (see note 9)	-	-	-	-	(14,495)	(14,495)
Balance at 31 January 2022	7,034	51,806	15,582	350,388	23,653	448,463

For the year ended 31 January 2021
		Share	Capital
	Share	premium	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 February 2020	7,164	51,806	15,452	318,923	20,603	413,948
Buyback of Ordinary shares	(13)	-	13	(560)	-	(560)
Return after taxation	-	-	-	(40,960)	16,885	(24,075)
Dividends paid (see note 9)	-	-	-	-	(13,897)	(13,897)
Balance at 31 January 2021	7,151	51,806	15,465	277,403	23,591	375,416

The accompanying notes on pages 70 to 87 of the 2022 Annual Report are an integral part of the financial statements.

Cashflow Statement

		Year ended	Year ended
		31 January 2022	31 January 2021
	Note	£'000	£'000
Operating activities
Net return before taxation		96,031	(21,601)
Adjustments for:
Net (gains)/losses on investments	11	(81,710)	40,373
Net losses/(gains) on foreign exchange transactions		558	(825)
Decrease/(increase) in dividend income receivable	12	265	(35)
Decrease in fixed interest income receivable	12	66	33
Decrease in derivatives	13	(120)	(524)
Decrease/(increase) in other debtors	12	1	(33)
(Decrease)/increase in other creditors	13	(828)	810
Corporation tax paid		-	(286)
Tax on overseas income	8	(2,159)	(2,048)
(Accretion)/amortisation of senior loan note expenses	6	(1)	3
Amortisation of fixed income book cost	11	(2)	9
Stock dividends included in investment income	4	-	(290)
Net cash inflow from operating activities		12,101	15,586

Investing activities
Purchases of investments		(193,847)	(243,480)
Sales of investments		206,909	211,499
Net cash generated from/(used in) investing activities		13,062	(31,981)

Financing activities
Equity dividends paid	9	(14,495)	(13,897)
Buyback of Ordinary shares		(6,330)	(560)
Drawdown of loan notes		-	37,461
Drawdown of loan		-	23,416
Repayment of loan		-	(41,365)
Net cash generated from/(used in) financing activities		(20,825)	5,055
Increase/(decrease) in cash and cash equivalents		4,338	(11,340)

Analysis of changes in cash and cash equivalents during the year
Opening balance		9,239	21,898
Effect of exchange rate fluctuation on cash held	3	298	(1,319)
Increase/(decrease) in cash as above		4,338	(11,340)
Closing balance		13,875	9,239

The accompanying notes on pages 70 to 87 of the 2022 Annual Report are an integral part of the financial statements.

Notes to the Financial Statements

For the year ended 31 January 2022

1	Principal activity
	The Company is a closed-end investment company, registered in Scotland No. SC005218, with its Ordinary shares being listed on the London Stock Exchange.

2.	Accounting policies
	A summary of the principal accounting policies, all of which, unless otherwise stated, have been consistently applied throughout the year and the preceding year is set out below.
	(a)	Basis of preparation and going concern. The financial statements have been prepared in accordance with Financial Reporting Standard 102, the Companies Act 2006 and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in April 2021. 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 a going concern basis and on the assumption that approval as an investment trust will continue to be granted.
		The Company's assets consist substantially of securities in companies listed on recognised stock exchanges and in normal circumstances are realisable within a short timescale and which can be sold to meet funding commitments if necessary. The Board has set gearing limits and regularly reviews actual exposures, cash flow projections and compliance with banking covenants. The Company replaced its Long-Term Financing Agreement in December 2020. The Board has considered the impact of COVID-19 and recent geopolitical developments and believes that there will be a limited resulting financial impact on the Company's operational resources and existence. Given that the Company's portfolio comprises primarily "Level One" assets (listed on a recognisable exchange and realisable within a short timescale), and the Company's relatively low level of gearing, the Company has the ability to raise sufficient funds so as to remain within its debt covenants and pay expenses. Taking the above factors into consideration, the Directors have a reasonable expectation that the Company has adequate financial resources to continue in operational existence for the foreseeable future and for at least twelve months from the date of this Report. Accordingly, the Board continues to adopt the going concern basis in preparing the financial statements.
		Significant estimates and judgements. Disclosure is required of judgements and estimates made by management in applying the accounting policies that have a significant effect on the financial statements. There are no significant estimates or judgements which impact these financial statements. The Company undertakes a continuation vote every three years. The last continuation vote was passed at the AGM held in June 2021 with 98.7% of votes in favour.
	(b)	Income. Income from investments, including taxes deducted at source, is included in revenue by reference to the date on which the investment is quoted ex dividend. Special dividends are credited to capital or revenue, according to the circumstances. The fixed returns on debt instruments are recognised using the time apportioned accruals basis and the discount or premium on acquisition is amortised or accreted on a straight line basis.
		Interest receivable from cash and short-term deposits is recognised the time apportioned accruals basis.
	(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 to capital in the Statement of Comprehensive Income;
		- expenses are charged to capital where a connection with the maintenance or enhancement of the value of the investments can be demonstrated. In this respect, the investment management fee is allocated 30% to revenue and 70% to capital to reflect the Company's investment policy and prospective income and capital growth.
	(d)	Taxation. The tax payable is based on the taxable profit for the year. Taxable profit differs from net profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible (see note 8 for a more detailed explanation). The Company has no liability for current tax.
		Deferred taxation is provided on 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 or a right to pay less tax in future have occurred at the Statement of Financial Position date, measured on an undiscounted basis and based on enacted tax rates. 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.
		Owing to the Company's status as an investment trust company, and the intention to continue to meet the conditions required to obtain approval for the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.

	(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. Investments are recognised and de-recognised at trade date where a purchase or sale is under a contract whose terms require delivery within the time frame established by the market concerned, and are initially measured at fair value. Subsequent to initial recognition, investments are measured at fair value. For listed investments, this is deemed to be bid market prices. Gains and losses arising from changes in fair value and disposals are included as a capital item in the Statement of Comprehensive Income and are ultimately recognised in the capital reserve.
	(f)	Borrowings. Monies borrowed to finance the investment objectives of the Company are stated at the amount of the net proceeds immediately after issue plus cumulative finance costs less cumulative payments made in respect of the debt. 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 to reflect the Company's investment policy and prospective income and capital growth.
	(g)	Dividends payable. Interim and final dividends are recognised in the period in which they are paid.
	(h)	Nature and purpose of reserves
		Share premium account. The balance classified as share premium includes the premium above nominal value from the proceeds on issue of any equity capital comprising Ordinary shares of 5p. This reserve is not distributable.
		Capital redemption reserve. The capital redemption reserve is used to record the amount equivalent to the nominal value of any of the Company's own shares purchased and cancelled in order to maintain the Company's capital. This reserve is not distributable.
		Capital reserve. This reserve reflects any gains or losses on realisation of investments in the period along with any changes in fair values of investments held that have been recognised in the Statement of Comprehensive Income. The costs of share buybacks for treasury are also deducted from this reserve. This reserve is distributable although the amount that is distributable is complex to determine and is not necessarily the full amount of the reserve as disclosed within these financial statements.
		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. The amount of the revenue reserve as at 31 January 2022 may not be available at the time of any future distribution due to movements between 31 January 2022 and the date of distribution.

	(i)	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 the realisation of foreign currencies are recognised in the Statement of Comprehensive Income and are then transferred to the capital reserve.
	(j)	Traded options. The Company may enter into certain derivative contracts (e.g. writing traded options). Option contracts are accounted for as separate derivative contracts and are therefore shown in other assets or other liabilities at their fair value. The initial fair value is based on the initial premium which is received/paid on inception. The premium is recognised in the revenue column over the life of the contract period. Losses on any movement in the fair value of open contracts at the year end realised and on the exercise of the contracts are recorded in the capital column of the Statement of Comprehensive Income.
		In addition, the Company may enter into derivative contracts to manage market risk and gains or losses arising on such contracts are recorded in the capital column of the Statement of Comprehensive Income.
	(k)	Cash and cash equivalents. Cash and cash equivalents comprise cash at bank.

3.	Net currency (losses)/gains
		2022	2021
		£'000	£'000
	Gains/(losses) on cash held	298	(1,319)
	Gains on bank loans	-	1,016
	(Losses)/gains on senior loan notes	(856)	1,128
		(558)	825

4.	Income
		2022	2021
		£'000	£'000
	Income from overseas listed investments
	Dividend income	13,424	14,168
	REIT income	2,218	1,199
	Interest income from investments	112	533
	Stock dividends	-	290
		15,754	16,190

	Other income from investment activity
	Traded option premiums	3,890	5,355
	Deposit interest	-	25
		3,890	5,380
	Total income	19,644	21,570

	During the year, the Company was entitled to premiums totalling £3,890,000 (2021 - £5,355,000) in exchange for entering into option contracts. At the year end there were 2 (2021 - 2) open positions, valued at a liability of £24,000 (2021 - liability of £144,000) as disclosed in note 13. Losses realised on the exercise of derivative transactions are disclosed in note 11.

5.	Investment management fee
		2022			2021
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
	Investment management fee	910	2,123	3,033	804	1,877	2,681

	Management services are provided by Aberdeen Standard Fund Managers Limited ("ASFML"). With effect from 1 May 2021 the management fee is charged at 0.75% of net assets up to £250 million, 0.6% between £250 million and £500 million, and 0.5% over £500 million, payable quarterly. Prior to this the management fee was charged at 0.75% of net assets up to £350 million, 0.6% between £350 million and £500 million and 0.5% over £500 million, payable quarterly. Net assets equals gross assets after deducting current liabilities and borrowings and excluding commonly managed funds. The balance due to ASFML at the year end was £773,000 (2021 - £1,351,000). The fee is allocated 30% to revenue and 70% to capital (2021 - same).
	The management agreement between the Company and the Manager is terminable by either party on three months' notice. In the event of a resolution being passed at the AGM to wind up the Company the Manager shall be entitled to three months' notice from the date the resolution was passed. In the event of termination on not less than the agreed notice period, compensation is payable in lieu of the unexpired notice period.

6.	Finance costs
		2022				2021
		Revenue	Capital	Total		Revenue	Capital		Total
		£'000	£'000	£'000		£'000	£'000		£'000
	Interest on bank loans	-	-	-		109	253		362
	Bank interest paid	2	5	7		-	-		-
	Senior Loan Notes	313	730	1,043		35	82		117
	Amortised Senior Loan Note issue expenses	1	2	3		1	2		3
		316	737	1,053		145	337		482
7.	Administrative expenses
					2022			2021
					£'000			£'000
	Directors' fees				129			123
	Registrar's fees				51			46
	Custody and bank charges				27			24
	Secretarial fees				120			118
	Auditor's remuneration:
	- fees payable to the Company's auditor for the audit of the annual report				31			29
	Promotional activities				177			212
	Printing, postage and stationery				31			30
	Fees, subscriptions and publications				51			55
	Professional fees				55			51
	Depositary charges				43			45
	Other expenses				20			20
					735			753

	Secretarial and administration services are provided by Aberdeen Standard Fund Managers Limited ("ASFML") under an agreement which is terminable on three months' notice. The fee is payable monthly in advance and based on an index-linked annual amount of £120,000 (2021 - £118,000). The balance due at the year end was £20,000 (2021 - £59,000).
	During the year £177,000 (2021 - £212,000) was paid to ASFML in respect of promotional activities for the Company and the balance due at the year end was £18,000 (2021 - £68,000).
	With the exception of Auditor's remuneration for the statutory audit, all of the expenses above include irrecoverable VAT where applicable. The Auditor's remuneration for the statutory audit excludes VAT amounting to £6,000 (2021 - £6,000).

8.	Taxation
			2022			2021
			Revenue	Capital	Total	Revenue	Capital	Total
			£'000	£'000	£'000	£'000	£'000	£'000
	(a)	Analysis of charge for the year
		UK corporation tax	152	-	152	615	-	615
		Double tax relief	(152)	-	(152)	(189)	-	(189)
		Overseas tax suffered	2,067	91	2,158	2,039	12	2,051
		Tax relief to capital	454	(454)	-	420	(420)	-
		Corporation tax prior year adjustment	1	-	1	-	-	-
		Deferred tax	-	-	-	(26)	-	(26)
		Double tax relief on deferred tax items	-	-	-	23	-	23
		Total tax charge for the year	2,522	(363)	2,159	2,882	(408)	2,474

(b)	Factors affecting the tax charge for the year. The UK corporation tax rate is 19% (2021 - 19%). The tax charge for the year is lower (2021 - higher) than the corporation tax rate. The differences are explained in the following table.

		2022			2021
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
	Net return before taxation	17,079	78,952	96,031	19,767	(41,368)	(21,601)

	Corporation tax at 19% (2021 - 19%)	3,245	15,001	18,246	3,755	(7,860)	(4,105)
	Effects of:
	Non-taxable overseas dividends	(2,550)	(115)	(2,665)	(2,749)	(19)	(2,768)
	Irrecoverable overseas withholding tax	2,067	91	2,158	2,039	12	2,051
	Expenses not deductible for tax purposes	1	-	1	-	-	-
	Double tax relief	(152)	-	(152)	(166)	-	(166)
	Corporation tax prior year adjustment	1	-	1	-	-	-
	Tax rate differentials	-	-	-	3	-	3
	Excess management expenses	(90)	90	-	-	-	-
	Non-taxable (gains)/losses on investments	-	(15,536)	(15,536)	-	7,615	7,615
	Non-taxable currency losses/(gains)	-	106	106	-	(156)	(156)
	Total tax charge	2,522	(363)	2,159	2,882	(408)	2,474

(c)	Provision for deferred taxation
		2022			2021
		Revenue	Capital	Total	Revenue	Capital	Total
		£'000	£'000	£'000	£'000	£'000	£'000
	Opening balance	-	-	-	4	-	4
	Deferred tax credit for the year	-	-	-	(4)	-	(4)
	Provision at end of the year	-	-	-	-	-	-

	At the period end there is no unrecognised deferred tax asset (2021 - £nil) in relation to surplus management expenses.

9.	Dividends
		2022	2021
		£'000	£'000
	Amounts recognised as distributions to equity holders in the year:
	3rd interim dividend for 2021 of 1.9p per share (2020 - 1.8p)	2,718	2,579
	4th interim dividend for 2021 of 4.5p per share (2020 - 4.3p)	6,408	6,161
	1st interim dividend for 2022 of 1.9p per share (2021 - 1.8p)	2,693	2,579
	2nd interim dividend for 2022 of 1.9p per share (2021 - 1.8p)	2,676	2,578
		14,495	13,897

	The third interim dividend and proposed final dividend were unpaid at the year end. Accordingly, neither have been included as a liability in these financial statements.
	The table below sets out 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 £14,557,000 (2021 - £16,885,000).

		2022	2021
		£'000	£'000
	1st interim dividend for 2022 of 1.9p per share (2021 - 1.8p)	2,693	2,579
	2nd interim dividend for 2022 of 1.9p per share (2021 - 1.8p)	2,676	2,578
	3rd interim dividend for 2022 of 2.5p per share (2021 - 1.9p)	3,517	2,718
	Proposed final dividend for 2022 of 4.0p per share (2021 - 4.5p)	5,609	6,408
		14,495	14,283

	The cost of the proposed final dividend for 2022 is based on 140,235,898 Ordinary shares in issue, being the number of Ordinary shares in issue at the date of this report.

10.	Return per Ordinary share
		2022		2021
		£'000	p	£'000	p
	Based on the following figures:
	Revenue return	14,557	10.28	16,885	11.79
	Capital return	79,315	56.00	(40,960)	(28.60)
	Total return	93,872	66.28	(24,075)	(16.81)

	Weighted average number of Ordinary shares in issue		141,625,873		143,206,658

11.	Investments at fair value through profit or loss
		2022	2021
		£'000	£'000
	Investments at fair value through profit or loss
	Opening book cost	395,289	388,574
	Opening investment holdings gains	8,972	22,226
	Opening fair value	404,261	410,800

	Analysis of transactions made during the year
	Purchases at cost	195,379	246,078
	Sales proceeds received	(210,378)	(212,235)
	Gains/(losses) on investments^A	81,710	(40,373)
	Accretion/(amortisation) of fixed income book cost	2	(9)
	Closing fair value	470,974	404,261

	Closing book cost	425,863	395,289
	Closing investment holdings gains	45,111	8,972
	Closing fair value	470,974	404,261

	Listed on overseas stock exchanges	470,974	404,261

	Net gains/(losses) on investments
	Gains/(losses) on investments^A	81,710	(40,373)
	Investment holding gains on traded options^B	56	293
		81,766	(40,080)
	^A Includes losses realised on the exercise of traded options of £3,250,000 (2021 - £3,706,000) which are reflected in the capital column of the Statement of Comprehensive Income in accordance with accounting policy 2(j). Premiums received from traded options totalled £3,890,000 (2021 - £5,355,000) per note 4.
	^B Options associated are derivative liabilities at the year end.

	The Company received £210,378,000 (2021 - £212,235,000) from investments sold in the year. The book cost of these investments when they were purchased was £164,807,000 (2021 - £239,354,000). 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.
	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	81	105
	Sales	142	194
		223	299

	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.

12.	Debtors: amounts falling due within one year
		2022	2021
		£'000	£'000
	Dividends receivable	549	814
	Interest receivable	32	98
	Other debtors	100	101
	Amount due from brokers	5,031	1,562
		5,712	2,575

13.	Creditors: amounts falling due within one year
		2022		2021
		£'000		£'000
	Amounts due to brokers	3,840		2,308
	Investment management fee payable	773		1,351
	Traded option contracts	24		144
	Interest payable	120		117
	Corporation tax payable	-		140
	Other creditors	150		263
		4,907		4,323
14.	Bank loan
	Creditors: amounts falling due after more than one year
		2022	2021
		£'000	£'000
	2.70% Senior Loan Notes - 10 years	18,634	18,206
	2.96% Senior Loan Notes - 15 years	18,634	18,206
	Unamortised Loan Note issue expenses	(77)	(76)
		37,191	36,336

	On 21 December 2020 the Company issued a US$25 million 10 years Senior Loan Note at an annualised interest rate of 2.70% and a US$25 million 15 years Senior Loan Note at an annualised interest rate of 2.96%. The Loan Notes are unsecured and unlisted. Interest is payable in half yearly instalments in June and December and the Loan Notes are due to be redeemed at par on 21 December 2030 and 21 December 2035. The Company has complied with the Senior Loan Note Purchase Agreement covenant throughout the period since issue that the ratio of net assets to gross borrowings must be greater than 3.5:1, that net assets will not be less than £200,000,000, and that the total number of Listed Assets is to be more than 35.
	The total fair value of the Senior Loan Notes at 31 January 2022 was £41,348,000 (2021 - £43,334,000) comprising £20,065,000 (2021 - £21,034,000) in respect of the 10 years 2.70% Senior Loan Note and £21,283,000 (2021 - £22,300,000) in respect of the 15 years 2.96% Senior Loan Note. The fair value of the Senior Loan Notes has been 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.

15.	Called-up share capital
		2022	2021
		£'000	£'000
	Allotted, called-up and fully paid:
	Opening balance	7,151	7,164
	Ordinary shares bought back in the year	(117)	(13)
	140,675,934 (2021 - 143,029,146) Ordinary shares of 5p each	7,034	7,151

	During the year 2,353,212 (2021 - 248,374) Ordinary shares of 5p each were repurchased by the Company at a total cost, including transaction costs, of £6,330,000 (2021 - £560,000).
	Subsequent to the year end, the Company 440,036 Ordinary shares of 5p each were repurchased by the Company at a total cost, including transaction costs of £1,248,000.

16.	Net asset value per Ordinary share
	The net asset value per share and the net assets attributable to the Ordinary shareholders at the year end were as follows:

		2022	2021
	Net assets attributable	£448,463,000	£375,416,000
	Number of Ordinary shares in issue^A	140,675,934	143,029,146
	Net asset value per share	318.79p	262.48p
	^A Including 66,395 Ordinary shares bought back for treasury prior to the year end which had not yet settled.

17.	Analysis of changes in net debt
		At				At
		1 February	Currency	Non-cash	Cash	31 January
		2021	differences	movement	flows	2022
		£'000	£'000	£'000	£'000	£'000
	Cash and short term deposits	9,239	298	-	4,338	13,875
	Debt due after more than one year	(36,336)	(856)	1	-	(37,191)
		(27,097)	(558)	1	4,338	(23,316)

		At				At
		1 February	Currency	Non-cash	Cash	31 January
		2020	differences	movement	flows	2021
		£'000	£'000	£'000	£'000	£'000
	Cash and short term deposits	21,898	(1,319)	-	(11,340)	9,239
	Debt due within one year	(18,965)	1,016	-	17,949	-
	Debt due after more than one year	-	1,128	(3)	(37,461)	(36,336)
		2,933	825	(3)	(30,852)	(27,097)

	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, other than derivatives, comprise securities and other investments, cash balances, loans and debtors and creditors that arise directly from its operations; for example, in respect of sales and purchases awaiting settlement, and debtors for accrued income.
	Subject to Board approval, the Company also has the ability to enter into derivative transactions, in the form of traded options, for the purpose of enhancing income returns and portfolio management. During the year, the Company entered into certain derivative contracts. As disclosed in note 4, the premium received in respect of options written in the year was £3,890,000 (2021 - £5,355,000). Positions closed during the year realised a loss of £3,250,000 (2021 - £3,706,000). The largest position in derivative contracts held during the year at any given time was £613,000 (2021 - £601,000). The Company had 2 (2021 - 2) open positions in derivative contracts at 31 January 2022 valued at a liability of £24,000 (2021 - £144,000) as disclosed in note 13.
	The Board has delegated the risk management function to the Manager under the terms of its management agreement with ASFML (further details which are included under note 5). 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 an 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 ASFML collectively assume responsibility for ASFML's obligations under the AIFMD including reviewing investment performance and monitoring the Company's risk profile during the year.
	ASFML is a fully integrated member of the abrdn plc group of companies (referred to as "the Group"), which provides a variety of services and support to ASFML 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 Aberdeen Asset Managers Limited, which is responsible for ensuring that the Company is managed within the terms of its investment guidelines and the limits set out in FUND 3.2.2R (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 AIFM 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 Head of Risk, 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 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, currency risk and price risk), (ii) liquidity risk and (iii) credit risk.
	The Board regularly reviews and agrees policies for managing each of these risks. The Manager's policies for managing these risks are summarised below and have been applied throughout the year. The numerical disclosures exclude short-term debtors and creditors, other than for currency disclosures.
	(i)	Market risk. The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements - interest rate risk, currency risk and other price risk.
		Interest rate risk. Interest rate movements may affect:
		- the fair value of the investments in fixed interest rate securities;
		- the level of income receivable on cash deposits;
		- interest payable on the Company's variable rate borrowings.
		Management of the risk. The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment and borrowing decisions.
		The Board reviews on a regular basis the values of the fixed interest rate securities.
		The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a regular basis. Borrowings comprise fixed rate, revolving and uncommitted facilities. Details of borrowings at 31 January 2022 are shown in note 14 on page 79.

Interest risk profile. The interest rate risk profile of the portfolio of financial instruments 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 January 2022	Years	%	£'000	£'000	£'000
Assets
Sterling	-	-	-	4,982	-
US Dollar	8	7	1,642	8,711	423,051
Canadian Dollar	-	-	-	182	46,281
Total assets			1,642	13,875	469,332

Liabilities
Loan Notes- US$25,000,000	9	3	18,596	-	-
Loan Notes- US$25,000,000	14	3	18,595	-	-
Total liabilities			37,191	-	-

	Weighted
	average
	period for	Weighted			Non-
	which	average	Fixed	Floating	interest
	rate is fixed	interest rate	rate	rate	bearing
At 31 January 2021	Years	%	£'000	£'000	£'000
Assets
Sterling	-	-	-	4,782	-
US Dollar	6	6	6,667	4,280	363,859
Canadian Dollar	-	-	-	177	33,735
Total assets			6,667	9,239	397,594

Liabilities
Loan Notes- US$25,000,000	10	3	18,168	-	-
Loan Notes- US$25,000,000	15	3	18,168	-	-
Total liabilities			36,336	-	-

The weighted average interest rate is based on the current yield of each asset, weighted by its market value.
The floating rate assets consist of cash deposits 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.
Financial Liabilities. The company has fixed rate borrowings by way of its senior loan notes, details of which can be found in note 14.

		Interest rate sensitivity. The sensitivity analyses below have been determined based on the exposure to interest rates for both derivative and 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 current parameter used by 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 January 2022 would increase/decrease by £139,000 (2021 - decrease/increase by £92,000). This is mainly attributable to the Company's exposure to interest rates on its floating rate cash balances.
		In the opinion of the Directors, the above sensitivity analyses are not representative of the year as a whole, since the level of exposure changes frequently as part of the interest rate risk management process used to meet the Company's objectives. The risk parameters used will also fluctuate depending on the current market perception.
		Foreign currency risk. The Company's portfolio is invested mainly in US quoted securities and the Statement of Financial Position can be significantly affected by movements in foreign exchange rates.
		Management of the risk. It is not the Company's policy to hedge this risk on a continuing basis but the Company may, from time to time, match specific overseas investment with foreign currency borrowings. A significant proportion of the Company's borrowings, as detailed in note 14, are denominated in foreign currency. Foreign currency risk exposure by currency denomination is detailed under Interest Risk Profile.
		The revenue account is subject to currency fluctuation arising on overseas income. The Company does not hedge this currency risk.
		Foreign currency sensitivity. There is no sensitivity analysis included as the Company's significant foreign currency financial instruments are in the form of equity investments, and they have been included within the other price risk sensitivity analysis so as to show the overall level of exposure.
		Price risk. Price risks (ie changes in market prices other than those arising from interest rate or currency risk) may affect the value of the quoted investments.
		Management of the risk. It is the Board's policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to a particular country or sector. The allocation of assets to international markets and the stock selection process, as detailed on page 93, 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.
		Price risk sensitivity. If market prices at the Statement of Financial Position date had been 10% higher or lower while all other variables remained constant, the return attributable to Ordinary shareholders for the year ended 31 January 2022 would have increased/decreased by £47,097,000 (2021 - increase/decrease of £40,426,000) and equity reserves 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.
		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.
	(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 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 review of failed trade reports on a daily basis. In addition, both stock and cash reconciliations to the custodian's records are performed on a daily basis to ensure discrepancies are investigated on a timely basis. The 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 exposure to credit risk at 31 January 2022 was as follows:

			2022		2021
			Statement of		Statement of
			Financial	Maximum	Financial	Maximum
			Position	exposure	Position	exposure
			£'000	£'000	£'000	£'000
		Non-current assets
		Quoted bonds	1,642	1,642	6,667	6,667

		Current assets
		Amount due from brokers	5,031	5,031	1,562	1,562
		Dividends receivable	549	549	814	814
		Interest receivable	32	32	98	98
		Other debtors and prepayments	100	100	101	101
		Cash and short-term deposits	13,875	13,875	9,239	9,239
			21,229	21,229	18,481	18,481

		None of the Company's financial assets are secured by collateral or other credit enhancements.
		Credit ratings. The table below provides a credit rating profile using Standard and Poors credit ratings for the quoted bonds at 31 January 2022 and 31 January 2021:
					2022	2021
					£'000	£'000
		B			-	665
		BB+			-	376
		BB			897	2,408
		BB-			745	1,530
		BBB-			-	1,688
					1,642	6,667

		Fair values of financial assets and financial liabilities. The book value of cash at bank and bank loans and overdrafts included in these financial statements approximate to fair value because of their short-term maturity. Investments held as dealing investments are valued at fair value. The carrying values of fixed asset investments are stated at their fair values, which have been determined with reference to quoted market prices. For all other short-term debtors and creditors, their book values approximate to fair values because of their short-term maturity.
19.	Capital management policies and procedures
	The investment objective of the Company is to provide investors with above average dividend income and long term capital growth through active management of a portfolio consisting predominately of S&P 500 US 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 14 of the financial statements.

20.	Fair value hierarchy
	FRS 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following classifications:
	Level 1: unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at the measurement date.
	Level 2: inputs other than quoted prices included within Level 1 that are observable (ie developed using market data) for the asset or liability, either directly or indirectly.
	Level 3: inputs are unobservable (ie for which market data is unavailable) for the asset or liability.
	The financial assets and liabilities measured at fair value in the Statement of Financial Position are grouped into the fair value hierarchy at the reporting date as follows:

				Level 1	Level 2	Level 3	Total
	As at 31 January 2022		Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities		a)	469,332	-	-	469,332
	Quoted bonds		b)	-	1,642	-	1,642
				469,332	1,642	-	470,974

	Financial liabilities at fair value through profit or loss
	Derivatives		c)	-	(24)	-	(24)
	Net fair value			469,332	1,618	-	470,950

				Level 1	Level 2	Level 3	Total
	As at 31 January 2021		Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities		a)	397,594	-	-	397,594
	Quoted bonds		b)	-	6,667	-	6,667
				397,594	6,667	-	404,261

	Financial liabilities at fair value through profit or loss
	Derivatives		c)	-	(144)	-	(144)
	Net fair value			397,594	6,523	-	404,117

	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 bonds. The fair value of the Company's investments in quoted 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.
	c)	Derivatives. The Company's investment in exchange traded options have been fair valued using quoted prices and have been classified as Level 2 as they are not considered to trade in active markets.
	The fair value of the senior loan notes has been calculated as £41,348,000 (2021 - £43,334,000), 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, compared to carrying amortised cost of £37,191,000 (2021 - £36,336,000).

21.	Related party transactions
	Directors' fees and interests. Fees payable during the year to the Directors and their interests in shares of the Company are disclosed within the Directors' Remuneration Report on pages 53 and 54 of the 2022 Annual Report.
	Transactions with the Manager. The Company has an agreement with the Manager for the provision of investment management, secretarial, accounting and administration and promotional activity services.
	Details of transactions during the year and balances outstanding at the year end are disclosed in notes 5 and 7.

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
The discount is the amount by which the share price is lower than the net asset value per share with debt at fair value, expressed as a percentage of the net asset value with debt at fair value.

			2022	2021
NAV per Ordinary share (p)		a	318.79p	262.48p
Share price (p)		b	283.00p	234.00p
Discount		(a-b)/a	11.2%	10.9%

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		a	10.28p	11.79p
Dividends per share		b	10.30p	10.00p
Dividend cover		a/b	1.00	1.18

Dividend yield
Dividend yield is calculated using the Company's annual dividend per Ordinary share divided by the share price, expressed as a percentage.

			2022	2021
Annual dividend per Ordinary share (p)		a	10.30p	10.00p
Share price (p)		b	283.00p	234.00p
Dividend yield		a/b	3.6%	4.3%

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

			2022	2021
Borrowings (£'000)		a	37,191	36,336
Cash (£'000)		b	13,875	9,239
Amounts due to brokers (£'000)		c	3,840	2,308
Amounts due from brokers (£'000)		d	5,031	1,562
Shareholders' funds (£'000)		e	448,463	375,416
Net gearing	(a-b+c-d)/e		4.9%	7.4%

Ongoing charges ratio
Ongoing charges ratio is considered to be an alternative performance measure. The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC which is defined as the total of investment management fees and administrative expenses and expressed as a percentage of the average daily net asset values with debt at fair value published throughout the year.

			2022	2021
Investment management fees (£'000)			3,033	2,681
Administrative expenses (£'000)			735	753
Less: non recurring charges ^A (£'000)			(10)	-
Ongoing charges (£'000)			3,758	3,434
Average net assets (£'000)			429,283	371,338
Ongoing charges ratio (excluding look-through costs)			0.88%	0.92%
Look-through costs^B			0.07%	0.09%
Ongoing charges ratio (including look-through costs)			0.95%	1.01%
^A Professional services considered unlikely to recur.
^B Calculated in accordance with AIC guidance issued in October 2020 to include the Company's share of costs of holdings in investment companies on a look-through basis.

The ongoing charges ratio provided in the Company's Key Information Document is calculated in line with the PRIIPs regulations which includes finance costs and transaction charges.
Total return
NAV and share price total returns show how the NAV and share price has performed over a period of time in percentage terms, taking into account both capital returns and dividends paid to shareholders. Share price and NAV total returns are monitored against open-ended and closed-ended competitors, and the Reference Index, respectively.

				Share
Year ended 31 January 2022			NAV	Price
Opening at 1 February 2021		a	262.5p	234.0p
Closing at 31 January 2022		b	318.8p	283.0p
Price movements		c=(b/a)-1	21.5%	20.9%
Dividend reinvestment^A		d	4.2%	4.7%
Total return		c+d	+25.7%	+25.6%

				Share
Year ended 31 January 2021			NAV	Price
Opening at 1 February 2020^B		a	287.1p	290.0p
Closing at 31 January 2021		b	262.5p	234.0p
Price movements		c=(b/a)-1	-8.6%	-19.3%
Dividend reinvestment^A		d	2.9%	2.8%
Total return		c+d	-5.7%	-16.5%
^A NAV total return involves investing the net dividend in the NAV of the Company with debt at fair value on the date on which that dividend goes ex-dividend. Share price total return involves reinvesting the net dividend in the share price of the Company on the date on which that dividend goes ex-dividend.
^B NAV per Statement of Financial Position of 288.91p reduced by 1.80p to take account of dividend going ex-div on 30 January 2020.

ADDITIONAL NOTES TO THE ANNUAL FINANCIAL REPORT

This Annual Financial Report announcement is not the Company's statutory accounts for the year ended 31 January 2022. The statutory accounts for the year ended 31 January 2022 received an audit report which was unqualified.

The financial information set out above does not constitute the company's statutory accounts for the years ended 31 January 2022 or 2021 but is derived from those accounts. Statutory accounts for 2021 have been delivered to the registrar of companies, and those for 2022 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The statutory accounts for the financial year ended 31 January 2022 were approved by the Directors on 6 April 2022 but will not be filed with the Registrar of Companies until after the Company's Annual General Meeting which is to be held at 2.00 pm on 8 June 2022.

The Annual Report will be posted to shareholders later in April 2022 and additional copies will be available from the Manager (Investor Helpline - Tel. 0808 00 0040) or by download from the Company's webpage

(www.northamericanincome.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. Investors may not get back the amount they originally invested.

For The North American Income Trust plc

Aberdeen Asset Management PLC, Company Secretary

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END

FR IFMFTMTJMBLT

ANNUAL FINANCIAL REPORT ANNOUNCEMENT FOR THE YEAR ENDED
31 JANUARY 2022

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Annual Financial Report

ANNUAL FINANCIAL REPORT ANNOUNCEMENT FOR THE YEAR ENDED 31 JANUARY 2022

Investment Objective

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North American Income Trust (The) PLC (NAIT)

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Market Overview

UK 350 Risers and Fallers

ANNUAL FINANCIAL REPORT ANNOUNCEMENT FOR THE YEAR ENDED
31 JANUARY 2022

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daily news email