Disclosure Response to the Stewardship Code

The Financial Reporting Council (FRC) published “the UK Stewardship Code” for Institutional shareholders on 2 July 2010. The purpose of the Code is to enhance the quality of engagement between institutional investors and companies to help improve long-term returns to shareholders and the efficient exercise of governance responsibilities. The FRC is encouraging institutional investors to make a statement of their commitment to the Code.

The Board of Dunedin Smaller Companies Investment Trust PLC has delegated responsibility for monitoring the corporate governance of investee companies to the Manager. The Board has reviewed and accepts the Manager’s Corporate Governance Principles, which may be found on the Manager’s website, at http://www.aberdeen-asset.com/aam.nsf/groupCsr/literature. This document sets out the Manager’s framework on corporate governance, proxy voting and shareholder engagement in relation to the companies in which the Manager has invested or is considering investing. The Board has also reviewed the Manager’s Statement of Compliance with the UK Stewardship Code, which appears on the Manager’s website, at http://www.aberdeen-asset.com/doc.nsf/Lit/SalesAidGroupDisclosureResponsetotheStewardshipCode.

The Board recognises and supports the Manager’s policy of active engagement with investee companies and the voting of all of the shares held by the Company. However, it should be noted that the Manager’s direct engagement with investee companies is essentially confined to companies which are covered by the Manager’s actively-managed investment mandates; the Manager will not necessarily engage with some companies in which the Company is invested, where these holdings result from the Company’s passive investment mandate and are too small to be considered material. Nonetheless, the Manager is responsible for reviewing annual reports, circulars and other publications produced by all investee companies and is expected to vote all shares held by the Company, unless instructed otherwise by the Board.

The Board also receives from the Manager regular reports on the exercise by the Manager of the Company’s voting rights and discusses with the Manager any issues arising. It is the Board’s view that having an active voting policy and a process for the monitoring by the Board of the Manager’s exercise of those votes, especially in relation to controversial issues, aids the efficient exercise of the Company’s governance responsibilities..