CT UK CAP AND INC INV TRUST PLC

Annual Report • Dec 6, 2022

Report and Accounts 2022 Formerly BMO Capital and Income Investment Trust PLC CT UK Capital and Income Investment Trust PLC Forward-looking statements     Report and Accounts 2022 | 1 Overview     Chairman’s Statement 4 Strategic Report Fund Manager’s Review 9         List of Investments 23 Manager’s Investment Philosophy and Process 24   Principal Risks and Future Prospects 30       Governance Report   Directors’ Report 40     Directors’ Remuneration Report 49         Independent Auditors’ Report         Contents Financial Report               Notice of Annual General Meeting  Other Information   How to Invest 90     Financial calendar Fourth interim dividend for 2022 19 December 2022 Annual General Meeting 9 March 2023 First interim dividend for 2023 March 2023 Interim results for 2023 announced May 2023 Second interim dividend for 2023 June 2023 Third interim dividend for 2023 September 2023 Final results for 2023 announced November 2023 Fourth interim dividend for 2023 December 2023 2   Company Overview   •    •   and grown at more than twice the  + •     institutional investors who seek growth over the longer-term in capital   Visit our website at ctukcapitalandincome.com DIVIDEND HERO Potential investors are reminded that the value of investments and the income from them may go down as well as up and investors may not receive back the full amount invested. Tax benefits may vary as a result of statutory changes and their value will depend on individual circumstances.  +     Report and Accounts 2022 | 3 Overview Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report The longer-term rewards In the last twenty years    £1,000 Investment, with dividends reinvested at 30 September   Annual Dividend Progression for CT UK Capital and Income Investment Trust     Financial Highlights for the year ended 30 September 2022 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 2018201620152014201320122011201020092008200720062005200420032002 2017 2019 2020 2021 2022 CT UK Capital and Income – share price total return FTSE All-Share – total return 202220212020201920182017201620152014201320122011201020092008200720062005200420032002 Annual Dividends 0 2p 4p 6p 8p 10p 12p Special Dividends  29th consecutive annual increase The dividends for the year are a  11.80p    The shares traded at an   0.8% (10.5)%    total return for the year was    (13.1)%  The share price total return for    4   Chairman’s Statement              Sep 22Sep 21Sep 20Sep 19Sep 18Sep 17 70 80 90 100 110 120 130  Sep 22Jul 22May 22Mar 22Jan 22Nov 21Sep 21 85 90 95 100 105 110              Rebased to 100 at 30 September 2017Rebased to 100 at 30 September 2021 See Alternative Performance Measures on pages 91 and 92 for explanation. “Notwithstanding continuing global and domestic economic and political pressures and uncertainties, the Board considers that your Company remains well placed to take advantage of opportunities to deliver attractive returns over the medium and longer-term.” Jonathan Cartwright, Chairman CT UK Capital and Income - NAV total return  CT UK Capital and Income - share price total return CT UK Capital and Income - NAV total return  CT UK Capital and Income - share price total return Report and Accounts 2022 | 5 Chairman’s Statement Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report           of investment trusts is that it allows companies such as ours to  years and then to draw down from this Reserve when circumstances          to continue to extend this record and the strength of our Revenue     contrast to the previous year when performance was very strong in    and the share price total    of this year’s reversal clearly rolls through to our medium and longer-          Revenue, Earnings and Dividends     of growth over two years is from the low point of portfolio dividend    Rebased to 100 at 30 September 2012  195 Sep 12 Sep 14 Sep 16 Sep 18 Sep 20 Sep 22 145 120 95 170 220  CT UK Capital and Income - NAV total return  CT UK Capital and Income - share price total return Rebased to 100 at 30 September 1997  460 100 Sep 97 Sep 02 Sep 07 Sep 12 Sep 17 Sep 22 340 300 260 220 180 140 60 380 420 580 500 540  See Alternative Performance Measures on pages 91 and 92 for explanation. CT UK Capital and Income - NAV total return  CT UK Capital and Income - share price total return 6   Share Rating   is very similar to the average level at which the shares traded in the          important to note that the effect of these activities is also to increase          Source: Columbia Threadneedle Investments 0.0 0.2 0.4 0.6 0.8 1.0 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 0.80 0.62 0.64 0.66 0.64 0.59 0.58 0.58 0.58 0.59 0.59 See Alternative Performance Measures on pages 91 and 92 for explanation.  Source: Columbia Threadneedle Investments Jul 22 Sep 22May 22Mar 22Jan 22Sep 21 Nov 21 1 -2 -3 2 0 -1 -4 -5 -6 See Alternative Performance Measures on pages 91 and 92 for explanation. Balance Sheet and Gearing          to have a much greater impact on the net investment return than the     Responsible Investment   an important part of the investment process as your Manager has    management of the portfolio and its engagement with our investee      Costs        Chairman’s Statement Report and Accounts 2022 | 7 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Directorate Change           As a further part of this plan a search company was commissioned                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     AGM “AGM”                          gain a deeper understanding of investors’ views and sentiment towards    noted that most respondents invest for the longer-term with retirement   took the time to complete the survey and provide comments and   8     Ownership of the Manager  “BMO GAM EMEA”                    and its trading instrument display   emphasised and received assurances from senior management     Outlook                        low valuation and attractive dividend yield should give some good    remains well placed to take advantage of opportunities to deliver   Jonathan Cartwright Chairman 30 November 2022 Report and Accounts 2022 | 9 Strategic Report Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report    particularly given some of the macroeconomic and geopolitical events          monetary conditions to help ward off the effects of the pandemic and       have driven up energy prices while many food prices have risen in       dampen economic activity and therefore having a generally negative   companies forecast to have stronger growth and greater longevity   market and we believe the stocks within our portfolio offer an attractive combination  Fund Manager’s Review Julian Cane, Fund Manager  Sep 20Sep 19Sep 18Sep 17 0 1 2 3 4 Sep 22 5 Sep 21  UK Government Bond 10 Year Yield                 10                     Weightings and Returns by Size for the Portfolio and FTSE All-Share Index Portfolio Average Weight FTSE All-Share Average Weight Portfolio Total Return + Index Total Return + FTSE 100 56.2 80.7 -4.0 1.6 FTSE 250 32.6 15.8 -25.3 -24.3 FTSE Small Cap 1.8 3.2 -12.0 -17.9 FTSE AIM 5.0 0.0 -11.8 -37.0 Other 4.4 0.3 -10.1 -46.3            Individual Stock Performance         short-term concerns or cyclical issues and ignoring the company’s                       the share prices after these sharp falls do not recognise the longer-   FTSE 100, FTSE 250 and FTSE Small Cap Total Return Mar 22Jan 22Nov 21Sep 21 70 80 85 90 95 100 110 105 Sep 22 115 May 22 Jul 22 75     Source: Columbia Threadneedle Investments + Returns for the year ended 30 September 2022 Report and Accounts 2022 | 11 Strategic Report Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report    shares with the strongest and weakest performance shown in the            economy or recession and falling house prices is shown in the poor   Portfolio Turnover  investments with the potential to produce attractive returns for   Table A: Absolute performance of stocks held during the year 10 Strongest share prices Portfolio Average Weight (%) Total Return to the Company (%) 10 Weakest share prices Portfolio Average Weight (%) Total Return to the Company (%) Beazley 3.7 52.7 Close Brothers Group 1.8 -37.2 Shell 2.3 42.1 Melrose Industries 1.6 -40.4 BP 1.7 33.1 Howden Joinery 2.0 -42.2 British American Tobacco 1.6 32.7 Sirius Real Estate 1.5 -44.1 Compass 2.6 20.1 FDM 0.6 -48.4 AstraZeneca 4.8 13.7 Vistry Group 2.7 -48.8 Secure Income REIT 2.6 13.7 Intermediate Capital 4.1 -49.5 Rio Tinto 3.5 10.9 Countryside Partnerships 2.2 -60.5 National Grid 1.4 10.3 Bridgepoint 0.2 -61.7 Ultra Electronics 0.8 7.9 XP Power 1.0 -66.5 Source: Columbia Threadneedle Investments Table B: Relative to the Benchmark Index Top 10 Contributors Portfolio Average Weight (%) Average Weight Relative to the Index (%) Total Return to the Company (%) Contribution To Relative Performance (%) Bottom 10 Contributors Portfolio Average Weight (%) Average Weight Relative to the Index (%) Total Return to the Company (%) Contribution To Relative Performance (%) Beazley 3.7 3.6 52.7 1.7 Sirius Real Estate 1.5 1.4 -44.1 -0.7 Prudential – -1.3 – 0.6 Close Brothers Group 1.8 1.7 -37.2 -0.8 Secure Income REIT 2.6 2.6 13.7 0.5 Howden Joinery 2.0 1.8 -42.2 -0.9 Scottish Mortgage Investment Trust – -0.6 – 0.4 HSBC – -4.2 – -1.0 Compass 2.6 1.3 20.1 0.3 Glencore – -2.4 – -1.0 Experian 0.4 -0.8 6.2 0.3 XP Power 1.0 1.0 -66.5 -1.0 Flutter Entertainment – -0.7 – 0.3 Vistry Group 2.7 2.6 -48.8 -1.5 Ocado – -0.2 – 0.3 Shell 2.3 -4.1 42.1 -1.6 Ashtead – -0.9 – 0.3 Countryside Partnerships 2.2 2.1 -60.5 -2.0 Entain – -0.4 – 0.2 Intermediate Capital 4.1 3.9 -49.5 -2.2 Source: Columbia Threadneedle Investments 12   Dividend Growth and Yield from the Ten Largest Contributors to Income  dividends per share dividend yield as at 30.09.22 Rio Tinto 7.2% 10.8% OSB 53.6% 7.1% Legal & General 5.0% 8.6% Vistry Group 200.0% 10.2% Phoenix 2.9% 9.4% Intermediate Capital 35.7% 7.7% Unilever -3.3% 3.6% GSK -13.8% 6.6% Beazley n/a 2.3% LXi REIT 14.6% 4.1%   market is through examination of its price / earnings multiple and    as it is only future earnings and dividends that will allow us to reach               As active investors we are not aiming to invest in all companies across                and total new     Revenue and Earnings Per Share    have increased their dividends due to the ongoing strength of their own      so the apparent strong growth is more a normalisation of dividend                  Source: Columbia Threadneedle Investments Report and Accounts 2022 | 13 Strategic Report Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report   2.0 2.5 3.0 3.5 4.0 4.5 5.5 5.0 6.0 Sep 97Sep 92 Sep 02 Sep 22Sep 07 Sep 12 Sep 17 Average dividend yield    FTSE All-Share price/earnings multiple 5.0 10.0 15.0 20.0 25.0 30.0 35.0 Sep 98Sep 93 Sep 03 Sep 22Sep 08 Sep 13 Sep 18   0.0 2.0 4.0 6.0 8.0 10.0 Sep 97Sep 92 Sep 02 Sep 22Sep 07 Sep 12 Sep 17  UK Benchmark bond 10 year yield  UK clearing banks base rate Outlook       the earnings of many companies are not linked solely or directly to the            which stem from food and energy costs soaring as a result of Russia’s              It is fairly rare for domestic and international geo-politics to have as direct an impact on stock market returns as they did last year and        Julian Cane Fund Manager 30 November 2022 14   Purpose and strategy “the Company”     The investment philosophy and processes underpinning this strategy are set out on pages 24    Business model            “the Manager”        Alignment of values and culture     “UNPRI”    annual assessment of its performance and in determining whether      Responsible investment impact        indirect impact occurs through the investments that it makes and this   Manager evaluation      on which the decision to reappoint the Manager for another year are  Purpose, Strategy and Business Model Report and Accounts 2022 | 15 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Strategic Report Fund Manager and management of the assets      Managing risks and opportunities  risks and uncertainties and so the performance of the Manager is                     “the Custodian”“the Depositary” The principal policies that support the strategy are set out from page        Communications and marketing with key stakeholders                 “the AGM”          The Manager also has in place a programme of visits designed to foster good relations with wealth managers and underlying investors in promoting    16   “We believe in the power of engaged long-term ownership as a force for positive change.” Strategic Report Report and Accounts 2022 | 17 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report * See Alternative Performance Measures on pages 91 and 92 for explanation.  2022 % 2021 % 2020 % Ongoing charges 0.59 0.59 0.58 This is a measure of the cost of running the Company as a percentage of the average  Ongoing Charges of competitor investment vehicles. Source: Columbia Threadneedle Investments  2022 % 2021 % 2020 % Premium/(discount) to NAV 0.8 (2.0) (0.3) This is the difference between the share price and the NAV per share. It is an indicator of excess supply over demand for the Company’s shares in the case of a discount and the excess demand over supply in the case of a premium. Average (discount)/premium to NAV during the year (1.8) (1.6) 0.4 Source: Columbia Threadneedle Investments Compound annual dividend growth 1 Year % 3 Years % 5 Years % Company’s annual dividend growth 1.7 1.2 2.1 This shows the Company’s dividend growth which can be compared to the changes in the UK Consumer Price Index (“CPI”).  10.1 4.5 3.5  Total return performance 1 Year % 3 Years % 5 Years % NAV per share total return (13.1) (5.4) 5.1 This is used to measure the performance of the portfolio in terms of capital and income growth and can be compared to the return of the Benchmark Index. The Manager is responsible for the performance of the portfolio. Benchmark Index: FTSE All-Share (4.0) 2.4 11.3 Share price total return (10.5) (3.4) 4.9 This is used to measure the return to Shareholders in terms of the capital growth and the dividends they have received and can be compared to the return of the Benchmark Index.  The Board assesses its performance in meeting the Company’s objective against the following key measures. Commentary can be found in the Chairman’s Statement and Fund Manager’s Review. Key Performance Indicators 18   Twenty Largest Holdings 2022 2021 2022 % of total investments 2022 Value £’000s 2021 Value £’000s   OSB Group         2 3 AstraZeneca      proving successful and producing strong growth now with further potential in  3 4 Diageo        4  Unilever           Beazley           Rio Tinto         – LXi REIT    –      20 RELX         9  Legal and General           Compass        Strategic Report Report and Accounts 2022 | 19 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report 2022 2021 2022 % of total investments 2022 Value £’000s 2021 Value £’000s  2 Intermediate Capital      It has experienced good demand and generated strong returns for many years                Coca-Cola HBC                    Burford Capital           Phoenix      Increased scale drives operational and capital efficiencies and diversification   30 BP         9           LondonMetric Property        20 24 Forterra        The value of the twenty largest holdings represents 67.1% (30 September 2021: 63.6%) of the Company’s total investments. Quoted on the Alternative Investment Market in the UK. 20   Performance of this sector in the portfolio % Performance of this sector in the FTSE All-Share Index % Average Portfolio weighting % Average FTSE All-Share weighting % Impact on relative performance % Energy            existing operations whilst governments appear ever more        Basic Materials              Industrials        its share price during the year allowed us to start a new              Investment Portfolio by Sector Strategic Report Report and Accounts 2022 | 21 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Performance of this sector in the portfolio % Performance of this sector in the FTSE All-Share Index % Average Portfolio weighting % Average FTSE All-Share weighting % Impact on relative performance % Consumer Staples         strongly and we have added to the investment over the course       Health Care               Consumer Discretionary The rise in inflation and interest rates driving the cost of living     We think the fundamental outlook for the operation of these three companies remains attractive and their share prices         Telecommunications We continue not to have any investments in the  telecommunications products and services has increased  operating in this area have generally not found a way to turn this demand and growth into attractive returns for    –     22   Performance of this sector in the portfolio % Performance of this sector in the FTSE All-Share Index % Average Portfolio weighting % Average FTSE All-Share weighting % Impact on relative performance % Utilities                Financials                  Technology          Real Estate       from inflation due to the nature of most of the leases it has       The figures shown in the first two columns compare the total return of the group of investments held within the portfolio in each     Strategic Report Report and Accounts 2022 | 23 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report 30 September 2022 Quoted investments Holding Value £’000s UNITED KINGDOM – EQUITIES AstraZeneca                                        Diageo      Experian   FDM   Ferguson   Forterra                     Intertek      LondonMetric Property         Melrose Industries            Phoenix      Rio Tinto   Round Hill Music Royalty Fund                           UNITED KINGDOM TOTAL EQUITIES  30 September 2022 Quoted investments Holding Value £’000s EUROPE (EX UK) – EQUITIES Heineken   EUROPE (EX UK) TOTAL EQUITY  TOTAL INVESTMENTS 318,796 The number of investments in the portfolio is 47 (2021: 50). Quoted on the Alternative Investment Market in the UK. Investments shown in italics are new additions to the portfolio during the year. List of Investments 24   • Understandable • Durable competitive advantages • Attractive business model • Strong sustainability characteristics Q u a l i t y V a l u a t i o n M a n a g e m e n t Manager’s Investment Philosophy and Process The Investment Process Focuses on Three Aspects for Each Company           This philosophy leads naturally to long-term investment thinking and              • Margin of safety • Present value of future  • Sustainable superior returns • ESG score embedded in proprietary valuation method   between market prices and a conservative assessment of a business’s intrinsic value. • Proven operators • Responsible capital allocators • Aligned interests • Appropriate incentives • Strong governance Report and Accounts 2022 | 25 Strategic Report Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report C o n t i n u o u s m o n i t o r i n g  review triggers Clear sell discipline Peer review V a l u a t i o n r e v i e w D e t a i l e d r e s e a r c h T h e s i s r e v i e w > > > Implementation of the Investment Process          important issues examined are a thorough assessment of the       to realise this does not work for all companies in all sectors so other          with in-depth reviews and retesting of the original investment thesis particularly if the company or its share price do not perform as initially               Julian Cane Fund Manager 30 November 2022 26   Our approach         The primary purpose of this report is to provide you with a clear    •  •  • how we have performed against those measures through  We recognise the importance of disclosing information that is  in a consistent way from year to year in order that our progress can  Our governance responsibilities       Responsible ownership     shareholders that they are applying appropriate oversight on material     Active use of our voting rights is also an important component of          actively with the management of investee companies to encourage “ESG”  the investment industry in its consideration of these issues and has    “UNPRI”      Our Approach to Responsible Investment Strategic Report Report and Accounts 2022 | 27 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report             The Manager’s strategic approach to engagement helps to achieve   These are instances of change in company practice which they   engagement and milestones achieved in the reporting period are set  ESG and the investment process          goals/                Engagement Source: Columbia Threadneedle Investments Climate Change 24 Environmental Stewardship 15 Human Rights 10 Labour Standards 11 Public Health 7 Corporate Governance 19 Issues raised with companies on engagement 28   Examples in the reporting period BP                  Ibstock     Pennon Group      Unilever     Strategic Report Report and Accounts 2022 | 29 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report                 in the further raising of those standards – indeed under the previous            considerations around climate change risks and opportunities in its               2022 CT UK Capital and Income Investment Trust PLC FTSE All-Share Tons COe / sales $m 0 50 100 150 Source: MSCI ESG 0 50 100 150 2023 In 2023 the Manager will continue its engagement on climate         30   The Board has carried out a robust assessment of the Company’s principal and emerging risks and the disclosures in the Annual Report that describe the principal risks, the procedures in place to identify emerging risks and explain how they are being managed or mitigated. The principal risks together with their mitigations are set out in            Principal Risks and Future Prospects Principal Risks Mitigation Actions taken on Principal Risks in the year Macroeconomic and geopolitical risk including the possibility of prolonged recession in the United Kingdom and the impact of the war in Ukraine.   changes in the macroeconomic and geo-political environment. The Company maintains a portfolio of  Forward looking stress tests ranging from moderate to extreme scenarios are provided by the Manager to the Board to support the Five-Year Horizon Statement. At each meeting of the Board, the Directors consider and discuss the investment performance of the Company with Julian Cane, the Company’s Fund Manager. The Board held its annual strategy meeting in September 2022. At this meeting, after due  At the November 2022 Audit and Risk Committee meeting, the Directors reviewed updated forward looking stress tests prepared by the Manager providing support for the Five-Year Horizon Statement disclosed on page 32. Unfavourable markets or asset allocation, sector and stock selection and use of gearing and derivatives are inappropriate giving rise to investment underperformance as well as impacting capacity to pay dividends.  view notwithstanding the current market volatility. Investment policy, performance, revenue and gearing are reviewed at each Board meeting. The Manager’s Performance and Risk Oversight team provides independent oversight on investment risk management. The Board regularly considers operating costs along with underlying dividend income and the implications for the dividend payment capacity of the Company taking into account revenue reserves. At each meeting of the Board, the Directors consider and discuss the investment performance of the Company with Julian Cane, the Company’s Fund Manager. The Board held a strategy meeting in September 2022 which considered, amongst other topics, investment performance and wider economic issues. Errors, fraud or control failures at service providers or loss of data through increasing cyber threats or business continuity failure could damage reputation or investors’ interests or result in losses. The Board receives regular control reports from the Manager covering risk and compliance including oversight of third party service providers. The Board has access to the Manager’s Risk Manager and requires any  liable for loss of any of the Company’s securities and cash held in custody. The Manager continues to strengthen and develop its Risk, Compliance and Internal Control functions including IT security. Supervision of third party service providers has been maintained by the Manager and includes assurances regarding IT security and cyber threat. The Depositary oversees custody of investments and cash and reports to the Company in accordance with the Alternative Investment Fund Managers Directive (“AIFMD”). Inappropriate business or marketing strategy particularly in relation to investor needs or sentiment giving rise to a share price discount to NAV per share. To gauge investor sentiment, the Board holds an investor satisfaction survey which is conducted every  meeting to consider the Company’s strategy and performance together with opportunities and threats to its business. The appointment of the Manager is also reviewed annually in terms of sustainable long-term growth in capital and income, which includes the growing recognition of the importance of the application of high standards of ESG practice. Share buybacks can be employed to help moderate discount volatility, while share issues can be made when the shares are trading at a premium. At each Board meeting the Directors receive an update on the marketing activities undertaken by the Manager. This includes details of the level of maturing Child Trust Funds and the decisions, if any, taken by their holders. The Company’s Broker provides periodic updates to the Board relating to the Company’s trading in the wider market. The Board agreed to the continuing appointment of the Manager, which has continued to deliver on the Company’s objective. At each Board meeting the marketing activities of the Manager are reported. This can include details of the level of Child Trust Funds reaching maturity and the decisions, if any, taken by their holders. To encourage the retention of these maturing funds, the Manager has introduced a Lifetime ISA and  Further proposals to encourage retention are being investigated by the Manager. During the year 757,819 shares were bought back at a small discount to NAV of which 175,000 shares were subsequently re-issued at a small premium. Since the year end no further share issuance or buybacks has occurred. These actions moderated share price volatility and enhanced NAV per share for continuing Shareholders. No change in overall risk during the year. No change in overall risk during the year. No change in overall risk during the year. Increase in overall risk during the year. Strategic Report Report and Accounts 2022 | 31 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Principal Risks Mitigation Actions taken on Principal Risks in the year Macroeconomic and geopolitical risk including the possibility of prolonged recession in the United Kingdom and the impact of the war in Ukraine.   changes in the macroeconomic and geo-political environment. The Company maintains a portfolio of  Forward looking stress tests ranging from moderate to extreme scenarios are provided by the Manager to the Board to support the Five-Year Horizon Statement. At each meeting of the Board, the Directors consider and discuss the investment performance of the Company with Julian Cane, the Company’s Fund Manager. The Board held its annual strategy meeting in September 2022. At this meeting, after due  At the November 2022 Audit and Risk Committee meeting, the Directors reviewed updated forward looking stress tests prepared by the Manager providing support for the Five-Year Horizon Statement disclosed on page 32. Unfavourable markets or asset allocation, sector and stock selection and use of gearing and derivatives are inappropriate giving rise to investment underperformance as well as impacting capacity to pay dividends.  view notwithstanding the current market volatility. Investment policy, performance, revenue and gearing are reviewed at each Board meeting. The Manager’s Performance and Risk Oversight team provides independent oversight on investment risk management. The Board regularly considers operating costs along with underlying dividend income and the implications for the dividend payment capacity of the Company taking into account revenue reserves. At each meeting of the Board, the Directors consider and discuss the investment performance of the Company with Julian Cane, the Company’s Fund Manager. The Board held a strategy meeting in September 2022 which considered, amongst other topics, investment performance and wider economic issues. Errors, fraud or control failures at service providers or loss of data through increasing cyber threats or business continuity failure could damage reputation or investors’ interests or result in losses. The Board receives regular control reports from the Manager covering risk and compliance including oversight of third party service providers. The Board has access to the Manager’s Risk Manager and requires any  liable for loss of any of the Company’s securities and cash held in custody. The Manager continues to strengthen and develop its Risk, Compliance and Internal Control functions including IT security. Supervision of third party service providers has been maintained by the Manager and includes assurances regarding IT security and cyber threat. The Depositary oversees custody of investments and cash and reports to the Company in accordance with the Alternative Investment Fund Managers Directive (“AIFMD”). Inappropriate business or marketing strategy particularly in relation to investor needs or sentiment giving rise to a share price discount to NAV per share. To gauge investor sentiment, the Board holds an investor satisfaction survey which is conducted every  meeting to consider the Company’s strategy and performance together with opportunities and threats to its business. The appointment of the Manager is also reviewed annually in terms of sustainable long-term growth in capital and income, which includes the growing recognition of the importance of the application of high standards of ESG practice. Share buybacks can be employed to help moderate discount volatility, while share issues can be made when the shares are trading at a premium. At each Board meeting the Directors receive an update on the marketing activities undertaken by the Manager. This includes details of the level of maturing Child Trust Funds and the decisions, if any, taken by their holders. The Company’s Broker provides periodic updates to the Board relating to the Company’s trading in the wider market. The Board agreed to the continuing appointment of the Manager, which has continued to deliver on the Company’s objective. At each Board meeting the marketing activities of the Manager are reported. This can include details of the level of Child Trust Funds reaching maturity and the decisions, if any, taken by their holders. To encourage the retention of these maturing funds, the Manager has introduced a Lifetime ISA and  Further proposals to encourage retention are being investigated by the Manager. During the year 757,819 shares were bought back at a small discount to NAV of which 175,000 shares were subsequently re-issued at a small premium. Since the year end no further share issuance or buybacks has occurred. These actions moderated share price volatility and enhanced NAV per share for continuing Shareholders. “The Company operates within a robust regulatory environment. The Company retains title to all assets held by the Custodian. Cash is held with banks approved and regularly reviewed by the Manager.”   Through a series of connected stress tests ranging from moderate to    •  •    •   •        frame for measuring and assessing medium to long-term investment    32   Five-Year Horizon Statement    •    •         •   for measuring and assessing medium to longer-term investment  •     •   •   •      volatility in stockmarkets and economic disruption when making this                        Strategic Report Report and Accounts 2022 | 33 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report     •  •  •   •   •   •                   decisions taken are set out in the Fund Manager’s Review on pages 9     “SDGs”    “the Bank and the Custodian”“the Depositary” “the Broker” “the Registrar” receives regular reports from them and evaluates them to ensure                   Dividends     providing some resilience to pay dividends in years when there is a     Promoting the Success of the Company  34      Share issuance and buy-backs      Board succession planning                 Retail investors      remains committed to its savings plans and its relationship with its   Report and Accounts 2022 | 35 Strategic Report Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Investment   and other stakeholders can understand the scope of its investment          of relative short-term underperformance giving rise to adverse         invest in securities listed on the Alternative Investment Market “AIM”                                 investment policy and the underlying policies during the course of         Policy Summary 36   Dividend    revenue reserves is made whenever necessary to help meet any          Premium/Discount   moderate any premium at which the shares have traded in relation              Taxation The policy towards taxation is one of full commitment to complying    “Section 1158”          Board diversity The policy towards the appointment of non-executive Directors is                    Board Gender as at 30 September 2022  Number of Board Members Percentage of the Board Number of senior positions on the Board  Men 3 50% 2 Women 3 50% (3) – (4) (1) The Company has opted not to disclose against the number of Directors in executive management as this is not applicable for an investment trust. (2) Composed of the Chair and the Senior Independent Director. (3) This meets the Listing Rules target of 40%. (4) The positions of the Chairs of the Audit and Risk, Nomination and Remuneration   Sharon Brown, the Chair of Audit and Risk will be held by a man. Following the retirement of Jonathan Cartwright, the position of Chair will be held by a woman. This will meet the Listing Rules target of 1. Report and Accounts 2022 | 37 Strategic Report Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report      Jonathan Cartwright Chairman 30 November 2022 Board Ethnic Background as at 30 September 2022  Number of Board Members Percentage of the Board Number of senior positions on the Board  White British or other white (including minority-white groups) 6 100% 2 Mixed/Multiple Ethnic Groups – (3) – – (1) The Company has opted not to disclose against the number of Directors in executive management as this is not applicable for an investment trust. (2) Composed of the Chair and the Senior Independent Director. (3) This Listing Rule target is 1.     will continue to take diversity into account as part of its succession  Integrity and business ethics  insofar as it applies to any Directors or employee of the Manager     Prevention of the facilitation of tax evasion      Modern Slavery Act 2015  customers and does not provide goods or services in the normal    38   Directors Jonathan Cartwright, Chair, was appointed                   Sharon Brown, Chair of the Audit and Risk Committee,                   Patrick Firth, Non-Executive Director, was                Report and Accounts 2022 | 39 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Governance Report No Director holds a directorship elsewhere in common with other members of the Board.  Nomination and Remuneration Committee. All Directors with the exception of Jonathan Cartwright are members of the Audit and Risk Committee. Jane Lewis, Chair of the Nomination and Remuneration Committee, was appointed on             Management Limited in investment trust     Nicky McCabe, Chair of the Management Engagement Committee, was appointed to    as she was formerly Head of Product and Investment Trusts at Fidelity International        Senior Independent Director,         a non-executive director of Fidelity Asian     40   Directors’ Report The Directors submit the Report and Accounts of the Company for the year ended 30 September 2022. The Directors’ biographies, Corporate Governance Statement; the Report of the Nomination and Remuneration Committee; the Directors’ Remuneration Report; the Report of the Audit and Risk Committee Report and the Report of the Management Engagement Committee form part of this Directors’ Report. Statement regarding Report and Accounts The Directors consider that following advice from the Audit and          Resolution 1 Results and dividends   Dividends paid in the year ended 30 September 2022 £’000s Fourth of four interims for the year ended 30 September 2021 of 3.75p per share 4,019 First of four interims for the year ended 30 September 2022 of 2.65p per share 2,841 Second of four interims for the year ended 30 September 2022 of 2.65p per share 2,839 Third of four interims for the year ended 30 September 2022 of 2.65p per share 2,833 12,532       pence per        Company status           Taxation         Accounting and going concern    “SORP” Report and Accounts 2022 | 41 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Governance Report          concern the Directors have therefore considered these in addition                       existence for at least twelve months from the date of the approval     Capital structure                   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               42      “Scotiabank”         Remuneration Report         and experience necessary for the effective stewardship of the   that this policy will continue for the three-year period ending at  Resolutions 3 and 4 As detailed on page 49 the Directors’ fees are reviewed each       The previous increase to Directors’ annual remuneration occurred    Director re-elections           Resolutions 5 to 9 Resolution 5         Resolution 6       Resolution 7  sector experience as she was formerly Head of Product and Investment Trusts at Fidelity International as well as a director and     Resolution 8     Resolution 9 concerns the election of Patrick Firth who was           Report and Accounts 2022 | 43 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Governance Report            in force throughout the period under review and remains in place     Statement as to disclosure of information to the auditors    unaware and they have taken all the steps a Director might    Appointment of auditor and auditor’s remuneration    auditor and resolutions proposing their re-appointment and for the   Resolutions 10 and 11 Safe custody of assets  “Custodian”  Manager in accordance with the provisions of the management   Depositary  “Depositary”         Although the Depositary has delegated the safekeeping of all      demonstrate that the loss has arisen as a result of an external    The Manager’s fee     AGM   Authority to allot shares and sell shares from treasury  Resolutions 12 and 13 are similar in content to the authorities        Resolution 12   authority to allot securities up to an aggregate nominal amount of     Resolution 13 empowers the Directors to allot such securities for   44              that they will mainly use them to satisfy demand from participants   no circumstances would the Directors use them to issue or sell any shares from treasury unless the existing shares in issue are   Authority for the Company to purchase its own shares  Resolution 14                        Continuation vote Resolution 15        within four months of the date on which the resolution was    Form of proxy       Form of direction         Recommendation       By order of the Board Columbia Threadneedle Investment Business Limited Secretary 30 November 2022 Report and Accounts 2022 | 45 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Governance Report   Articles of association   The Board                          Each Director has a signed letter of appointment to formalise the     Introduction   “AIC Code”      “UK Code”  •  •  •                 and  AIFMD “AIF”   appoint a Depositary and an Alternative Investment Fund Manager “AIFM” Corporate Governance Statement 46   Board effectiveness       considers that the appraisal process is a constructive means of      Independence of Directors     none has a past or current connection with the Manager and           Director attendance – year ended 30 September 2022 Board Annual General Meeting Audit and Risk Committee (1) Management Engagement Committee Nomination and Remuneration Committee (1) No. of meetings Jonathan Cartwright 5 1 3 1 2 Sharon Brown 5 1 3 1 2 Patrick Firth (2) 2 (2) N/A N/A N/A N/A Jane Lewis 5 1 3 1 2 Nicky McCabe 5 1 3 1 2  5 1 3 1 2 (1) Prior to 1 December 2021 was named Nomination Committee (2) All meetings attended since appointment on 21 July 2022                 Appointments   takes place for new appointees and all Directors are encouraged        Report and Accounts 2022 | 47 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Governance Report  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  By order of the Board Columbia Threadneedle Investment Business Limited Secretary 30 November 2022 48                       Diversity and tenure     Committee evaluation  appraisal process completed in accordance with standard governance    Nomination Committee       Jane Lewis Chair of the Nomination and Remuneration Committee 30 November 2022        •  particularly in terms of succession planning and the experience and   •  •   • the reappointment of those Directors standing for re-election at  •   •   •  in accordance with the provisions of the Act and the policy and  •  •   Composition of the Committee   Succession planning          Report of the Nomination and Remuneration Committee Report and Accounts 2022 | 49 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Governance Report                Annual fees for Board Responsibilities For the year ending 30 September 2023 £’000s 2022 £’000s 2021 £’000s Chairman 40.5 38.5 37.0 Director 27.0 25.5 24.5 Senior Independent Director 28.5 27.0 26.0 Audit and Risk Committee Chairman 32.5 31.0 30.0 Dear Shareholder, I am pleased to introduce the Directors’ Remuneration Report for the  forward looking Directors’ Remuneration Policy and the Remuneration   Directors’ Remuneration Policy  commensurate with the skills and experience necessary for the                               Directors’ Remuneration Report 50    At 30 September 2022 2021 Number of shares held  Number of shares held  Jonathan Cartwright 6,218 6,218 Sharon Brown 1,500 1,500 Patrick Firth – n/a Jane Lewis 3,095 3,095 Nicky McCabe 3,420 3,420  8,500 8,500 As at 30 September 2022 the shareholding of the Company’s fund manager, Julian Cane, was 324,122 shares (2021: 313,437 shares). The Company’s register of Directors’ interests contains full details of Directors’ shareholdings. Appointed as a Director with effect from 21 July 2022.      Policy implementation       Directors’ remuneration report The Directors who served during the year received the following amounts for services as non-executive Directors for the years     Fees £’000s  Taxable   £’000s  Total £’000s  Director 2022 2021 2022 2021 2022 2021 Jonathan Cartwright 38.5 37.0 0.1 - 38.6 37.0 Sharon Brown 31.0 30.0 4.8 0.5 35.8 30.5 Patrick Firth (2) 5.0 n/a 0.4 n/a 5.4 n/a Jane Lewis 25.5 24.5 2.0 0.3 27.5 24.8 Nicky McCabe (3) 25.5 18.4 1.8 - 27.3 18.4  (4) 27.0 24.9 0.1 - 27.1 24.9 Total 152.5 155.3 9.4 (5) 0.9 161.9 156.2 (1) Comprises amounts reimbursed for expenses incurred in carrying out  contributions. (2) Appointed as a Director with effect from 21 July 2022. (3) Appointed as a Director with effect from 1 January 2021. (4) Appointed Senior Independent Director on 14 July 2021. (5) Increased year on year as a result of a return to normal business travel on behalf of the Company post COVID-19.   Fees annual percentage change Director 2022   2021   2020   Jonathan Cartwright +4.1 +37.0 (1) n/a Sharon Brown +3.3 – +3.4 Jane Lewis +4.1 – +2.1  +8.4 (2) +1.6 +2.1 Nicky McCabe +38.6 (3) n/a n/a Patrick Firth n/a n/a n/a (1) Appointed as a non-executive Director on 26 November 2019, became Chair with effect from 1 April 2020. Increase reflects the first full year in the role. (2) Appointed Senior Independent Director on 14 July 2021, increase reflects the first full year in the role. (3) Appointed as a Director with effect from 1 January 2021, increase reflects the first full year with the Company.    Relative importance of pay Actual Expenditure Year ended 30 September 2022 £’000s 2021 £’000s  Change Aggregate Directors’ fees 152.5 155.3 -1.8 Management and other expenses (1) 2,110.0 1,979.0 6.6 Dividends paid to Shareholders 12,532.0 12,424.0 0.9 (1) Includes Directors’ remuneration. Report and Accounts 2022 | 51 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Governance Report 80 100 120 140 160 180 200 220 FTSE All-Share – total return CT UK Capital and Income - share price total return 2012 2013 2014 2015 2016 2017 2018 202120202019 2022 Shareholder total return vs Benchmark total return over ten years   Company performance          Jane Lewis Chair of the Nomination and Remuneration Committee 30 November 2022 52       when assessing going concern the Directors have considered this in    of the going concern principle is detailed in note 20 to the Financial         “Directive”         Composition of the Committee             Role of the Committee         • The audited annual results statement and Report and Accounts and the unaudited half-yearly results statement and Report and  •  •     • The effectiveness of the external audit process and the current  • The policy on the engagement of the external auditor to supply  •  •    •      As noted within Principal Risks and Future Prospects on page 30 the     Report of the Audit and Risk Committee The primary responsibilities of the Audit and Risk Committee (the “Committee”) are to ensure the  and risk management processes. Report and Accounts 2022 | 53 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Governance Report The systems of internal controls are designed to manage rather than      management infrastructure and the report on policies and procedures “ISAE/AAF Report”   “ISAE”     control policies and procedures with respect to the management of its     and evaluate any failings and weaknesses within the Manager’s control environment and those extending to any outsourced service providers                    the Committee               Management of risk                 Internal controls                54    Matter Action       errors in the valuation could have a          Misappropriation of Assets Misappropriation or non-existence            Income Recognition Incomplete or inaccurate income recognition could have an adverse      set at the start of the year and discussed the accounting treatment of special dividends with the                    Auditor assessment and independence         Non-audit services     • the provision of the services would contravene any regulation or  •   •   •       Sharon Brown Chair of the Audit and Risk Committee 30 November 2022 Report and Accounts 2022 | 55 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Governance Report    performance of and the fee paid to the Manager for the services it provides under the management agreement together with the terms        Composition of the Committee    Manager and supplier evaluation process        detailed reports and views from the Fund Manager on investment  comprehensive performance and risk management schedules to          Report of the Management  Manager reappointment   Manager continued to commit the necessary resources in all areas         Nicky McCabe Chair of the Management Engagement Committee 30 November 2022 56            Statement under Disclosure Guidance and Transparency Rule 4.1.12   •    •     •      On behalf of the Board Jonathan Cartwright Chair 30 November 2022              •   •   •    •    •             Statement of Directors’ Responsibilities Report and Accounts 2022 | 57 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Governance Report Management and Advisers The Manager          under a management agreement with the    The Manager also acts as the Alternative  Julian Cane Fund Manager and director of    Marrack Tonkin Head of Investment Trusts    Scott McEllen Represents the Manager as     The Secretary and the Company’s    Exchange House        The Auditors    The Bank    The Custodian    The Depositary    The Registrars       The Legal Counsel    The Broker    58   Independent Auditors’ Report    Conclusions relating to going concern      • Evaluating the appropriateness of the Directors’ method of assessing the going concern in light of market volatility and    • Assessing the appropriateness of the Directors’ assumptions    • Reviewing the loan agreements and covenant calculations and   •  assessment on the survey results to assess the likelihood of          or draw attention to in relation to the Directors’ statement in the        •   •   •    ‘Company’        The Financial Reporting Standard applicable in the UK and Republic of Ireland   Basis for opinion       opinion is consistent with the additional report to the Audit and Risk  Independence     The period of total uninterrupted engagement including retenders      Independent auditor’s report to the members of CT UK Capital and Income Investment Trust PLC Report and Accounts 2022 | 59 Independent Auditors’ Report Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report An overview of the scope of our audit        Key audit matters           Key audit matter How the scope of our audit addressed the key audit matter  ownership quoted of investments   The investment portfolio at the year end comprised of quoted investments which are carried at fair value    performance. As the Manager is responsible for valuing  potential risk of overstatement of investment valuations. Further, there is a risk that the Company does not legally own the investments at the year end. For these reasons and given the investment is the  time. Therefore, we consider the valuation and ownership of investment as the key audit matter. We responded to this matter by testing the valuation and ownership of the whole portfolio of quoted investments. We performed the following procedures: •  • Assessed if there were contra indicators, such as liquidity considerations, to suggest bid price is not the most appropriate indication of fair value by considering the realisation period for individual holdings; • Recalculated the valuation by multiplying the number of shares held per the statement obtained from the custodian by the valuation per share; •  custodian regarding all investments held at the balance sheet date. Key observations: Based on our procedures performed we did not identify any matters to suggest that the valuation and ownership of investments was not appropriate. Revenue recognition   Dividend income arises from the investment portfolio and is a key factor in demonstrating the performance of the portfolio.  as it is the key driver of dividend returns to investors and judgement is required in determining the allocation of income to revenue or capital. We performed the following procedures: • We derived our own expectation of total expected income based on the investment holding and records of distributions from independent sources. • We cross checked the portfolio against corporate actions and special dividends and challenged if these had been appropriately accounted for as revenue or capital. • We analysed the population of dividend receipts to identify any unusual items that could indicate a capital distribution, for example where a dividend represented a particularly high yield and investigated the underlying basis of those distributions. • We traced a sample of dividend income received through from the nominal ledger to bank. Key observations: Based on our procedures performed we did not identify any matters to suggest that the recognition of the revenue was not appropriate. Overview 2022 2021 Key audit matters Valuation and ownership of quoted investments   Revenue recognition   Materiality Overall materiality £2.9m (2021:£3.5m) based on 1% (2021: 1%) of NAV  £0.64m based on 5% (2021: 5%) of net revenue returns attributable to equity  items impacting the revenue returns to the Shareholders. 60           Our application of materiality                      Reporting threshold       Other information  information comprises the information included in the Annual Report               Corporate governance statement           2022 £m 2021 £m Materiality 2.9 3.5 Basis for determining materiality 1% of NAV 1% of NAV Rationale for the Benchmark applied As an investment trust, the NAV is the key measure of  As an investment trust, the NAV is the key measure of  Performance materiality 2.2 2.6 Basis for determining performance materiality Performance materiality was set at 75% of materiality. The level of performance materiality applied was set after having considered a number of factors including the expected total value of known and likely misstatements and the level of transactions in the year. Performance materiality was set at 75% of materiality. The level of performance materiality applied was set after having considered a number of factors including the expected total value of known and likely misstatements and the level of transactions in the year. Report and Accounts 2022 | 61 Independent Auditors’ Report Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Other Companies Act 2006 reporting   Going concern and longer-term viability • The Directors’ statement with regards to the appropriateness of adopting the going concern basis of  • The Directors’ explanation as to their assessment of the Company’s prospects, the period this assessment covers and why the period is appropriate. Other Code provisions • Directors’ statement on fair, balanced and understandable; •  • The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems ; and • The section describing the work of the Audit and Risk Committee. Strategic report and Directors’ report In our opinion, based on the work undertaken in the course of the audit: •   • the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements. In the light of the knowledge and understanding of the Company and its environment obtained in the course of the  Directors’ remuneration In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006. Matters on which we are required to report by exception We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: • adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or •  agreement with the accounting records and returns; or •  • we have not received all the information and explanations we require for our audit. Responsibilities of Directors              statements           Extent to which the audit was capable of detecting irregularities, including fraud       62     procedures performed and the further removed non-compliance with       Use of our report          For and on behalf of BDO LLP, Statutory Auditor London, United Kingdom 30 November 2022   We gained an understanding of the legal and regulatory framework           We focused on laws and regulations that could give rise to a material   •   •  relating to the existence of any non-compliance with laws and  •  •   • reviewing the calculation in relation to investment trust    misstatement including fraud and considered the fraud risk areas in   •  •   •  •  •  supporting documentation and evaluating whether there was     alert to any indications of fraud or non-compliance with laws and    of not detecting a material misstatement due to fraud is higher than  Report and Accounts 2022 | 63 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Financial Report Income Statement for the year ended 30 September Revenue £’000s Capital £’000s 2022 Total £’000s Revenue £’000s Capital £’000s 2021 Total £’000s 10 (Losses)/gains on investments – (57,259) (57,259) – 89,657 89,657 Foreign exchange (losses)/gains (1) – (1) (4) 13 9 3 17 Income 14,495 – 14,495 12,697 58 12,755 4 4 Management fee (714) (714) (1,428) (721) (721) (1,442) 5 5 Other expenses (680) (1) (681) (535) (2) (537)  13,100 (57,974) (44,874) 11,437 89,005 100,442 6 6 Finance costs (192) (192) (384) (114) (114) (228) Net return before taxation 12,908 (58,166) (45,258) 11,323 88,891 100,214 7 7 Taxation (18) – (18) (13) – (13) 17 17 Net return attributable to Shareholders 12,890 (58,166) (45,276) 11,310 88,891 100,201 8 8 Return per share – basic and diluted 12.03p (54.29p) (42.26p) 10.56p 82.95p 93.51p  guidance published by the AIC. All revenue and capital items in the above statement derive from continuing operations.   Revenue notes Capital notes 64   Statement of Changes for the year ended 30 September 2022 Notes Share capital £’000s Share premium account £’000s Capital redemption reserve £’000s Special reserve £’000s Capital reserve £’000s Revenue reserve £’000s Total Shareholders’ funds £’000s Balance at 30 September 2021 26,822 141,374 4,146 4,432 168,366 10,735 355,875 Movements during the year ended 30 September 2022: 9 Dividends paid – – – – – (12,532) (12,532) 16 Ordinary shares issued from treasury – 21 – 568 – – 589 16 Ordinary shares bought back and held in treasury – – – (2,358) – – (2,358) 16 Costs relating to broker – (15) – – – – (15) Net return attributable to Shareholders – – – – (58,166) 12,890 (45,276) Balance at 30 September 2022 26,822 141,380 4,146 2,642 110,200 11,093 296,283 for the year ended 30 September 2021 Notes Share capital £’000s Share premium account £’000s Capital redemption reserve £’000s Special reserve £’000s Capital reserve £’000s Revenue reserve £’000s Total Shareholders’ funds £’000s Balance at 30 September 2020 26,677 139,814 4,146 4,434 79,475 11,849 266,395 Movements during the year ended 30 September 2021: 9 Dividends paid – – – – – (12,424) (12,424) 15,16 Ordinary shares issued 145 1,549 – – – – 1,694 16 Ordinary shares issued from treasury – 29 – 443 – – 472 16 Ordinary shares bought back and held in treasury – – – (445) – – (445) 16 Costs relating to broker – (18) – – – – (18) Net return attributable to Shareholders – – – – 88,891 11,310 100,201 Balance at 30 September 2021 26,822 141,374 4,146 4,432 168,366 10,735 355,875 The notes on pages 67 to 83  Report and Accounts 2022 | 65 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Financial Report Balance Sheet at 30 September Notes 2022 £’000s 2021 £’000s Fixed assets 10 Investments 318,796 378,420 Current assets 11 Debtors 5,106 1,087 14 Cash and cash equivalents 906 1,813 Total current assets 6,012 2,900 Current liabilities 12 Creditors: amounts falling due within one year (4,525) (445) 13,14 Bank loan (24,000) (25,000) Total current liabilities (28,525) (25,445) Net current liabilities (22,513) (22,545) Total assets less current liabilities 296,283 355,875 Capital and reserves 15 Share capital 26,822 26,822 16 Share premium account 141,380 141,374 16 Capital redemption reserve 4,146 4,146 16 Special reserve 2,642 4,432 17 Capital reserve 110,200 168,366 17 Revenue reserve 11,093 10,735 Total Shareholders’ funds 296,283 355,875 18 Net Asset Value per ordinary share – pence 277.66 331.70   Jonathan Cartwright, Chair 66   Statement of Cash Flows for the year ended 30 September Notes 2022 £’000s 2021 £’000s 19  (2,241) (2,038) Dividends received 14,133 12,279 Interest received 9 15 Interest paid (376) (227)  11,525 10,029 Investing activities Purchase of investments (22,303) (42,713) Sale of investments 25,189 39,028 Other capital charges (1) (2)  2,885 (3,687)  14,410 6,342 Financing activities 9 Equity dividends paid (12,532) (12,424) 15,16 Net proceeds from issuance of new shares – 1,694 16 Net proceeds from issuance of shares held in treasury 589 472 16 Broker costs associated with share issues and buybacks (15) (18) 16 Costs of shares bought back and held in treasury (2,358) (445) 13,14 (Repayment)/drawdown of bank loan (1,000) 5,000  (15,316) (5,721) 14 Net movement in cash and cash equivalents (906) 621 14 Cash and cash equivalents at the beginning of the year 1,813 1,183 14 Effect of movement in foreign exchange (1) 9 14 Cash and cash equivalents at the end of the year 906 1,813 Represented by: Cash at bank 36 3 Short-term deposits 870 1,810 906 1,813  Report and Accounts 2022 | 67 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Financial Report 1. General information          2.   Going concern         Basis of accounting              Notes to the Accounts 68      Principal accounting policies   Financial instruments        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   Foreign currency       Report and Accounts 2022 | 69 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Financial Report  Income                –   –   –   Taxation        Dividends payable       Share capital     –  70    Capital Redemption Reserve The nominal value of ordinary share capital purchased and cancelled is transferred out of called-up share capital and into the capital     –  –     –  –  –  –    –  –  Revenue reserve    Use of judgements and estimates                 Report and Accounts 2022 | 71 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Financial Report 3. Income 2022 £’000s 2021 £’000s Income from investments: UK dividend income 13,742 10,877 UK dividend income – special dividends (1) 114 1,285 Overseas dividend income 364 286 Property income distributions 266 234 14,486 12,682 Other income: Interest on cash and cash equivalents 9 1 Underwriting Commission (2) – 14 9 15 Total income 14,495 12,697 (1) Special dividends classified as revenue in nature in accordance with note 2(c)(xv). (2) As at 30 September 2022 there was no outstanding sub-underwriting contracts (2021: none outstanding).  4. Management fee 2022 2021 Revenue £’000s Capital £’000s Total £’000s Revenue £’000s Capital £’000s Total £’000s Management fee 714 714 1,428 721 721 1,442       5. Other expenses 2022 2021 Revenue £’000s Capital £’000s Total £’000s Revenue £’000s Capital £’000s Total £’000s Auditors’ remuneration: – for audit services (1) 43 – 43 32 – 32 Directors’ fees for services to the Company (2) 153 – 153 155 – 155 Directors’ and Officers’ liability insurance 10 – 10 8 – 8 Loan commitment fee 11 – 11 6 – 6 Marketing (3) 126 – 126 78 – 78 Professional fees 98 – 98 67 – 67 Printing and postage 75 – 75 62 – 62 Registrars’ fees 28 – 28 27 – 27 Subscriptions and listing fees 55 – 55 51 – 51 Sundry expenses 81 1 82 49 2 51 Total other expenses 680 1 681 535 2 537 All expenses are stated gross of irrecoverable VAT, where applicable. (1) Total Auditors’ remuneration for 2022 audit services, exclusive of VAT amounts to £35,000 (2021: £27,000). (2) See the Directors’ Remuneration Report on pages 49 to 51. (3) 2022 marketing figure increase is the result of an under accrual brought forward from the prior year. 72   6. Finance costs 2022 2021 Revenue £’000s Capital £’000s Total £’000s Revenue £’000s Capital £’000s Total £’000s Loan interest 190 190 380 113 113 226 Overdraft interest 2 2 4 1 1 2 Total finance cost 192 192 384 114 114 228  7. Taxation on ordinary activities  Analysis of tax charge for the year 2022 2021 Revenue £’000s Capital £’000s Total £’000s Revenue £’000s Capital £’000s Total £’000s Overseas taxation 18 – 18 13 – 13 Total taxation charge (see note 7(b)) 18 – 18 13 – 13    Factors affecting the current tax charge for the year 2022 2021 Revenue £’000s Capital £’000s Total £’000s Revenue £’000s Capital £’000s Total £’000s Net return on ordinary activities before taxation 12,908 (58,166) (45,258) 11,323 88,891 100,214 Return on ordinary activities multiplied by the effective rate of corporation tax of 19% (2020: 19%) 2,452 (11,052) (8,600) 2,151 16,889 19,040 Effects of: Dividends (2,752) – (2,752) (2,409) (11) (2,420) Excess expenses not utilised in the year 300 172 472 258 159 417 Overseas taxation not relieved 18 – 18 13 – 13 Capital returns – 10,880 10,880 – (17,037) (17,037) Total taxation (see note 7(a)) 18 – 18 13 – 13   8. Return per share 2022 2021 Revenue Capital Total Revenue Capital Total Net return attributable to equity Shareholders – £’000s 12,890 (58,166) (45,276) 11,310 88,891 100,201 Return per share – pence 12.03 (54.29) (42.26) 10.56 82.95 93.51   Report and Accounts 2022 | 73 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Financial Report 9. Dividends Dividends on ordinary shares Register date Payment date 2022 £’000s 2021 £’000s Fourth of four interims for the year ended 30 September 2020 of 3.75p per share 04-Dec-20 17-Dec-20 – 4,007 First of four interims for the year ended 30 September 2021 of 2.65p per share 12-Mar-21 31-Mar-21 – 2,837 Second of four interims for the year ended 30 September 2021 of 2.60p per share 11-Jun-21 30-Jun-21 – 2,790 Third of four interims for the year ended 30 September 2021 of 2.60p per share 03-Sep-21 30-Sep-21 – 2,790 Fourth of four interims for the year ended 30 September 2021 of 3.75p per share 03-Dec-21 17-Dec-21 4,019 – First of four interims for the year ended 30 September 2022 of 2.65p per share 11-Mar-22 31-Mar-22 2,841 – Second of four interims for the year ended 30 September 2022 of 2.65p per share 10-Jun-22 30-Jun-22 2,839 – Third of four interims for the year ended 30 September 2022 of 2.65p per share 02-Sep-22 30-Sep-22 2,833 – 12,532 12,424     2022 £’000s Net revenue return attributable to Shareholders 12,890 First of four interims for the year ended 30 September 2022 of 2.65p per share (2,841) Second of four interims for the year ended 30 September 2022 of 2.65p per share (2,839) Third of four interims for the year ended 30 September 2022 of 2.65p per share (2,833) Fourth of four interims for the year ended 30 September 2022 of 3.85p per share (1) (4,108) Transferred to revenue reserve 269 (1) Based on shares in issue and their entitlement to the dividend at 29 November 2022. 74   10. Investments Level 1 (1) £’000s Level 3 £’000s 2022 Total £’000s Level 1 (1) £’000s Level 3 (2) £’000s 2021 Total £’000s Cost brought forward 256,643 – 256,643 246,295 – 246,295 Gains/(losses) brought forward 121,777 – 121,777 38,548 – 38,548 Fair value of investments brought forward 378,420 – 378,420 284,843 – 284,843 Transferred to Level 3 (2) – – – (1,432) 1,432 – Purchases at cost 26,398 – 26,398 42,713 – 42,713 Sales proceeds (28,876) – (28,876) (38,978) – (38,978) Gains/(losses) on investments sold in year 5,781 – 5,781 7,860 (1,432) 6,428 (Losses)/gains on investments held at year end (62,927) – (62,927) 83,414 – 83,414 Fair value of investments at 30 September 318,796 – 318,796 378,420 – 378,420 Cost at 30 September 260,060 – 260,060 256,643 – 256,643 Gains at 30 September 58,736 – 58,736 121,777 – 121,777 Fair value of investments at 30 September 318,796 – 318,796 378,420 – 378,420 2022 £’000s 2021 £’000s Gains on investments sold in year 5,781 6,428 (Losses)/gains on investments held at year end (62,927) 83,414 Investment transaction costs (113) (185) Total (losses)/gains in year (57,259) 89,657 (1) The hierarchy of investments is described in note 2(c)(i) and below Level 1 includes investments listed on any recognised stock exchange or quoted on AIM in the UK. Level 3 includes any unquoted investments. (2) Ahtium PLC was written off as at 30 September 2021 as a result of bankruptcy first announced in 2018.    11. Debtors 2022 £’000s 2021 £’000s Accrued income 1,318 983 Investments sold awaiting settlement 3,687 – Prepayments 16 21 Overseas taxation recoverable 85 83 5,106 1,087 12. Creditors: amounts falling due within one year 2022 £’000s 2021 £’000s Management fee 318 382 Investments purchased awaiting settlement 4,095 – Loan interest 9 1 Accruals 103 62 4,525 445 Report and Accounts 2022 | 75 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Financial Report 13. Loans 2022 £’000s 2021 £’000s Sterling loans: falling due after more than one year 24,000 25,000     14. Analysis of changes in net debt Cash £’000s Bank loans £’000s 2022 Total £’000s Cash £’000s Bank loans £’000s 2021 Total £’000s Net debt brought forward 1,813 (25,000) (23,187) 1,183 (20,000) (18,817) Cash-flows: Repayment/(drawdown) of bank loan – 1,000 1,000 – (5,000) (5,000) Net movement in cash and cash equivalents (906) – (906) 621 – 621 Non-cash: Effect of movement in foreign exchange (1) – (1) 9 – 9 Net debt carried forward 906 (24,000) (23,094) 1,813 (25,000) (23,187) 15. Share capital Total Listed Held in Treasury 2022 Issued and fully paid 2021 Issued and fully paid Number £’000s Number £’000s Number £’000s Number £’000s Ordinary shares of 25 pence each Balance brought forward 107,289,022 26,822 – – 107,289,022 26,822 106,709,268 26,677 Ordinary shares issued – – – – 579,754 145 Ordinary shares issued from treasury – – (175,000) (44) 175,000 44 150,000 38 Ordinary shares bought back & held in treasury – – 757,819 189 (757,819) (189) (150,000) (38) Balance at 30 September 107,289,022 26,822 582,819 145 106,706,203 26,677 107,289,022 26,822      76   16. Reserves Share Premium account £’000s Capital Redemption Reserve £’000s Special Reserve £’000s Balance brought forward as at 1 October 2021 141,374 4,146 4,432 Ordinary shares issued from treasury – – 568 Ordinary shares bought back and cancelled or held in treasury (net of costs) – – (2,346) Stamp duty – – (12) Premium on issue of shares from treasury 21 – – Broker costs associated with the issue of new shares (15) – – Balance carried forward as at 30 September 2022 141,380 4,146 2,642 Balance brought forward as at 1 October 2020 139,814 4,146 4,434 Ordinary shares issued from treasury – – 443 Ordinary shares bought back and cancelled or held in treasury (net of costs) – – (443) Stamp duty – – (2) Premium on issue of shares 1,549 – – Premium on issue of shares from treasury 29 – – Broker costs associated with the issue of new shares (18) – – Balance carried forward as at 30 September 2021 141,374 4,146 4,432 17. Other reserves Capital reserve – realised £’000s Capital reserve – unrealised £’000s Capital reserve – total £’000s Revenue reserve £’000s Movements during the year ended 30 September 2022: Gains on investments sold in year 5,781 – 5,781 – Losses on investments held at year end – (62,927) (62,927) – Transaction costs – (113) (113) – Management fee (see note 4) (714) – (714) – Finance costs (see note 6) (192) – (192) – Other capital charges (1) – (1) – Revenue return – – – 12,890 Return attributable to Shareholders 4,874 (63,040) (58,166) 12,890 Dividends paid in year (see note 9) – – – (12,532) Balance at 30 September 2021 46,589 121,777 168,366 10,735 Balance at 30 September 2022 51,463 58,737 110,200 11,093    Report and Accounts 2022 | 77 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Financial Report 18.  2022 2021 Net asset value per share – pence 277.66 331.70 Net assets attributable at the year end – (£'000s) 296,283 355,875 Number of ordinary shares in issue at the year end 106,706,203 107,289,022 19.  2022 £’000s 2021 £’000s Net return on ordinary activities before taxation (45,258) 100,214 Adjustments for non-cash flow items, dividend income and interest expense: Losses/(gains) on investments (note 10) 57,146 (89,842) Foreign exchange movements 1 (9) Non-operating expenses of a capital nature (note 5) 1 2 Dividend income receivable (note 3) (14,486) (12,682) Interest receivable (9) (15) Interest payable (note 6) 384 228 Decrease/(increase) in other debtors 3 (16) (Decrease)/increase in other creditors (23) 82 43,017 (102,252) Cash outflows from operating activities before dividends received and interest paid (2,241) (2,038) 20. 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Financial Risk Management        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  Market risks               Currency Exposure     At 30 September 2022 Average for the year At 30 September 2021 Average for the year Euro 1.140 1.180 1.163 1.145 US dollar 1.117 1.280 1.348 1.369 Report and Accounts 2022 | 79 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Financial Report The following calculations demonstrate the approximate effect of a weakening or strengthening of sterling against other currencies and are  –  –   –  –     Weakening of sterling by 10% against other currencies Local currency Return Local currency Sterling equivalent £’000s 10% weakened sterling fx rate Adjusted income, assets and liabilities (£’000s) 2022 Net return attributable to Shareholders (£’000s) 2021 Net return attributable to Shareholders (£’000s) Euro Revenue 833 731 1.0256 812 81 61 Euro Capital 4,539 3,983 1.0256 4,426 443 778 US Dollar Revenue 233 209 1.0053 232 23 12 US Dollar Capital 5,693 5,096 1.0053 5,663 567 604 Net Total Return attributable to Shareholders 1,114 1,455 Shares in issue 106,706,203 107,289,022 NAV per share - pence 1.04 1.36 Strengthening of sterling by 10% against other currencies Local currency Return Local currency Sterling equivalent £’000s 10% strengthened sterling fx rate Adjusted income, assets and liabilities (£’000s) 2022 Net return attributable to Shareholders (£’000s) 2021 Net return attributable to Shareholders (£’000s) Euro Revenue 833 731 1.2535 665 (66) (49) Euro Capital 4,539 3,983 1.2535 3,621 (362) (637) US Dollar Revenue 233 209 1.2287 190 (19) (9) US Dollar Capital 5,693 5,096 1.2287 4,633 (463) (494) Net Total Return attributable to Shareholders (910) (1,189) Shares in issue 106,706,203 107,289,022 NAV per share - pence (0.85) (1.11)   80     2022 Short-term debtors £’000s Cash and cash equivalents £’000s Short-term creditors – other £’000s Short-term creditors – loans £’000s Net monetary (liabilities)/assets £’000s Investments £’000s Net exposure £’000s Sterling 5,021 906 (4,525) (24,000) (22,598) 309,802 287,204 Other 85 – – – 85 8,994 9,079 Total 5,106 906 (4,525) (24,000) (22,513) 318,796 296,283 2021 Short-term debtors £’000s Cash and cash equivalents £’000s Short-term creditors – other £’000s Short-term creditors – loans £’000s Net monetary (liabilities)/assets £’000s Investments £’000s Net exposure £’000s Sterling 1,004 1,813 (445) (25,000) (22,628) 366,063 343,435 Other 83 – – – 83 12,357 12,440 Total 1,087 1,813 (445) (25,000) (22,545) 378,420 355,875 Interest rate exposure  Within one year £’000s More than one year £’000s 2022 Total £’000s Within one year £’000s More than one year £’000s 2021 Total £’000s Exposure to floating rates: Cash and cash equivalents 906 – 906 1,813 – 1,813 Loans (24,000) – (24,000) (25,000) – (25,000) Net exposure (23,094) – (23,094) (23,187) – (23,187)          Increase in rate £’000s 2022 Decrease in rate £’000s Increase in rate £’000s 2021 Decrease in rate £’000s Revenue return (222) 222 (214) 214 Capital return (240) 240 (250) 250 Total return (462) 462 (464) 464 NAV per share – pence (0.43) 0.43 (0.43) 0.43 Report and Accounts 2022 | 81 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Financial Report Other market risk exposures        Increase in value £’000s 2022 Decrease in value £’000s Increase in value £’000s 2021 Decrease in value £’000s Capital return 63,759 (63,759) 75,684 (75,684) NAV per share – pence 59.75 (59.75) 70.54 (70.54)  Liquidity risk            2022 Three months or less £’000s More than three months but less than one year £’000s More than one year £’000s Total £’000s Current liabilities – others 4,525 – – 4,525 Loans 24,000 – – 24,000 28,525 – – 28,525 2021 Three months or less £’000s More than three months but less than one year £’000s More than one year £’000s Total £’000s Current liabilities – others 445 – – 445 Loans 25,000 – – 25,000 25,445 – – 25,445 82      Credit risk and counterparty exposure 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    Capital risk management       22. Transactions with related parties and Manager       Report and Accounts 2022 | 83 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Financial Report 23. AIFMD      Leverage exposure Gross method Commitment method Maximum limit 200% 200% Actual 108% 108%    24.     84   Ten Year Record (Unaudited)   Assets at 30 September £'000s 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Total assets (before debt) 203,079 244,708 251,387 256,876 297,027 332,463 347,472 348,149 286,395 380,875 320,283 Loans 7,967 20,000 20,000 20,000 25,000 20,000 20,000 10,000 20,000 25,000 24,000 Net assets 195,112 224,708 231,387 236,876 272,027 312,463 327,472 338,149 266,395 355,875 296,283 Net Asset Value (NAV) at 30 September 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 NAV per share – pence 222.0 251.4 251.8 250.5 281.1 317.1 324.0 329.0 249.7 331.7 277.7 Total Returns (1) (rebased to 100 at 30 September 2012) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 NAV per share 100.0 117.7 122.3 126.6 147.7 172.6 182.2 191.9 151.6 208.8 181.5 Middle market price per share 100.0 116.4 123.4 127.2 148.3 171.7 180.7 186.4 148.5 201.2 180.1 FTSE All-Share Index 100.0 118.9 126.2 123.3 144.0 161.2 170.7 175.3 146.2 186.9 179.5 Returns excluding dividends (1) (rebased to 100 at 30 September 2012) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 NAV per share 100.0 113.2 113.4 112.8 126.6 142.8 145.9 148.2 112.5 149.4 125.1 Middle market price per share 100.0 112.0 114.4 113.5 127.3 142.4 145.0 144.1 110.4 144.1 124.2 FTSE All-Share Index 100.0 114.8 117.8 111.2 125.2 135.0 137.6 135.4 109.4 135.4 125.5 (1) See Alternative Performance Measures on pages 91 and 92 for explanation. Report and Accounts 2022 | 85 Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Financial Report Share Price at 30 September 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Middle market price per share – pence 225.5 252.5 258.0 256.0 287.0 321.0 327.0 325.0 249.0 325.0 280.0 Premium/(discount)to NAV – % 1.6 0.4 2.5 2.2 2.1 1.2 0.9 (1.2) (0.3) (2.0) 0.8 Share price high – pence 227.0 269.0 271.8 277.0 289.8 327.5 350.0 337.0 358.0 339.0 343.5 Share price low – pence 195.0 222.8 248.0 233.8 234.8 274.0 309.5 276.5 193.8 237.5 273.0 Revenue for the year ended 30 September 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Available for ordinary shares (£’000s) 8,715 9,941 9,575 9,475 10,785 11,459 11,710 13,426 8,758 11,310 12,890 Return per share – pence 10.01 11.26 10.56 10.10 11.26 11.71 11.70 13.12 8.34 10.56 12.03 Dividends per share – pence 9.00 9.45 9.85 10.10 10.30 10.65 10.95 11.40 11.50 11.60 11.80 Revenue Performance (rebased to 100 at 30 September 2012) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Return per share 100.0 112.5 105.5 100.9 112.5 117.0 116.9 131.1 83.3 105.5 120.2 Dividends per share 100.0 105.0 109.4 112.2 114.4 118.3 121.7 126.7 127.8 128.9 131.1 CPI 100.0 102.7 103.9 103.8 104.8 107.9 110.5 112.4 113.0 116.5 128.3 Cost of running the Company (Ongoing charges) (1) for the year ended 30 September 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Expressed as a percentage of average net assets: Ongoing charges 0.80 0.62 0.66 0.64 0.64 0.59 0.58 0.58 0.58 0.59 0.59 Gearing (1) at 30 September 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Net gearing % 1.22 3.81 4.43 10.32 9.32 4.81 4.51 1.71 7.06 6.52 7.79 (1) See Alternative Performance Measures pages 91 and 92 for explanation Analysis of Ordinary Shareholders (Unaudited) Category Holding % at 30 September 2022 Holding % at 30 September 2021 CT Savings Plans 79.5 79.5 Retail Investors (excluding those investing through CT Savings Plans) 9.6 9.4 Institutions 6.1 6.2 Intermediaries 4.8 4.9 100.0 100.0 Source: Columbia Threadneedle Investments 86   Special Resolutions:         “Act”    commencing on the date of the passing of this resolution     “relevant period”    this power make offers or enter into agreements which would  the expiry of the relevant period and notwithstanding such  in pursuance of such offers or agreements as if such power  treasury shares as if in the opening sentence of this resolution      “Act”   “ordinary shares” and in such manner as the Directors may from time to time             the higher of the last independent trade and the highest current     Ordinary Resolutions:    To receive and adopt the Directors’ Report and Accounts          To approve the Directors’ Remuneration Report for the year                      “Act”   “Rights”  on the date of the passing of this resolution and expiring at      “relevant period” time prior to the expiry of this authority make offers or enter   of the relevant period and notwithstanding such expiry the  pursuance of such offers or agreements as if such authority  Notice of Annual General Meeting Report and Accounts 2022 | 87 Notice of Meeting Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report           conferred prior to the expiry of such authority which will or may   Special Business  ordinary resolution   By Order of the Board Columbia Threadneedle Investment Business Limited, Secretary 30 November 2022  Exchange House Primrose Street London EC2A 2NY Registered number: 02732011 Notes:       appointed to exercise the rights attached to a different share or shares                         where full instructions for the procedure     power of attorney or other authority under which the proxy appointment              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        regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy      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    for a range of dealing  Common reporting standards  information annually to the local tax authority on the tax  and corporate entities who have purchased shares in investment     Exchange of Information – information for account holders   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    Electronic communications             90   How to Invest Charges Annual management charges and other charges apply according to the type of plan. Annual account charge ISA/LISA: £60+VAT GIA: £40+VAT JISA/JIA/CTF: £25+VAT You can pay the annual charge from your account, or by direct debit (in addition to any annual subscription limits). Dealing charges £12 per fund (reduced to £0 for deals placed through the online Columbia Threadneedle Investor Portal) for ISA/GIA/LISA/JIA and JISA. There are no dealing charges on a CTF. Dealing charges apply when shares are bought or sold but not on the reinvestment of dividends or the investment of monthly direct debits. Government stamp duty of 0.5% also applies on the purchase of shares (where applicable). The value of investments can go down as well as up and you may not get back your original investment. Tax benefits depend on your individual circumstances and tax allowances and rules may change. Please ensure you have read the full Terms and Conditions, Privacy Policy and relevant Key Features documents before investing. For regulatory purposes, please ensure you have read the Pre- sales Cost & Charges disclosure related to the product you are applying for, and the relevant Key Information Documents (KIDs) for the investment trusts you want to invest into, these can be found at ctinvest.co.uk/documents. How to Invest To open a new Columbia Threadneedle Investments plan, apply online at ctinvest.co.uk Online applications are not available if you are transferring an existing plan with another provider to Columbia Threadneedle Investments, or if you are applying for a new plan in more than one name but paper applications are available at ctinvest.co.uk/documents or by contacting Columbia Threadneedle Investments. New Customers: Call: 0800 136 420 ( )  invest@columbiathreadneedle.com Existing Plan Holders: Call: 0345 600 3030 ( )  investor.enquiries@columbiathreadneedle.com By post: Columbia Threadneedle Management Limited PO Box 11114 Chelmsford CM99 2DG You can also invest in the trust through online dealing platforms for private investors that offer share dealing and ISAs. Companies include: Barclays Stockbrokers, EQi, Halifax, Hargreaves Lansdown, HSBC, Interactive Investor, Lloyds Bank, The Share Centre One of the most convenient ways to invest in CT UK Capital and Income Investment Trust PLC is through one of the savings plans run by Columbia Threadneedle Investments. © 2022 Columbia Threadneedle Investments. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies. Financial promotions are issued for marketing and information purposes by Columbia Threadneedle Management Limited, authorised and regulated in the UK by the Financial Conduct Authority. 195600 (06/22) UK CT Individual Savings Account (ISA) You can use your ISA allowance to make an annual tax efficient investment of up to £20,000 for the current tax year with a lump sum from £100 or regular savings from £25 a month. You can also transfer any existing ISAs to us whilst maintaining the tax benefits. CT Junior Individual Savings Account (JISA) A tax efficient way to invest up to £9,000 per tax year for a child. Contributions start from £100 lump sum or £25 a month. JISAs or CTFs with other providers can be transferred to Columbia Threadneedle Investments. CT Lifetime Individual Savings Account (LISA) For those aged 18-39, a LISA could help towards purchasing your first home or retirement in later life. Invest up to £4,000 for the current tax year and receive a 25% Government bonus up to £1,000 per year. Invest with a lump sum from £100 or regular savings from £25 a month. CT General Investment Account (GIA) This is a flexible way to invest in our range of Investment Trusts. There are no maximum contributions, and investments can be made from £100 lump sum or £25 a month. CT Junior Investment Account (JIA) This is a flexible way to save for a child in our range of Investment Trusts. There are no maximum contributions, and the plan can easily be set up under bare trust (where the child is noted as the beneficial owner) or kept in your name if you wish to retain control over the investment. Investments can be made from a £100 lump sum or £25 a month per account. You can also make additional lump sum top-ups at any time from £100 per account. The CTF and JISA accounts are opened by parents in the child’s name and they have access to the money at age 18. *Calls may be recorded or monitored for training and quality purposes. CT Child Trust Fund (CTF) If your child already has a CTF, you can invest up to £9,000 per birthday year, from £100 lump sum or £25 a month. CTFs with other providers can be transferred to Columbia Threadneedle Investments.  ctinvest.co.uk 0345 600 3030 monitored for training and quality purposes. Report and Accounts 2022 | 91 Other Information Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Alternative Performance Measures “APMs”   Premium or Discount –    30 September 2022 pence 30 September 2021 pence Net Asset Value per share (a) 277.66 331.70 Share price per share (b) 280.00 325.00 Premium or (Discount) (c= (b-a)/a) (c) 0.8% (2.0%) Gearing –      30 September 2022 £’000 30 September 2021 £’000 Loan 24,000 25,000 Less cash and cash equivalents (906) (1,813) Total (a) 23,094 23,187 Net Asset Value (b) 296,283 355,875 Gearing (c = a/b) (c) 7.79% 6.52% 92   Ongoing Charges –      Ongoing charges calculation 30 September 2022 £’000 30 September 2021 £’000 Management fees 1,428 1,442 Other expenses 680 535 Broker fee 15 18 Less loan arrangement fees (16) (6) Ad-hoc non-recurring expenses (80) (37) Total (a) 2,027 1,952 Average daily net assets (b) 343,168 331,180 Ongoing charges (c = a/b) (c) 0.59% 0.59% Total Return –   Net Asset Value Share price NAV/Share price per share at 30 September 2021 (pence) 331.70 325.00 NAV/Share price per share at 30 September 2022 (pence) 277.66 280.00 Change in the year (16.3%) (13.8%) Impact of dividend reinvestments 3.2% 3.3% Total return for the year (13.1%) (10.5%) Report and Accounts 2022 | 93 Other Information Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report AAF Report –  Administrator – AIC – AIC Code –  AIM – AIFMD – AIFs AIFM  CT UK Capital and Income Investment Trust PLC – the “Company CT Savings Plans –    Benchmark –Index      Closed-end company –   Cum-dividend –  Custodian –    Depositary –   Glossary of Terms 94     Derivative –    Distributable Reserves –    Dividend Dates –record payment ex-dividend  Fund Manager –  GAAP –               ISAE Report –  Leverage –       Manager –       Report and Accounts 2022 | 95 Other Information Strategic Report Governance Report Financial Report Notice of Meeting Other Information Chairman’s StatementOverview Auditors’ Report Non-executive Director –    Open-ended investment vehicle –  Price/earnings multiple –  Registrar –   SORP –   SSAE16 –      96   Warning to Shareholders – Beware of Share Fraud. Fraudsters use persuasive and high-pressure tactics to lure investors into scams. They may offer to sell to you shares that turn out to be worthless or non-existent, or to buy your shares at an inflated price in return for an upfront payment following which the proceeds are never received. If you receive unsolicited investment advice or requests: • Check the Financial Services Register from fca.org.uk to see if the person or firm contacting you is authorised by the FCA • Call the Financial Conduct Authority (“FCA”) on 0800 111 6768 if the firm does not have contact details on the Register or you are told they are out of date • Search the list of unauthorised firms to avoid at fca.org.uk/scams • Consider that if you buy or sell shares from an unauthorised firm you will not have access to the Financial Ombudsman Service or Financial Services Compensation Scheme • Think about getting independent financial and professional advice If you are approached by fraudsters please tell the FCA by using the share fraud reporting form at fca.org.uk/scams where you can find out more about investment scams. You can also call the FCA Consumer Helpline on 0800 111 6768. If you have already paid money to share fraudsters you should contact Action Fraud on 0300 123 2040. CT UK Capital and Income Investment Trust PLC Report and Accounts 2022  columbiathreadneedle.com © 2022 Columbia Threadneedle Investments. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies. Contact us   020 7628 8000 ctukcapitalandincome.com invest@columbiathreadneedle.com  Computershare Investor Services PLC The Pavilions, Bridgwater Road Bristol BS99 6ZZ 0370 889 4094 computershare.com web.queries@computershare.co.uk