M&G CREDIT INCOME INVESTMENT TRUST

Annual Report • Mar 28, 2024

M&G Credit Income Investment Trust plc

Annual Report and audited Financial Statements for the year ended 31 December 2023

Company registration number: 11469317

M&G Credit Income Investment Trust

An investment trust from the fixed income experts

M&G Credit Income Investment Trust plc (the 'Company') seeks to generate high-quality, reliable income from a diversified credit portfolio, while seeking to preserve investors' capital through low net asset value (NAV) volatility. The Company has the flexibility to invest in both public and private debt, which allows individual investors to access potential opportunities normally only available to large institutions. By investing in these specialised areas, we can construct a predominantly investment grade-quality portfolio with the potential to produce superior income to traditional bond funds without compromising on credit quality. This is thanks to M&G's leading market position and decades of experience in private lending, which enables them to source deals unavailable to most other asset managers. Through the Company's closed-ended structure, investors can benefit from holding these private assets to their maturity, whilst retaining access to their capital via the Company's public listing.

Why invest in the Company?

Seeks to pay dividends of 4% above cashª

offers a yield of 8.6% based on the year end share price

Higher income potential

than comparably rated bond portfolios thanks to M&G's ability to source private credit deals

High-quality, reliable income

sourced primarily from private credit, with 70%+ of the portfolio invested in investment gradequality assets

Investment trust structure

allows investors to buy and sell the Company's shares to suit their circumstances without affecting the underlying portfolio

Stable capital value

of private assets, which are typically held to maturity, compared to other investments that can offer similar income, such as equities and high yield bonds

Zero discount policyᵇ

designed to enable investors to buy and sell shares at close to NAV

M&G's track record in public debt and private markets

£212 billion in credit and private investments under management

M&G is one of the UK's largest credit investors, with a leading position in private markets, creating potential opportunities unavailable to other managers

Since 1997

M&G has developed a rigorous and selective investment process based on more than two decades' experience in private debt markets

130 analysts

M&G has built one of Europe's largest in-house credit research teams, which provides extensive resources required to identify and analyse potential deals

a Based on the SONIA (Sterling Overnight Index Average) interest rate benchmark administered by the Bank of England.

b Please refer to the Board's principal decisions within the Section 172 Statement on page 32 and the Glossary on page 118 for more details on the zero discount policy.

Contents

M&G Credit Income Investment Trust plc

Strategic report

Company highlights2
Chairman's statement.5
Investment manager's report7
Portfolio analysis10
Strategic review 14
Governance
Directors37
Directors' report. 38
Corporate governance statement.43
Directors' remuneration report.57
Report of the Audit Committee63
Management report and Directors' responsibilities statement 68
Financial
Independent auditor's report70
Income statement79
Statement of financial position 80
Statement of changes in equity.81
Cash flow statement.82
Notes to the financial statements 84
Additional information
Notice of Annual General Meeting 106
Administrative notes in connection with the Annual General Meeting 108
Shareholder communications 111
Company information. 112
Alternative performance measures 113
Glossary 115
Shareholder information and analysis 119
Other regulatory disclosures 121

Company highlights

NAV, dividend and NAV total return

SONIA increased significantly over the year and the Company's dividends grew as a consequence.

Source: M&G and State Street as at 31 December 2023

Financial highlights

Key data

	As at 31 December 2023	As at 31 December 2022
Net assets (£'000)	135,285	135,109
Net asset value (NAV) per Ordinary Share	96.21p	94.99p
Ordinary Share price (mid-market)	92.2p	92.1p
Discount to NAVa	4.2%	3.0%
Ongoing charges figurea	1.28%	1.22%

Return and dividends per Ordinary Share

	Year ended 31 December 2023	Year ended 31 December 2022
Capital return	3.3p	(6.0)p
Revenue return	6.0p	4.2p
NAV total returna	10.4%	(1.7)%
Share price total returna	9.5%	(2.8)%
Total dividends declaredb	7.96p	5.35p

a Alternative performance measure. Please see pages 113 to 114 for further information.

b The total dividends declared in respect of each financial year equated to a dividend yield of SONIA plus 4% on the adjusted opening NAV.

Company highlights

Total return (one year)

NAV total return during 2023 outperformed the SONIA+4% benchmark as the portfolio captured positive credit performance.

a Alternative performance measure. Please see pages 113 to 114 for further information. b SONIA +4%.

Source: M&G and Morningstar

Company highlights

Total return (since inception)

a Alternative performance measure. Please see pages 113 to 114 for further information.

b 3 Month LIBOR +2.5% from inception to 31 December 2019, 3 Month LIBOR +4% from 1 January 2020 to 31 December 2021, thereafter SONIA +4%.

Source: M&G and Morningstar

NAV total return (%, pa)*	1 year	2 years	3 years	5 years	Since Inception **
M&G Credit Income Investment Trust	10.42%	4.17%	4.20%	4.47%	4.26%
Benchmark***	8.96%	7.21%	6.16%	5.22%	5.17%

Calendar year NAV total return (%, pa)*	2023	2022	2021	2020	2019
M&G Credit Income Investment Trust	10.42%	(1.74)%	4.25%	3.75%	6.04%
Benchmark***	8.96%	5.47%	4.09%	4.32%	3.34%

Source: M&G and Morningstar, 31 December 2023

* Alternative performance measure. Please see pages 113 to 114 for further information.

** Company inception 14 November 2018.

*** 3 Month LIBOR +2.5% from inception to 31 December 2019, 3 Month LIBOR +4% from 1 January 2020 to 31 December 2021, thereafter SONIA +4%.

Chairman's statement

Performance

I am pleased to report that your Company achieved its benchmark of paying an annualised dividend yield of SONIA plus 4% for 2023, while also increasing its NAV. It is also gratifying that UK Investor Magazine gave the Company its 2023 award for the Best Debt Income Investment Trust.

The opening NAV on 1 January 2023 (adjusted for the last dividend for 2022) was 92.56p per Ordinary Share and the NAV on 31 December 2023 (adjusted for the last dividend for 2023) was 94.07p per Ordinary Share. Including dividends paid, the NAV total return for the year to 31 December 2023 was 10.4%, compared to our benchmark return of 9.0%. The outperformance of the NAV came from tightening credit spreads which drove capital growth and from strong income returns supported by higher yielding private assets. The portfolio was substantially protected from interest rate rises and rate-driven volatility by the use of interest rate hedges: these remain an integral part of the Company's investment strategy.

Your Company's portfolio (including irrevocable commitments) at the year end was 54% invested in private (not listed) assets, with an additional amount of some 10% in illiquid publicly listed assets which are intended to be held to maturity. The latter part of the year saw a reduction in the overall exposure to private assets as older positions matured; sufficiently attractive new opportunities did not present themselves.

Share buybacks and discount management

Your board remains committed to seeking to ensure that the Ordinary Shares trade close to NAV in normal market conditions through buybacks and issuance of Ordinary Shares. During the year, the Company bought back 1,613,783 shares pursuant to the zero discount policy initially announced on 30 April 2021. On 31 December 2023 the Ordinary Share price was 92.2p, representing a 4.2% discount to NAV as at that date.

I am pleased that demand after the period end has enabled your Company to begin to issue Ordinary Shares again. As at 27 March 2024, a total of 300,000 Ordinary Shares had been re-issued from treasury at a premium to NAV.

Ordinary Share price (mid-market) vs NAV

Source: M&G and Morningstar as at 29 February 2024

Chairman's statement

Amendment of Articles of Association

The success to date of our zero discount policy gave our shareholders the confidence to defer the opportunity to realise the value of some or all of their Ordinary Shares at NAV per Ordinary Share less costs (the 'Liquidity Opportunity') in 2023 as set out in your Company's Articles of Association (the 'Articles'). The Articles were duly amended at a general meeting on 15 June 2023 and the next Liquidity Opportunity will now occur at, or within the twelve months prior to, the 2028 annual general meeting unless shareholders direct by way of a special resolution not to offer such Liquidity Opportunity. Our Investment Manager thus now has an extended window in which to take account of the attractive opportunities it expects to continue to occur in volatile markets.

Dividends

Your Company paid four quarterly interim dividends in respect of the year ended 31 December 2023 at an annual rate of SONIA plus 4%, calculated by reference to the adjusted opening NAV as at 1 January 2023. These totalled 7.96p per Ordinary Share, which represented a dividend yield of 8.6% on the Ordinary Share price at 31 December 2023. Your Company's Investment Manager continues to believe that an annual total return, and thus ultimately a dividend yield, of SONIA plus 4% will continue to be achievable although there can be no guarantee that this will occur in any individual year.

Outlook

The technical backdrop in fixed income markets remains strong: all-in bond yields continue to compare favourably to other asset classes. Sterling Investment Grade and High Yield credit spreads are (at time of writing) the tightest they have been in close to two years which reflects the strength of the technical tailwind and future optimism for the 'soft landing' narrative. Despite this creating a slightly more challenging environment in which to deploy capital, your Company's board believes there is still attractive value to be found in credit and that the current backdrop favours an active management approach. As it has done since inception, the Investment Manager will use capital gains from the portfolio to help achieve its return and dividend objectives, as set out above in the section entitled 'Dividends'. The currently undrawn £25 million credit facility is available to take advantage of investment opportunities as they occur.

David Simpson Chairman 27 March 2024

Investment manager's report

Investment manager's report

We are pleased to provide commentary on the factors that have had an impact on our investment performance during 2023. In particular we discuss the performance and composition of the portfolio.

In 2023 the course of financial markets was dominated by interest rates and interest rate expectations, as central banks pressed ahead with the sharpest and most aggressive rate hikes seen since the 1980s. This saw volatility persist throughout the year as economies grappled with the impact of elevated inflation and the transition to a higher interest rate regime. After a positive start, by the end of the first quarter the collapse of Silicon Valley Bank in the US and the emergency rescue of Credit Suisse in Switzerland had sparked turmoil in the global banking sector. This resulted in a flight to perceived 'safe-haven' assets which saw government bonds rally and left investors contemplating whether central banks would be forced to halt interest rate hikes in order to prevent a wider financial collapse. However, widespread contagion in either Europe or the US failed to materialise, leading market volatility to reduce and paving the way for investor sentiment to improve. Having moved notably wider during this episode, investment grade credit spreads then tightened from Q2 onwards, signalling improved investor confidence. Whilst investor capital was being reallocated to the fixed income market to seek out attractive all-in yields, new supply remained constrained with issuers having issued debt in prior years in anticipation of increased financing costs. This supply/demand imbalance kept credit spreads well-anchored despite tightening financial conditions and a more challenging economic backdrop. In view of this, portfolio activity in the first half of the year focussed on reducing risk and increasing credit quality as we rotated out of tighter yielding public bonds, redeploying proceeds into comparable or higher rated asset backed securities (ABS) and collateralised loan obligations (CLOs) at new issue. We also paid down the outstanding loan balance on the Company's credit facility. Into the middle of the year we added attractively priced private assets into the portfolio as the pipeline of opportunities picked up. In

selling down corporate bonds and reallocating capital into private and alternative sectors of the fixed income market, we were able to achieve a significant spread pick-up and improve both the overall yield and credit quality of the portfolio.

The second half of the year began on a positive footing as a notable deceleration in inflation in Europe and the US saw 'soft landing' expectations drive a strong rally in risk assets, supported by good news all round from an economic standpoint. However, early summer optimism lost momentum as concerns grew that central banks' determination to bring inflation under control with restrictive policies would keep interest rates elevated for a prolonged period. Portfolio activity remained quiet in the third quarter as we continued to favour the up-inquality trade, selectively adding public and private new issues and taking exposure in an attractively priced secondary market securitisation. Private asset repayments saw cash returned to the portfolio which we invested into the daily dealing M&G Senior Asset Backed Credit Fund as we waited for suitably priced public and private opportunities to arise. October saw a dramatic escalation in geopolitical tensions in the Middle East after an attack by Hamas militants led Israel to declare war on the group, adding another layer of complexity to an already uncertain economic outlook. The initial aftermath saw a flight to quality and perceived 'safehaven' assets, with government bonds then whipsawing as macro and geopolitics vied for pole position in driving markets. Corporate earnings continued to show companies performing more robustly than many expected and economies remained resilient, with a wider global recession failing to materialise, although the UK did slip into a technical recession in the final quarter of the year. As we moved into November, the lack of a wider regional escalation in the Israel-Hamas conflict assuaged investors' concerns substantially. Sentiment was bolstered by the easing of inflationary pressures, optimism about forthcoming rate cuts by central banks and a potential economic 'soft landing'. The year ended with a powerful two-month rally in bond and equity markets which saw credit spreads compress, driving strong portfolio returns into the close of the year.

Investment manager's report

Investment manager's report (continued)

Consequently, this also created a more challenging environment in which to add assets to the portfolio that, in our opinion, would provide attractive risk-adjusted returns. We concluded that the most attractive relative value was in both public and private ABS new issues, which offered a significant spread pick-up versus equivalently rated corporate bonds. Into the market strength we also took the opportunity to sell holdings in issuers that had tightened too far relative to their credit fundamentals.

Whilst we continue to be shown a high number of private investment opportunities, those we have found attractive reduced into the close of the year, largely on credit quality or pricing grounds. The funded private asset portion of the portfolio decreased over the period to 53.8% (versus 57.0% at 31 December 2022), largely in the second half of the year as repayments outweighed new activity. We actively monitor the portfolio for signs of distress and currently have exposure to three issuers amounting to 0.82% of the latest NAV, which are either in technical default or at some stage of a restructuring process. These positions are already marked-to-market within your Company's latest NAV. The increase in exposure since the first half of the year (0.2%) is due to two private assets (from the same issuer) having a 'Defaulted' rating assigned internally. This decision was taken following a cash flow crunch at the issuer during which the coupon payment for December was missed. M&G is working with the issuer toward a solution that should see coupon payments resume in Q2 2024, at which point our expectation would be for ratings to be reinstated. It should be noted that the position is overcollateralised and no loss on principal is expected, whilst any missed interest is expected to be capitalised and therefore remain to the portfolio's benefit. As at 31 December 2023, the average overall credit quality of the portfolio remains comfortably investment grade at BBB.

Outlook

The early part of 2024 has seen corporate bonds and equities continue to rally on expectations for rate cuts and the successful navigation of a 'soft landing'. Conversely, government bonds have sold off since the start of the year, completely reversing the significant tightening seen in the wake of December's dovish pivot. The has come amidst concerns about the pace of disinflation and the implication for the timing and depth of cuts from the Fed, which have been heightened by the release of two consecutive stronger than expected US CPI reports. This has, however, done little to dampen investor enthusiasm for risk and the technical backdrop in fixed income remains strong, with all-in bond yields still screening favourably to other asset classes. The general risk-on tone and supply/demand imbalance in corporate bond markets has resulted in a significant tightening in credit spreads. There is also a lot of capital currently invested in money market funds which looks likely to make its way into corporate bond funds once overnight interest rates reduce, providing an additional tailwind which should keep credit spreads anchored. It is in such market conditions, when corporate bond spreads are looking expensive, that our flexibility in being able to invest across a diverse range of alternative asset classes and private credit has the potential to offer an attractive return premium to public markets.

Given the positive mood music, the first few months of the year have seen a deluge of new issuance as companies look to lock in financing costs which are the lowest they have been since mid-2022. We've previously highlighted the sizeable debt maturity wall due in 2024, however this now looks less ominous with refinancing risk reduced given how far spreads have moved and indices of high-yield bonds and speculative-grade loans showing signs of growing investor confidence. This has improved the outlook for market liquidity and indicators of volatility have returned to pre-pandemic levels. Despite the loosening in financial conditions, debt burdens and refinancing schedules of issuers remain a key component of our credit analysis process. Overall,

Investment manager's report

Outlook (continued)

we see the general outlook for investment grade sterling credit as a positive one, with recent upwardly revised UK economic growth forecasts and the progress on disinflation providing an improved backdrop for corporate fundamentals.

In a year full of electoral events across the globe, both domestic and foreign politics are poised to play a central role in financial markets in 2024. In the UK, a general election is expected in the second half of the year and recent events have shown how sensitive market participants can be to surprises in fiscal policy. In the US, the outcome of November's election has the potential to cause ripples on a global scale regarding issues such as trade, climate, and defence policy. Geopolitical tensions are as heightened as they have been for decades as the Russia-Ukraine war moves into its third year, whilst the ongoing conflict between Israel and Hamas threatens to engulf the Middle East. We have already seen the impact to commercial shipping and should tensions between Palestinian backers and Israel's Western allies spill over further, the threat to global trade and oil prices could significantly impact an already precariously positioned global economy.

At current spread levels we continue to favour moving up in credit quality when investing in public markets. In addition, where opportunities permit we will look to sell existing public bond holdings, realising capital gains and reinvesting proceeds into new private investments. This rotation into higher yielding private assets with stronger structural protections would further improve the credit quality of the portfolio. Pricing in private credit markets remains competitive and we are happy to remain disciplined in adding assets into the portfolio only where we feel we are compensated appropriately for the level of risk taken. In such a well bid market, M&G's track record and scale is a competitive advantage that allows us to negotiate attractive terms and security packages with borrowers. We also have the experience and expertise to provide bespoke solutions in response to

borrower requirements, with the added complexity of such deals allowing us to attract a higher return premium. We have entered the year with the portfolio cautiously positioned, with access to a £25 million credit facility and a further £10 million invested in a AAA-rated, daily dealing ABS fund, ready to be reallocated should market volatility present us with attractive opportunities.

M&G Alternatives Investment Management Limited 27 March 2024

Top 20 holdings

	Percentage of portfolio of investmentsa
As at 31 December	2023	2022
M&G European Loan Fund	11.48	11.73
M&G Senior Asset Backed Credit Fund	4.89	–
Delamare Finance FRN 1.279% 19 Feb 2029	1.76	1.65
M&G Lion Credit Opportunity Fund IV	1.57	–
Hammond Var. Rate 28 Oct 2025	1.42	1.37
Millshaw SAMS No. 1 Var. Rate 15 Jun 2054	1.33	1.40
Atlas 2020 1 Trust Var. Rate 30 Sep 2050	1.32	1.34
Signet Excipients Var. Rate 20 Oct 2025	1.29	1.25
RIN II FRN 1.778% 10 Sep 2030	1.27	1.45
Regenter Myatt Field North Var. Rate 31 Mar 2036	1.23	1.27
Grover Group Var. Rate 30 Aug 2027	1.21	–
Gongga 5.6849% 2 Aug 2025	1.17	1.19
Income Contingent Student Loans 1 2002-2006 FRN 2.76% 24 Jul 2056	1.17	1.09
Aria International Var. Rate 23 Jun 2025	1.16	–
Citibank FRN 0.01% 25 Dec 2029	1.15	1.17
STCHB 7 A Var. Rate 25 Apr 2031	1.15	1.20
Finance for Residential Social Housing 8.569% 04 Oct 2058	1.13	1.13
Whistler Finco 1% 30 Nov 2028	1.12	–
Project Grey 1% 30 Apr 2025	1.11	–
DCC Treasury 2014 Limited 1% 21 May 2024	1.03	–
Total	38.96

Geographical exposure Percentage of portfolio of investments as at 31 December 2023 (2022)*

Source: M&G and State Street * Excluding cash on deposit and derivatives.

Credit rating breakdown

As at 31 December	2023 %	2022 %
Unrated	(0.29)	0.62
Cash and investment grade	81.48	75.90
Sub-investment grade	18.81	23.48
Total	100.00	100.00

Source: State Street

For the detailed breakdown of the credit ratings of the investment portfolio, please refer to page 101 in note 13 to the Financial Statements.

a Including cash on deposit and derivatives.

Source: State Street

Portfolio overview

As at 31 December	2023 %	2022 %
Cash on deposit	0.90	0.36
Public	45.59	42.01
Asset-backed securities	17.50	15.34
Bonds	23.20	26.67
Investment funds	4.89	–
Private	53.80	57.01
Asset-backed securities	5.08	5.22
Bonds	2.35	2.30
Investment funds	13.05	11.73
Loans	18.89	22.62
Private placements	2.28	2.14
Other	12.15	13.00
Derivatives	(0.29)	0.62
Debt derivatives	(0.33)	0.72
Forwards	0.04	(0.10)
Total	100.00	100.00

Source: State Street

Top 20 holdings % as at 31 December 2023	Company description
M&G European Loan Fund 11.48%	Open-ended fund managed by M&G which invests in leveraged loans issued by, generally, substantial private companies located in the UK and Continental Europe. The fund's objective is to create attractive levels of current income for investors while maintaining relatively low volatility of NAV. (Private)
M&G Senior Asset Backed Credit Fund 4.89%	Open-ended fund managed by M&G investing in a diversified pool of investment grade ABS. In usual market conditions, the fund will invest predominantly in senior traches of ABS, with 80% expected to be of a credit rating of at least AA– or higher. The latest average credit rating of the underlying portfolio is AAA. The daily dealing fund is used by the Investment Manager as an alternative to holding cash. (Public)
Delamare Finance FRN 1.279% 19 Feb 2029	Floating-rate, senior tranche of a CMBS secured by the sale and
1.76%	leaseback of 33 Tesco superstores and 2 distribution centres. (Public)
M&G Lion Credit Opportunity Fund IV 1.57%	Open-ended fund managed by M&G which invests primarily in high grade European ABS with on average AA risk. The fund seeks to find value in credits which offer an attractive structure or price for their risk profile. (Private)
Hammond Var. Rate 28 Oct 2025 1.42%	Secured, bilateral real estate development loan backed by a combined portfolio of 2 office assets leased to an underlying roster of global corporate tenants. (Private)
Millshaw SAMS No. 1 Var. Rate 15 Jun 2054	Floating-rate, single tranche of an RMBS backed by shared-appreciation
1.33%	mortgages. (Public)
Atlas 2020 1 Trust Var. Rate 30 Sep 2050	Floating-rate, senior tranche of a bilateral RMBS transaction backed by a
1.32%	pool of Australian equity release mortgages. (Private)
Signet Excipients Var. Rate 20 Oct 2025	Fixed-rate loan secured against 2 large commercial premises in London,
1.29%	currently leased to 2 FTSE listed UK corporations. (Public)
RIN II FRN 1.778% 10 Sep 2030	Mixed CLO (AAA). Consists primarily of senior secured infrastructure
1.27%	finance loans managed by RREEF America L.L.C. (Public)
Regenter Myatt Field North Var. Rate 31 Mar 2036 1.23%	PFI (Private Finance Initiative) floating-rate, amortising term loan relating to the already completed refurbishment and ongoing maintenance of residential dwellings and communal infrastructure in the London borough of Lambeth. (Private)
Grover Group Var. Rate 30 Aug 2027	Floating-rate, senior tranche of a securitisation of receivables originated
1.21%	by a leading European technology subscription platform. (Private)
Gongga 5.6849% 2 Aug 2025	Structured Credit trade by Standard Chartered referencing a US\$2bn
1.17%	portfolio of loans to companies domiciled in 36 countries. (Private)
Income Contingent Student Loans 1 2002-2006 FRN	Floating-rate, mezzanine tranche of a portfolio comprised of income
2.76% 24 Jul 2056	contingent repayment student loans originally advanced by the UK
1.17%	Secretary of State for Education. (Public)
Aria International Var. Rate 23 Jun 2025	Floating-rate, senior tranche of a securitisation of invoice receivables
1.16%	originated by a specialist digital recruitment platform. (Private)
Citibank FRN 0.01% 25 Dec 2029 1.15%	Floating-rate, mezzanine tranche of a regulatory capital transaction backed by a portfolio of loans to large global corporates, predominantly in North America. (Private)

Top 20 holdings % as at 31 December 2023	Company description
STCHB 7 A Var. Rate 25 Apr 2031 1.15%	Floating-rate, mezzanine tranche in a regulated capital securitisation where the portfolio consists of 36 loans, secured on the undrawn Limited Partner (LP) investor capital commitments. (Private)
Finance for Residential Social Housing 8.569% 04 Oct 2058 1.13%	High grade (AA/Aa3), fixed-rate bond backed by cash flows from housing association loans. (Public)
Whistler Finco 1% 30 Nov 2028 1.12%	Floating-rate, senior secured term loan lending to an outdoor media infrastructure owner which invests and manages a large billboard portfolio in the UK, Netherlands, Spain, Ireland and Germany. (Private)
Project Grey 1% 30 Apr 2025 1.11%	Floating-rate, senior secured position in a bilateral real estate loan to fund the acquisition and refurbishment of an office block in the London CBD. (Private)
DCC Treasury 2014 Limited 1% 21 May 2024 1.03%	Fixed coupon, private placement note. DCC is Ireland's largest publicly traded business support services company. It operates across four divisions: LPG, Retail & Oil, Technology and Healthcare, in 20 countries. (Private)

The Directors present the Strategic Review Report of the Company for the year ended 31 December 2023. The Strategic Report aims to provide Shareholders with the information to assess how the Directors have performed their duty to promote the success of the Company during the year under review.

Business and status of the Company

The Company was incorporated on 17 July 2018 and the IPO of the Company's shares took place on 14 November 2018.

The Company is registered in England and Wales as a public limited company and is an investment company within the terms of Section 833 of the Companies Act 2006. The principal activity of the Company is to carry on business as an investment trust.

The Company has been approved by HM Revenue & Customs as an authorised investment trust under Sections 1158 and 1159 of the Corporation Tax Act 2010. In the opinion of the Directors, the Company is directing its affairs so as to enable it to continue to qualify for such approval.

The Company's shares have a listing on the premium segment of the Official List of the FCA and trade on the London Stock Exchange's (LSE) main market for listed securities.

Investment objective

The Company aims to generate a regular and attractive level of income with low asset value volatility.

Investment policy

The Company seeks to achieve its investment objective by investing in a diversified portfolio of public and private debt and debt-like instruments ('Debt Instruments'). Over the longer term, it is expected that the Company will be mainly invested in private Debt Instruments, which are those instruments not quoted on a stock exchange.

The Company operates an unconstrained investment approach and investments may include, but are not limited to:

• Asset-backed securities, backed by a pool of loans secured on, amongst other things, residential and commercial mortgages, credit card receivables, auto loans, student loans, commercial loans and corporate loans;
• Commercial mortgages;
• Direct lending to small and mid-sized companies, including lease finance and receivables financing;
• Distressed debt opportunities to companies going through a balance sheet restructuring;
• Infrastructure-related debt assets;
• Leveraged loans to private equity owned companies;
• Public Debt Instruments issued by a corporate or sovereign entity which may be liquid or illiquid;
• Private placement debt securities issued by both public and private organisations; and
• Structured credit, including bank regulatory capital trades.

The Company invests primarily in Sterling denominated Debt Instruments. Where the Company invests in assets not denominated in Sterling, it is generally the case that these assets are hedged back to Sterling.

Investment policy (continued)

Investment restrictions

There are no restrictions, either maximum or minimum, on the Company's exposure to sectors, asset classes or geography. The Company, however, achieves diversification and a spread of risk by adhering to the limits and restrictions set out below.

The Company's portfolio comprises a minimum of 50 investments.

The Company may invest up to 30% of Gross Assets in below investment grade Debt Instruments, which are those instruments rated below BBB- by S&P or Fitch or Baa3 by Moody's or, in the case of unrated Debt Instruments, which have an internal M&G rating below BBB-.

The following restrictions will also apply at the individual Debt Instrument level which, for the avoidance of doubt, does not apply to investments to which the Company is exposed through collective investment vehicles:

Rating	Secured Debt Instruments (% of Gross Assets)a	Unsecured Debt Instruments (% of Gross Assets)
AAA	5%	5%b
AA/A	4%	3%
BBB	3%	2%
Below investment grade	2%	1%

a Secured Debt Instruments are secured by a first or secondary fixed and/or floating charge.

b This limit excludes investments in G7 Sovereign Instruments.

For the purposes of the above investment restrictions, the credit rating of a Debt Instrument is taken to be the rating assigned by S&P, Fitch or Moody's or, in the case of unrated Debt Instruments, an internal rating by M&G. In the case of split ratings by recognised rating agencies, the second highest rating will be used.

The Company typically invests directly, but it also invests indirectly through collective investment vehicles which are managed by an M&G Entity. The Company may not invest more than 20% of Gross Assets in any one collective investment vehicle and not more than 40% of

Gross Assets in collective investment vehicles in aggregate. No more than 10% of Gross Assets may be invested in other investment companies which are listed on the Official List.

Unless otherwise stated, the above investment restrictions are to be applied at the time of investment.

Borrowings

The Company is managed primarily on an ungeared basis although the Company may, from time to time, be geared tactically through the use of borrowings.

Borrowings will principally be used for investment purposes, but may also be used to manage the Company's working capital requirements or to fund market purchases of shares. Gearing represented by borrowing will not exceed 30% of the Company's Net Asset Value, calculated at the time of draw down, but is typically not expected to exceed 20% of the Company's Net Asset Value.

Hedging and derivatives

The Company will not employ derivatives for investment purposes. Derivatives may however be used for efficient portfolio management, including for currency hedging.

Cash management

The Company may hold cash on deposit and may invest in cash equivalent investments, which may include shortterm investments in money market-type funds ('Cash and Cash Equivalents').

There is no restriction on the amount of Cash and Cash Equivalents that the Company may hold and there may be times when it is appropriate for the Company to have a significant Cash and Cash Equivalents position. For the avoidance of doubt, the restrictions set out above in relation to investing in collective investment vehicles do not apply to money market-type funds.

Changes to the investment policy

Any material change to the Company's investment policy set out above will require the approval of Shareholders by way of an ordinary resolution at a general meeting and the approval of the Financial Conduct Authority (FCA).

Investment strategy

The Company seeks to achieve its investment objective by investing in a diversified portfolio of public and private debt and debt-like instruments of which at least 70% is investment grade. The Company is mainly invested in private debt instruments. This part of the portfolio generally includes debt instruments which are nominally quoted but are generally illiquid. Most of these will be floating rate instruments, purchased at inception and with the intention to be held to maturity or until prepaid by issuers; Shareholders can expect their returns from these instruments to come primarily from the interest paid by the issuers.

The remainder of the Company's portfolio is invested in cash, cash equivalents and quoted debt instruments, which are more readily available and which can generally be sold at market prices when suitable opportunities arise. These instruments may also be traded to take advantage of market conditions. Fixed rate instruments will often be hedged in order to protect the portfolio from adverse changes in interest rates. Shareholders can expect their returns from this part of the portfolio to come from a combination of interest income and capital movements.

Investment process

The investment process for the Company consists principally of three stages: the decision to invest, monitoring and ongoing engagement and finally divestment.

Investment decision-making is undertaken by the Investment Manager, based on extensive research and credit analysis by the Investment Manager's large and experienced teams of 130 in-house analysts who specialise in public and private debt markets. This rigorous in depth analysis is fundamental to understanding the risk and return profile of potential investments.

Regular monitoring is carried out to ensure that continued holding of an investment remains appropriate. This includes monitoring the performance of investments by fund managers, analysts and internal control and governance processes. The Investment Manager engages with relevant stakeholders on any issues which may, potentially, affect an investment's ability to deliver sustainable performance in line with those expectations.

At some point, the Investment Manager may decide to divest from an investment (or the investment may complete in line with agreed terms, including prepayment), although typically, private investments are held to their full maturity. Divestment can occur for a variety of reasons including; the investment being no longer suitable for the investment mandate, the outcome of engagement being unsatisfactory or as a result of the investment team's valuation assessment. Investment decision making is only undertaken by the portfolio managers designated by the Investment Manager.

As part of the investment process, full consideration is given to sustainability risks, as set out in more detail on pages 34 to 35.

Investment process overview

Key performance indicators

In order to measure the success of the Company in meeting its objectives and policy, and to evaluate the performance of the Investment Manager, the Directors take into account the following key performance indicators (KPIs):

	As at or year ended 31 December 2023	As at or year ended 31 December 2022
NAV per share	96.21p	94.99p
Ordinary Share price (mid-market)	92.2p	92.1p
Discount to NAVa	4.2%	3.0%
Annualised dividend yielda	8.6%	5.8%
Dividends declared per Ordinary Share	7.96p	5.35p
Revenue return per Ordinary Share	6.0p	4.2p
NAV total returna	10.4%	(1.7)%
Share price total returna	9.5%	(2.8)%
Ongoing charges figurea	1.28%	1.22%

a Alternative performance measure. Please see pages 113 to 114 for further information.

Share price discount or premium to NAV

The share price discount to NAV as at 31 December 2023 was 4.2% (31 December 2022: 3.0%). During the year to 31 December 2023 the shares traded at an average discount to NAV of 2.5% (2022: 1.6%).

Dividend yield

The Company paid dividends during the year on a quarterly basis. The fourth dividend of 2.43p per Ordinary Share in respect of the period ended 31 December 2022 was paid on 24 February 2023.

The first interim dividend in respect of the year ended 31 December 2023 of 1.77p per Ordinary Share was paid on 26 May 2023. The second interim dividend of 1.93p

per Ordinary Share was paid on 25 August 2023 and the third interim dividend of 2.12p per Ordinary Share was paid on 24 November 2023.

The fourth dividend of 2.14p per Ordinary Share was paid on 23 February 2024. The total dividends declared per share for the year ended 31 December 2023 were 7.96p (year ended 31 December 2022: 5.35p). The total dividends declared for the financial year represented a dividend yield of SONIA plus 4% on the adjusted opening NAV. The annualised dividend yield for the year was 8.6%, based on the closing share price on 31 December 2023 (2022: 5.8%).

Portfolio performance

In support of the Company's investment objective, the Board monitors the portfolio performance against the benchmark of a NAV total return of SONIA plus 4% per annum. In addition, performance is assessed against a number of total return indices in public investment grade and high yield markets.

In addition, progress of deployment of funds into private assets is monitored alongside the balance of fixed to floating rate coupons, yield to maturity and modified duration of the portfolio. Further details are provided in the Chairman's statement on pages 5 to 6 and Investment Manager's report on pages 7 to 9.

Ongoing charges

The Board reviews the costs of running the Company calculated using the Association of Investment Companies' (AIC) methodology for the ongoing charges. Full details are provided on page 113.

Risk management

Role of the Board

The Directors have overall responsibility for risk management and internal control within the Company. They recognise that risk is inherent in the Company's operation and that effective risk management is an important element in the success of the organisation. The Directors have delegated responsibility for the assurance of the risk management process and the review of mitigating controls to the Audit Committee.

The Directors, when setting the risk management strategy, also determine the nature and extent of the significant risks and their risk appetite in implementing this strategy.

In arriving at its judgement of what risks the Company faces, the Board has considered the Company's operations in light of the following factors:

• the nature and extent of risks it regards as acceptable for the Company to bear in line with its overall business objective;
• the threat of such risks becoming reality;
• the Company's ability to reduce the incidence and impact of risk on its performance;
• the cost to the Company and benefits related to the review of risk and associated controls of the Company; and
• the extent to which the third-party service providers operate the relevant controls.

Principal risks

The Company is exposed to a variety of risks that could cause the valuation of its assets and/or the income from the investment portfolio to fluctuate. The Board, through delegation to the Audit Committee, has undertaken a robust assessment and review of the principal and emerging risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity.

These risks are formally documented in the Company's risk register, so that the risks identified and the controls in place to mitigate those risks can be monitored. The Audit Committee reviews and discusses potential new and emerging risks to the Company including those identified by the Investment Manager. Any new or emerging risks that are identified and that are considered to be of significance are also included in the Company's risk register together with any mitigating actions required.

The Board will continue to assess these risks on an ongoing basis. In relation to the UK Corporate Governance Code (the UK Code), the Board is confident that the procedures that the Company has put in place are sufficient to ensure that the necessary monitoring of risks and controls has been carried out throughout the reporting period.

The key risks identified by the Board, and the associated key mitigants and controls, are set out on the next page.

Risk management (continued)

Market risk

Market risk embodies the potential for both losses and gains and includes foreign currency risk, interest rate risk and market price risk. Market risk mainly arises from uncertainty about future values of financial instruments influenced by price, currency and interest rate movements. It represents the potential gain or loss that the Company may suffer through holding market positions in investments in the face of market movements.

Market risk includes the potential impact of events that are outside the Company's control.

Foreign currency risk

Foreign currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to risks that the exchange rate of its reporting currency relative to other currencies may change in a manner that has an effect on the value of the portion of the Company's assets which are denominated in currencies other than its own reporting currency.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's investments are in some cases subject to interest rate risk. In relation to fixed-rate obligations, when interest rates decline, the values can be expected to rise, and, conversely, when interest rates rise, the value of fixed-rate obligations can be expected to decline.

Market price risk

Market price risk includes changes in market prices, other than those arising from foreign currency or interest rate risk, which may affect the value of investments, such as macroeconomic and geopolitical events and trends, and sectoral influences.

As the Company invests in public and private debt instruments, it is regularly exposed to market price risk and the value of the Company's portfolio fluctuates in response to developments in financial markets.

Key Risk Key Mitigants and Controls

Key mitigants and controls are set out in the sub-headings below.

The Company fully hedges non-base currency investments at time of purchase using spot and forward foreign exchange contracts which are rolled forward periodically. Non-base currency exposure is monitored on an ongoing basis via internal systems, with hedging maintained at approximately +/-20bps tolerance.

The Company uses gilt futures contracts to mitigate interest rate risk with portfolio duration monitored on an ongoing basis via internal systems and adjusted accordingly. Market conditions since launch have seen the Company maintain an average modified duration of 1-1.5 years. There are no restrictions regarding the level of duration the Company can maintain however its Investment Objective outlines commitment to low asset value volatility.

The Board has put in place limits on the Company's gearing, portfolio concentration and use of derivatives, which it believes to be appropriate to keep the Company's investment portfolio adequately diversified and to manage risk.

Risk management (continued)

Credit risk

Because of its investment strategy, the Company is also materially exposed to credit risk, which is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The main concentration to which the Company is exposed arises from the Company's investments in Debt Instruments.

The Company is also exposed to counterparty credit risk on trading derivative products, Cash and Cash Equivalents, amounts due from brokers and other receivable balances.

Key Risk (continued) Key Mitigants and Controls (continued)

The Company's policy to manage this risk is to invest no more than 30% of the Company's assets in Debt Instruments that have a minimum credit rating below BBB- (or equivalent). Within the above limit, the Company may also invest in unrated assets where a rating is assigned by the Investment Manager using an internal methodology that is based on the categorisations used by rating agencies. When new investment opportunities arise, a detailed credit review is undertaken by the Investment Manager. A fundamental qualitative and quantitative assessment of both business and financial risk, supported by appropriate financial modelling, alongside a review of the corporate structure and issuance document form the basis of the credit review. On an ongoing basis, the Investment Manager monitors the Company's investments against a variety of measures including financial performance and their progress against a variety of covenants.

The Company only transacts with parties that the Investment Manager considers to be suitable from a credit risk perspective.

Investment management performance risk

Other than in respect of market risk, the performance of the Company's portfolio of assets depends primarily on the investment strategy, asset allocation and stock selection decisions taken by the Investment Manager within the parameters and constraints imposed by the Company's investment policy.

The Investment Manager applies a 'three lines of defence' model for risk management, incorporating the individual fund manager and line management; independent risk and compliance functions and reporting structures; and internal audit. Measures and tools such as volatility estimation, value at risk analysis and stress testing are used in order to better understand risk concentrations within the portfolio.

The Board receives Investment Manager commentary, performance statistics against the benchmark and a portfolio analysis report on a monthly basis. The key performance indicators used by the Board to evaluate the performance of the Investment Manager are shown on page 17. The Board regularly reviews the implementation of the investment strategy, adherence to investment process and adequacy of risk controls.

Risk management (continued)

Liquidity risk

The Company invests in public and private debt instruments. Some of these investments may be difficult to value or realise (if at all). The market price that is achievable for such investments may ultimately therefore be different than the carrying values of these assets as reflected in the Company's reported NAV per Ordinary Share from time to time.

Key Risk (continued) Key Mitigants and Controls (continued)

As the Company is closed-ended, it is not exposed to the same risks of liquidity mismatch that are inherent in the management of portfolios owned by open-ended funds. This enables the Company to invest in assets that have limited or no secondary market liquidity in order to seek to capture the additional yield that is generally available compared to more liquid instruments.

Before the Company's AGM in 2028, the Board will submit to Shareholders proposals to enable them to realise the value of their Ordinary Shares. The Board monitors the liquidity profile of the Company's assets on a quarterly basis through the receipt of an asset liquidity analysis from the Investment Manager.

Dividend policy risk

The level of dividends that the Board will declare will be dependent largely on the performance of the Company's investment portfolio over time and the market conditions that exist during relevant performance periods. Apart from asset selection and market conditions, factors that may also affect performance include, inter alia, the Company's level of gearing, its accounting policies, changes in variable interest rates, the level of loan or bond prepayments and a change in the tax treatment of the interest received by the Company.

The Investment Manager runs a dividend projection model that is regularly reviewed by the Board.

Risk management (continued)

Operational risk (including cybersecurity risk)

In common with most other investment trusts, the Company has no executive directors, no executive management and no employees. The Company delegates key operational tasks to third-party service providers that are specialists in their fields as follows:

• Management of the Company's investment portfolio to M&G Alternatives Investment Management Limited
• Preparation and maintenance of the Company's Financial Statements and maintenance of its records to State Street Bank and Trust Company
• Company Secretarial Services to Link Company Matters Limited
• Registrar services to Link Group
• Worldwide custody of the Company's assets to State Street Bank and Trust Company
• Safekeeping and depositary services to State Street Trustees Limited

Failure by any service provider to carry out its obligations to the Company in accordance with the terms of its appointment could have a materially detrimental impact on the operation of the Company or administration of its investments. The termination of the Company's relationship with any third-party service provider or any delay in appointing a replacement for such service provider could disrupt the business of the Company materially and could have a material adverse effect on the Company's performance.

Key Risk (continued) Key Mitigants and Controls (continued)

Due diligence is undertaken before contracts are entered into with third-party service providers. Thereafter, service provider oversight is conducted through ongoing interaction with the Management Engagement and Audit Committees and is formalised through an annual evaluation process, which includes a review of service provider cybersecurity protocols and experience.

Most third party service providers produce internal control reports to provide assurance regarding the effective operation of internal controls as reported on by their reporting accountants. These reports are provided to the Audit Committee for review by the Investment Manager's Supplier Management Team. The Committee would seek further representations from the service providers if not satisfied with the effectiveness of their control environment.

The Management Engagement and Audit Committees also consider the business continuity arrangements of the Company's key service providers and review these as part of the review of the Company's risk register.

Risk management (continued)

Regulatory, legal and statutory risk: changes in laws, government policy or regulations

The Company is subject to laws, government policy and regulations enacted by national and local governments. Any change in the law, regulation or government policy affecting the Company may have a material adverse effect on the value of its investments, its ability to carry on its business and successfully pursue its investment policy and on its earnings and returns to Shareholders.

In particular, the Company is required to comply with certain requirements that are applicable to listed closed- ended investment companies, including Section 1158 of the Corporation Tax Act 2010. Any failure to comply may potentially result in a loss of investment trust company status.

The Company must comply with the Listing Rules, Prospectus Rules, the Disclosure Guidance and Transparency Rules, the Market Abuse Regulation (MAR) and the rules of the London Stock Exchange. Any failure to comply with any future changes to such rules and regulations may result in the shares being suspended from trading on the London Stock Exchange.

MAR can be defined as Regulation (EU) No 596/2014 of the European Parliament on market abuse, as incorporated by UK law by the European Union (Withdrawal) Act 2018 and as amended by the Market Abuse (Amendment) (EU Exit) Regulations 2019, otherwise known as the Market Abuse Regulation, or 'MAR'. It requires the Board of the Company to adopt certain processes to ensure that, inter alia, price sensitive information must be, subject to certain exemptions, promptly disclosed to the public via a regulatory news service in order to ensure an orderly market in the Company's shares.

Sustainability risk

Sustainability risk means exposure to an environmental, social or governance ('ESG') event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of an investment.

Key Risk (continued) Key Mitigants and Controls (continued)

The Company mitigates any such failure by delegating key operational tasks to specialist third-party service providers combined with close oversight and monitoring through the Audit Committee.

The Investment Manager monitors investment movements, forecast income and expenditure and the amount of proposed dividends to ensure that the provisions of Chapter 4 of Part 24 of the Corporation Tax Act 2010 are not breached. The results are reported to the Board at each meeting.

Compliance with the accounting rules affecting investment trusts is also carefully and regularly monitored.

The Company Secretary, Investment Manager and the Company's professional advisers provide regular reports to the Board in respect of compliance with all applicable rules and regulations. The Board and the Investment Manager also monitor changes in government policy and legislation which may have an impact on the Company.

The risk to the Company of failure to comply with MAR is mitigated by close Board oversight and monitoring through the compliance function and controls monitoring team at the Investment Manager.

Please refer to the 'Sustainability risk and investment process' section on pages 34 to 35 for further details.

Viability statement

As set out in the Chairman's Statement, the Articles were amended at the meeting on 15 June 2023. The next Liquidity Opportunity will now occur at, or within the twelve months prior to, the 2028 annual general meeting unless shareholders direct by way of a special resolution not to offer such Liquidity Opportunity.

The Directors remain confident in the Company's ability to achieve its investment objective. On this basis and notwithstanding the value realisation opportunity in 2028, the Directors have elected to review the viability of the Company for a five-year period. This is linked to the weighted average life of the Debt Instruments in the Company's portfolio.

In assessing the viability of the Company over this five-year period, the Directors have considered the current position of the Company and a number of factors. Most importantly, they have weighed the characteristics of a closed-ended fund and the investment policy of the Company against the principal risks the Company faces as set out in this Strategic Report. The Directors have evaluated scenarios of current and possible future circumstances and the prospects for the Company's portfolio. The Directors regularly review the inputs such as expense and dividend forecasts, the ongoing charges, use of the revolving credit facility and investor feedback. The Company entered into a £25 million Facility Agreement with State Street Bank International GmbH, expiring on 14 October 2024. It is anticipated that the Company will renew the credit facility when it expires.

The results of dividend forecasting prepared by the Investment Manager, which models the dividend cover with no further investment pipeline or portfolio capital gains, demonstrated that the Company had the ability to continue to pay dividends from income and distributable reserves at the rate of SONIA plus 4% over the period under review. The Company's distributable reserves provide sufficient capacity for dividend cover, when required, which gives additional comfort for future periods.

The results of the liquidity profile stress testing prepared by the Investment Manager, which models the time taken to liquidate the portfolio, demonstrated no material concerns on the ability to liquidate the portfolio.

The Directors have assumed that neither the closedended structure of the Company, its investment policy nor the risks it faces are likely to change substantially, or for the worse with respect to the viability of the Company, over the five-year period they have selected for the purposes of this viability statement. The Directors have also assumed that the Company will continue to maintain a sufficient level of liquidity and to generate substantial income for the foreseeable future in order to meet its liabilities. As the Directors are ultimately responsible for ensuring that the investment policy of the Company is followed by the Investment Manager, they are confident in making these assumptions about the future of the Company.

The Company is an investment trust, not a trading company, and it invests in a diversified portfolio. As a closed-ended fund, it is not subject to redemptions by Shareholders other than, potentially, the 2028 Liquidity Opportunity.

The Company's portfolio also generates substantial levels of income to meet its expenses, which are largely fixed overheads that represent a small percentage of its net assets. Based on their assessment of the nature of the Company, its investment policy and financial resources, the Directors have a reasonable expectation that the Company will be able to continue in operation and to meet its liabilities as they fall due over the next five years.

Going concern statement

The activities of the Company, together with the factors likely to affect its future development, including its performance, financial position, cash flows and liquidity position, are described in the Strategic Report.

In addition, the Company's policies and processes for managing its key financial risks are described in note 13 on pages 96 to 102.

Going concern statement (continued)

As at 31 December 2023, the Company's total assets less current liabilities were £135.29 million (31 December 2022: £135.11 million) and total current assets less current liabilities were £1.9 million (31 December 2022: £(2.5) million). The Directors have reviewed the financial projections of the Company from the date of this report, which shows that the Company will be able to generate sufficient cash flows in order to meet its liabilities as they fall due.

The Directors have reviewed the operational resilience of the key service providers. The Management Engagement Committee considers the business continuity arrangements of the Company's key service providers at least annually.

The Directors have considered the liquidity profile stress testing which is described in the Viability Statement on page 24.

As a consequence, the Directors believe that the Company continues to be well placed to manage its business risks successfully. In assessing the going concern basis of accounting, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and for a period of 12 months from the date of the approval of this Annual Report. The outlook section of the Chairman's statement on page 6 details the expectations for 2024. Accordingly, the Directors continue to adopt the going concern basis in preparing this Annual Report and Accounts.

Investment management and third-party service provider arrangements

The Board has overall responsibility for the Company's activities, including the review of investment activity and performance and the control and supervision of all suppliers of services to the Company, including the Investment Manager. It is also responsible for the determination of the Company's investment policy and

strategy and the Company's system of internal and financial controls, including ensuring that commercial risks and financing needs are properly considered and that the obligations of a public limited company are adhered to.

To assist the Board in the operations of the Company, arrangements have been put in place to delegate authority for the performance of day-to-day operations of the Company to the Investment Manager and other third-party service providers. The Board has appointed the Investment Manager to manage the Company's investment portfolio within guidelines set by the Board.

The Investment Manager is in frequent contact with the Board and supplies the Directors with regular updates on the Company's activities and detailed reports at each Board meeting.

Investment Manager

The Company has appointed M&G Alternatives Investment Management Limited (the 'Investment Manager') to act as the Company's Alternative Investment Fund Manager (AIFM) for the purposes of the AIFM Directive and, accordingly, the Investment Manager is responsible for providing discretionary portfolio management and risk management services to the Company.

The Investment Management Agreement dated 26 September 2018 is subject to termination on not less than six months' written notice by either party. The Investment Management Agreement can be terminated at any time in the event of the insolvency of the Company or the Investment Manager or in the event that the Investment Manager ceases to be authorised and regulated by the FCA (if required to be so authorised and regulated to continue to carry out its duties under the Investment Management Agreement).

The Investment Manager is entitled to receive from the Company an investment management fee, which is calculated and paid quarterly in arrears at an annual rate of 0.7% per annum of the prevailing published NAV.

Where the Company invests in a collective investment vehicle that is managed or advised by an M&G entity, the Investment Manager reduces its investment

Investment management and third-party service provider arrangements (continued)

management fee by the amount of any equivalent management fee that is charged to such collective investment vehicle or such entity rebates its management fee such that the Investment Manager ensures the Company is not charged twice. The above arrangement does not apply to any other fees or expenses charged to the Company or any such entity in which it invests.

The Investment Manager is also entitled to be paid half of any arrangement fee charged by the Company to the issuer of a Debt Instrument in which the Company invests. The balance of any arrangement fee is retained by the Company.

Continuing appointment of Investment Manager

As at the date of this Report, the Directors are of the opinion that the Investment Manager has satisfactorily executed the Company's investment strategy according to the Board's expectations. Accordingly, the Directors believe that the continuing appointment of M&G Alternatives Investment Management Limited as the Investment Manager of the Company, on the terms agreed, is in the best interests of the Company and its Shareholders as a whole.

Administrator

Under an Administration Agreement dated 26 September 2018, the Company has appointed State Street Bank and Trust Company to act as administrator. The administrator provides day-to-day administration of the Company and is also responsible for the Company's general administrative functions, including the calculation and publication of the NAV and maintenance of the Company's accounting and statutory records.

The Administration Agreement is terminable, inter alia, upon not less than six months' written notice. The Administration Agreement is also terminable immediately upon the occurrence of certain standard

events, including the insolvency of the Company or the Administrator or a party committing a material breach of the Administration Agreement (where such breach has not been remedied within 30 calendar days of written notice being given).

Depositary

Under a Depositary Agreement dated 26 September 2018, the Company has also appointed State Street Trustees Limited as depositary to provide depositary services to the Company, which will include safekeeping of the assets of the Company. The Depositary is permitted to delegate (and authorise its delegates to sub-delegate) the safekeeping of the assets of the Company.

The Administrator and Depositary are entitled to a combined fee (the 'State Street Fee'). The State Street Fee shall be up to 0.10% of the NAV per annum. The fee is subject to a minimum rate, whereby if the NAV is less than £250 million, the fee will be calculated as if the NAV were £250 million. The State Street Fee is calculated monthly and payable monthly in arrears.

Custodian

The Depositary has delegated safekeeping duties as set out in the AIFM Directive and the FCA Handbook to State Street Bank & Trust Company, whom it has appointed as global sub-custodian. The fees for this are included in the State Street Fee.

Registrar

The Company entered into a Registrar Agreement dated 26 September 2018 with Link Group to provide registrar services in relation to the transfer and settlement of shares.

In April 2021 the Company entered into a new Registrar Agreement with Link Group. Effective from 1 May 2021, under the terms of the agreement a fixed annual fee of £13,000 (exclusive of VAT) will be payable. The Registrar Agreement is for a period of three years until 30 April 2024 when the fee will increase in line with the Retail Prices Index (RPI).

Investment management and third-party service provider arrangements (continued)

Company Secretary

The Company entered into a Company Secretarial Services Agreement dated 26 September 2018 appointing Link Company Matters Limited ('Company Matters') as Company Secretary to provide the company secretarial functions required by the Companies Act.

Following the initial period of 12 months the Company Secretarial Agreement automatically renewed, and continues to renew, for successive periods of 12 months unless or until terminated by either party at the end of any successive 12-month period, provided written notice is given to the other party at least six months prior to the end of such successive 12-month period.

Pursuant to the terms of the Company Secretarial Services Agreement, Company Matters have applied an annual inflationary increase at the rate of the Retail Prices Index prevailing at the time. With effect from 1 June 2023, the aggregate fee payable to Company Matters was £74,867 (exclusive of VAT).

Section 172 Statement: promoting the success of the Company

Overview

The Directors' overarching duty is to act in good faith and in a way that is the most likely to promote the success of the Company as set out in Section 172 of the Companies Act 2006. In doing so, Directors must take into consideration the interests of the various stakeholders of the Company and the impact the Company has on the community and the environment; take a long-term view on consequences of the decisions they make; and aim to maintain a reputation for high standards of business conduct and fair treatment between the members of the Company.

Fulfilling this duty naturally supports the Company in achieving its investment objective and helps to ensure that all decisions are made in a responsible and sustainable way. In accordance with the requirements of the Companies (Miscellaneous Reporting) Regulations 2018, the Company explains how the Directors have discharged their duty under Section 172 below.

To ensure that the Directors are aware of and understand their duties, they are provided with the relevant information as part of their induction, as well as receiving regular and ongoing updates and training on the relevant matters. They also have continued access to the advice and services of the Company Secretary and, when deemed necessary, the Directors can seek independent professional advice.

The schedule of Matters Reserved for the Board, as well as the Terms of Reference of its committees are reviewed on at least an annual basis and further describe the Directors' responsibilities and obligations, and include any statutory and regulatory duties. The Audit Committee has the responsibility for the ongoing review of the Company's risk management systems and internal controls and, to the extent that they are applicable, risks related to the matters set out in Section 172 are included in the Company's risk register and are subject to periodic and regular reviews and monitoring.

Decision-making

The Board considers the impact that any material decision will have on all relevant stakeholders to ensure that it is making a decision that promotes the long-term success of the Company, whether this be in relation to dividends, new investment opportunities, potential future fundraisings etc.

Stakeholders

The Board seeks to understand the needs and priorities of the Company's stakeholders and these are taken into account during all of its discussions and as part of its decision-making. The Board has considered which parties should be deemed to be stakeholders of the Company. As the Company is an externally managed investment company and does not have any employees or customers, its key stakeholders comprise its Shareholders, regulators (including service party regulators) and service providers. The section on the following page discusses why these stakeholders are considered of importance to the Company and the actions taken to ensure that their interests are taken into account.

Section 172 Statement: promoting the success of the Company (continued)

Importance Board engagement

Shareholders Continued Shareholder support and engagement are critical to the continued existence of the Company and the

successful delivery of its long-term strategy.

The Company provides a Liquidity Opportunity* for Shareholders, which will now occur at, or within the twelve months prior to, the 2028 annual general meeting. In all circumstances, the Board will seek to balance the interests of both continuing Shareholders and those electing to realise their investment.

* See the Glossary on page 117 for further explanation.

The Company has over 195 Shareholders on the Register of Members, including institutional and private individuals. The Board is committed to maintaining open channels of communication and to engage with Shareholders in a manner they find most meaningful in order to gain an understanding of their views. These include the channels below.

AGM: The Company welcomes and encourages attendance and participation from Shareholders at its AGMs and when possible, Shareholders will have the opportunity to meet the Directors and the Investment Manager and to address questions to them directly. The Company values any feedback and questions it may receive from Shareholders ahead of and during the AGM and will take action or make changes, when and as appropriate.

Publications: the Annual Report and Half Year Report are made available on the Company's website and the Annual Report is circulated to Shareholders. This information is supplemented by the monthly calculation and publication of the NAV per share which is announced via the regulatory news service of the London Stock Exchange. In addition, a monthly factsheet and/or a quarterly newsletter is published by the Investment Manager on the Company's website. Feedback and/or questions that the Company receives from Shareholders help the Company evolve its reporting, aiming to render the reports and updates transparent and understandable.

Shareholder meetings: unlike trading companies, one-to-one Shareholder meetings usually take the form of a meeting with the Investment Manager rather than members of the Board. Feedback from all substantive meetings between the Investment Manager and Shareholders is shared with the Board. During the year there were nine meetings with Shareholders. The Chairman, the Chairman of the Audit Committee or other members of the Board are available to meet with Shareholders to understand their views on governance and the Company's performance where they wish to do so.

Section 172 Statement: promoting the success of the Company (continued)

Importance (continued)	Board engagement (continued)
	Shareholder concerns: in the event that Shareholders wish to raise issues or concerns with the Board, they are welcome to do so at any time by writing to the Chairman at the registered office. The Senior Independent Director is also available as an intermediary to Shareholders.
	Investor relations updates: at every Board meeting, the Directors receive updates from the Company's broker on the share trading activity, share price performance and any Shareholders' feedback, as well as an update from the Investment Manager.
Other stakeholders

The Investment Manager

Holding the Company's shares offers investors a publicly traded investment vehicle through which they can obtain exposure to the Company's diversified portfolio. The Investment Manager's performance is critical for the Company to successfully deliver its investment strategy and meet its objective.

Maintaining a close and constructive working relationship with the Investment Manager is crucial, as the Board and the Investment Manager both aim to continue to achieve consistent, long-term returns in line with the Company's investment objective. Important components in the collaboration with the Investment Manager, representative of the Company's culture include those listed below.

• Encouraging open, honest and collaborative discussions at all levels, allowing time and space for original and innovative thinking
• Ensuring that the impact on the Investment Manager is fully considered and understood before any business decision is made
• Ensuring that any potential conflicts of interest are avoided or managed effectively

The Board holds detailed and intensive discussions with the Investment Manager on all key strategic and operational topics on an ongoing basis. In addition to a monthly call their interactions have addressed a range of topics including the dividend and zero discount policy, valuation methodology and credit risk against a background of heightened economic and geopolitical risk during the year. Beyond this, there are regular discussions by email and calls on various operational matters.

Section 172 Statement: promoting the success of the Company (continued)

Importance (continued)	Board engagement (continued)
The Administrator, the Company Secretary, the Registrar, the Depositary, the Custodian and the Broker In order to function as an investment trust with a listing on the premium segment of the official list of the FCA and trade on the London Stock Exchange's (LSE) main market for listed securities, the Company relies on a diverse range of reputable advisors for support in meeting all relevant obligations.	The Board maintains regular contact with its key external providers and receives regular reporting from them through the Board and committee meetings, as well as outside of the regular meeting cycle. Their advice, as well as their needs and views are routinely taken into account. The Management Engagement Committee formally assesses their performance, fees and continuing appointment at least annually to ensure that the key service providers continue to function at an acceptable level and are appropriately remunerated to deliver the expected level of service. The Audit Committee reviews and evaluates the control environments in place at each service provider and assesses the effectiveness through review of the annual assurance reports from each organisation. This reporting is supplemented by the view of the Investment Manager's Supplier Management Team regarding the control environments in operation at the providers.
	Interactions take place at least monthly including the approval of the NAV, review of forecasts and management accounts.
Regulators (including third-party service providers' regulators) The Company can only operate with the approval of its regulators and its third party service providers' regulators who have a legitimate interest in how the Company operates in the market and how it treats its Shareholders.	The Company regularly considers how it meets various regulatory and statutory obligations and follows voluntary and best practice guidance. It also gives full consideration to how any governance decisions it makes can have an impact on its stakeholders, both in the shorter and in the longer term. The Company's service providers provide regular reporting to the Company in respect of their interaction with their own respective regulators.
Lenders Availability of funding and liquidity are crucial to the Company's ability to take advantage of investment opportunities as they arise.	Considering how important the availability of funding is, the Company aims to demonstrate to lenders that it is a well-managed business, and in particular, that the Board focuses regularly and carefully on the management of risk. The Board has worked with the Investment

Manager to agree the terms of the revolving credit facility.

Section 172 Statement: promoting the success of the Company (continued)

Importance (continued)	Board engagement (continued)
Institutional investors and proxy advisers
The evolving practice and support of the	Recognising the principles of stewardship, as promoted by the UK
major institutional investors and proxy	Stewardship Code, the Board welcomes engagement with all of its
adviser agencies are important to the	investors. The Board recognises that the views, questions from, and
Directors, as the Company aims to	recommendations of many institutional investors and proxy adviser
maintain its reputation for high standards	agencies provide a valuable feedback mechanism and play a part in
of corporate governance, which	highlighting Shareholders' evolving expectations and concerns. These
contributes to its long-term sustainable	are important factors for the Board in delivering the Company's
success.	strategy.

The above mechanisms for engaging with stakeholders are kept under review by the Directors and will be discussed on a regular basis at Board meetings to ensure that they remain effective.

Examples of the Board's principal decisions taken during the year, and how the Board fulfilled its duties under Section 172 of the Act, and the related engagement activities are set out below.

Principal decision	Long-term impact	Stakeholder considerations and engagement
The Board convened a General Meeting in June 2023, setting out proposals for adjustments to the timing of the Liquidity Opportunity. See the Glossary on page 117 for further explanation.	By amending the Articles to provide for the Liquidity Opportunity to be put to Shareholders at, or in the twelve months prior to, the AGM to be held in 2028, and not to be offered to Shareholders in 2024, the Board believed it would be beneficial to the Company as it would place the Investment Manager in a position to seek new investments for the Company with the benefit of certainty as to a longer term horizon.	Prior to the decision to put the proposals to Shareholders at a General Meeting, the Board considered the initial rationale for the Liquidity Opportunity which was to have been offered in 2024. The Board set out its reasoning for the proposals in the Notice of General Meeting dated 24 May 2023. In conjunction with the Company's broker, the Board engaged with a broad group of Shareholders who all indicated their support for the proposals.

Section 172 Statement: promoting the success of the Company (continued)

Principal decision (continued)	Long-term impact (continued)	Stakeholder considerations and engagement (continued)
The Board continued with the implementation of a zero discount policy.	Through the implementation of this policy, the Company will seek to ensure that the shares trade close to NAV where possible.	In April 2021 the Board announced the decision to implement a zero discount policy to manage the discount, or premium, to NAV. The Board believes that it is important for Shareholders to be able to benefit appropriately from the Company's investment objective which is to generate a regular and attractive level of income with low asset value volatility. The Company therefore seeks to ensure that the Ordinary Shares trade close to NAV in normal market conditions through a combination of Ordinary Share buybacks and the issue of new Ordinary Shares, or resale of Ordinary Shares held in treasury, where demand exceeds supply.
		To implement the zero discount policy, the Company has repurchased Ordinary Shares from time to time, with 3.8 million Ordinary Shares currently held in treasury as a result and available to be resold into the market. Since the introduction of the zero discount policy the Shares have also traded at times at a premium to NAV per Share and the Company has been able to sell from treasury 3.1 million Shares to satisfy market demand.
The Company renewed the agreement for a revolving credit facility of £25 million with State Street Bank International GmbH.	In line with its approach to balance sheet management, the Company has renewed its agreement for a one-year multicurrency revolving credit facility of £25 million.	The Board regularly reviews the Company's cash position and commitments taking into consideration the impact on Shareholders. The facility is used to support the long-term growth of the Company and in particular to fund investments. The facility increases the Company's net liquid resources available for future deployment, including dividend payments to Shareholders and any repurchase of the Company's issued share capital. The terms of the credit facility with State Street Bank International GmbH contain covenants with which the Company is regularly required to confirm to State Street Bank International GmbH that it has remained compliant. As at the year end, the Company's drawings stood at £nil (2022: £7m).

Section 172 Statement: promoting the success of the Company (continued)

Principal decision (continued)	Long-term impact (continued)	Stakeholder considerations and engagement (continued)
The Company carried out a comprehensive audit tender process and appointed BDO LLP as the Company's auditor.	The audit tender process and appointment of an external auditor were carried out against criteria specific to the Company to ensure the appointment of the firm which would provide the highest quality, most effective and efficient audit for the Shareholders over the long-term.	The tender process was led by the Audit Committee Chair with the support of the Manager's Financial Reporting team. Requests for proposals were issued to six firms, three of which submitted responses and presented to the Audit Committee. The Board recommended the appointment of BDO LLP to be in the best interests of Shareholders, having regarding to its market share of investment trust companies, reputation in the market and its experience in the audit of portfolio valuations.

Culture

The Directors are of the opinion that establishing and maintaining a healthy corporate culture amongst the Board and in its interaction with the Investment Manager, Shareholders and other stakeholders will support the delivery of its purpose, values and strategy. The Board seeks to promote a culture of openness, transparency and integrity through ongoing dialogue and engagement with its stakeholders, principally the Investment Manager.

The Board strives to ensure that its culture is in line with the Company's purpose, values and strategy and will consider this through its annual evaluation processes. Further information relating to the Company's values is provided in the Corporate Governance Statement on page 44. There are also policies and procedures in place to assist with maintaining a culture of good governance that include those relating to Directors' dealings in the Company's shares, conflicts of interest, bribery and tax evasion.

The Board seeks to appoint appropriate third-party service providers and evaluates their services on a regular basis as described on pages 25 to 27. Their ongoing appointments are not only reflective of their performance by reference to their contractual and service level obligations, but also take into account the extent to which their individual corporate cultures align with those of the Company. The Board considers the culture of the Investment Manager and other stakeholders, including their policies, practices and behaviour, through regular reporting from these stakeholders and in particular during the annual review of the performance and continuing appointment of all service providers.

Employees, human rights and social and community issues

The Board recognises certain requirements under the Companies Act 2006 to detail information about human rights, employees and community issues, including information about any policies it has in relation to these matters and the effectiveness of these policies. These requirements are not in practice applicable to the Company as it has no employees, all the Directors are non-executive and it has outsourced all operational functions to third-party service providers. The Company has therefore not reported further in respect of these provisions.

Under listing rule 15.4.29(R), the Company, as a closedended investment fund, is exempt from complying with the requirements of the Task Force on Climate-related Financial Disclosures. However, the Investment Manager

Employees, human rights and social and community issues (continued)

will publish TCFD reports in compliance with the FCA's rules on climate-related financial disclosures. The TCFD Report which includes M&G Alternatives Investment Management Limited and the TCFD Company Report will be published on or before the end of June 2024. These reports will be available via the Sustainability Disclosures page on our website at mandg.com/footer/ sustainability-disclosures.

Board diversity

As at 31 December 2023, the Board of Directors of the Company comprised two male Directors and two female Directors. The Board is an enthusiastic supporter of diversity in its composition, recognising that it brings additional benefits to the Company and its stakeholders beyond specialist skills, knowledge, experience, backgrounds and perspectives. The Board welcomes the FTSE Women Leaders Review regarding the proportion of women on boards and the Parker Review with respect to ethnic representation on boards, amongst other published commentaries. Full details of the Company's compliance with the Financial Conduct Authority's Listing Rules on diversity are set out on page 55.

Environmental, social and governance (ESG) issues

The Company has no employees, property or activities other than investments, and the day-to-day management of the Company's investing activities is delegated to the Investment Manager. The Company does not invest with a specific ESG strategy or sustainable objective but complies with the minimum requirements covered by the delegated Investment Manager's house policies.

The investment manager has developed a set of ESG investment principles that guide all investment activity across the firm but do not supersede the fiduciary duty to clients: to invest according to a given investment mandate, or as defined in the fund documentation.

ESG related policies that will be applied to the investments held by the Company are the M&G Investments ESG Investment Policy, ESG Exclusion List and the M&G Investments Thermal Coal Policy. These can be found alongside the aforementioned ESG Principles via the following link:

Responsible Investing at M&G Investments – M&G plc (mandg.com)

MG-Investments-ESG-Exclusions-List-January-2022.pdf (mandg.com)

As a signatory member to the Principles for Responsible Investment (PRI), the Investment Manager is committed to providing detailed ESG transparency to market participants in relation to its business activities. The most recent transparency report is available at unpri. org/signatory-directory/mandg-investments/1483. article

Given its commitment to responsible investment, the Investment Manager has allocated significant human and financial capital to the implementation of the PRI principles.

Sustainability risk and investment process

The Board believes that sustainability risk can have a material impact on long-term investment outcomes. Sustainability risk means exposure to an ESG event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of an investment. The Company's goal is to generate the best possible risk adjusted returns for investors, taking into account all factors that influence investment performance, and therefore ESG issues are incorporated into investment decisions wherever they have a potentially meaningful impact on risk or return.

Sustainability risk and investment process (continued)

ESG factors themselves are, generally, non-financial considerations that may impact the risk, volatility and long-term return of individual investments, as well as markets as a whole. Individual investments can have both a positive and negative impact on society and the environment.

In certain contexts, ESG factors may be referred to as sustainability factors. Due to the nature of its stated investment strategy, the Company does not seek to actively promote ESG factors and does not seek to maximise portfolio alignment with ESG factors, but it nevertheless remains exposed to sustainability risks.

Impacts on the Company following the occurrence of a sustainability risk event may be numerous and will vary depending on the specific investment risk, geographical region and asset class. In general, where a sustainability risk event occurs in respect of an individual asset, there is the potential for a negative impact on, or an entire loss of, its value.

The following types of sustainability risks have the potential to materially impact the returns of the Company over time:

• Environmental factors, which include, but are not limited to, the ability of investee companies to mitigate and adapt to climate change, the potential for higher carbon prices, exposure to increasing water scarcity and potential for higher water prices, waste management challenges, and impact on global and local ecosystems.
• Social risks, which include, but are not limited to, product safety, supply chain management and labour standards, health and safety and human rights, employee welfare, data & privacy concerns and increasing technological regulation.
• Governance aspects, which include, but are not limited to, board composition and effectiveness, management incentives, management quality, ethnic and gender diversity, and stakeholder alignment.

The potential impacts of sustainability risk events on the Company's portfolio include degradation of issuer cashflow and consequent inability to meet debt servicing obligations, and inability to continue to actively and competitively participate in its chosen markets.

Sustainability risks may also affect the credit quality of an issuer. The Company has exposure to higher-yielding private debt arrangements, which may include debt securities of smaller companies, some of which may be privately owned, and thus may be less transparent in respect of environmental, social and governance and sustainability-related disclosures.

In order to ensure that sustainability risks are properly considered within the investment decision making and risk monitoring processes, to the extent that they represent potential or actual material risks and/or opportunities for maximising long-term risk-adjusted returns, the Investment Manager follows a series of environmental, social and governance investment principles described in the Investment Manager's ESG Principles Statement, which can be accessed via the Investment Manager's website.

At its quarterly meeting held on 1 February 2022, the Company resolved to approve the implementation of M&G Investment's Thermal Coal Investment Policy (Thermal Coal Policy). This came into effect on 27 April 2022.

The Thermal Coal Policy is a forward looking policy, excluding issuers who are either unable or unwilling to transition away from thermal coal within the necessary timelines to keep the earth's average warming within the targets set by the Paris Agreement. The portfolio of the Company does not currently have any assets that are failing the policy and require divestment.

Greenhouse gas emissions

All of the Company's activities are outsourced to third parties. As such it does not have any physical assets, property, employees or operations of its own and does not generate any greenhouse gas or other emissions or consume any energy reportable under the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 or the Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, implementing the UK Government's policy on Streamlined Energy and Carbon Reporting.

Modern slavery

The Company, as an investment vehicle, does not provide goods or services in the normal course of business and does not have customers. The Directors consider that the Company is thus not required to make a slavery or human trafficking statement under the Modern Slavery Act 2015. The Board considers the Company's supply chains, dealing predominantly with professional advisers and service providers in the financial services industry, to be low risk in relation to this matter.

Approval

The Strategic Report was approved by the Board at its meeting on 27 March 2024. The Chairman's Statement together with the Investment Manager's Report form part of this Strategic Report.

David Simpson Chairman

27 March 2024

Directors

David Simpson, Chairman. Appointed as a nonexecutive Director on 18 September 2018. David Simpson is a qualified solicitor and was a partner at KPMG for 15 years until 2013, culminating as global head of M&A. Before that he spent 15 years in investment banking, latterly at Barclays de Zoete Wedd Ltd. He is chairman of Ecofin Global Utilities and Infrastructure Trust plc and a non-executive Director of abrdn New India Investment Trust plc. David graduated from the University of Cambridge with a degree in Economics and Law.

Richard Boléat FCA, Audit Committee Chairman. Appointed as a non-executive Director on 18 September 2018. Richard Boléat is a Fellow of the Institute of Chartered Accountants in England & Wales, having trained with Coopers & Lybrand in Jersey and the United Kingdom. After qualifying in 1986, he subsequently worked in the Middle East, Africa and the UK for a number of commercial and financial services groups before returning to Jersey in 1991. He was formerly a Principal of Channel House Financial Services Group from 1996 until its acquisition by Capita Group plc ('Capita') in September 2005. Richard led Capita's financial services client practice in Jersey until September 2007, when he left to establish Governance Partners, L.P., an independent corporate governance practice. Alongside his roles at the Company, he currently acts as Chairman of CVC Credit Partners European Opportunities Limited, a non-executive Director of Third Point Investors Limited and a nonexecutive Director of Digital 9 Infrastructure plc, all of which are listed on the London Stock Exchange. He is regulated in his personal capacity by the Jersey Financial Services Commission.

Barbara Powley, Senior Independent Director. Appointed as a non-executive Director on 18 September 2018 and Senior Independent Director from 26 April 2023. Barbara Powley is a qualified chartered accountant with over 30 years' experience in the investment trust industry. Prior to her retirement in March 2018 she was a Director in BlackRock's closedended funds team from 2005 with responsibility for the oversight and administration of BlackRock's stable of investment trusts. From 1996 to 2005, she had a similar role at Fidelity. Barbara graduated from the University of York with a degree in Mathematics and Economics. Barbara is currently a non-executive Director of Montanaro UK Smaller Companies Investment Trust plc.

Jane Routledge, appointed as a non-executive Director on 25 October 2021. Jane Routledge has spent 30 years in marketing & communications roles in the investment management sector, communicating with pension fund, intermediary and private investor audiences. She has worked in a number of investment management businesses, including Schroders, Invesco and Hermes Fund Managers. Most recently, she spent eight years to December 2019 as a partner in Seven Investment Management, building and leading its marketing function across all channels to market. Jane is currently a non-executive director of Cumbria Education Trust and Brown Advisory US Smaller Companies PLC. She graduated from the University of Cambridge with a degree in Modern & Medieval Languages, and has a Masters degree in Organisational Psychology from the University of London.

The Directors are pleased to present the Annual Report and audited Financial Statements for the year ended 31 December 2023.

In accordance with the Companies Act 2006 (as amended), the Listing Rules and the Disclosure Guidance and Transparency Rules, the Corporate Governance Statement, Directors' Remuneration Report, Report from the Audit Committee and the Statement of Directors' Responsibilities should be read in conjunction with one another and the Strategic Report. As permitted by legislation, some of the matters normally included in the Directors' Report have instead been included in the Strategic Report, as the Board considers them to be of strategic importance. Therefore, a review of the business of the Company, recent events, outlook and likely future developments can be found on pages 7 to 9 and information regarding environmental, social and governance issues can be found on page 34.

Directors

The Directors in office during the year and at the date of this report are shown on page 37 together with their biographical details. None of the Directors or any persons connected with them had a material interest in the transactions and arrangements of, or the agreement with, the Investment Manager during the year.

Results and dividends

A summary of the Company's performance during the year ended 31 December 2023 and the outlook for the forthcoming year is set out in the Strategic Report on pages 7 to 9.

The interim dividends paid for the year ended 31 December 2023 are set out in note 7 to the Financial Statements.

Corporate governance

The Company's Corporate Governance Statement is set out on pages 43 to 56 and forms part of this report.

Investment trust status

The Company has received approval from HM Revenue & Customs (HMRC) as an authorised investment trust under Sections 1158 and 1159 of the Corporation Tax Act 2010, subject to the Company continuing to meet the eligibility conditions. The Directors are of the opinion that the Company has conducted its affairs in compliance with such approval and intends to continue doing so.

Current share capital

As at 31 December 2023 there were 140,619,239 Ordinary Shares in issue, excluding 4,126,532 Ordinary Shares held in treasury.

At the date of this report, there are 140,919,239 Ordinary Shares in issue, excluding 3,826,532 held in treasury. At General Meetings of the Company, Shareholders are entitled to one vote on a show of hands and, on a poll, to one vote for every share held.

The total voting rights of the Company as at 31 December 2023 were 140,619,239.

There are no restrictions concerning the transfer of securities in the Company or on voting rights; no special rights with regard to control attached to securities and no agreements between holders of securities regarding their transfer known to the Company.

Change of Control

There are no agreements to which the Company is party that might be affected by a change of control of the Company except for the agreement in relation to the Company's credit facility. The Company entered into a £25 million Facility Agreement with State Street Bank International GmbH, expiring on 14 October 2024. This agreement could alter or terminate on the change of control of the Company. Further information is disclosed in note 6 to the Financial Statements.

Share issues

At the Annual General Meeting ('AGM') held on 15 June 2023, the Directors were granted the authority to allot Ordinary Shares and/or C Shares up to an aggregate nominal amount of £142,133 (ie up to 14,213,300 Ordinary Shares and/or C Shares, representing approximately 10% of the issued share capital of the Company. This authority is due to expire at the Company's AGM on 21 May 2024 when a resolution for its renewal will be proposed (see page 41 for further information). During the year ended 31 December 2023, no shares were issued pursuant to this authority.

The Company has a block listing of 14,203,384 Ordinary Shares, as the balance of an initial application for a block listing of 20,000,000 Ordinary Shares listed and admitted to trading on the premium segment of the LSE's main market on 17 January 2019. The shares may be issued under the block listing from time to time for cash and in accordance with the Company's Articles of Association, provided that such issues are made at prices of not less than the prevailing net asset value per share.

During the year ended 31 December 2023, no shares were issued under the block listing. Following the year end, a total of 300,000 shares at an average price of 96.35p per share were sold from treasury for cash representing a total consideration of £288,900. The shares were sold at a premium to the previously published net asset value per share.

Purchase of own shares

The current authority to repurchase up to 14.99% of the Company's issued share capital to be held in treasury or for cancellation was granted to the Directors on 15 June 2023 and will expire at the conclusion of the 2024 AGM when a resolution for its renewal will be proposed (see page 42 for further information).

On 18 November 2020, the Company announced that it had given instructions to Winterflood Securities Limited ('Winterflood') to purchase the Company's shares

pursuant to the authority by Shareholders at the previous AGM. On 30 April 2021, the Company announced its intention to implement a zero discount policy to seek to manage the discount or premium to net asset value and gave instructions to Winterflood to implement the policy on the Board's behalf. During the year ended 31 December 2023, the Company bought back a total of 1,613,783 shares (2022: 2,305,000) to be held in treasury at an average price of 89.32p per share (2022: 91.15p) representing total consideration of £1,433,921 (2022: £2,184,800).

Substantial shareholdings

The Company has been informed of the following latest notifiable interestsa in the voting rights of the Company, in accordance with Disclosure Guidance and Transparency Rule 5.1.2, as at 31 December 2023:

	Number of shares held	% of voting rights at 31 December 2023
M&G plc	38,830,132	27.6
Schroders Plc	14,160,877	10.1
Alder Investment Management Limited	7,877,039	5.6
EFG Private Bank Limited	7,226,335	5.1

The Company has not been informed of any changes to the above interests between 31 December 2023 and the date of this Report.

a Notifications are required where a shareholder reaches the 3% threshold and for every 1% increase or decrease thereafter, subject to certain exemptions. The above holdings may therefore not be wholly accurate statements of the actual Shareholder holdings at 31 December 2023 and the date of this report.

Articles of Association

The Company's Articles of Association may only be amended by a special resolution at a General Meeting of the Shareholders.

Requirements of the listing rules

Listing Rule 9.8.4 requires the Company to include certain information in a single identifiable section of the Annual Report or a cross-reference table indicating where the information is set out.

The Directors confirm that there are no disclosures to be made in relation to Listing Rule 9.8.4.

Directors' indemnity

Under the Company's Articles of Association, the Directors are provided, subject to the provisions of UK legislation and at the discretion of the Board, with an indemnity in respect of liabilities owed to third parties which they may sustain or incur in connection with their appointment. This indemnity was in force during the year and remains in force as at the date of this report. Apart from this, there are no qualifying third-party indemnity provisions or qualifying pension scheme indemnity provisions that would require disclosure.

Auditor

The Directors who held office at the date of approval of the Directors' Report confirm that, so far as they are aware, there is no relevant audit information of which the Company's Auditor is unaware and each Director has taken all the steps that they ought to have taken as a Director to make themselves aware of any relevant audit information and to establish that the Company's Auditor is aware of that information.

BDO LLP has expressed its willingness to continue in office as Auditor of the Company and resolutions for its re-appointment and for the Directors to determine its remuneration will be proposed at the forthcoming AGM.

Financial risk management

As noted on page 24, information about the Company's financial risk management objectives and policies is set out in note 13 to the Financial Statements.

Going concern and viability statement

The going concern statement and viability statement can be found on pages 24 and 25 of the Strategic Report.

Political donations

The Company made no political donations during the year to 31 December 2023 (2022: none).

Directors' and Officers' liability insurance

Directors' and Officers' liability insurance cover is maintained by the Company, at its expense, on behalf of the Directors.

AGM

The Directors are pleased to invite Shareholders to attend the fifth AGM of the Company, at the offices of M&G Alternatives Investment Management Limited.

The Notice of AGM (the 'Notice') to be held on 21 May 2024 is set out on pages 106 to 110. Shareholders are being asked to vote on various items of business as follows:

• The receipt and acceptance of the Strategic Report, Directors' Report, Auditor's Report and the audited Financial Statements for the year ended 31 December 2023
• The receipt and approval of the Directors' Remuneration Report
• Approval of the Company's dividend policy
• The re-election of Directors

AGM (continued)

• The re-appointment of BDO LLP as Auditor and the authorisation of the Audit Committee to determine the remuneration of the Auditor
• The authority to allot shares
• The authority for disapplication of pre-emption rights in respect of the shares the Directors are authorised to allot or sell from those held as Treasury Shares
• The purchase of own shares
• The holding of general meetings (other than AGMs) on not less than 14 clear days' notice

The details about the resolutions are provided on pages 106 to 110.

Dividend policy

By way of a resolution granted on 18 September 2018, the Directors are authorised to declare and pay all dividends as interim dividends without the need for the prior approval of the Company's Shareholders. However, regarding Corporate Governance best practices relating to the payment of interim dividends, without Shareholder approval of a final annual dividend, the Board has decided to seek express approval of its dividend policy. The Company's dividend policy remains unchanged to that disclosed in the IPO Prospectus published on 26 September 2018 which stated that the Company intends to distribute at least 85% of its distributable income earned in each financial year by way of dividends and that, from 2020, such dividends are intended to be paid quarterly.

Authority to allot Ordinary Shares and to sell shares from treasury for cash

As explained on page 39, the authorities granted on 15 June 2023 are due to expire at the 2024 AGM. An ordinary resolution to authorise the Directors to allot Ordinary Shares and/or C Shares up to an aggregate nominal amount of £140,919 (ie up to 14,091,900 Ordinary Shares and/or C Shares, representing approximately 10% of the issued share capital of the Company (excluding treasury shares) as at the last business day before publication of the Notice of AGM), will be proposed as Resolution 10.

When shares are to be allotted for cash, Section 561 of the Companies Act 2006 provides that existing Shareholders have pre-emption rights and that the new shares must be offered first to such shareholders in proportion to their existing holding of shares. However, Shareholders can, by special resolution, authorise the Directors to allot shares otherwise than by a pro rata issue to existing Shareholders.

Resolution 11, a special resolution, is being proposed to authorise the Directors to issue Ordinary Shares and/or C Shares for cash and by way of a sale of Treasury Shares and to disapply the pre-emption rights of existing Shareholders in relation to issues of Ordinary Shares and/or C Shares under Resolution 10 (being in respect of up to 10% of the Company's issued share capital as at the date of the Notice, as if Section 561 does not apply. Shares would only be issued at a price at or above the prevailing NAV per share. As at the date of the Notice, the Company holds 3,826,532 shares in treasury. If passed, the authorities conferred by Resolutions 10 and 11 will commence on the date of passing the Resolutions and expire at the conclusion of the AGM to be held in 2025.

Purchase of own shares

Resolution 12, a special resolution, will renew the Company's authority to make market purchases of up to 21,123,793 Ordinary Shares (being 14.99% of the issued share capital as at the date of the Notice, excluding any treasury shares, or, if changed, 14.99% of the issued share capital, excluding any treasury shares, immediately following the passing of the resolution), either for cancellation or placing into treasury at the determination of the Directors. Purchases of Ordinary Shares will be made within guidelines established from time to time by the Board. Any purchase of Ordinary Shares would be made only out of the available cash resources of the Company.

The maximum price which may be paid for an Ordinary Share must not be more than the higher of (i) 5.0% above the average of the mid-market value of the Ordinary Shares for the five business days before the purchase is made, or (ii) the higher of the price of the last independent trade and the highest current independent bid for the Ordinary Shares. The minimum price which may be paid is £0.01 per Ordinary Share.

This authority, if approved by Shareholders, will expire at the AGM to be held in 2025, when a resolution for its renewal will be proposed.

Notice period for General Meetings

In terms of the Companies Act 2006, the notice period for General Meetings (other than an AGM) is 21 clear days' notice unless the Company: (i) has gained shareholder approval for the holding of General Meetings on 14 clear days' notice by passing a special resolution at the most recent AGM; and (ii) offers the facility for all Shareholders to vote by electronic means. The Company would like to preserve its ability to call General Meetings (other than an AGM) on less than 21 clear days' notice. The shorter notice period proposed by Resolution 13, a special resolution, would not be used as a matter of routine, but only where the flexibility is merited by the business of the meeting and is thought to be in the interests of Shareholders as a whole. The approval will be effective until the date of the AGM to be held in 2025, when it is intended that a similar resolution will be proposed.

Directors' recommendation

The Directors consider each resolution being proposed at the AGM to be in the best interests of the Company and Shareholders as a whole and they unanimously recommend that all Shareholders vote in favour of them, as they intend to do in respect of their own beneficial shareholdings.

By order of the Board

Link Company Matters Limited Company Secretary

27 March 2024

Introduction

The Directors recognise the importance of strong corporate governance and acknowledge that they are ultimately accountable to the Company and its Shareholders for the governance of the Company's affairs.

The Listing Rules and the Disclosure Guidance and Transparency Rules (Disclosure Rules) of the FCA require listed companies to disclose how they have adhered to the principles and followed the recommended provisions of the corporate governance code to which the issuer is subject.

The Board has considered the Principles and Provisions of the AIC Code of Corporate Governance (AIC Code), published In February 2019. The AIC Code addresses the Principles and Provisions set out in the UK Corporate Governance Code (the UK Code) issued by the Financial Reporting Council (FRC), as well as setting out additional principles and recommendations on issues that are of specific relevance to investment trusts.

The Board considers that reporting against the Principles and Provisions of the AIC Code, which has been endorsed by the FRC, provides more relevant information to Shareholders than the UK Code. The terms of the FRC's endorsement mean that AIC members who report against the AIC Code fully meet their obligations under the UK Code and the related disclosure requirements contained in the Listing Rules. The AIC Code is available on the AIC website (theaic. co.uk). It includes an explanation of how the AIC Code adapts the Principles and Provisions set out in the UK Code to make them relevant for investment companies. The UK Code can be viewed at frc.org.uk

Throughout the year ended 31 December 2023, the Company has complied with the principles and provisions of the AIC Code which incorporates the UK Code. However, it should be noted that the UK Code includes provisions relating to the role of the chief executive, executive directors' remuneration and the need for an internal audit function and for the reasons set out in the AIC Guide, the Board considers that these provisions are not relevant to the Company, being an externally managed investment company. In particular, all of the Company's day-to-day management and administrative functions are outsourced to third parties. As a result, the Company has no executive Directors, employees or internal operations and has therefore not reported further in respect of these provisions.

The Principles of the AIC Code

The AIC Code is made up of 17 principles split into five sections:

• Board leadership and purpose
• Division of responsibilities
• Composition, succession and evaluation
• Audit, risk and internal control
• Remuneration

AIC Code Principle	Compliance statement
Board leadership and purpose
A. A successful company is led by an effective board, whose role is to promote the long-term sustainable success of the	The Board considers the Company's long-term sustainable success as its main focus and all decisions are considered from this point of view. As outlined below, the Company is run with a very clear culture and values which are embedded into everything the Company does.
Company, generating value for shareholders and contributing to wider society.	As part of this the opportunities and risks faced by the business are considered, monitored and assessed on a regular basis, both in terms of potential and emerging risks that the business may face. More detail regarding the principal risks and the sustainability of the Company's business model can be found in the Strategic Report on pages 18 to 23. In addition, the Company, through the Investment Manager, has a strong, long-term commitment to a responsible investment methodology, which expressly considers the interests of wider society within the Investment Manager's investment processes. Details can be found on pages 34 to 35 of the Strategic Report.
B. The Board should establish the Company's purpose, values and strategy, and satisfy itself that these and its culture are aligned. All directors must act with integrity, lead by example and promote the desired culture.	The purpose of the Company is the investment objective which is to generate a regular and attractive level of income with low asset value volatility. It seeks to do this by investing in a diversified portfolio of public and private debt and debt-like instruments. Over the longer term, it is expected that the Company will be mainly invested in private debt instruments. This part of the portfolio will generally include Debt Instruments which are nominally quoted but are generally illiquid. The strategy that the Board follows in order to execute this is outlined in the Strategic Report on pages 5 to 9. More detail regarding how the Company considers the long-term sustainable success of the Company can be found in the Section 172 statement on pages 27 to 33.
	The Board adopts key values that are embedded in the culture of the business and are important to any investment decision made by the Company. These values and culture also drive how the Board and its relationship with the Investment Manager proceed. These are to: invest in a manner consistent with the PRI Principles; ● ensure all business decisions are made once all potential impacts on ● relevant stakeholders are fully understood; encourage open, honest and collaborative discussions at all levels in ● Board meetings, with Shareholders and with other stakeholders; and
	seek to avoid or manage any potential conflicts of interest. ●
	The values and culture of the business are considered as part of the annual board evaluation process to ensure that they remain a key focus that all decisions are based on.

AIC Code Principle (continued)	Compliance statement (continued)
C. The Board should ensure that the necessary resources are in place for the Company to meet its objectives and measure	The Board and the Management Engagement Committee regularly review the performance of the Company and the performance and resources of the Investment Manager to ensure that the Company can continue to meet its investment objective.
performance against them. The Board should also	The Board assesses the performance of the Investment Manager in a number of different ways, including through the KPIs.
establish a framework of prudent and effective controls, which enable risk to be assessed and managed.	The Audit Committee is responsible for assessing and managing risks and further information about how this is done can be found in the Report of the Audit Committee on pages 63 to 67.
D. In order for the Company to meet its responsibilities to shareholders and stakeholders, the Board should ensure effective engagement with, and encourage participation from, these parties.	The Board understands its responsibilities to Shareholders and other stakeholders and considers the expressed opinions of all such parties when making any material decision. The Board considers that, other than Shareholders, their other key stakeholders are their third-party service providers and the Investment Manager in particular. The Management Engagement Committee considers the relationship with all third-party service providers on at least an annual basis and there is an ongoing dialogue with the Investment Manager to ensure views are aligned.
	More information regarding how the Board engages with stakeholders and considers the impact that any material decision will have on relevant stakeholders can be found in the Section 172 statement on pages 27 to 33.
	Representatives of the Investment Manager regularly meet institutional investors to discuss strategy and to understand their issues and concerns and, if applicable, to discuss corporate governance issues. The results of such meetings are reported at the following Board meeting. Regular reports on investor sentiment and industry issues from the Company's broker are submitted to the Board.
	Any substantive communications regarding major corporate issues would be discussed by the Board taking into account representations from the Investment Manager, the auditor, legal advisers, the broker and the Company Secretary.

The Principles of the AIC Code (continued)

AIC Code Principle (continued)	Compliance statement (continued)
Division of responsibilities
F. The chair leads the Board and is responsible for its overall effectiveness in directing the Company. They should demonstrate objective judgement throughout their tenure and promote a culture of openness and debate. In addition, the chair facilitates constructive board relations and the effective contribution of all non-executive directors, and ensures that directors receive accurate, timely and clear information.	There is a clear division of responsibility between the Chairman, the Directors, the Investment Manager and the Company's other third-party service providers. The Chairman is responsible for leading the Board, ensuring its effectiveness in all aspects of its role and is responsible for ensuring that all Directors receive accurate, timely and clear information. The Board meets regularly throughout the year and representatives of the Investment Manager are in attendance, when appropriate, at each meeting
	and most Committee meetings. The Board has agreed a schedule of matters specifically reserved for decision by the Board. This includes establishing the investment objective, strategy and benchmarks, the permitted types or categories of investment, the markets in which transactions may be undertaken, the level of permitted gearing and borrowings, the amount or proportion of the assets that may be invested in any category of investment or in any one investment, and the Company's treasury and share buyback policies.
	The Board, at its regular meetings, undertakes reviews of key investment and financial data, revenue projections and expenses, analyses of asset allocation, transactions and performance comparisons, share price and net asset value performance, gearing, marketing and shareholder communication strategies, the risks associated with pursuing the investment strategy and industry issues.
	The review of the performance of the Chairman was carried out during the year by Barbara Powley as Senior Independent Director. It was concluded that the Directors believed the Chairman encouraged good debate, ensured all Directors were involved in discussions and that the Board as a whole was

working well.

	AIC Code Principle (continued)	Compliance statement (continued)
	G. The Board should consist of an appropriate combination of directors (and, in particular, independent non-executive directors) such that no one individual or small group of individuals dominates the Board's decision making.	All of the Directors are non-executive and are independent of the Investment Manager and the other service providers. A majority of the Board will at all times be independent of the Investment Manager.
		The Chairman, David Simpson, was independent of the Investment Manager at the time of his appointment and remains so.
		Each Director is not a director of another investment company managed by the Company's Investment Manager, nor has any Board member been an employee of the Company or any of its service providers.
		The Board evaluation concluded that each Director provides a valuable contribution to Board meeting discussions and exercises appropriate levels of challenge and debate.
		During the year under review, following a review of Director roles and the composition of Board Committees by the Nomination Committee, the Board agreed to rotate the role of Senior Independent Director and Barbara Powley assumed this role from 26 April 2023.
	H. Non-executive directors should have sufficient time to meet their board responsibilities. They should provide constructive challenge, strategic guidance, offer specialist advice and hold third party service providers to account.	As part of the Board evaluation process, the contributions of each Director, as well as the time commitments made by each board member are considered and reviewed. Directors' other commitments are regularly reviewed and any new appointments are considered by the other Directors to ensure there is no conflict of interest or risk of overboarding. As explained above, it was concluded that each Director provided appropriate levels of challenge and provided the Company and the Investment Manager with guidance and advice when required.
		The Management Engagement Committee reviews the performance and cost of the Company's third-party service providers on an annual basis. More information regarding the work of the Management Engagement Committee can be found on page 54.
I.	The Board, supported by the Company Secretary, should ensure that it has the policies, processes, information, time and resources it needs in order to function effectively and efficiently.	The Directors have access to the advice and services of the Company Secretary through its appointed representative who is responsible to the Board for ensuring that Board procedures are followed and that applicable rules and regulations are complied with. The Company Secretary is also responsible for ensuring good information flows between all parties.

The Principles of the AIC Code (continued)

AIC Code Principle (continued) Compliance statement (continued)

Composition, succession and evaluation

J.Appointments to the Board should be subject to a formal, rigorous and transparent procedure, and an effective succession plan should be maintained. Both appointments and succession plans should be based on merit and objective criteria and, within this context, should promote diversity of gender, social and ethnic backgrounds, cognitive and personal strengths.

The Board has established a Nomination Committee, comprising all the independent Directors. This Committee will lead the appointment process of new Directors as and when vacancies arise and as part of the Directors' ongoing succession plans. More information regarding the work of the Nomination Committee can be found on pages 54 to 55.

The Board has adopted a diversity policy, as set out on page 34, which acknowledges the benefits of greater diversity and remains committed to ensuring that the Company's Directors bring a wide range of skills, knowledge, experience, backgrounds and perspectives to the Board. Whilst the Board does not feel that it would be appropriate to set targets as all appointments are made on merit, the following objectives for the appointment of Directors have been established:

• All Board appointments will be made on merit, in the context of the skills, knowledge and experience that are needed for the Board to be effective.
• Long lists of potential non-executive Directors should include diverse candidates of appropriate merit.

The Company is committed to ensuring that any board vacancies are filled by the most qualified candidates.

	AIC Code Principle (continued)	Compliance statement (continued)
	K. The Board and its committees should have a combination of skills, experience and knowledge. Consideration should be given to the length of service of the Board as a whole and membership regularly refreshed.	The Directors' biographical details are set out on page 37 of this Report. These demonstrate the wide range of skills and experience that they bring to the Board. The Board carried out a skills audit during the year and will continue to do so on an annual basis concurrently with the Board evaluation.
		The Board has adopted a Tenure Policy for all Directors, including the Chairman, which states that the Board believes that it is an advantage to have the continuous contribution of Directors over a period of time during which they are able to develop awareness and insight of the Company and thereby be able to make a valuable contribution to the Board as a whole. The Board believes that recommendations for re-election should be on an individual basis following a rigorous review which assesses the contribution made by the Director concerned, and takes into account the need for regular refreshment and diversity. The Board believes that it is appropriate for a Director to serve for up to nine years following their initial election, and it is expected that Directors will stand down from the board by the conclusion of the AGM following that period.
L.	Annual evaluation of the Board should consider its composition, diversity and how effectively members work together to achieve objectives. Individual evaluation should demonstrate whether each director continues to contribute effectively.	The Board has agreed to evaluate its own performance and that of its Committees, Chairman and Directors on an annual basis. For the year under review this was carried out by way of a questionnaire and subsequent individual discussions. The Chairman led the assessment, which covered the functioning of the Board as a whole, the effectiveness of the Board Committees and the independence and contribution made by each Director.
		The Chairman discussed the responses with each Director individually. The Chairman absented himself from the Board's review of his effectiveness as the Company Chairman, and this review was led by
		Barbara Powley, the Senior Independent Director. Following this review, the Board is satisfied that the structure, mix of skills and operation of the Board is effective and relevant for the Company.
		The individual performance of each Director standing for election has been evaluated and it is recommended that Shareholders vote in favour of their election at the AGM. Directors are subject to annual re-election by Shareholders and accordingly, all Directors will submit themselves for re-election by Shareholders at the forthcoming Annual General Meeting. More information regarding the proposed election of each Director can be found on page 106.

AIC Code Principle (continued)	Compliance statement (continued)
Audit, risk and internal control
M. The Board should establish formal and transparent policies and procedures to ensure the independence and effectiveness of external audit functions and satisfy itself on the integrity of financial and narrative statements.	The Audit Committee has put in place a non-audit services policy, which ensures that any work outside the scope of the standard audit work requires prior approval by the Audit Committee. This enables the Committee to ensure that the external auditors remain fully independent. In addition, the Audit Committee carries out a review of the performance of the external auditor on an annual basis. Feedback from other third parties, including the Investment Manager, is included as part of this assessment to ensure the Audit Committee takes into account the views of different parties who have a close working relationship with the external auditor.
	The Audit Committee considers the output from the FRC audit quality reviews in relation to the external auditor to ensure that any matters of concern are identified and discussed. Further information regarding the work of the Audit Committee can be found on pages 63 to 67.

AIC Code Principle (continued)		Compliance statement (continued)
	N. The Board should present a fair, balanced and understandable assessment of the Company's position and prospects.	The Audit Committee has considered the Annual Report and Accounts as a whole and believes that the document presents a fair, balanced and understandable assessment of the Company's position and prospects. In particular, the Committee has considered the language used in the document to ensure technical terminology is avoided to the extent possible, or where used it is suitably explained.
	O. The Board should establish procedures to manage risk, oversee the internal control framework, and determine the nature and extent of the principal risks the Company is willing to take in order to achieve its long-term strategic objectives.	The Audit Committee reviews reports from the principal service providers on compliance and the internal and financial control systems in operation and relevant independent audit reports thereon.
		The Audit Committee has carried out a review of the effectiveness of the Company's systems of internal control as they have operated during the year under review and up to the date of approval of the Annual Report.
		Given the nature of the business, the Company is reliant on its service providers and their internal controls. The Audit Committee reviews the Investment Manager's and Administrator's compliance and control systems in operation insofar as they relate to the affairs of the Company.
		As set out in more detail in the Report of the Audit Committee on pages 63 to 67, the Company has in place a detailed system for assessing the adequacy of those controls.
		The Audit Committee's internal control oversight focus is described in more detail in the Report of the Audit Committee on pages 66 to 67.

	AIC Code Principle (continued)	Compliance statement (continued)
Remuneration
P.	Remuneration policies and practices should be designed to support strategy and promote long-term sustainable success.	As outlined in the Remuneration Report on pages 57 to 62, the Company follows the recommendation of the AIC Code that non-executive Directors' remuneration should reflect the time commitment and responsibilities of the role. The Company's policy is that the remuneration of non-executive Directors should reflect the experience of the Board as a whole and be determined with reference to comparable organisations and appointments. Directors are not eligible for bonuses, share options, long-term incentive schemes or other performance related benefits as the Board does not believe that this is appropriate for non-executive Directors.
		The Remuneration Policy is therefore designed to attract and retain high quality Directors, whilst ensuring that Directors remain focused and incentivised to promote the long-term sustainable success of the Company.
		As at the date of this Report, all Directors own shares in the Company. All shares were purchased in the open market and using the Directors' own resources.
		Directors' fees were initially set at the time of the Company's IPO. The Remuneration Committee annually reviews the fees paid to the Directors and compares these with the investment trust industry generally, taking into account the time commitment and responsibility of each Board member.
		More information regarding the work of the Remuneration Committee can be found in the Remuneration Report on page 57.
	Q. A formal and transparent procedure for developing policy remuneration should be established. No director should be involved in deciding their own remuneration outcome.	The Remuneration Policy has been developed with reference to comparable organisations and appointments. There is an agreed fee which all non executive Directors receive (irrespective of experience or tenure) and an additional fee for the role of Audit Committee Chairman. There is also an agreed fee for the role of Chairman. Any changes to the Chairman's fee are considered by the Remuneration Committee as a whole, with the exception of the Chairman who excuses himself from this part of the meeting.

The Principles of the AIC Code (continued)

AIC Code Principle (continued)	Compliance statement (continued)
R. Directors should exercise independent judgement and discretion when authorising remuneration outcomes, taking account of company and individual performance, and wider circumstances.	Any decision with regard to remuneration is taken after considering the performance of the Company and the current market conditions. The Remuneration Committee has no current intention to change the Remuneration Policy, as approved by Shareholders at the 2023 Annual General Meeting, for the foreseeable future. If any significant changes to the Remuneration Policy were to be considered before it is next due for approval in 2026, the Remuneration Committee would consult with Shareholders and seek external advice before proposing any such changes. For any changes to be effective the Remuneration Policy would be proposed for approval at a General Meeting, if necessary outside of the statutory requirement to seek shareholder consent to the Remuneration Policy on a triennial basis.

Board Committees

The Board has agreed a schedule of matters specifically reserved for decision by the full Board, subject to which the Board has delegated specific duties to Committees of the Board which operate within written terms of reference. Link Company Matters Limited acts as Company Secretary to each Committee. No persons other than the Committee members are entitled to attend Committee meetings unless formally invited by the Committee. Copies of the terms of reference for Board Committees are available from the Company Secretary and on the Company's website.

The Board has also adopted a procedure for Directors, in the furtherance of their duties, to take independent professional advice at the expense of the Company.

At its annual meeting in February 2023, the Nomination Committee considered the roles of the Directors and recommended to the Board that Barbara Powley should become chair of the Management Engagement Committee and Senior Independent Director and Jane Routledge should chair the Remuneration Committee. The Board accepted the recommendations and these changes became effective from 26 April 2023.

Audit Committee

The Audit Committee comprises Richard Boléat FCA as Chairman, Barbara Powley, David Simpson and Jane Routledge. The Audit Committee meets at least four times a year. As David Simpson was independent on appointment and provides significant input into Audit Committee meetings, the Directors believe it is appropriate for him to be a member of the Audit Committee, despite his role as Chairman of the Board. In particular, the Board considers that the Audit Committee as a whole has competence relevant to the sector and the Board is satisfied that at least one member of the Audit Committee has recent and relevant financial experience. The Board considers that the members of the Audit Committee have the requisite skills and experience to fulfil the responsibilities of the Audit Committee. The Audit Committee examines the effectiveness of the Company's control systems. It reviews the Half Year and Annual Reports and also receives information from the Investment Manager. It reviews the scope, results, cost effectiveness, independence and objectivity of the external auditor.

The Audit Committee has set out a formal Report on pages 63 to 67 of the Annual Report.

Management Engagement Committee

The Management Engagement Committee consists of David Simpson, Richard Boléat, Jane Routledge and is chaired by Barbara Powley. The Management Engagement Committee meets at least once a year or more often if required. Its principal duties are to consider the terms of appointment of the Investment Manager and other service providers and it will annually review those appointments and the terms of engagement.

The Committee considers the quality, cost and remuneration method of the service provided by the Investment Manager against its contractual obligations and the Board receives regular reports on compliance with the Investment Restrictions it has set. It also considers the performance analysis provided by the Investment Manager.

The Management Engagement Committee also reviews the arrangements with, and the services provided by, the Custodian to ensure that the safeguarding of the Company's assets and security of the Shareholders' investment is being maintained.

The Management Engagement Committee will review, at least annually, the performance of all of the Company's third-party service providers, including the level and structure of fees payable and the length of the notice period, to ensure that they remain competitive and in the best interests of Shareholders.

The Management Engagement Committee met once during the year ended 31 December 2023. In discharging its duties the Committee considered:

• The performance and terms of engagement of the service providers during the year; and
• The performance and continuing appointment of the Investment Manager, for further detail please see page 26.

Nomination Committee

The Company's Nomination Committee consists of Richard Boléat, Barbara Powley and Jane Routledge and is chaired by David Simpson. The Nomination Committee meets at least once a year or more often if required. Its principal duties are to advise the Board on succession planning bearing in mind the balance of skills, knowledge and experience existing on the Board and will make recommendations to the Board in this regard. The Nomination Committee advises the Board on its balance of relevant skills, experience, gender, race, ages and length of service of the Directors serving on the Board. All appointments to the Board will be made in a formal and transparent matter. New appointees to the Board will be provided with a full induction programme. This programme will cover the Company's investment strategy, policies and practices.

The Directors are also given key information on the Company's regulatory and statutory requirements as they arise, including information on the role of the Board, matters reserved for its decision, the terms of reference for the Board Committees, the Company's corporate governance practices and procedures and the latest financial information.

The Nomination Committee met once during the year ended 31 December 2023. In discharging its duties the Committee considered:

• The feedback from the annual Board evaluation process, for further Information please see page 49;
• The re-appointment of the Directors and recommended to the Board the re-election of all Directors at the 2023 AGM;
• The skills, diversity and composition of the Board and agreed no new appointments were necessary at this time;
• The role of chair of each Board Committee and recommended to the Board the change of Senior Independent Director, Chair of the Remuneration Committee and Chair of the Nomination Committee, for further detail please see page 53;

Nomination Committee (continued)

• The annual training plan and it was agreed by the Committee that the Board would benefit from receiving targeted sessions with the Investment Manager in respect of the credit market and response to interest rate changes; and
• The new Listing Rule disclosures on diversity.

The Listing Rules of the FCA now require companies to report on whether they have met the following targets on board diversity: that at least 40% of the individuals on the board are women; at least one of the senior positions on the board is held by a woman; and, that at least one of the Board is from an ethnic minority background. As at 31 December 2023, the Company had met two of these requirements. Two out of the four Directors (50%) are women, and Barbara Powley holds a senior position, being the Senior Independent Director. There was no member of the Board from an ethnic minority background. The Board will fully consider diversity, including ethnic diversity, whenever a new appointment is made. There have been no changes to the Board or the roles of Directors since 31 December 2023. This data was provided through individual Director self-assessment.

The following tables set out the gender and ethnic diversity of the Board:

Gender diversity	Number of Board members	Percentage of the Board	Number of senior positionsa on the Board
Men	2	50	1
Women	2	50	1b
Not specified/prefer not to say	–	–	–

Ethnic diversity	Number of Board members	Percentage of the Board	Number of senior positionsa on the Board
White British or other White (including minority white groups)	4	100	2
Mixed/Multiple Ethnic Groups	–	–	–
Asian/Asian British	–	–	–
Black/African/Caribbean/ Black British	–	–	–
Other ethnic group, including Arab	–	–	–
Not specified/prefer not to say	–	–	–

• a Senior positions specified by the Listing Rules are CEO, CFO, senior independent director, and chair.
• b As the Company is managed externally, and there are no executive roles, the Company only has two of the senior roles specified by the Listing Rules, namely Senior Independent Director and Chair, the former occupied by a woman and the latter by a man. However, the Company considers that the chairs of its permanent sub-committees, that is the Audit Committee, Nomination Committee, Management Engagement Committee and Remuneration Committee are all senior positions. Of these four positions, two are performed by women and two by men.

Remuneration Committee

The Company's Remuneration Committee consists of David Simpson, Richard Boléat and Barbara Powley and is chaired by Jane Routledge. The Remuneration Committee meets at least once a year or more often if required. The Remuneration Committee's main functions include: (i) agreeing the policy for the remuneration of the Directors and reviewing any proposed changes to the policy; (ii) reviewing and considering ad hoc payments to the Directors in relation to duties undertaken over and above normal business; and (iii) appointing independent professional remuneration advice.

The Remuneration Committee met to consider whether the current level of non-executive Director fees remained appropriate. The Committee agreed that Directors' fees would increase in line with inflation. Further details can be found in the Directors' Remuneration Report which is set out on page 57 of the Annual Report.

Meeting attendance

The number of scheduled Board and Board Committee meetings held during the year ended 31 December 2023 and the attendance of the individual Directors is shown below:

	Board	Audit Committee	Nomination Committee	Management Engagement Committee	Remuneration Committee
David Simpson	6/6	6/6	1/1	1/1	1/1
Richard Boléat	6/6	6/6	1/1	1/1	1/1
Barbara Powley	6/6	6/6	1/1	1/1	1/1
Jane Routledge	6/6	6/6	1/1	1/1	1/1

The Board meets at least four times a year to review investment performance, financial reports and other reports of a strategic nature. Board and Board Committee meetings are also held on an ad hoc basis to consider particular issues as they arise. During the year, the Board met on an ad hoc basis to consider the publication of the Circular and convening of the General Meeting and renewal of the credit facility. Key representatives of the Investment Manager attend each meeting and between these meetings there is regular contact with the Chairman and other Directors where appropriate.

Link Company Matters Limited

Corporate Secretary

27 March 2024

The Board presents the Directors' Remuneration Report for the year ended 31 December 2023. This Report is prepared in accordance with Schedule 8 of the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013.

An ordinary resolution to approve this Report will be proposed at the AGM of the Company to be held on 21 May 2024. The law requires the Company's auditor to audit certain disclosures provided. Where disclosures have been audited, they are indicated as such. The auditor's opinion is included in their report on pages 70 to 78.

Statement from the Chair of the Remuneration Committee

Directors' remuneration is determined by the Remuneration Committee, at its discretion within an aggregate ceiling of £300,000 per annum, as set out in the Company's Articles of Association.

The Remuneration Committee's main functions include: (i) agreeing the policy for the remuneration of the Directors and reviewing and proposing changes to the policy; (ii) reviewing and considering ad hoc payments to the Directors in relation to duties undertaken over and above normal business; and (iii) appointing independent professional remuneration advisors. The Remuneration Committee consists of myself, Barbara Powley, David Simpson and Richard Boléat.

Each Director abstains from voting on his or her own individual remuneration.

During the year ended 31 December 2023, the annual fees were set out at the rate of £47,000 for the Chairman, £41,000 for the Chairman of the Audit Committee and £35,500 for a Director. The Board's remuneration is considered annually. Following a review, it was agreed that effective from 1 January 2024, the fees would be increased in line with inflation, accordingly the fees of the Chairman would increase to £49,000, the Chairman of the Audit Committee to £43,000 and the other Directors to £37,000.

In accordance with the Companies Act 2006, the Company is required to obtain shareholder approval of its remuneration policy on a triennial basis. An ordinary resolution for the approval of the remuneration policy as set out below was put to members at the 2023 Annual General Meeting. It is the intention of the Board that the policy on remuneration will continue to apply for the current financial year.

Remuneration policy

The Company follows the recommendation of the AIC Code that non-executive Directors' remuneration should reflect the time commitment and responsibilities of the role. The Company's policy is that the remuneration of non-executive Directors should reflect the experience of the Board as a whole and be determined with reference to comparable organisations and appointments. The Board also considers the average rate of inflation during the period since the last fee increase and reviews the level of remuneration in comparison with other investment trusts of a similar size and/or mandate, as well as taking account of any data published by relevant organisations to ensure that fees are in line with industry practice. This comparison, together with consideration of any alteration in non-executive Directors' responsibilities, is used to review whether any change in remuneration is necessary.

All Directors are non-executive, appointed under the terms of letters of appointment. There are no service contracts in place. The Company has no employees.

The fees for the non-executive Directors are determined within the limits (not to exceed £300,000 per annum) set out in the Company's Articles of Association, or any greater sum that may be determined by special resolution of the Company. Directors are not eligible for bonuses, share options, long-term incentive schemes or other performance-related benefits as the Board does not believe that this is appropriate for non-executive Directors. There are no pension arrangements or retirement benefits in place for the Directors of the Company.

Remuneration policy (continued)

Under the Company's Articles of Association, if any Director is called upon to perform or render any special duties or services outside their ordinary duties as a Director, they may be paid such reasonable additional remuneration as the Board, or any committee authorised by the Board, may from time to time determine.

The Directors are entitled to be repaid all reasonable travelling, hotel and other expenses properly incurred by them in or about the performance of their duties as Director, including any expenses incurred in attending meetings of the Board or any committee of the Board or general meetings of the Company.

Directors' and Officers' liability insurance cover is maintained by the Company on behalf of the Directors.

Directors' remuneration components

The components of the remuneration package for the Company's non-executive Directors, which comprise the Directors' Remuneration Policy, are set out below:

Remuneration type	Description and approach to determination
Fixed fees	Annual fees are set for each of the Directors, taking into account the wider industry and individual skills, time commitment and experience.
	When making recommendations for any changes in fees, the Committee will also consider wider factors such as the average rate of inflation over the period since the previous review, and the level and any change in complexity of the Directors' responsibilities (including additional time commitments as a result of increased regulatory or corporate governance requirements).
	These fees shall not exceed £300,000 per annum, divided between the Directors as they may determine.
	Directors do not participate in discussions relating to their own fee.
Additional fees	If any Director, being willing and having been called upon to do so, shall render or perform extra or special services of any kind, including services on any Committee of the Board, or shall travel or reside abroad for any business or purposes of the Company, he or she shall be entitled to receive such sum as the Board may think fit for expenses, and also such remuneration as the Board may think fit, either as a fixed sum or otherwise, and such remuneration may, as the Board shall determine, be either in addition to or in substitution for any other remuneration he or she may be entitled to receive.
Expenses	The Directors shall be entitled to be paid all expenses properly incurred by them in attending General Meetings or separate meetings of the holders of any class of shares or meetings of the Board or Committees of the Board or otherwise in or with a view to the performance of their duties.
Other	Directors are not eligible for bonuses, share options or long-term incentive schemes or other performance-related benefits. There are no pension arrangements in place for the Directors of the Company.

Remuneration policy (continued)

Directors' fee levels per annum (effective from 1 January 2024)

Component	Role	Fee level per annum	Purpose of Remuneration
Annual fee	Chairman	£49,000	Commitment as Chairmana
Annual fee	Non-executive Director	£37,000	Commitment as non-executive Director
Additional fee	Chairman of the Audit Committee	£6,000	For additional responsibilities and time commitmentsb
Additional fee	All Directors	n/a	For extra or special services performed in their role as a Directorc
Expenses	All Directors	n/a	Reimbursement of expenses incurred in the performance of duties as a Director

a The Chairman of the Board is paid a higher fee than the other Directors to reflect the additional responsibility and remit of the role.

b The Chairman of the Audit Committee is paid a higher fee than the other Directors to reflect the additional responsibility and remit of the role.

c Additional fees would only be paid in exceptional circumstances in relation to the performance of extra or special services. No such fees have been paid in the current year.

Fees are reviewed annually in accordance with the above policy. The fee for any new Director appointed to the Board will be determined on the same basis. The Company is committed to ongoing Shareholder dialogue and any views expressed by Shareholders on the fees being paid to Directors would be taken into consideration by the Board when reviewing the Directors' Remuneration Policy and in the annual review of Directors' fees.

Compensation will not be made upon early termination of appointment.

Annual report on remuneration

The report below provides Shareholders with an understanding of how the Company has implemented the Remuneration Policy.

Directors' remuneration (audited)

The remuneration paid to the Directors for the years ended 31 December 2023 and 31 December 2022 is set out in the single total figure table below:

		Year ended 31 December 2023			Year ended 31 December 2022
Director	Fees	Taxable benefitsa	Total	Fees	Taxable benefitsa	Total
	£	£	£	£	£	£
David Simpson	47,000	623	47,623	43,000	–	43,000
Richard Boléat	41,000	4,706	45,706	37,500	5,355	42,855
Barbara Powley	35,500	3,033	38,533	32,250	2,910	35,160
Jane Routledge	35,500	62	35,562	32,250	32	32,282
	159,000	8,424	167,424	145,000	8,297	153,297

All fees are at a fixed rate and there is no variable remuneration. Fees are pro-rated where a change takes place during a financial year. There were no payments to third parties included in the fees referred to in the table above. There are no further fees to disclose as the Company has no employees, chief executive or executive directors.

a Reimbursement of expenses incurred in the performance of duties as a Director.

Annual report on remuneration (continued)

Company performance

The graph below compares the total return to holders of Ordinary Shares since they were first admitted to trading on the LSE, compared to a return of 3 Month LIBOR +2.5% from inception to 31 December 2019, a return of 3 Month LIBOR +4% from 1 January 2020 until 31 December 2021 and an annual return of SONIA +4% from 1 January 2022. SONIA (which replaced LIBOR) plus target rates have been chosen for comparison purposes as these were the dividend targets for the stated periods.

a Alternative performance measure. Please see pages 113 to 114 for further information.

b 3 Month LIBOR +2.5% from inception to 31 December 2019, 3 Month LIBOR +4% from 1 January 2020 to 31 December 2021, thereafter SONIA +4%.

Source: M&G and Morningstar

Relative importance of spend on pay

The table below shows the proportion of the Company's income spent on pay.

for the year ended 31 December	2023 £'000	2022 £'000	Change £'000
Spent on Directors' feesa	167	153	14
Management fee and other expensesb	1,557	1,499	58
Dividend paymentsb	11,694	6,645	5,049
Costs of repurchasing Ordinary Shares	1,444	2,201	(757)

• a As the Company has no employees, the total spent on remuneration comprises fees and taxable benefits paid to Directors.
• b The items listed in the table above are as required by the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 ss.20 with the exception of the management fee and other expenses, which have been included because the Directors believe it will help Shareholders' understanding of the relative importance of the amount spent on pay. The figures for this measure are the same as those shown in notes 4 and 5 to the Financial Statements.

Annual percentage change in Directors' remuneration

The following table sets out the annual percentage change in Directors' fees for the applicable years. Directors' fees were unchanged in the period from inception to 31 December 2020.

Director	% from 2023 to 2024	% from 2022 to 2023	% from 2021 to 2022	% from 2020 to 2021
David Simpson (Chairman)	4.3	9.3	4.9	2.5
Richard Boléat (Audit Committee Chairman)	4.9	9.3	4.9	2.1
Barbara Powley	4.2	10.0	4.9	2.5
Jane Routledgea	4.2	10.0	4.9	–
Mark Hutchinsonb	n/a	n/a	–	–

a Jane Routledge was appointed as a Director on 25 October 2021; the percentage shown is the increase on a full-year basis.

b While a Director of the Company, Mark Hutchinson was employed by M&G as Chair of Private Assets and had agreed to waive his fee. He retired on 31 August 2021.

Annual report on remuneration (continued)

Directors' interests (audited)

The Company's Articles of Association do not require a Director to own shares in the Company. The interests of the Directors and any connected persons in the Ordinary Shares of the Company at 31 December 2022 and 31 December 2023 are shown in the table below.

	Number of shares 31 December 2023	Number of shares 31 December 2022
David Simpson	25,000	25,000
Richard Boléat	30,000	30,000
Barbara Powleya	22,744	17,494
Jane Routledge	19,696	19,696

a Barbara Powley purchased an additional 504 shares on 23 February 2024.The information in the above table has been audited.

All of the holdings of the Directors are beneficial.

None of the Directors or any person connected with them had a material interest in the Company's transactions, arrangements or agreements during the year.

Remuneration advisors

The Company has not sought the advice or service of any outside person in respect of consideration of Directors' remuneration.

Consideration of Shareholders' views

An ordinary resolution to approve the Remuneration Report is put to Shareholders at each Annual General Meeting. An ordinary resolution to approve the Remuneration Policy is put to Shareholders on a triennial basis and Shareholders also have the opportunity to comment on and raise any questions in respect of the remuneration policy at each AGM meeting. To date, no Shareholders have expressed an opinion on the remuneration policy. Should there be a substantial vote against any resolution proposed at the Annual General Meeting, the reasons for the vote would be sought and action taken. In the event that the vote was against resolutions in relation to the Directors' remuneration, further details would be provided in future Directors' Remuneration Reports.

Shareholder voting

The Directors' Remuneration Report for the year ended 31 December 2022 and the Directors' Remuneration Policy were approved by Shareholders at the Annual General Meeting held on 15 June 2023. The votes cast were as follows:

	Directors' remuneration report		Directors' remuneration policy
	Number of votes	% of votes cast	Number of votes	% of votes cast
For	63,761,972	99.99	64,046,119	99.99
Against	5,091	0.01	5,091	0.01
Total votes cast	63,767,063	100.00	64,051,210	100.00
Number of votes withheld	285,543	–	1,396	–

Annual report on remuneration (continued)

Approval

On behalf of the Board and in accordance with Part 2 of Schedule 8 of the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013, I confirm that the above Report on Remuneration Implementation summarises, as applicable, for the year to 31 December 2023:

• The major decisions on Directors' remuneration.
• Any substantial changes relating to Directors' remuneration made during the year.
• The context in which the changes, if any, occurred and decisions have been taken.

The Directors' Remuneration Report was approved by the Board and signed on its behalf by:

Jane Routledge Chair of the Remuneration Committee

27 March 2024

I am pleased to present the Report of the Audit Committee for the year ended 31 December 2023.

Role of the Audit Committee

The primary responsibilities of the Audit Committee are:

• to monitor the integrity and contents of the Company's Half Year reports, Annual reports and audited Financial Statements and accounting policies, and to review compliance with regulatory and financial reporting requirements;
• to advise the Board, where requested, on whether the Annual Report and audited Financial Statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for Shareholders to assess the Company's position and performance, business model and strategy;
• to review the principal risks facing the Company that would threaten its business model, future performance, solvency or liquidity, and to review the effectiveness of the Company's internal controls and risk management systems;
• to assess the prospects of the Company for the next 12 months and to consider its longer term viability;
• to review the Company's internal financial controls and review the adequacy and effectiveness of the Company's risk management systems;
• to consider annually whether there is a need for the Company to have its own internal audit function;
• to oversee the selection process of possible new appointees as external auditor;
• to make recommendations to the Board in relation to the appointment, re-appointment and removal of the Auditor, including the approval of its remuneration and terms of engagement;
• to review the adequacy and scope of the external audit;
• to consider the independence, objectivity and effectiveness of the Auditor and the effectiveness of the audit; and
• to approve any non-audit services to be provided by the Auditor and the fees paid for such services.

Composition of the Audit Committee and resources

All of the independent non-executive Directors of the Company are members of the Audit Committee. I am a Fellow of the Institute of Chartered Accountants in England and Wales, and have more than 30 years' financial sector and accounting experience and therefore consider myself to have recent and relevant financial and investment experience sufficient to chair the Audit Committee. I consider that the Audit Committee as a whole has competence relevant to the investment trust sector. Details of the Committee Members' experience are given in the biographical information on page 37.

As the Company has no employees, there is no dedicated resource available to the Audit Committee. However, representatives from the Investment Manager are invited to attend and present on issues as required.

The Audit Committee also has direct access to BDO LLP, who act as Auditor to the Company.

The Independent Auditor attends Audit Committee meetings as required. The Audit Committee reviews, with the Independent Auditor, the plan and scope of the audit prior to its start, and the results after it is concluded. At least annually, the Audit Committee discusses any relevant matters with the Auditor privately without the presence of the Investment Manager.

The Audit Committee is authorised to use whatever resources are required to fulfil its duties including seeking independent legal or other professional advice.

Terms of reference

The Committee operates within defined terms of reference which are available on the Company's website.

Matters considered during the year

During the year under review, the Audit Committee has ensured the effective assessment of the Company's evolving risk environment, particularly in the context of the impact of interest and inflation rates on credit market conditions. Rigorous evaluation and close oversight of the Company's risk matrix has been undertaken together with the Company's internal control systems. The monitoring of credit risk in particular has been enhanced by detailed reviews of the assets which the Investment Manager considers to have the most credit risk attached. The Committee regularly ensures that those internal control systems established at IPO are maintained and updated as necessary and receives confirmations from third party providers in this regard. In addition, the Committee has closely assessed the Company's ability to meet its financial obligations over the next 12 months and the ongoing viability of the Company. In particular, the Committee has given close consideration to the forward-looking elements of the Company's statements, noting the changes on the horizon and being clear on the assumptions made in regard to those.

In relation to the Company's financial statements which appear within the latter part of this Report, the key area of focus has been on the valuation of those financial instruments where there is no ready market, which comprise a material part of the Company's portfolio of securities. The Committee regards as a key duty the obtaining of ongoing comfort that the process behind the valuation of such instruments is robust, consistent, reliable and able to withstand external scrutiny. This is particularly critical given the regular publication of the Company's net asset value, which incorporates the output from these processes. The Committee, after due and detailed enquiry, is satisfied that these processes are fit for purpose.

As reported in the Annual Report for the year ended 31 December 2022, earlier in 2023, the Committee agreed to review the audit services provided by the previous auditor, Deloitte LLP, and following consultation with the auditor, agreed to re-tender the audit services in respect of the year ending 31 December 2023. Following a comprehensive tender process, organised by the Investment Manager's Financial Reporting team in conjunction with the Committee Chair, the Board recommended to Shareholders the appointment of BDO LLP as auditor with effect from the conclusion of the 2023 AGM and this resolution was passed.

Significant issues

The significant issues considered by the Committee in relation to the Annual Report and audited Financial Statements were:

• 1. Whether the analysis of principal risks faced by the Company as set out in the Strategic Report adequately captures and explains all key risks in a manner which enables Shareholders to properly understand the risks faced by the Company;
• 2. The determination of fair value in respect of the Company's assets classified as levels 2 and 3 under the FRS102 fair value hierarchy;
• 3. The determination of the correct level of individual assets within the FRS102 fair value hierarchy; and
• 4. A critical review and appraisal of the form and content of the Full Year Report to seek to ensure that it is fair, balanced and understandable.

Audit fees and non-audit services

An audit fee of £94,500 exclusive of VAT and recharge of support costs at 5% has been agreed in respect of the audit for the year ended 31 December 2023 (2022: £85,000 exclusive of VAT).

In accordance with the Company's Non-Audit Services Policy, as last updated and adopted by the Company on 7 March 2024, the Audit Committee reviews the scope and nature of all proposed non-audit services before engagement, to ensure that auditor independence and objectivity are safeguarded. Pursuant to the introduction of the Revised Ethical Standard 2019, the policy includes a 'whitelist' of non-audit services which may be provided by the Auditor provided there is no apparent threat to independence, as well as a list of services which are prohibited. Non-audit services are capped at 70.0% of the average of the statutory audit for the preceding three years. During the year ended 31 December 2023, the Auditor provided no non-audit services (2022: none).

Further information on the fees paid to the Auditor is set out in note 5 to the Financial Statements on page 89.

Effectiveness of the external audit

The Audit Committee monitors and reviews the effectiveness of the external audit carried out by the Auditor, including a detailed review of the audit plan and the audit results report, and makes recommendations to the Board on the appointment, re-appointment, remuneration and terms of engagement of the Auditor. This review takes into account the experience and tenure of the audit partner and team, the nature and level of services provided, and confirmation that the Auditor has complied with independence standards. Any concerns with the effectiveness of the external audit process would be reported to the Board.

Independence and objectivity of the Auditor

The Committee has considered the independence and objectivity of the Auditor and has noted that no non-audit services have been provided by the Auditor during the year under review.

2023 was the first year for which BDO LLP has been the Auditor to the Company. The Committee will review the continuing appointment of the Auditor on an annual basis and give regular consideration to the Auditor's fees and independence, along with matters raised during each audit.

The Committee is satisfied that the Auditor's objectivity and independence is not impaired and that the Auditor has fulfilled its obligations to the Company and its Shareholders.

Appointment of the Auditor

Following consideration of the performance of the Auditor, the services provided during the year and a review of its independence and objectivity, the Committee has recommended to the Board the reappointment of BDO LLP as Auditor to the Company.

In accordance with the requirements relating to the appointment of auditors, the Company would need to conduct an audit tender following a ten year tenure, ie no later than the financial year beginning 1 January 2033. Even if no change is made to the audit firm appointed, the audit partner will be subject to change at least every five years.

Internal controls and risk management

The Board, through the Audit Committee, is responsible for ensuring that suitable internal control systems to prevent and detect fraud and error are designed and implemented by the third-party service providers to the Company and is also responsible for reviewing the effectiveness of such controls.

The Board confirms that there is an ongoing process for identifying, evaluating and managing the principal and emerging risks faced by the Company in line with the FRC's Guidance on Risk Management, Internal Control and Related Financial and Business Reporting published in September 2014 and the FRC's Guidance on Audit Committees published in April 2016. This process has been in place for the year under review and up to the date of approval of this report, and accords with the guidance.

In particular, it has reviewed and updated the process for identifying and evaluating the significant risks affecting the Company and policies by which these risks are managed. The risks of any failure of such controls are identified in a risk matrix and a schedule of key risks, which are regularly reviewed by the Board and which identify the likelihood and severity of the impact of such risks and the controls in place to minimise the probability of such risks occurring.

Where reliance is placed on third parties to manage identified risks, those risks are matched to appropriate controls reported in the relevant third-party service provider's annual report on controls. The principal risks identified by the Board are set out in the Strategic Report on pages 18 to 23.

The following are the key components which the Company has in place to provide effective internal control:

● The Board has agreed clearly defined investment criteria, which specify levels of authority and exposure limits. Reports on compliance with these criteria are regularly reviewed by the Board.

• The Board has a procedure to ensure that the Company can continue to be approved as an investment trust by complying with Sections 1158/1159 of the Corporation Tax Act 2010.
• The Investment Manager and Administrator prepare forecasts and management accounts which allow the Board to assess the Company's activities and to review its performance.
• The contractual agreements with the Investment Manager and other third-party service providers, and adherence to them, are regularly reviewed.
• The services and controls at the Investment Manager and at other third-party service providers are reviewed at least annually.
• The Audit Committee receives and reviews assurance reports on the controls of all third-party service providers, including the Administrator.

Internal control systems are designed to meet the Company's particular needs and the risks to which it is exposed. They do not eliminate the risk of failure to achieve business objectives and, by their nature, can only provide reasonable and not absolute assurance against misstatement or loss.

As the Company has no employees, it does not have a whistleblowing policy and procedure in place. The Company delegates its main functions to third-party service providers, each of whom report on their policies and procedures to the Audit Committee.

Changes to the UK Corporate Governance Code

The Committee has noted the recent changes to the UK Code, in particular the increased focus on internal controls which will apply to financial years beginning on or after 1 January 2026 and intends to consider what enhancements, if any, should be made to the current internal controls review process in due course.

Internal audit function

The Audit Committee believes that the Company does not require an internal audit function, principally because the Company delegates its day-to-day operations to third parties, which are monitored by the Committee, and which provide control reports on their operations at least annually.

My thanks go to all the individuals who have generously committed their time up to the publication of this report in contributing to the successful completion of the Committee's work program to date. I would very much welcome feedback from Shareholders on the form and content of this Annual Report and audited Financial Statements.

Richard Boléat Chairman of the Audit Committee

27 March 2024

Management report and Directors' responsibilities statement

Management report

Listed companies are required by the FCA's Disclosure Guidance and Transparency Rules (the 'Rules') to include a management report in their Financial Statements. This information is included in the Strategic Report on pages 2 to 36 inclusive (together with the sections of the Annual Report and audited Financial Statements incorporated by reference) and the Directors' Report on pages 38 to 42. Therefore, a separate management report has not been included.

Statement of Directors' responsibilities in respect of the Annual Report and audited Financial Statements

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

Company law requires the Directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with UK Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland.

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
• assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
• use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

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

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

Management report and Directors' responsibilities statement

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

The Directors listed on page 37 confirm that to the best of their knowledge

• the Financial Statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of the Company taken as a whole; and
• the Strategic Report/Directors' Report include a fair review of the development and performance of the business and the position of the issuer, together with a description of the principal risks that they face.

The 2018 UK Corporate Governance Code also requires Directors to ensure that the Annual Report and audited Financial Statements are fair, balanced and understandable. In order to reach a conclusion on this matter, the Board has requested that the Audit Committee advise on whether it considers that the Annual Report and audited Financial Statements fulfil these requirements. The process by which the Audit Committee has reached these conclusions is set out in the Report of the Audit Committee on pages 63 to 67. As a result, the Board has concluded that the Annual Report and audited Financial Statements for the year ended 31 December 2023, taken as a whole, are fair, balanced and understandable and provide the information necessary for Shareholders to assess the Company's position, performance, business model and strategy.

On behalf of the Board

David Simpson Chairman 27 March 2024

Independent auditor's report to the members of M&G Credit Income Investment Trust plc

1 Opinion on the financial statements

Opinion on the financial statements

• give a true and fair view of the state of the Company's affairs as at 31 December 2023 and of its profit for the year then ended;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements of M&G Credit Income Investment Trust plc (the 'Company') for the year ended 31 December 2023 which comprise the Income statement, Statement of financial position, Statement of changes in equity, Cash flow statement and Notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

2 Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit opinion is consistent with the additional report to the Audit Committee.

Independence

Following the recommendation of the Audit Committee, we were appointed by the Board of Directors on 15 June 2023 to audit the financial statements for the year ended 31 December 2023 and subsequent financial periods. The period of total uninterrupted engagement including retender and reappointment is one year, covering the year ended 31 December 2023. We remain independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by that standard were not provided to the Company.

3 Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors' assessment of the Company's ability to continue to adopt the going concern basis of accounting included:

• Evaluating the appropriateness of the Directors' method of assessing the going concern in light of economic and market conditions by reviewing the information used by the Directors in completing their assessment;
• Assessing the appropriateness of the Directors' assumptions and judgements made by comparing the prior year forecasted costs to the actual costs incurred to check that the projected costs are reasonable;

● Assessing the projected management fees for the year to check that it was in line with the current assets under management levels and the projected market growth forecasts for the following year; and

● Assessing the appropriateness of the Directors' assumptions and judgements made in their analysis and performing a stress and reverse stress test on their analysis including consideration of the available cash resources relative to forecast expenditure and commitments.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

In relation to the Company's reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the Directors' statement in the financial statements about whether the Directors considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

Key audit matters	Valuation and ownership of investments.
Materiality	Company financial statements as a whole £1.35 million based on 1% of Net assets.
Specific Materiality	Items impacting revenue return £0.4 million based on 5% of return on ordinary activities before tax.

4 Overview

5 An overview of the scope of our audit

Our audit was scoped by obtaining an understanding of the Company and its environment, including the Company's system of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter		How the scope of our audit addressed the key audit matter
Valuation and ownership of investments	The investment portfolio at the year-end comprised both quoted and unquoted investments.	We responded to this matter by testing the valuation and ownership of the the whole portfolio of quoted investments. We performed the following procedures:
Note 1 and note 14	The unquoted investments involve significant judgement in selecting a valuation methodology as well as estimation uncertainty in determining their valuations. There is a risk that the prices used for the quoted investments held by the Company are not reflective of fair value and the risk that errors made in the recording of investment holdings result in the incorrect reflection of investments owned by the Company. Therefore we considered the valuation and ownership of quoted and unquoted investments to be the most significant audit area as the quoted and unquoted investments also represent the most significant balance in the financial statements and underpin the principal activity of the entity. For these reasons and the materiality of the balance in relation to the financial statements as a whole, we considered this to be a key audit matter.	With respect to quoted investments: Confirmed the year-end bid price was used by ● agreeing to externally quoted prices; Recalculated the valuation by multiplying the ● number of shares/notional value held per the statement obtained from the custodian by the valuation price; and Obtained direct confirmation of the number of ● shares outstanding or notional/principal balance held per investment from the custodian regarding all investments held at the balance sheet date. With respect to unquoted investments we: Considered the appropriateness of the valuation ● methodology applied; Obtained direct confirmation of the unquoted ● population by confirming the outstanding principal balance with the relevant independent third parties in which the debt instruments are held. With the use of our valuation experts, for a ● sample of the investments that management has valued using discounted cash flows or a single broker quote we have: agreed stated terms to the original term ● sheets; assessed the credit spreads applied in the ● valuation; and recalculated using discounted cash flow ● valuations.

Key audit matter (continued) How the scope of our audit addressed the key audit matter (continued)

● With the involvement of our valuation experts, for a sample of the private senior floating rate loans we assessed appropriateness of par as at the valuation date, reviewed the Company's policy and reviewed management's assessment of triggers.

Key observations:

Based on our procedures performed we did not identify any matters to suggest the valuation or ownership of the investments was not appropriate.

6 Our application of materiality

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements.

In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows:

	Company financial statements
	2024 £m
Materiality	1.35
Basis for determining materiality	1% of Net assets
Rationale for the benchmark applied	As an investment trust, the net asset value is the key measure of performance for users of the financial statements.
Performance materiality	1.01
Basis for determining performance materiality	75% of materiality
Rationale for the percentage applied for performance 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.

Specific materiality

We also determined that for Revenue return before tax, a misstatement of less than materiality for the financial statements as a whole, specific materiality, could influence the economic decisions of users as it is a measure of the Company's performance of income generated from its investments after expenses. As a result, we determined materiality for these items to be £0.4 million, based on 5% of Revenue return before tax. Further applied a performance materiality level of 75% of specific materiality to ensure that the risk of errors exceeding specific materiality was appropriately mitigated.

Reporting threshold

We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £67,600. We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.

7 Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

8 Corporate governance statement

The Listing Rules require us to review the Directors' statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the Company's compliance with the provisions of the UK Corporate Governance Code specified for our review.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit.

Going concern and longer-term ● viability Pages 24-25	The Directors' statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified; and
●	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 (page 69);
	●	Board's confirmation that it has carried out a robust assessment of the emerging and principal risks (page 18);
	●	The section of the annual report that describes the review of effectiveness of risk management and internal control systems (pages 18-23); and
	●	The section describing the work of the Audit Committee (pages 63-67).

9 Other Companies Act 2006 reporting

Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.

Strategic report and Directors' report	In our opinion, based on the work undertaken in the course of the audit:
	the information given in the Strategic report and the Directors' report ● for the financial year for which the financial statements are prepared is consistent with the financial statements; and
	the Strategic report and the Directors' report have been prepared in ● accordance with applicable legal requirements.
	In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the Directors' report.
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
	the financial statements and the part of the Directors' remuneration ● report to be audited are not in agreement with the accounting records and returns; or
	certain disclosures of Directors' remuneration specified by law are not ● made; or
	we have not received all the information and explanations we require for ● our audit.

10 Responsibilities of Directors

As explained more fully in the Management report and Directors' responsibilities statement, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

11 Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Extent to which the audit was capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Non-compliance with laws and regulations

Based on:

• Our understanding of the Company and the industry in which it operates;
• Discussion with management, Audit Committee and those charged with governance;
• Obtaining an understanding of the Company's policies and procedures regarding compliance with laws and regulations; and

We considered the significant laws and regulations to be Companies Act 2006, the FCA listing and DTR rules, the principles of the AIC Code of Corporate Governance, industry practice represented by the AIC SORP, the applicable accounting framework, and qualification as an Investment Trust under UK tax legislation as any non-compliance of this would lead to the Company losing various deductions and exemptions from corporation tax.

Our procedures in respect of the above included:

• Agreement of the financial statement disclosures to underlying supporting documentation;
• Enquiries of management and those charged with governance relating to the existence of any non-compliance with laws and regulations;
• Reviewing minutes of meeting of those charged with governance throughout the period for instances of noncompliance with laws and regulations; and
• Reviewing the calculation in relation to Investment Trust compliance to check that the Company was meeting its requirements to retain their Investment Trust Status.

Fraud

We assessed the susceptibility of the financial statement to material misstatement including fraud.

Our risk assessment procedures included:

• Enquiry with management, Audit Committee, and those charged with governance regarding any known or suspected instances of fraud;
• Obtaining an understanding of the Company's policies and procedures relating to:
  • Detecting and responding to the risks of fraud; and
  • Internal controls established to mitigate risks related to fraud.
• Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud; and
• Discussion amongst the engagement team as to how and where fraud might occur in the financial statements.

Based on our risk assessment, we considered the areas most susceptible to be management override of controls and key judgements and estimates included within the valuation of unquoted investments.

Our procedures in respect of the above included:

• Relevant procedures in respect of valuation of investments, as set out in the Key Audit Matters section above;
• In addressing the risk of management override of control, we:
  • Performed a review of estimates and judgements applied by management in the financial statements to assess their appropriateness and the existence of any systematic bias;
  • Testing post closure journals by agreeing them to supporting documentation and evaluating whether there was evidence of bias by the Investment Manager and Directors that represented a risk of material misstatement due to fraud; and
  • Performed a review of unadjusted audit differences, if any, for indications of bias or deliberate misstatement.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed noncompliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council's website at: frc.org.uk/ auditorsresponsibilities. This description forms part of our auditor's report.

12 Use of our report

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Chris Meyrick (Senior Statutory Auditor)

For and on behalf of BDO LLP Statutory Auditor Edinburgh United Kingdom

27 March 2024

Income statement

			Year ended 31 December 2023		Year ended 31 December 2022
	Note	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Net gains/(losses) on investments	9	–	2,792	2,792	–	(8,044)	(8,044)
Net gains/(losses) on derivatives	9	–	1,869	1,869	–	(289)	(289)
Net currency (losses)/gains		(263)	86	(177)	294	(207)	87
Income	3	10,701	–	10,701	7,530	–	7,530
Investment management fee	4	(943)	–	(943)	(964)	–	(964)
Other expenses	5	(781)	–	(781)	(688)	–	(688)
Net return/(loss) on ordinary activities before finance costs and taxation		8,714	4,747	13,461	6,172	(8,540)	(2,368)
Finance costs	6	(147)	–	(147)	(205)	–	(205)
Net return/(loss) on ordinary activities before taxation		8,567	4,747	13,314	5,967	(8,540)	(2,573)
Taxation on ordinary activities	8	–	–	–	–	–	–
Net return/(loss) attributable to Ordinary Shareholders after taxation		8,567	4,747	13,314	5,967	(8,540)	(2,573)
Net return/(loss) per Ordinary Share (basic and diluted)	2	6.04p	3.35p	9.39p	4.21p	(6.03)p	(1.82)p

The total column of this statement represents the Company's statutory profit and loss account. The 'Revenue' and 'Capital' columns represent supplementary information provided under guidance issued by the Association of Investment Companies.

All revenue and capital items in the above statement derive from continuing operations.

The Company has no other comprehensive income and therefore the net return on ordinary activities after taxation is also the total comprehensive income for the year.

The notes on pages 84 to 105 form an integral part of these Financial Statements.

Strategic report • Governance • Financial • Additional information

Financial statements

Statement of financial position

		As at 31 December 2023		As at 31 December 2022
	Note	£'000	£'000	£'000	£'000
Non-current assets
Investments at fair value through profit or loss	9		133,392		137,584
Current assets
Derivative financial assets held at fair value through profit or loss	9	285		1,477a
Receivables	10	2,526		2,100
Cash and cash equivalents	10	2,838		3,672
		5,649		7,249
Current liabilities
Derivative financial liabilities held at fair value through profit or loss	9	(684)		(618)a
Payables	10	(3,072)		(9,106)
		(3,756)		(9,724)
Net current assets/(liabilities)			1,893		(2,475)
Net assets			135,285		135,109
Capital and reserves
Called up share capital	11		1,447		1,447
Share premium			42,257		42,257
Special distributable reserve			91,276		96,198
Capital reserve	11		(1,949)		(6,696)
Revenue reserve			2,254		1,903
Total shareholders' funds			135,285		135,109
Net Asset Value per Ordinary Share (basic and diluted)	2		96.21p		94.99p

a Reclassification of the derivative financial assets and derivative liabilities to align with current year presentation.

The notes on pages 84 to 105 form an integral part of these Financial Statements.

Approved and authorised for issue by the Board of Directors on 27 March 2024 and signed on its behalf by:

David Simpson Chairman Company registration number: 11469317 27 March 2024

Statement of changes in equity

Year ended 31 December 2023	Note	Called up Ordinary Share capital	Share premium	Special distributable reservea	Capital reservea	Revenue reservea	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2022		1,447	42,257	96,198	(6,696)	1,903	135,109
Purchase of Ordinary Shares to be held in treasury		–	–	(1,444)	–	–	(1,444)
Net return attributable to shareholders		–	–	–	4,747	8,567	13,314
Dividends paid	7	–	–	(3,478)	–	(8,216)	(11,694)
Balance at 31 December 2023		1,447	42,257	91,276	(1,949)	2,254	135,285

Year ended 31 December 2022	Note	Called up Ordinary Share capital	Share premium	Special distributable reservea	Capital reservea	Revenue reservea	Total
		£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2021		1,447	42,217	95,670	3,473	952	143,759
Ordinary Shares issued from treasury		–	40	2,729	–	–	2,769
Purchase of Ordinary Shares to be held in treasury		–	–	(2,201)	–	–	(2,201)
Net return/(loss) attributable to shareholders		–	–	–	(8,540)	5,967	(2,573)
Dividends paid	7	–	–	–	(1,629)	(5,016)	(6,645)
Balance at 31 December 2022		1,447	42,257	96,198	(6,696)	1,903	135,109

a These reserves form the distributable reserves of the Company and may be used to fund distributions to investors via dividend payments. For the detailed analysis of the realised and investment holding gains and losses of the capital reserve, please refer to note 11 on page 95.

The notes on pages 84 to 105 form an integral part of these Financial Statements.

Cash flow statement

	Note	Year ended 31 December 2023 £'000	Year ended 31 December 2022 £'000
Cash flows from operating activities
Net profit/(loss) before finance costs and taxationa		13,461	(2,368)
Adjustments for:
Net (gains)/losses on investments	9	(2,792)	8,044
Net (gains)/losses on derivatives	9	(1,869)	289
Net currency losses/(gains)		177	(87)
Increase in receivables		(440)	(859)
Increase in payables		966	1,019
Purchases of investmentsb	9	(34,621)	(54,740)
Sales of investmentsb	9	44,746	48,096
Net cash inflow/(outflow) from operating activities		19,628	(606)
Financing activities
Finance costs	6	(147)	(205)
Ordinary Shares issued from treasury		–	2,769
Proceeds from loan facility		–	8,000
Repayment of loan facility		(7,000)	(1,000)
Purchase of Ordinary Shares to be held in treasury		(1,444)	(2,201)
Dividends paid	7	(11,694)	(6,645)
Net cash (outflow)/inflow from financing activities		(20,285)	718
(Decrease)/increase in cash and cash equivalents	10	(657)	112
Cash and cash equivalents at the start of the year		3,672	3,473
Effect of foreign exchange rates		(177)	87
(Decrease)/increase in cash and cash equivalents as above		(657)	112
Cash and cash equivalents at the end of the year	10	2,838	3,672

a Cash inflow from interest was £10,244,168 (2022: £7,164,640) and cash outflow from interest was £1,284 (2022: £3,822).

b Receipts from the sale of, and payments to acquire investment securities have been classified as components of cash flows from operating activities because they form part of the Company's dealing operations.

Analysis of changes in net (debt)/cash

	As at 31 December 2022 £'000	Net cash flows £'000	As at 31 December 2023 £'000
Cash and cash equivalents
Cash and cash equivalents	3,672	(834)	2,838
Borrowings
Debt due within one year	(7,000)	7,000	–
Net (debt)/cash	(3,328)	6,166	2,838

The notes on pages 84 to 105 form an integral part of these Financial Statements.

Notes to the Financial Statements

1 Significant accounting policies

The Company is a public limited company incorporated in the United Kingdom and registered in England and Wales, with the registered office of 6th Floor, 65 Gresham Street, London, EC2V 7NQ.

The significant accounting policies, as set out below, have all been applied consistently throughout the year and the preceding year.

a) Basis of accounting

The Financial Statements have been prepared on a going concern basis under the historical cost convention, modified to include certain items at fair value, and in accordance with United Kingdom Accounting Standards, including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice) and the Statement of Recommended Practice issued by the Association of Investment Companies ('SORP') in July 2022 'Financial Statements of Investment Trust Companies and Venture Capital Trusts'.

The Directors believe that the Company has adequate resources to continue in operational existence for the foreseeable future and for at least the next 12 months from the date of approval of these financial statements. The Directors have reviewed the liquidity of the investment portfolio, financial projections, the level of income and expenses, and key service providers' operational resilience in making their assessment. Further information is given in the Viability Statement (unaudited) on page 24 and the Going Concern Statement on pages 24 to 25.

The functional and presentational currency of the Company is pound sterling because that is the currency of the primary economic environment in which the Company operates.

All values are recorded to nearest thousands, unless otherwise stated.

b) Financial instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.

Financial liabilities are classified according to the substance of the contractual arrangements entered into.

Financial assets and liabilities

Financial assets and liabilities are classified as at fair value through profit or loss (FVTPL) and are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar Debt Instrument.

Changes in the fair value of financial instruments held at FVTPL and gains and losses on disposal are recognised as capital.

Financial assets and liabilities are offset in the statement of financial position only when there exists a legally enforceable right to set off the recognised amounts and the Company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Notes to the Financial Statements (continued)

With the exception of some hedging instruments, other Debt Instruments not meeting conditions of being 'basic' financial instruments are measured at FVTPL.

Commitments to make and receive loans that meet the conditions mentioned above are measured at cost (which may be nil) less any impairment. They are recorded and disclosed at the date of the legal commitment and recognised upon funding.

Financial assets are derecognised only when (a) the contractual rights to the cash flows from the financial asset expire or are settled, (b) the Company transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or (c) the Company, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party.

Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires.

Derivative financial instruments

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in the Income Statement. Derivative returns are recognised as revenue or capital depending on their nature.

Fair value measurement

The best evidence of fair value is a quoted price for an identical asset in an active market. When quoted prices are unavailable, the price of a recent transaction for an identical asset provides evidence of fair value as long as there has not been a significant change in economic circumstances or a significant lapse of time since the transaction took place. If the market is not active and recent transactions of an identical asset on their own are not a good estimate of fair value, the fair value is estimated by using a valuation technique. For further details please refer to note 14 on pages 103 to 104.

c) Impairment of assets

Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss. As at 31 December 2023, no impairment of assets has been recognised (2022: same).

d) Tax

Current tax is accounted for at the appropriate rate of corporation tax. The tax accounting treatment follows the principal amounts involved.

Deferred tax is recognised in respect of all timing differences between the treatment of certain items for tax and accounting purposes that have originated but not reversed at the balance sheet date.

Due to the Company's status as an investment trust company and the intention to continue meeting the conditions required to obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.

Notes to the Financial Statements (continued)

e) Income and expenses

Interest from Debt Instruments is recognised as revenue by reference to the coupon payable adjusted to spread any premium or discount on purchase over its remaining life. Other interest income is recognised as revenue on an accruals basis. Income from investment funds is recognised in revenue when the right to receive it is established.

Expenses not incidental to the purchase or sale of investments are recognised on an accruals basis and charged to revenue. Rebate of management fees incurred by investment funds managed by M&G Alternatives Investment Management Limited are recognised on an accrual basis as revenue or capital in accordance with the underlying scheme's distribution policy.

f) Finance cost

Finance costs are recognised on an accruals basis and are charged to revenue.

g) Foreign currency

Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Assets and liabilities denominated in foreign currencies at the balance sheet date are reported at the rates of exchange prevailing at that date.

Other exchange differences are recognised in profit or loss in the year in which they arise.

All gains and losses on the translation of foreign currency are recognised as revenue or capital in the Income Statement depending on the underlying nature of the transactions.

h) Cash and cash equivalents

Cash and cash equivalents are defined as cash and short-term, highly liquid investments that are readily convertible to known amounts of cash and that are subject to insignificant risk of change in value.

i) Share capital and reserves

Called up Ordinary Share capital

Called up Ordinary Share capital represents the nominal value of Ordinary Shares issued.

Share premium

Share premium represents the excess over nominal value of shares issued, net of expenses of the share issue, except where amounts have been cancelled in accordance with section 610 of the Companies Act 2006 and transferred to special distributable reserve.

Special distributable reserve

Share premium of £99,000,001 was cancelled on 12 February 2019 and transferred to the special distributable reserve, in accordance with section 610 of the Companies Act 2006. The Company may, at the discretion of the Board, pay all or part of any future dividends out of this special distributable reserve, taking into account the Company's investment objective. The costs of repurchasing Ordinary Shares has been debited to the special distributable reserve.

Notes to the Financial Statements (continued)

Capital reserve

Capital reserve reflects any:

• gains or losses on the disposal of investments;
• exchange differences of a capital nature;
• increases and decreases in the fair value of investments held at the year end.

This reserve can also be used for distributions by way of a dividend and for funding the cost of repurchasing Ordinary Shares. The portion of the capital reserve arising on revaluation of investments held is non-distributable.

Revenue reserve

Revenue reserve reflects all income and expenditure which are recognised in the revenue column of the Income Statement and is distributable by way of dividends. It can also be used for funding the cost of repurchasing Ordinary Shares.

j) Repurchasing of Ordinary Shares for cancellation or to be held in treasury/reissue of Ordinary Shares from treasury

The costs of repurchasing shares including the related stamp duty and transaction costs are currently charged to the special distributable reserve and dealt with within the Statement of changes in equity. Share repurchase transactions are accounted for on a trade date basis.

Where Ordinary Shares held in treasury are subsequently reissued, the sale proceeds up to the purchase price of the shares will be transferred to the special distributable reserve or capital reserve and the excess of the sale proceeds over the purchase price will be transferred to share premium.

k) Investment management fees

Investment management fees are recognised on an accruals basis and are charged to revenue.

l) Accounting judgements, estimates and assumptions

The preparation of the Financial Statements requires the Directors to make judgements, estimates and assumptions that affect the amounts recognised in the Financial Statements. However, uncertainty about these judgements, assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in future years.

Whilst estimates are based on best judgement using information and financial data available the actual outcome may differ from these estimates.

When determining the level of investments within the fair value hierarchy, the determination of what constitutes 'observable' requires significant judgement by the Company. The Company considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary and provided by independent sources that are actively involved in the relevant market. If a fair value measurement uses inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. Fair value estimates are made at a specific point in time, based on market conditions and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgement (eg interest rates, volatility, estimated cash flows etc.). For further details please refer to note 14 on pages 103 to 104.

No other significant judgements, estimates or assumptions have been required in the preparation of the accounts for the current year.

Notes to the Financial Statements (continued)

2 Returns and net asset value (NAV)

	Year ended 31 December 2023	Year ended 31 December 2022
Revenue return
Revenue return attributable to Ordinary Shareholders (£'000)	8,567	5,967
Weighted average number of shares in issue during the year	141,789,016	141,741,337
Revenue return per Ordinary Share (basic and diluted)	6.04p	4.21p
Capital return
Capital return attributable to Ordinary Shareholders (£'000)	4,747	(8,540)
Weighted average number of shares in issue during the year	141,789,016	141,741,337
Capital return per Ordinary Share (basic and diluted)	3.35p	(6.03)p
Net return
Net return per Ordinary Share (basic and diluted)	9.39p	(1.82)p
NAV per Ordinary Share
Net assets attributable to Ordinary Shareholders (£'000)	135,285	135,109
Number of shares in issue at year end	140,619,239	142,233,022
NAV per Ordinary Share	96.21p	94.99p

3 Income

	Year ended 31 December 2023 £'000	Year ended 31 December 2022 £'000
Income from investments
Interest income from Debt Instruments	9,109	6,580
Distributions from investment funds	1,331	765
Management fee rebate	96	101
	10,536	7,446
Other income
Interest from cash and cash equivalents	115	39
Other income	50	45
	10,701	7,530

Notes to the Financial Statements (continued)

4 Investment management fee

Year ended	Year ended
31 December 2023	31 December 2022
£'000	£'000
Investment management fee 943	964

The amount outstanding at the year end is shown in note 10.

The basis for calculating the investment management fee is set out on pages 25 to 26.

5 Other expenses

	Year ended 31 December 2023 £'000	Year ended 31 December 2022 £'000
Revenue expenses
Administration fees	124	129
Auditors' remuneration for audit servicesa	119	102
Broker fees	76	67
Directors' fees	167	153
Legal fees	47	24
Printing and postage	5	6
Registrar's and secretarial fees	113	98
Other	130	109
	781	688

a The audit services fees are disclosed including VAT.

Notes to the Financial Statements (continued)

6 Finance costs

	Year ended 31 December 2023 £'000	Year ended 31 December 2022 £'000
Commitment fee	72	66
Arrangement fees	15	13
Legal fees	5	23
Interest on loan facility	55	103
	147	205

On 19 October 2020 the Company entered into a £25 million revolving credit facility agreement with State Street Bank International GmbH. On 16 October 2023 the Company renewed the credit facility on the existing terms, with the new credit facility expiring on 14 October 2024. During the year the facility was fully repaid; as at 31 December 2023 no amounts were drawn down.

7 Dividends

	Year ended 31 December 2023 £'000	Year ended 31 December 2022 £'000
Revenue
2021 fourth interim interest distribution of 0.67p	–	941
2022 first interim interest distribution of 0.77p	–	1,085
2022 second interim interest distribution of 0.96p	–	1,368
2022 third interim interest distribution of 1.14p	–	1,622
2022 fourth interim interest distribution of 1.33p	1,892	–
2023 first interim interest distribution of 1.30p	1,848	–
2023 second interim interest distribution of 1.34p	1,903	–
2023 third interim interest distribution of 1.83p	2,573	–
	8,216	5,016

Notes to the Financial Statements (continued)

	Year ended 31 December 2023 £'000	Year ended 31 December 2022 £'000
Capital
2021 fourth interim dividend distribution of 1.11p	–	1,558
2022 first interim dividend distribution of 0.05p	–	71
2022 fourth interim dividend distribution of 1.10p	1,565	–
2023 first interim dividend distribution of 0.47p	668	–
2023 second interim dividend distribution of 0.59p	838	–
2023 third interim dividend distribution of 0.29p	407	–
	3,478	1,629

Set out below are the total dividends paid and proposed in respect of the year, which forms the basis on which the requirements of Sections 1158-1159 of the Corporation Tax Act 2010 are considered.

	Year ended 31 December 2023 £'000	Year ended 31 December 2022 £'000
Interest distributions paid of 4.47p (2022: 2.87p)	6,324	4,075
Dividend distributions paid of 1.35p (2022: 0.05p)	1,913	71
Interest distributions declared of 1.60p (2022: 1.33p)	2,250	1,892
Dividend distributions declared of 0.54p (2022: 1.10p)	759	1,565
	11,246	7,603

On 24 January 2024 the Board declared a fourth interim dividend of 2.14p per Ordinary Share for the year ended 31 December 2023, which was paid on 23 February 2024 to Ordinary Shareholders on the register on 2 February 2023. The ex-dividend date was 1 February 2023. The amount shown in the table above for distributions declared is based on 140,619,239 Ordinary Shares in issue.

In accordance with FRS 102, Section 32, 'Events After the End of the Reporting Period', the 2023 fourth interim dividend has not been included as a liability in this set of financial statements.

Notes to the Financial Statements (continued)

8 Taxation on ordinary activities

	Year ended 31 December 2023			Year ended 31 December 2022
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Foreign tax	–	–	–	–	–	–

As an investment trust, the Company is exempt from UK corporation tax on capital gains. Pursuant to the interest streaming regime applicable to investment trusts, the Company may designate all or part of the amount it distributes as an interest distributions to its Shareholders. These distributions are treated as tax deductible against taxable income in the revenue return and therefore, no corporation tax liability has been recognised.

The effective corporation tax rate was 23.52% (2022: 19.00%). The main rate of corporation tax increased from 19% to 25% since 1 April 2023 after the UK government announced it in the March 2021 Budget. The tax charge for the year differs from the charge resulting from applying the standard rate of corporation tax in the UK for an investment trust company. The differences are explained below:

	Year ended 31 December 2023			Year ended 31 December 2022
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Net return/(loss) on ordinary activities before taxation	8,567	4,747	13,314	5,967	(8,540)	(2,573)
Corporation tax at standard rate of 23.52% (2022: 19.00%)	2,015	1,117	3,132	1,134	(1,623)	(489)
Effects of:
Net (gains)/losses on investments	–	(657)	(657)	–	1,529	1,529
Net (gains)/losses on derivatives	–	(440)	(440)	–	55	55
Tax deductible interest distributions	(2,015)	–	(2,015)	(1,134)	–	(1,134)
Net currency (gains)/losses	–	(20)	(20)	–	39	39
Total tax charge	–	–	–	–	–	–

Due to the Company's status as an investment trust and the intention to continue to meet the conditions required to obtain approval in the foreseeable future, the Company has not provided deferred tax on capital gains and losses arising on the revaluation or disposal of investments.

Notes to the Financial Statements (continued)

9 Investments held at fair value through profit or loss (FVTPL)

	As at 31 December 2023 £'000	As at 31 December 2022 £'000
Opening valuation	138,443	140,132
Analysis of transactions made during the year
Purchases at cost	34,621	54,740
Sale proceeds	(44,732)	(48,096)
Gains/(losses) on investments	4,661	(8,333)
Closing valuation	132,993	138,443
Closing cost	137,414	145,846
Closing investment holding losses	(4,421)	(7,403)
Closing valuation	132,993	138,443

The Company received £44,732,000 (2022: £48,096,000) from investments sold in the year. The book cost of these investments when they were purchased was £49,308,000 (2022: £48,225,000). These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the investments. Transaction costs on purchases during the year amounted to £503 (2022: £419) and transaction costs on sales during the year amounted to £403 (2022: £406).

	As at 31 December 2023 £'000	As at 31 December 2022 £'000
Gains/(losses) on investments
Net gains/(losses) on investments	2,792	(8,044)
Net gains/(losses) on derivatives	1,869	(289)
Net gains/(losses) on investments	4,661	(8,333)

	As at 31 December 2023 £'000	As at 31 December 2022 £'000
Closing valuation
Investments at fair value through profit or loss	133,392	137,584
Derivative financial (liabilities)/assets held at fair value through profit or loss	(399)	859
Closing valuation	132,993	138,443

Notes to the Financial Statements (continued)

10 Receivables, cash and cash equivalents and payables

	As at 31 December 2023 £'000	As at 31 December 2022 £'000
Receivables
Sales for future settlement	25	39
Accrued income	2,193	1,855
Prepaid expenses	31	26
Management fee rebate	277	180
Total receivables	2,526	2,100
Cash and cash equivalents
Cash at bank	907	2,938
Amounts held at futures clearing houses	717	234
Cash on deposit	1,214	500
Total cash and cash equivalents	2,838	3,672
Payables
Expenses payable and deferred income	341	239
Management fee payable	2,679	1,736
Loan facility interest payable	23	74
Bank loan	–	7,000
Other payables	29	57
Total payables	3,072	9,106

Notes to the Financial Statements (continued)

11 Called up share capital

		As at 31 December 2023	As at 31 December 2022
	Number of shares	Nominal value £'000	Number of shares	Nominal value £'000
Ordinary Shares of 1p
Ordinary Shares in issue at the beginning of the year	142,233,022	1,422	141,723,022	1,417
Ordinary Shares issued from treasury during the year	–	–	2,815,000	28
Purchase of Ordinary Shares held in treasury	(1,613,783)	(16)	(2,305,000)	(23)
Ordinary Shares in issue at the end of the year	140,619,239	1,406	142,233,022	1,422
Treasury Shares (Ordinary Shares of 1p)
Treasury Shares at the beginning of the year	2,512,749	25	3,022,749	30
Ordinary Shares issued from treasury during the year	–	–	(2,815,000)	(28)
Purchase of Ordinary Shares held in treasury	1,613,783	16	2,305,000	23
Treasury Shares at the end of the year	4,126,532	41	2,512,749	25
Total Ordinary Shares in issue and in treasury at the end of the year	144,745,771	1,447	144,745,771	1,447

The analysis of the capital reserve is as follows:

	Year ended 31 December 2023			Year ended 31 December 2022
	Realised capital reserve £'000	Investment holding gains and losses £'000	Total capital reserve £'000	Realised capital reserve £'000	Investment holding gains and losses £'000	Total capital reserve £'000
Capital reserve at the beginning of the year	707	(7,403)	(6,696)	3,189	284	3,473
Gains/(losses) on realisation of investments at fair value	1,679	–	1,679	(646)	–	(646)
Realised currency gains/(losses) during the year	86	–	86	(207)	–	(207)
Movement in unrealised gains/(losses)	–	2,982	2,982	–	(7,687)	(7,687)
Dividends paid	–	–	–	(1,629)	–	(1,629)
Capital reserve at the end of the year	2,471	(4,421)	(1,949)	707	(7,403)	(6,696)

The above split in capital reserve is shown in accordance with provisions of the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts', 2022.

Notes to the Financial Statements (continued)

12 Related party transactions

M&G Alternatives Investment Management Limited, as Investment Manager, is a related party to the Company. The management fee payable to the Investment Manager for the year is disclosed in the income statement, in note 4 and amounts outstanding at the year end are shown in note 10.

Amounts paid to the Investment Manager in respect of rebate arrangements are shown in note 3 and the amounts outstanding at the year end from the Investment Manager in respect of these rebates are disclosed in note 10.

The Company holds investments in M&G European Loan Fund, M&G Senior Asset Backed Credit Fund and M&G Lion Credit Opportunity Fund IV which are managed by M&G Investment Management Limited. At the year end these were valued at £24,076,000 (2022: £16,298,000) and represented 17.94% (2022: 11.73%) of the Company's investment portfolio. The income earned from these investments of £1,330,597 (2022: £765,046) is included in note 3. Amounts receivable at the balance sheet date of £431,000 (2022: £267,000) are included under Receivables in note 10. The total purchase costs of these investments was £10,500,000 (2022: £nil) and the total sales amounted to £3,794,000 (2022: £nil).

The Directors of the Company are related parties. The details of the fees payable to Directors and details of Directors' shareholdings are given in the Directors' Remuneration Report on pages 59 and 61.

13 Financial instruments

In pursuing the Company's objectives, the Company accepts market price risk and interest rate risk, in relation to the portfolio of investments. Since the Company's investment objectives are to deliver returns over the long term, transactions with the sole intention of realising short-term returns are not undertaken.

The quantitative data disclosed is representative of the Company's exposure to risk throughout the year.

The AIFM attempts to gain the best and most consistent returns for clients via the following:

• a bottom-up approach, centred around a detailed evaluation of individual investments; and
• diversification across issuer, to minimise the impact of default.

Portfolio management decisions are based on an in-house credit assessment and instrument rating which is carried out by the AIFM's credit analysts.

Market risk

Market risk embodies the potential for both losses and gains and includes foreign currency risk, interest rate risk and price risk, which are discussed in detail under separate headings within this note.

Market risk arises mainly from uncertainty about future values of financial instruments influenced by other price, currency and interest rate movements. It represents the potential loss the Company may suffer through holding market positions in investments in the face of market movements.

Notes to the Financial Statements (continued)

Management of market risk

The Board meets formally at least four times a year with the Investment Manager to review, inter alia, the Company's strategy and performance, the composition of the investment portfolio and the management of risk. The investment management team has responsibility for monitoring the portfolio, which is selected in accordance with the Company's investment objective and seeks to ensure that any investments meet an acceptable risk/reward profile.

Market risk arising from foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The fair values of the Company's monetary items which have foreign currency exposure at 31 December 2023 are shown below.

	2023				2022
	Australian dollar	Euro	New Zealand dollar	US dollar	Australian dollar	Euro	New Zealand dollar	US dollar
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Debtors	25	290	33	146	21	221	22	172
Investments	2,227	15,102	794	14,662	3,269	13,666	2,407	19,244
Cash	337	170	13	295	69	681	38	1,825
Total foreign currency exposure on net monetary items	2,589	15,562	840	15,103	3,359	14,568	2,467	21,241

The Company is exposed to risks that the exchange rate of its reporting currencies relative to other currencies may change in a manner which has an adverse effect on the value of the portion of the Company's assets which are denominated in currencies other than their own currencies. Typically, the fund manager will substantially hedge these risks using foreign exchange forward contracts.

Notes to the Financial Statements (continued)

The following table illustrates the sensitivity of revenue and capital return on ordinary activities after tax and net assets attributable to Shareholders to an increase of or decrease of 5% in exchange rates. A 5% increase in the value of the fund's currency exposure would have the effect of increasing the return and net assets by £1,616,000 (2022: £1,973,000a). A 5% decrease would have an equal and opposite effect.

	Increase in exchange rates 2023 £'000	Decrease in exchange rates 2023 £'000	Increase in exchange rates 2022a £'000	Decrease in exchange rates 2022a £'000
Income statement
Revenue return	(8)	8	(10)	10
Capital return	1,624	(1,624)	1,983	(1,983)
Total change to net return on ordinary activities after tax	1,616	(1,616)	1,973	(1,973)
Change to net assets attributable to shareholders	1,616	(1,616)	1,973	(1,973)

a The prior year figures are restated to align with current year calculation.

Market risk arising from interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The Company's investments may be subject to interest rate risk. When interest rates decline, the value of fixed rate obligations can be expected to rise, and conversely when interest rates rise, the value of fixed rate obligations can be expected to decline. In general, if prevailing interest rates fall significantly below the interest rates on any Debt Investments held by the Company, such investments are more likely to be the subject of prepayments than if prevailing rates remain at or above the rates borne by such investments.

After the global financial crash of 2007-08 there was a sustained period of very low levels of central bank-set interest rates. Since the start of 2022, the Bank of England and other central banks have been increasing interest rates. As at December 2023 the Bank of England base rate was 5.25%. For investments that have a fixed rate of return, any such interest rate rises may negatively impact the returns on the investments and the returns realised by the investors.

Notes to the Financial Statements (continued)

The following table illustrates the sensitivity of revenue and capital return on ordinary activities after tax and net assets attributable to shareholders to an increase or decrease of 2% in interest rates. The decrease in interest rates illustrated below of 2% is reasonably possible based on observation of market conditions and historic trends. The sensitivity analysis is based on the Company's bond holdings at each reporting date, with all other variables held constant.

	Decrease in interest rates 2023 £'000	Increase in interest rates 2023 £'000	Decrease in interest rates 2022 £'000	Increase in interest rates 2022 £'000
Income statement
Revenue return	14	(14)	14	(14)
Capital return	2,725	(2,725)	2,825	(2,825)
Total change to net return on ordinary activities after tax	2,739	(2,739)	2,839	(2,839)
Change to net assets attributable to shareholders	2,739	(2,739)	2,839	(2,839)

Market risk arising from other price risk

Market price risk includes changes in market prices, other than those arising from interest rate risk, which may affect the value of investments.

The following table illustrates the sensitivity of revenue and capital return on ordinary activities after tax and net assets attributable to shareholders to an increase or decrease of 10% in the fair value of the Company's investments. This level of change is considered to be reasonably possible based on observation of market conditions and historic trends. The sensitivity analysis is based on the Company's investments at each reporting date, with all other variables held constant.

	Increase in fair value 2023 £'000	Decrease in fair value 2023 £'000	Increase in fair value 2022 £'000	Decrease in fair value 2022 £'000
Income statement
Revenue return	(67)	67	(69)	69
Capital return	13,339	(13,339)	13,758	(13,758)
Total change to net return on ordinary activities after tax	13,272	(13,272)	13,689	(13,689)
Change to net assets attributable to shareholders	13,272	(13,272)	13,689	(13,689)

Notes to the Financial Statements (continued)

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. The Company invests in illiquid public and private Debt Instruments. Such investments may be difficult to value or realise (if at all) and therefore the market price that is achievable for such investments might be lower than the valuation of these assets and as reflected in the Company's published NAV per Ordinary Share.

The contractual maturities of the financial liabilities at the year end, based on the earliest date on which payment can be required are as follows:

	Three months or less 2023 £'000	More than three months but less than one year 2023 £'000	Total 2023 £'000	Three months or less 2022 £'000	More than three months but less than one year 2022 £'000	Total 2022 £'000
Creditors: amounts falling due within one year
Bank loan	–	–	–	–	7,000	7,000
Other creditors	3,072	–	3,072	2,106	–	2,106
	3,072	–	3,072	2,106	7,000	9,106

Credit risk

Credit risk is the risk that one party to a financial instrument or contract will cause a financial loss for the other party by failing to discharge an obligation. In the case of invested assets this is the potential for the reduction in the value of investments which relates to the risk of an issuer being unable to meet its obligations, whilst for trading activities this relates to the risk that the counterparty to any contract the Company enters into being unable to meet its obligations causing loss.

The Investment Manager maintains a credit risk policy and standards which set out the assessment and measurement of credit risk, compliance with which is monitored, and exposures and breaches are reported daily by the Risk team. The policy is reviewed on an annual basis to ensure that it remains fit for purpose and relevant to changes in the risk environment.

Investment mandates specify explicitly the counterparty risk appetite for cash on deposit, foreign exchange and OTC trading whilst other counterparty risk is taken for the purposes of efficient portfolio management and reduction in risk.

Notes to the Financial Statements (continued)

The table below shows the breakdown of the credit ratings of the investment portfolio.

	As at 31 December 2023 %	As at 31 December 2022 %
Unrated	(0.29)	0.62
Derivatives	(0.29)	0.62
Cash and investment grade	81.48	75.90
Cash on deposit	0.90	0.36
AAA	7.56	2.79
AA+	0.15	0.32
AA	5.13	3.53
A+	1.73	1.27
A	1.86	1.17
A-	3.86	4.64
BBB+	12.15	12.38
BBB	17.70	18.01
BBB-	21.49	22.28
M&G European Loan Fund (ELF) (see note)	8.95	9.15
Sub-investment grade	18.81	23.48
BB+	3.96	6.15
BB	1.98	3.07
BB-	3.24	2.99
B+	2.22	3.89
B	4.07	3.03
B-	–	0.78
CCC+	–	0.43
CCC-	–	0.34
D	0.81	0.22
M&G European Loan Fund (ELF) (see note)	2.53	2.58
Total	100.00	100.00

Note: ELF is an open-ended fund managed by M&G that invests in leveraged loans issued by, generally, substantial private companies located in the UK and Continental Europe. ELF is not rated and the Investment Manager has determined an implied rating for this investment, utilising rating methodologies typically attributable to collateralised loan obligations. On this basis, 78% of the Company's investment in ELF has been ascribed as being investment grade, and 22% has been ascribed as being sub-investment grade. These percentages have been utilised on a consistent basis for the purposes of determination of the Company's adherence to its obligation to hold no more than 30% of its assets in below investment grade securities.

Notes to the Financial Statements (continued)

Management of counterparty risk

To mitigate counterparty risk, the AIFM follows the standards below:

• Preference for 'high-quality' rated counterparties, mainly banks with short-term A1/P1 ratings and banks rated A or better.
• Limited exposure to each counterparty to diversify risk.
• Collateral taken from counterparties and posted against their default where appropriate.
• Regular monitoring of counterparty rating.
• Capability to rapidly reduce exposure on adverse market intelligence.
• Trading on Delivery Versus Payment (DVP) basis.

Credit risk exposure

The following amounts represent the maximum exposure to credit risk at the year end.

	2023 £'000	2022 £'000
Fixed assets
Investments held at fair value through profit or loss	133,392	137,584
Current assets
Other receivables	2,526	2,100
Cash and cash equivalents	2,838	3,672
	138,756	143,356

No debtors are past their due date and none have been written down or deemed to be impaired.

Fair values of financial assets and financial liabilities

All financial assets and liabilities are either carried at fair value or the amount in the Statement of Financial Position is a reasonable approximation of fair value.

Notes to the Financial Statements (continued)

14 Fair value hierarchy

Under FRS 102 an entity is required to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy shall have the levels stated below.

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: other significant observable inputs (including quoted prices for similar investments, interest rates, prepayments, credit risk, spread premium, credit ratings etc).
• Level 3: significant unobservable inputs (including the Company's own assumptions in determining the fair value of investments, discounted cashflow model or single broker quote).

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability.

The determination of what constitutes 'observable' requires significant judgement by the Company. The Company considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary and provided by independent sources that are actively involved in the relevant market.

	As at 31 December 2023		As at 31 December 2022
	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Financial assets at FVTPL
Debt Instruments	–	50,301	59,015	109,316	–	52,155	69,131	121,286
Investment in funds	–	24,076	–	24,076	–	16,298	–	16,298
Derivatives – Forwards	–	285	–	285	–	481a	–	481a
Derivatives – Futures	–	–	–	–	996	–	–	996
Financial liabilities at FVTPL
Derivatives – Forwards	–	(243)	–	(243)	–	(618)a	–	(618)a
Derivatives – Futures	(441)	–	–	(441)	–	–	–	–
Net fair value	(441)	74,419	59,015	132,993	996	68,316	69,131	138,443

The financial assets measured at FVTPL are grouped into the fair value hierarchy as follows:

a Reclassification of the derivative financial assets and derivative liabilities to align with current year presentation.

Notes to the Financial Statements (continued)

Sensitivity of Level 3 holdings to unobservable inputs

The Company utilises a number of valuation methodologies such as a discounted cash flow (DCF) model. Discount rates are applied to the cashflows of the debt instrument to determine fair value. The significant unobservable input within the fair value measurement is the credit spread component of the discount rate, which will be determined based on public comparable bonds of a similar sector and credit rating, as well as an appropriate additional spread premium. The market value of these investments was £21,146,000. The table below summarises a quantitative sensitivity analysis as at 31 December 2023.

Valuation technique	Fair value	Significant unobservable input	Range of unobservable inputs utilised	Sensitivity of fair value to changes in unobservable inputs +/- 0.5%
	£'000			£'000
Discounted cash flow	21,146	Credit spread	2.13%–15.86%	20,837 – 21,440

Additionally, some investments are priced monthly using a single quote from a broker, which the AIFM have designated as level 3. The broker, typically either the lead manager and/or the broker where the deal was most recently traded through, will run a DCF model to arrive at a valuation. The market value of these investments was £12,832,000.

Private senior floating rate loans are valued at par and are monitored to ensure this represents fair value for these instruments. On a monthly basis these instruments are assessed to understand whether there is any evidence of market price movements, including impairment or any upcoming refinancing. The market value of these investments was £24,418,000.

One loan is now priced below par and in line with observable broker quotes for the loan. The market value of these investments was £619,000.

Level 3 reconciliation

The following table shows a reconciliation of all movements in the fair value of financial instruments categorised within Level 3 between the beginning and the end of the financial year:

	Level 3 31 December 2023 £'000	Level 3 31 December 2022 £'000
Financial assets at FVTPL
Opening balance	69,131	67,599
Net realised gains/(losses)	152	(1,248)
Purchases	8,679	20,609
Sales	(18,947)	(18,838)
Transfer into/(out of) Level 3	–	1,009
Closing balance	59,015	69,131

During the year ended 31 December 2023, there were no transfers in/out of level 3.

Notes to the Financial Statements (continued)

15 Capital commitments

There were outstanding unfunded investment commitments of £376,000 (2022: £2,118,000) at the year end.

	As at 31 December 2023 £'000	As at 31 December 2022 £'000
Grover Group Var. Rate 30 Aug 2027	–	1,109
Project Grey Var. Rate 30 Apr 2025 (Senior)	205	574
Project Grey Var. Rate 30 Apr 2025 (Junior)	171	311
Project Mercury Var. Rate 1 May 2024	–	75
Kaveh Ventures LLC Var. Rate 22 Mar 2024	–	49
	376	2,118

16 Capital management policies and procedures

The Company's capital management objectives are:

• to ensure that the Company will be able to continue as a going concern; and
• to generate a regular and attractive level of income with low asset value volatility by investing in a diversified portfolio of public and private debt instruments.

The capital of the Company consists of equity, comprising issued capital, reserves and retained earnings.

The Board monitors and reviews the broad structure of the Company's capital on an ongoing basis. This review includes:

• the nature and planned level of gearing, which takes account of the Investment Manager's views on the market;
• the issue and buy back of share capital within limits set by the shareholders in a general meeting; and
• the extent to which revenue in excess of that which is required to be distributed should be retained.

17 Post Balance Sheet Events

There were no significant events after the balance sheet date to disclose.

This document is important and requires your immediate attention. If you are in any doubt as to what action you should take, you are recommended to seek your own financial advice from your stockbroker or other independent adviser authorised under the Financial Services and Markets Act 2000 immediately.

If you have sold or otherwise transferred all of your shares in M&G Credit Income Investment Trust plc, please forward this document as soon as possible to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

NOTICE IS HEREBY GIVEN that the fifth ANNUAL GENERAL MEETING (AGM) of M&G Credit Income Investment Trust plc will be held at the offices of M&G Alternatives Investment Management Limited, 10 Fenchurch Avenue, London EC3M 5AG at 10:00 am on Tuesday, 21 May 2024 to consider and vote on the resolutions below.

Resolutions 1 to 10 (inclusive) will be proposed as ordinary resolutions and resolutions 11 to 13 (inclusive) will be proposed as special resolutions.

Ordinary business

• 1. To receive and, if thought fit, to accept the Strategic Report, Directors' Report, Auditor's Report and the audited Financial Statements for the year ended 31 December 2023.
• 2. To receive and approve the Directors' Remuneration Report (excluding the Directors' Remuneration Policy) for the year ended 31 December 2023.
• 3. To approve the Company's dividend policy that the Company intends to distribute at least 85% of its distributable income earned each financial year by way of dividends and that, until the conclusion of the next general meeting at which financial statements are laid before the Company, such dividends are intended to be paid quarterly.
• 4. To re-elect Mr David Simpson as a Director of the Company.
• 5. To re-elect Mr Richard Boléat as a Director of the Company.
• 6. To re-elect Mrs Barbara Powley as a Director of the Company.
• 7. To re-elect Ms Jane Routledge as a Director of the Company.
• 8. To re-appoint BDO LLP as Auditor to the Company, to hold office from the conclusion of this meeting until the conclusion of the next general meeting at which financial statements are laid before the Company.
• 9. To authorise the Audit Committee to determine the remuneration of the Auditor of the Company.
• 10. THAT, in substitution for all existing authorities, the Directors be and are hereby generally and unconditionally authorised in accordance with Section 551 of the Companies Act 2006 ('the Act') to exercise all the powers of the Company to allot shares in the Company and to grant rights to subscribe for, or to convert any security into, shares in the Company, up to an aggregate nominal amount of £140,919 (ie up to 14,091,900 Ordinary Shares and/or C Shares, representing approximately 10% of the issued share capital of the Company (excluding treasury shares) as at 27 March 2024) during the period commencing on the date of the passing of this Resolution and expiring at the conclusion of the Annual General Meeting of the Company to be held in 2025 (unless previously renewed, varied or revoked by the Company in general meeting) (the 'Section 551 period'), but so that the Company shall be entitled, at any time prior to the expiry of the Section 551 period, to make offers or agreements which would or might require shares to be allotted or such rights to be granted after the expiry of the Section 551 period and the Directors shall be entitled to allot shares or grant rights in pursuance of such offers or agreements as if the authority had not expired.

Special resolutions

• 11. THAT, in substitution for all existing authorities and, subject to the passing of Resolution 10, the Directors be and they are hereby authorised, in accordance with Sections 570 and 573 of the Companies Act 2006 ('the Act'), to allot equity securities (within the meaning of section 560 of the Act) for cash pursuant to the authority conferred by Resolution 10 above, and by way of a sale of treasury shares as if Section 561(1) of the Act did not apply to any such allotment or sale, up to an aggregate nominal amount of £140,919 (ie up to 14,091,900 Ordinary Shares and/or C Shares, representing approximately 10% of the issued share capital of the Company (excluding treasury shares) as at 27 March 2024), such power to expire at the conclusion of the Annual General Meeting of the Company to be held in 2025 (unless previously renewed, varied or revoked by the Company in general meeting) save that the Company shall be entitled, at any time prior to the expiry of such power, to make an offer or enter into an agreement which would or might require equity securities to be allotted or sold after the expiry of such power and the Directors shall be entitled to allot or sell equity securities in pursuance of such an offer or agreement as if such power had not expired.
• 12. THAT, the Company be authorised in accordance with Section 701 of the Act to make market purchases (within the meaning of Section 693(4) of the Act) of Ordinary Shares provided that the maximum number of Ordinary Shares authorised to be purchased will be up to 14.99% of the Ordinary Shares in issue at the date of this Notice, excluding any treasury shares, or, if changed, 14.99% of the Ordinary Shares in issue, excluding any treasury shares, immediately following the passing of this resolution. The minimum price which may be paid for an Ordinary Share is £0.01. The maximum price which may be paid for an Ordinary Share must not be more than the higher of:
  • 5.0% above the average of the mid-market value of the Ordinary Shares for the five business days before the purchase is made; or
  • the higher of the price of the last independent trade and the highest current independent bid for the Ordinary Shares

Such authority will expire at the AGM of the Company to be held in 2025, save that the Company may contract to purchase Ordinary Shares under the authority thereby conferred prior to the expiry of such authority, which contract will or may be executed wholly or partly after the expiry of such authority and may purchase Ordinary Shares in pursuance of such contract.

This resolution revokes and replaces all unexercised authorities previously granted to the Directors to make market purchases of Ordinary Shares.

All Ordinary Shares purchased pursuant to the above authority shall be either:

• held, sold, transferred or otherwise dealt with as treasury shares in accordance with the provisions of the Act; or
• cancelled immediately upon completion of the purchase.

13. THAT, a General Meeting, other than an AGM, may be called on not less than 14 clear days' notice.

Registered Office: Link Company Matters Limited 6th Floor, 65 Gresham Street, London, EC2V 7NQ

By Order of the Board of Directors Link Company Matters Limited Company Secretary 27 March 2024

ADMINISTRATIVE NOTES IN CONNECTION WITH THE ANNUAL GENERAL MEETING

1. Entitlement to attend and vote

To be entitled to attend and vote at the Meeting (and for the purposes of the determination by the Company of the votes that may be cast in accordance with Regulation 41 of the Uncertified Securities Regulations 2001), only those members registered in the Company's register of members at close of business on 17 May 2024 (or, if the Meeting is adjourned, close of business on the date which is two business days before the adjourned Meeting) shall be entitled to attend and vote at the Meeting. Changes to the register of members of the Company after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the Meeting.

2. Website giving information regarding the Meeting

Information regarding the Meeting, including the information required by Section 311A of the Act, is available from mandg.com/creditincomeinvestmenttrust

3. Attending in person

If you wish to attend the Meeting in person, please bring some form of identification.

Appointment of proxies

• 4. If you are a member of the Company at the time set out in note 1 above, you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at the Meeting. You can appoint a proxy only using the procedures set out in these notes and the notes to the proxy form.
• 5. A proxy does not need to be a member of the Company but must attend the Meeting to represent you. If you wish your proxy to speak on your behalf at the Meeting you will need to appoint your own choice of proxy (not the Chairman) and give your instructions directly to them.
• 6. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy, please indicate on your proxy submission how many shares it relates to.
• 7. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the Resolution. If no voting indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the Meeting.

8. Appointment of proxy using hard copy proxy form

A hard copy form of proxy has not been sent to you but you can request one directly from the registrars, Link Group's general helpline team on 0371 664 0300. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 09:00-17:30, Monday to Friday excluding public holidays in England and Wales. You can also request via email at shareholderenquiries@linkgroup.co.uk or via postal address at Link Group, PXS1, Central Square, 29 Wellington Street, Leeds, LS1 4DL. In the case of a member that is a company, the proxy form must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. Any power of attorney or any other authority under which the proxy form is signed (or a duly certified copy of such power or authority) must be included with the proxy form. For the purposes of determining the time for delivery of proxies, no account has been taken of any part of a day that is not a working day.

9. Appointment of a proxy online

You may submit your proxy electronically using the Share Portal service at signalshares.com Shareholders can use this service to vote or appoint a proxy online. The same voting deadline of 48 hours (excluding non-working days) before the time of the meeting applies.

Shareholders will need to use the unique personal identification Investor Code ('IVC') printed on your share certificate. If you need help with voting online, please contact our Registrar, Link Group's portal team on 0371 664 0391. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 09:00- 17:30, Monday to Friday excluding public holidays in England and Wales. You can also email shareholderenquiries@linkgroup.co.uk

10. Appointment of proxies through CREST

CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so for the Meeting and any adjournment(s) of it by using the procedures described in the CREST Manual (available from euroclear.com/site/public/EUI). CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a CREST Proxy Instruction) must be properly authenticated in accordance with Euroclear UK & International Limited's (EUI) specifications and must contain the information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by the issuer's agent (ID: RA10) by 10:00 am on 17 May 2024. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST.

CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time.

In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5) (a) of the Uncertificated Securities Regulations 2001.

11. Proxymity

If you are an institutional investor you may be able to appoint a proxy electronically via the Proxymity platform. For further information regarding Proxymity, please go to proxymity.io Your proxy must be lodged by 10:00 am on 17 May 2024 in order to be considered valid. Before you can appoint a proxy via this process you will need to have agreed to Proxymity's associated terms and conditions. It is important that you read these carefully as you will be bound by them and they will govern the electronic appointment of your proxy.

12. Appointment of proxy by joint members

In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company's register of members in respect of the joint holding, the first-named being the most senior.

13. Changing proxy instructions

To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note that the cut-off times for receipt of proxy appointments (see above) also apply in relation to amended instructions; any amended proxy appointment received after the relevant cut-off time will be disregarded. Where you have appointed a proxy using the hard-copy proxy form and would like to change the instructions using another hard-copy proxy form, please contact Link Group as per the communication methods shown in note 8. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence.

14. Termination of proxy appointments

In order to revoke a proxy instruction, you will need to inform the Company by sending a signed hard copy notice clearly stating your intention to revoke your proxy appointment to Link Group, at the address shown in note 8. In the case of a member that is a company, the revocation notice must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company.

Any power of attorney or any other authority under which the revocation notice is signed, or a duly certified copy of such power or authority, must be included with the revocation notice. The revocation notice must be received by Link Group no later than 48 hours before the Meeting. If you attempt to revoke your proxy appointment but the revocation is received after the time specified then, subject to the paragraph directly below, your proxy appointment will remain valid. Appointment of a proxy does not preclude you from attending the Meeting and voting in person. If you have appointed a proxy and attend the Meeting in person, your proxy appointment will automatically be terminated.

15. Corporate representatives

A corporation that is a member can appoint one or more corporate representatives who may exercise, on its behalf, all its powers as a member provided that no more than one corporate representative exercises powers over the same share.

16. Issued shares and total voting rights

As at 27 March 2024, the Company's issued share capital (excluding 3,826,532 treasury shares) comprised 140,919,239 Ordinary Shares of £0.01 each. Each Ordinary Share carries the right to one vote at a General Meeting of the Company and, therefore, the total number of voting rights in the Company on 27 March 2024 is 140,919,239. The website referred to in note 2 will include information on the number of shares and voting rights.

17. Questions at the Meeting

Under Section 319A of the Act, the Company must answer any question you ask relating to the business being dealt with at the Meeting unless:

• answering the question would interfere unduly with the preparation for the Meeting or involve the disclosure of confidential information;
• the answer has already been given on a website in the form of an answer to a question; or
• it is undesirable in the interests of the Company or the good order of the Meeting that the question be answered.

18. Website publication of audit concerns

Under Section 527 of the Companies Act 2006, Shareholders meeting the threshold requirements set out in that section have the right to require the Company to publish on a website a statement setting out any matter relating to: (i) the audit of the Company's financial statements (including the Auditor's Report and the conduct of the audit) that are to be laid before the Meeting; or (ii) any circumstances connected with an auditor of the Company ceasing to hold office since the previous meeting at which annual financial statements and reports were laid in accordance with Section 437 of the Companies Act 2006 (in each case) that the Shareholders propose to raise at the relevant meeting.

The Company may not require the Shareholders requesting any such website publication to pay its expenses in complying with Sections 527 or 528 of the Companies Act 2006. Where the Company is required to place a statement on a website under Section 527 of the Companies Act 2006, it must forward the statement to the Company's auditor not later than the time when it makes the statement available on the website. The business which may be dealt with at the Meeting for the relevant financial year includes any statement that the Company has been required under Section 527 of the Companies Act 2006 to publish on a website.

19. Documents on display

Copies of the letters of appointment of the Directors of the Company and a copy of the Articles of Association of the Company will be available for inspection at the registered office of the Company from the date of this notice until the end of the Meeting.

Shareholder communications

The majority of Shareholders choose to receive Annual Reports and Notices of meetings electronically. This has a number of advantages for the Company and its Shareholders. It increases the speed of communication, saves you time and reduces print and distribution costs and our impact on the environment.

Company law requires that the Company asks Shareholders to consent to the receipt of communications electronically and via a websitea. Please note that if you consent to website publication you will continue to be notified in writing and through the release of an announcement on the London Stock Exchange each time the Company places a statutory communication on the website. Annual Reports and other documents which are required to be sent to Shareholders ('shareholder information') are published on our website at mandg.com/creditincomeinvestmenttrust If you consent, the website will be the way in which you access all future shareholder information.

Please note that you still have the right to request hard copies of shareholder information at no charge.

• If you would like to receive notifications by email, you can register your email address via the Share Portal signalshares.com or write to FREEPOST SAS, 29 Wellington Street, LS1 4DL (no stamp or further address detail is required). Please write in BLOCK CAPITALS.
• If you would like to receive shareholder information by means of a website, there is nothing more you need to do. You will be notified by post when shareholder information has been placed on the website.
• If you would like to receive shareholder information in hard copy form, you can register your request via the Share Portal signalshares.com or write to FREEPOST SAS, 29 Wellington Street, LS1 4DL (no stamp or further address detail is required). Please write in BLOCK CAPITALS.

Please note that if you hold your shares corporately or in a CREST account, you are not able to use the Share Portal to inform us of your preferred method of communication and should instead write to FREEPOST SAS, 29 Wellington Street, LS1 4DL (no stamp or further address detail is required). Please write in BLOCK CAPITALS.

If we do not receive a reply from you within 28 days of the date of dispatch of this notice, you will be deemed to have consented to website publication of shareholder information and you will not receive hard copies of shareholder information in the post.

a The Company reserves the right to send hard copy documents to Shareholders where, for example, overseas securities laws do not permit electronic communication or in other circumstances where the Company considers that electronic delivery may not be appropriate.

Additional shareholder information

Arrange to have your dividends paid direct into your bank account

This means that:

• Your dividend reaches your bank account on the payment date.
• It is more secure cheques can sometimes get lost in the post.
• You don't have the inconvenience of depositing a cheque.
• Helps reduce cheque fraud.

If you have a UK bank account you can sign up for this service on Signal shares (by clicking on 'your dividend options' and following the on screen instructions).

Company information

Directors (all non-executive)

David Simpson (Chairman) Richard Boléat (Chairman of the Audit Committee) Barbara Powley (Senior Independent Director) Jane Routledge

AIFM and Investment Manager

M&G Alternatives Investment Management Limited (MAGAIM)a 10 Fenchurch Avenue, London EC3M 5AG Website: mandg.com/investments/private-investor/en-gb Telephone: +44 (0) 800 390 390

Administrator

State Street Bank and Trust Companya 20 Churchill Place, London E14 5HJ

Company Secretary and registered office

Link Company Matters Limited 6th Floor, 65 Gresham Street, London, EC2V 7NQ Telephone: 07936 332 503

Broker

Winterflood Securities Limiteda Riverbank House, 2 Swan Lane, London EC4R 3GA

Solicitors

Herbert Smith Freehills LLPa Exchange House, Primrose Street, London EC2A 2EG

Auditor

BDO LLP 55 Baker Street, London W1U 7EU

Registrar and transfer office

Link Group Shareholder Services Department 29 Wellington Street, Leeds LS1 4DL

Telephone: 0371 664 0300

(Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 09:00 – 17:30, Monday to Friday excluding public holidays in England and Wales). Email: shareholderenquiries@linkgroup.co.uk Website: linkgroup.eu

Depositary

State Street Trustees Limiteda 20 Churchill Place, London E14 5HJ

Custodian

State Street Bank and Trust Companya 20 Churchill Place, London E14 5HJ

Banker

State Street Bank International GmbH Brienner Straße 59, 0333 Munich, Germany

Association of Investment Companies (AIC)

The Company is a member of the AIC, which publishes monthly statistical information in respect of member companies.

The AIC can be contacted on 020 7282 5555, enquiries@theaic.co.uk or visit the website: theaic.co.uk

Company website

mandg.com/creditincomeinvestmenttrust

a Authorised and regulated by the Financial Conduct Authority.

Alternative performance measures

Net Asset Value (NAV) per Ordinary Share

The NAV, also described as shareholders' funds, is the value of the Company's assets less its liabilities. The NAV per Ordinary Share is calculated by dividing the NAV by the number of Ordinary Shares in issue (excluding treasury shares).

Ongoing charges

Ongoing charges represent the total of the investment management fee and all other operating expenses (excluding non-recurring items, certain finance costs and cost of buying back or issuing shares), expressed as a percentage of the average net assets (of the Company) over the reporting year.

	Year ended 31 December 2023 £'000	Year ended 31 December 2022 £'000
Ongoing charges are calculated with reference to the following figures:
Investment management fee	943	964
Other expensesa	853	754
Total expenses for the year	1,796	1,718
Ongoing expenses	1,730	1,666
Average net assets over the year	134,798	137,058
Ongoing charges figure	1.28%	1.22%

a Includes the commitment fee on the revolving credit facility.

Premium/discount to NAV

The premium is the amount by which the share price of an investment trust exceeds the NAV per Ordinary Share. The discount is the amount by which the NAV per Ordinary Share exceeds the share price of an investment trust. The premium/discount is normally expressed as a percentage of the NAV per Ordinary Share.

Total return

Total return is the return to shareholders that measures the combined effect of any dividends paid in the period with the increase or decrease in the share price or NAV per share.

Share price total return

Total return to shareholders, assuming all dividends received were reinvested at the mid-market price without transaction costs into the shares of the Company at the time the shares were quoted ex-dividend.

	Year ended 31 December 2023 £'000	Year ended 31 December 2022 £'000
Opening share price	92.1p	99.5p
Dividend paid	8.25p	4.70p
Effect of dividend reinvested	0.36p	(0.12)p
Closing share price	92.2p	92.1p
Adjusted closing share price	100.8p	96.7p
Share price total return	9.5%	(2.8)%

Alternative performance measures

NAV total return

Total return on NAV per share assuming dividends paid by the Company were reinvested into the shares of the Company at the NAV per share at the time the shares were quoted ex-dividend.

	Year ended 31 December 2023 £'000	Year ended 31 December 2022 £'000
Opening NAV per share	94.99p	101.44p
Dividend paid	8.25p	4.70p
Effect of dividend reinvested	0.43p	(0.01)p
Closing NAV per share	96.21p	94.99p
Adjusted closing NAV per share	104.89p	99.68p
NAV total return	10.4%	(1.7)%

Dividend yield

The annual dividend expressed as a percentage of the share price.

	Year ended 31 December 2023 £'000	Year ended 31 December 2022 £'000
Dividends declared per Ordinary Sharea	7.96p	5.35p
Ordinary Share price	92.2p	92.1p
Dividend yield	8.6%	5.8%

a Based on dividends declared in respect of the previous 12 months.

Adjusted opening NAV The opening NAV, adjusted for the payment of the last dividend in respect of the previous financial year.

Asset Anything having commercial or exchange value that is owned by a business, institution or individual.

ABS (Asset backed security) A security whose income payments and value are derived from and collateralised by a specified pool of underlying assets.

Asset class Category of assets, such as cash, company shares, fixed income securities and their sub-categories, as well as tangible assets such as real estate.

Association of Investment Companies (AIC) The UK trade body that represents investment managers. It works with investment managers, liaising with government on matters of taxation and regulation, and also aims to help investors understand the industry and the investment options available to them.

AUM Assets under management.

Basis points (bps) A common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01%, or 0.0001, and is used to denote the percentage change in a financial instrument.

Bond A loan in the form of a security, usually issued by a government or company, which normally pays a fixed rate of interest over a given time period, at the end of which the initial amount borrowed is repaid.

Callable bond A bond that can be redeemed (in other words, called) by the issuer before its maturity date. The price at which the issuer buys back the bond is normally higher than its issue price. A bond is usually called when interest rates fall, so that the issuer can refinance its debt at the new, lower interest rates.

Capital Refers to the financial assets, or resources, that a company has to fund its business operations.

Capitalisation The total market value of all of a company's outstanding shares.

CTA Corporation Tax Act.

CLO (Collateralised loan obligation) Actively managed investment vehicle which issues rated tranches of debt from AAA-B and an unrated equity tranche. Underlying assets are predominantly made up of leveraged loans and high yield bonds.

Closed-ended A term used to describe an investment company whose capital is fixed and whose shares are not generally redeemable at the option of a holder.

CMBS ( Commercial mortgage-backed security) A type of asset-backed security which is collateralised by a commercial real estate asset, either a single property, or – more often – a portfolio of several properties.

Comparative sector A group of investment companies with similar investment objectives and/or types of investment, as classified by bodies such as the AIC or Morningstar™. Sector definitions are mostly based on the main assets an investment company should invest in, and may also have a geographic focus. Sectors can be the basis for comparing the different characteristics of similar investment companies, such as their performance or charging structure.

Consumer Prices Index (CPI) An index used to measure inflation, which is the rate of change in prices for a basket of goods and services. The contents of the basket are meant to be representative of products and services we typically spend our money on.

Convertible bonds Fixed income securities that can be exchanged for predetermined amounts of company shares at certain times during their life.

Corporate bonds Fixed income securities issued by a company. They are also known as bonds and can offer higher interest payments than bonds issued by governments as they are often considered more risky.

Credit The borrowing capacity of an individual, company or government. More narrowly, the term is often used as a synonym for fixed income securities issued by companies.

Credit default swaps (CDS) Are a type of derivative, namely financial instruments whose value, and price, are dependent on one or more underlying assets. CDS are insurance-like contracts that allow investors to transfer the risk of a fixed income security defaulting to another investor.

Credit rating An independent assessment of a borrower's ability to repay its debts. A high rating indicates that the credit rating agency considers the issuer to be at low risk of default; likewise, a low rating indicates high risk of default. Standard & Poor's, Fitch and Moody's are the three most prominent credit rating agencies. Default means that a company or government is unable to meet interest payments or repay the initial investment amount at the end of a security's life.

Credit spread The difference between the yield of a corporate bond, a fixed income security issued by a company, and a government bond of the same life span. Yield refers to the income received from an investment and is expressed as a percentage of the investment's current market value.

Debt instrument A formal contract that a government, a business or an individual can use to borrow money. Debt instruments outline the detailed conditions of the loan, such as the amount and schedule of payment of interest, the length of time before the principal is paid back, or any guarantees (collateral) that the borrower offers. Any type of debt can be a debt instrument – from bonds and loans to credit cards.

Default When a borrower does not maintain interest payments or repay the amount borrowed when due.

Derivatives Financial instruments whose value, and price, are dependent on one or more underlying assets. Derivatives can be used to gain exposure to, or to help protect against, expected changes in the value of the underlying investments. Derivatives may be traded on a regulated exchange or traded over the counter.

Developed economy or market Well-established economies with a high degree of industrialisation, standard of living and security.

Dividend Dividends represent a share in the profits of the company and are paid out to a company's shareholders at set times of the year.

ECB (European Central Bank) Central bank of the 19 European Union countries which have adopted the euro.

Emerging economy or market Economies in the process of rapid growth and increasing industrialisation. Investments in emerging markets are generally considered to be riskier than those in developed markets.

Episode A phase during which investors allow their emotions to affect their decision making, which can cause financial markets to move irrationally.

Equities Shares of ownership in a company.

Ex-dividend, ex-distribution or XD date The date on which declared distributions or dividends officially belong to underlying investors.

Exposure The proportion of an investment company invested in a particular share/fixed income security, sector/region, usually expressed as a percentage of the overall portfolio.

Fixed income security A loan in the form of a security, usually issued by a government or company, which normally pays a fixed rate of interest over a given time period, at the end of which the initial amount borrowed is repaid.

Floating rate notes (FRNs) Securities whose interest (income) payments are periodically adjusted depending on the change in a reference interest rate.

Gearing Is a measure of financial leverage that demonstrates the degree to which the Investment Trust's operations are funded by equity capital versus creditor financing.

Gilts Fixed income securities issued by the UK Government.

Government bonds Fixed income securities issued by governments, that normally pay a fixed rate of interest over a given time period, at the end of which the initial investment is repaid.

Hard currency (bonds) Refers to bonds denominated in a highly traded, relatively stable international currency, rather than in the bond issuer's local currency. Bonds issued in a more stable hard currency, such as the US dollar, can be more attractive to investors where there are concerns that the local

currency could lose value over time, eroding the value of bonds and their income.

Hedging A method of reducing unnecessary or unintended risk.

High yield bonds Fixed income securities issued by companies with a low credit rating from a recognised credit rating agency. They are considered to be at higher risk of default than better quality, i.e. higher rated fixed income securities but have the potential for higher rewards. Default means that a company or government is unable to meet interest payments or repay the initial investment amount at the end of security's life.

Index An index represents a particular market or a portion of it, serving as a performance indicator for that market.

Index-linked bonds Fixed income securities where both the value of the loan and the interest payments are adjusted in line with inflation over the life of the security. Also referred to as inflation-linked bonds.

Inflation The rate of increase in the cost of living. Inflation is usually quoted as an annual percentage, comparing the average price this month with the same month a year earlier.

Investment grade bonds Fixed income securities issued by a company with a medium or high credit rating from a recognised credit rating agency. They are considered to be at lower risk from default than those issued by companies with lower credit ratings. Default means that a company or government is unable to meet interest payments or repay the initial investment amount at the end of a security's life.

Investment trust An investment trust is a form of collective investment fund found mostly in the United Kingdom. Investment trusts are closed-end funds and are constituted as public limited companies.

IRR Internal Rate of Return.

IPO Initial Public Offering. The process of offering shares of a private corporation to the public.

Issuer An entity that sells securities, such as fixed income securities and company shares.

Leverage When referring to a company, leverage is the level of a company's debt in relation to its assets. A company with significantly more debt than capital is considered to be leveraged. It can also refer to an investment company that borrows money or uses derivatives to magnify an investment position.

LIBOR The three-month GBP London Interbank Borrowing Rate is the rate at which banks borrow money from each other (in UK pounds) for a three-month period.

Liquidity A company is considered highly liquid if it has plenty of cash at its disposal. A company's shares are

considered highly liquid if they can be easily bought or sold since large amounts are regularly traded.

Liquidity Opportunity The opportunity to the Shareholders to realise the value of some or all of their Ordinary Shares at NAV per Ordinary Shares less costs, as set out in the Company's Articles of Association unless the Board is directed by shareholders by way of a special resolution not to offer such Liquidity Opportunity.

Local currency (bonds) Refers to bonds denominated in the currency of the issuer's country, rather than in a highly traded international currency, such as the US dollar. The value of local currency bonds tends to fluctuate more than bonds issued in a hard currency, as these currencies tend to be less stable.

Long position Refers to ownership of a security held in the expectation that the security will rise in value.

Macroeconomic Refers to the performance and behaviour of an economy at the regional or national level. Macroeconomic factors such as economic output, unemployment, inflation and investment are key indicators of economic performance. Sometimes abbreviated to 'macro'.

Maturity The length of time until the initial investment amount of a fixed income security is due to be repaid to the holder of the security.

Mezzanine tranche A generally small layer of corporate debt positioned between the senior tranche (mostly AAA) and a junior tranche (unrated, typically called equity tranche).

Modified duration A measure of the sensitivity of a fixed income security, also called a bond, or bond fund to changes in interest rates. The higher a bond or bond fund's modified duration, the more sensitive it is to interest rate movements.

Monetary policy A central bank's regulation of money in circulation and interest rates.

Morningstar™ A provider of independent investment research, including performance statistics and independent investment company ratings.

Near cash Deposits or investments with similar characteristics to cash.

Net asset value (NAV) An investment company's NAV is calculated by taking the current value of its assets and subtracting its liabilities.

NAV total return A measure showing how the net asset value (NAV) per share has performed over a period of time, taking into account both capital returns and dividends paid to shareholders.

NAV total return is expressed as a percentage change from the start of the period. It assumes that dividends paid to shareholders are reinvested at NAV at the time the shares are quoted ex-dividend.

NAV total return shows performance which is not affected by movements in share price discounts and premiums. It also takes into account the fact that different investment companies pay out different levels of dividends.

Non-executive Director (NED) A non-executive Director is a member of a company's board of directors who is not part of the executive team. A non-executive Director typically does not engage in the day-to-day management of the organisation, but is involved in policy making and planning exercises.

Official List The Official List (or UKLA Official List) is the list maintained by the Financial Conduct Authority in accordance with Section 74(1) of the Financial Services and Markets Act 2000 (the Act) for the purposes of Part VI of the Act.

Ongoing charges figure The ongoing charges figure includes charges for management of the fund; administration services; and services provided by external parties, which include depository, custody and audit, as well as incorporating the ongoing charges figure from funds held in the portfolio (taking into account any rebates). The ongoing charges figure (as a percentage of shareholders' funds) is an annualised rate calculated using average net assets over the period in accordance with the Association of Investment Companies' (AIC) recommended methodology.

Options Financial contracts that offer the right, but not the obligation, to buy or sell an asset at a given price on or before a given date in the future.

Ordinary Share Ordinary Share is the only class of shares issued and benefits from all the income and capital growth in the portfolio.

Overweight If an investment company is 'overweight' in a stock, it holds a larger proportion of that stock than the comparable index or sector.

Payment date The date on which dividends will be paid by the investment company to investors.

Private debt instruments These instruments not traded on a stock exchange and typically issued to small groups of institutional investors.

Public debt instruments These instruments refers to assets that are listed on a recognised exchange.

REIT (real estate investment trust) A REIT is a company that owns, operates or finances income-producing real estate.

Retail Prices Index (RPI) A UK inflation index that measures the rate of change of prices for a basket of goods and services in the UK, including mortgage payments and council tax.

Revolving credit facility A line of credit (essentially a loan agreement) is established between a bank and a business from which the business can draw funds at any time as needed. The bank sets a ceiling for the loan.

RMBS (Residential mortgage-backed security) A type of asset-backed security which is collateralised by a portfolio of residential properties.

Securitise/securitisation The creation and issuance of tradeable securities, such as bonds, that are backed by the income generated by an illiquid asset or group of assets. By pooling a collection of illiquid assets, such as mortgages, securities backed by the mortgages' income payments can be packaged and sold to a wider range of investors.

Senior tranche The highest tranche of a debt security, i.e. the one deemed least risky. Any losses on the value of the security are only experienced in the senior tranche once all other tranches have lost all their value. For this relative safety, the senior tranche pays the lowest rate of interest.

Share price total return Total return to shareholders, assuming all dividends received were reinvested at the mid-market price without transaction costs into the shares of the company at the time the shares were quoted ex-dividend.

Short position A way for an Investment Manager to express his or her view that the market might fall in value.

Short dated corporate bonds Fixed income securities issued by companies and repaid over relatively short periods.

Short dated government bonds Fixed income securities issued by governments and repaid over relatively short periods.

SMEs (Small and medium-sized enterprise) A business defined in the United Kingdom by reference to staff headcount (less than 250 employees) and annual turnover (less than £25 million).

SONIA (Sterling Overnight Index Average) SONIA is an interest rate index administered by the Bank of England and based on actual transactions. It reflects the average interest rate that banks pay to borrow sterling overnight from other banks and institutional investors.

Spread duration A measure of the portfolio's sensitivity to changes in credit spreads.

Sub-investment grade bonds Fixed income securities issued by a company with a low rating from a recognised credit rating agency. They are considered to be at higher risk from default than those issued by companies with higher credit ratings. Default means that a company or government is unable to meet interest payments or repay the initial investment amount at the end of a security's life.

Swap A swap is a derivative contract where two parties agree to exchange separate streams of cash flows. A common type of swap is an interest rate swap to hedge against interest rate risk.

Synthetic inflation-linked bonds Refers to securities created using a combination of assets to simulate the characteristics of inflation-linked bonds. By buying inflation-linked government bonds and selling protection against companies defaulting on

their debts, using credit default swaps, the combined synthetic investment will behave similarly to a physical inflation-linked bond, had one been issued. Synthetic inflation-linked bonds are usually created where a company does not have any inflation-linked bonds in issue.

Tap issuance programme A method of share issuance whereby the company issues shares over a period of time, rather than in one sale. A tap issue allows the company to make its shares available to investors when market conditions are most favourable.

Total return The term for the gain or loss derived from an investment over a particular period. Total return includes income (in the form of interest or dividend payments) and capital gains.

Treasury shares Shares that the company bought back from the marketplace and it keeps in its treasury; they do not count for the distribution of dividends or the calculation of earnings per share or net asset value per share. Also known as treasury stock.

Valuation The worth of an asset or company based on its current price.

Volatility The degree to which a given security, investment company, fund, or index rapidly changes. It is calculated as the degree of deviation from the norm for that type of investment over a given time period. The higher the volatility, the riskier the security tends to be.

Weighted average life (WAL) The asset-weighted average number of years to final maturity of the portfolio, based on the final maturity for all assets/exposures.

Yield This refers to either the interest received from a fixed income security or to the dividends received from a share. It is usually expressed as a percentage based on the investment's costs, its current market value or its face value. Dividends represent a share in the profits of a company and are paid out to the company's shareholders at set times of the year.

Yield to maturity The total return anticipated on the portfolio if the underlying bonds are held until maturity.

Zero discount policy On 30 April 2021, the Company announced a zero discount policy (the 'Policy') to manage the discount or premium to NAV at which the Company's Ordinary Shares trade. The Policy has been adopted so that shareholders benefit appropriately from the Company's investment objective which is to generate a regular and attractive level of income with low asset value volatility. The Company seeks to ensure that the Ordinary Shares trade close to NAV in normal market conditions through a combination of Ordinary Share buybacks and the issue of new Ordinary Shares, or resale of Ordinary Shares held in treasury, where demand exceeds supply.

Shareholder information and analysis

Website

The Company's website is mandg.com/ creditincomeinvestmenttrust. The site provides visitors with Company information and literature downloads.

Annual and Half Year Reports

Copies of the Annual and Half Year Reports may be obtained from the Company by visiting mandg.com/ creditincomeinvestmenttrust

Share prices and NAV information

The Company's Ordinary Shares of 1p each are quoted on the London Stock Exchange's (LSE) main market for listed securities:

Ordinary £0.01 shares SEDOL number: BFYYL32 ISIN: GB00BFYYL325

Ticker: MGCI

LEI: 549300E9W63X1E5A3N24

The codes above may be required to access trading information relating to the Company on the internet.

The Company's NAV per share is released monthly to the London Stock Exchange and published on the Company's website.

Investing in the Company

The Company's shares can be bought or sold through a stockbroker or other financial intermediary.

The Ordinary Shares are permissible assets for a self-invested personal pension (SIPP) and a small self-administered scheme (SSAS) and are 'qualifying investments' for the stocks and shares component of an Individual Savings Account (ISA). Individuals wishing to invest in shares through an ISA, SIPP or SSAS should, however, contact their professional advisers regarding their eligibility.

Share register enquiries

The register for the Ordinary Shares is maintained by Link Group. In the event of queries regarding your holding, please contact the Registrar on 0371 664 0300.

Changes of name and/or address must be notified in writing to the Registrar, at the address shown on page 112. You can check your shareholding and find practical help on transferring shares or updating your details at signalshares.com

Dividends

Shareholders who wish to have dividends paid directly into a bank account rather than by cheque to their registered address can complete a mandate form for the purpose. Mandate forms may be obtained from Link Group on request from the address on page 112 or downloaded from their website signalshares.com Alternatively If you have a UK bank account you can sign up for this service on Signal Shares, if you have already registered you can log in to record your bank account details. Once logged in, click on 'Manage your account' at the top of the screen and then select 'Payment Preferences' to record your bank details.

If you haven't registered you can do so and update your bank details immediately. Go to the home screen and follow the link under 'Register an account'. You'll need to enter your investor code, surname and postcode.

The Company operates the BACS system for the payment of dividends. Where dividends are paid directly into Shareholders' bank accounts, dividend tax vouchers are sent to Shareholders' registered addresses.

Key dates

Annual results	March
Annual General Meeting	May
Half Year results	September
Dividends declared	January, April, July, October

Shareholder information and analysis

Association of Investment Companies

The Company is a member of the AIC, which publishes monthly statistical information in respect of member companies. The AIC can be contacted on 020 7282 5555, enquiries@theaic.co.uk or visit the website: theaic.co.uk

Company registration

Registered in England and Wales. Company registration number 11469317.

Enquiries

Shareholders can contact the Company Secretary, Link Company Matters Limited at: mandg@linkgroup.co.uk

Shareholder warning

Many companies are aware that their shareholders have received unsolicited phone calls or correspondence concerning investment matters. These calls typically come from fraudsters operating in 'boiler rooms' offering investors shares that often turn out to be worthless or non-existent, or an inflated price for shares they own. While high profits are promised, those who buy or sell shares in this way usually lose their money.

These fraudsters can be very persistent and extremely persuasive. Shareholders are therefore advised to be very wary of any unsolicited advice, offers to buy shares at a discount or offers of free company reports.

It is very unlikely that either the Company or the Company's Registrar would make unsolicited telephone calls to Shareholders and that any such calls would relate only to official documentation already circulated to Shareholders and never in respect of investment 'advice'.

If you have been contacted by an unauthorised firm regarding your shares, you can report this using the FCA helpline on 0800 111 6768 or by using the share fraud reporting form at fca.org.uk/consumers/scams

Other regulatory disclosures

Alternative Investment Fund Managers ('AIFM') Directive

In accordance with the AIFMD, information in relation to the Company's leverage, pre-investment disclosures and the remuneration of the Company's AIFM are required to be made available to investors.

Leverage

For the purpose of the Alternative Investment Fund Manager (AIFM) Directive, leverage is any method that increases the Company's exposure, including the borrowing of cash and the use of derivatives.

It is expressed as the ratio of the Company's exposure to its NAV. This exposure must be calculated in two ways, the 'gross method' and the 'commitment method'.

Under the gross method, exposure represents the sum of the absolute values of all positions, so as to give an indication of overall exposure. Under the commitment method, exposure is calculated in a similar way, but after netting off hedges which satisfy certain strict criteria.

The Company's maximum and actual leverage levels at 31 December 2023 are shown below.

	Gross method	Commitment method
Maximum permitted limit	300%	150%
Actual	130%	104%

Pre-investment disclosures

The AIFMD requires certain information to be made available to investors in AIFs before they invest and requires that material changes to this information be disclosed in the Annual Report of each AIF. An Investor Disclosure Document, which sets out information on the Company's investment strategy and policies, leverage, risk, liquidity, administration, management, fees, conflicts of interest and other shareholder information is available on the website at mandg.com/investments/ investor-disclosure-document

There have been no material changes (other than those reflected in these Financial Statements) to this information requiring disclosure. Any information requiring immediate disclosure pursuant to the AIFMD will be disclosed to the London Stock Exchange through a primary information provider.

Other regulatory disclosures

Remuneration

In line with the requirements of the Alternative Investment Fund Managers Directive ('AIFMD'), M&G Alternatives Investment Management Limited (the 'AIFM') is subject to a remuneration policy which is consistent with the principles outlined in the European Securities and Markets Authority guidelines on sound remuneration policies under the AIFMD.

The remuneration policy is designed to ensure that any relevant conflicts of interest can be managed appropriately at all times and that the remuneration of employees is in line with the risk policies and objectives of the alternative investment funds managed by the AIFM. Further details of the remuneration policy can be found here: mandgplc.com/our-business/mandginvestments/mandg-investments-business-policies. The remuneration policy and its implementation is reviewed on an annual basis, or more frequently where required, and is approved by the M&G plc Board Remuneration Committee. The most recent review found no fundamental issues with no material changes made to the policy.

The AIFM is required under the AIFMD to make quantitative disclosures of remuneration. These disclosures are made in line with M&G's interpretation of currently available guidance on quantitative remuneration disclosures. As market or regulatory guidance evolves, M&G may consider it appropriate to make changes to the way in which quantitative disclosures are calculated.

The 'Identified Staff' of M&G Alternatives Investment Management Limited are those who could have a material impact on the risk profile of M&G Alternatives Investment Management Limited or the AIFs it manages (including M&G Credit Income Investment Trust plc) and generally includes senior management, risk takers and control functions. 'Identified Staff' typically provide both AIFMD and non-AIFMD related services and have a number of areas of responsibility. Therefore, only the portion of remuneration for those individuals' services which may be attributable to the AIFM is included in the remuneration figures disclosed. Accordingly the figures are not representative of any individual's actual remuneration. The information needed to provide a further breakdown of remuneration is not readily available and would not be relevant or reliable

The amounts shown below reflect payments made in respect of the financial year 1 January 2023 to 31 December 2023.

	Fixed Remuneration £'000	Variable Remuneration (incl. carried interest) £'000	Total £'000	Benefi ciaries
Senior Management	45	137	181	11
Other Identified Staff	2,156	5,953	8,109	26
Total	2,201	6,090	8,291	37

Notes

Strategic report • Governance • Financial • Additional information

Notes

Notes