MITON UK MICROCAP TRUST PLC — Interim / Quarterly Report 2017

Oct 31, 2017

Miton UK MicroCap Trust plc

Half-year Report For the half year to 31 October 2017

...accessing the inherent vibrancy of the smallest quoted stocks to generate attractive potential returns

During globalisation, growth was plentiful...

• ☞ Normally, credit booms are inherently unstable as the extra inflationary pressures they engender drive up interest rates, preventing ongoing expansion of leverage.
• ☞ But globalisation has undermined these disciplines. The surge of low-cost imports has offset the inflationary price rises of local services, so decades of low interest rates and easy credit have persisted. For many, plentiful growth has come to be regarded as normal.
• ☞ Since 2008, the long period of ultra-low interest rates has led to a degree of misallocation of capital. With world productivity flatlining, the absence of wage growth has now led social and political attitudes to harden against globalisation.
• ☞ This marks a multi-decade turning point. Investors will need to favour companies that are continuing to improve productivity going forward, particularly those with a degree of corporate resilience.
• ☞ The investment strategy of Miton UK MicroCap Trust plc has been crafted to take advantage of these changing trends. This Half-year Report outlines the reasons why we believe a company investing in microcaps can deliver premium returns for shareholders, in spite of the stagnation of productivity growth.

... but with productivity stagnating, we're at a multi-decade turning point

Miton UK MicroCap Trust plc Report for the half year to 31 October 2017

Miton UK MicroCap Trust plc is an investment trust quoted on the London Stock Exchange under the ticker code MINI. It is referred to as the Company or as MINI in the text of this Report. The Company has a Board that is independent of the Investment Manager.

This Report covers the six months up to 31 October 2017. The net asset value ("NAV") of the Ordinary shares has risen by 1.8% over the half year. The NAV of the Company has increased by 33.6% since the fund was launched on 30 April 2015.

Our objective

The Company invests in a portfolio of UK quoted companies, generally with market capitalisations of less than £150m. Our primary objective is to achieve capital growth by investing in a portfolio of stocks that are well placed to generate an attractive cash payback from productivity improvements. While these types of stocks tend to pay modest dividends, it is anticipated that they will be able to fund a growing stream of dividend payments over the next three to five years.

The image on the cover refers to Zotefoams plc, which is an example of the stocks in the Company's portfolio.

Zotefoams manufactures polyethylene foams used in sports, leisure and medical products, together with packaging, marine and industrial applications. For many years, the company has been developing new innovative products that are now ready for commercial sale. The company remains conservatively financed with net cash balances, in spite of investing over £30m over the last three years to step up its capacity to supply its products. Like many other holdings in the Company, as Zotefoams grows its sales and profits, we believe it will generate a rising stream of corporate cashflow and in time this will lead to additional dividends and share price appreciation.

Contents

• The Company
• 2 What makes MINI distinctive?
• 4 The advantages of being small
• 6 Results for the Half Year
• 7 Financial Performance Indicators
• 8 Chairman's Statement
• 10 Investment Manager's Report
• 14 Portfolio Information
• 16 Interim Management Report and Directors' Responsibility Statement Company Accounts

17 Condensed Income Statement

• 18 Condensed Statement of Changes in Equity
• 19 Condensed Balance Sheet
• 20 Condensed Statement of Cash Flows
• 21 Notes to the Condensed Financial Statements Shareholder Information
• 28 Investment Objective and Policy
• 29 Shareholder Information
• 31 Directors and Advisers

What makes MINIdistinctive?

MINI's strategy is based upon overlooked microcap stocks

1. The smallest companies have outperformed larger companies

During the period of globalisation, economic growth was plentiful, with both large and small companies expanding well. Prior to the credit boom, when world growth was less vigorous, it was harder for many of the larger companies to find enough major capex opportunities to deliver much growth. In contrast, smallcaps normally have a multitude of small projects under review, so they have greater opportunity to invest and greater scope to access potential growth – even when economic growth is limited. Therefore, prior to the period of globalisation, smallcaps often ended up delivering premium returns over mainstream indices and progressively outperformed the largest companies over a number of decades.

2. Overlooked stocks have delivered the best returns in the past

Ultra-low yields on long-dated Government debt imply that investment returns on mainstream assets may be sub-normal going forward. If investment returns do become more constrained in the future, we believe that the merits of overlooked stocks will become more relevant. In the past, growth stocks often underperformed because the excitement about their prospects led their market valuations to over-anticipate their chances of succeeding. Conversely, overlooked stocks, typically those standing on undemanding valuations, tended to outperform as the market had underestimated their ability to beat undemanding estimates. Therefore, a strategy focused on those with less-demanding initial valuations, combined with an inclination to invest in smaller quoted companies, has tended to generate better outperformance in the past.

3. Diversification can be found locally

The progressive decline of yields on Government debt since 1992 has boosted the valuations of nearly all assets, including equities, corporate bonds and property. One impact has been that returns on all of these asset classes have tended to correlate. Going forward, if bond yields were to reverse, then the simultaneous retreat of several asset classes might be a worry. Therefore, strategies where the returns are not as closely correlated with the movements of mainstream markets may well become more highly valued in the future. The fluctuations in microcap share prices tend to be only partly correlated with mainstream stocks, so the diversification advantages of a microcap strategy may have greater investment appeal going forward.

This chart demonstrates how smaller quoted companies (in grey) have outperformed mainstream stocks (in red). The 'smaller company effect' is proportional, so the very smallest stocks (in green) have outperformed both the mainstream stocks and smaller company stocks in general.

Source: Numis Securities, Elroy Dimson and Paul Marsh (London Business School).

Performance of quadrants of big and small companies

FTSE AIM All-Share v FTSE Small Cap v FTSE 100 2 Jan 2009 – 31 Oct 2017

This bar chart shows how building a portfolio of overlooked stocks (often known as Value in this data) overlaid with both bigger-small and smaller-small companies (denoted as Big and Small in this data) enhances the long-term returns.

Source: Dimson, E and Marsh, P (2014) Numis Smaller Companies Index 2014 Annual Review. All the stocks in the Numis Smaller Companies Index (NSCI) were classified by market capitalisation as either bigger (Big) or smaller (Small). In addition, the stocks were also classified by Book-to-Market to identify those with Value or Growth characteristics.

Whilst all share prices reflect the general movement of markets, it is advantageous for investors to spread this market risk through holding different groups of stocks that tend to peak and trough at different times. This chart outlines how much the market trends in smaller company stocks diverge from that of the main market, thereby adding a degree of diversification for those investors holding both.

Source: Morningstar 2 January 2009 to 31 October 2017. Data is provided on a total return basis.

3

Further detail on these trends can be accessed on the Miton website using the QR codes above, which can be read using your mobile device once you have installed the appropriate app.

The long period of strong market returns . . .

Globalisation has led to an extraordinarily favourable environment for corporate profit and cash flow growth.

Over recent decades, globalisation has fed economic expansion. Meanwhile, the deflationary effect of cheaper imports has more than offset any inflationary pressures from that extra growth, so inflation has remained benign and corporate profit margins have expanded.

Over time, this has helped interest rates to move progressively lower and brought about a remarkable reduction in bond yields. In the UK, the cost of government borrowing for the next 10 years has fallen from 10% in 1992 to 1.25% currently. As a trend of ever lower bond yields has tended to drive up the valuation of nearly all assets, UK housing prices have risen tremendously over recent decades, whilst equity markets have also delivered outstanding returns.

However, the 'emergency' reduction of interest rates after the global financial crisis in 2008 has had an unsettling effect. The point is that many investors are chasing equity yields simply because cash and bond yields are now so meagre. Many companies now find their market valuations are higher if they divert capital away from improving corporate productivity towards paying extra dividends instead. This effect constrains ongoing productivity improvement and undermines the long-term scope for dividend growth from equities in the future.

…has reduced institutional interest in smallness

At the time of the next economic setback, there is a real risk that markets may not recover as quickly as they have previously. There is little room to cut interest rates and central banks have almost no scope to re-liquefy markets through lower bond yields. Governments can also be expected to be cautious about increasing their budget deficits further, since they are still unwinding those of the past.

Meanwhile, over recent decades, investors have become increasingly obsessed with maximising their returns, whilst being less interested in managing downside risk. During this time, most equity portfolios have moved away from investing across the full ecosystem of corporate holdings towards a narrower investment universe, typically defined by the stock weightings in mainstream equity indices. This trend is exemplified by the recent rise of passive investing tools such as exchange traded funds.

Over recent decades, asset allocators have therefore progressively reduced their weightings in the smallest quoted stocks. Arguably, narrowing the investment universes may have left many mainstream equity portfolios in a position of greater vulnerability than appreciated, which may become costly in the next market downturn.

A wider opportunity set may offer…

The largest quoted companies often compete against one another internationally. Therefore, many mainstream equity markets are often comprised of a relatively similar range of industry sectors. For example, the largest oil companies are a significant part of the mainstream equity indices, with the share price of Shell largely correlated with that of Total or Exxon in other markets. This pattern is often duplicated within individual stock exchanges as well, with both Shell and BP being large parts of the FTSE100 Index for example. The overall result is that the movements of many international equity markets are largely synchronised.

In contrast, there are numerous quoted microcaps compared with the very limited number of the largest companies. Therefore, the investment universe of the very smallest quoted companies tends to comprise a much wider opportunity set, with a much broader range of industrial sectors and corporate characteristics.

…scope for superior dividend growth

The absence of productivity improvement since 2006 has led to a moderating of corporate cashflow over the last decade. Consequently, dividend cover, a measure of the sustainability of equity dividends, has moved to the low end of its historic range. This implies that future dividend growth is likely to be relatively limited, with a growing risk of wide-ranging dividend cuts should the next economic setback be protracted. This is a real worry, as a key driver of prospective returns is the progressive growth of corporate cashflow and dividends. Given the scarcity of productivity improvement, equity strategies will need to narrow their holdings to the limited number of companies that still have good opportunities to invest in profitability. This is all the more relevant at times when economic prospects are muted.

In the past, it has been the superior productivity and dividend growth of the average microcap stock that has fuelled their premium returns. Given the economic headwinds, we believe this point of microcap difference will become ever more relevant to investors going forward. A stock selective strategy, focusing on those particular microcap stocks with the best prospects of forthcoming cashflow after capital investment, should generate premium returns.

Miton UK MicroCap Trust plc Half-year Report 2017

Results for the Half Year to

31 October

2017

• ☞ Over the half year, the Ordinary share NAV rose from 64.27p on 30 April 2017 to 65.44p on 31 October 2017, an appreciation of 1.8%.
• ☞ The Company has grown during the period, with the net assets of the Company reaching £112.0m at the end of the period.
• ☞ The Ordinary share price moved from 62.25p at the end of April 2017 to 63.75p at the end of October 2017, an appreciation of 2.4% as the discount to NAV narrowed.
• ☞ Revenue after costs amounting to £292,000 in the half year to October 2017 has been credited to the revenue reserves. The Company normally pays a final dividend each year after shareholders' approval at the Annual General Meeting.

Summary of Results

	31 October 2017	30 April 2017	Change %
Total net assets attributable to equity shareholders (£'000)	112,005	111,246
NAV per Ordinary share	65.44p	64.27p	1.82
Share price (mid)	63.75p	62.25p	2.41
Discount to NAV	2.58%	3.14%
Revenue return per Ordinary share	0.17p	0.53p
Total return per Ordinary share	1.53p	11.77p
Ongoing charges	1.43%*	1.47%
Ordinary shares in issue	171,151,514**	173,086,001

* Estimated as at 31 October 2017 in accordance with Association of Investment Companies ("AIC") guidelines. Ongoing charges are the Company's annualised revenue and capitalised expenses (excluding finance costs and certain non-recurring items) expressed as a percentage of the average monthly net assets of the Company during the year.

** On 15 May 2017, the Company redeemed 1,934,487 Ordinary shares pursuant to its voluntary redemption facility.

Financial Performance Indicators

Source: Morningstar 30 April 2015 to 31 October 2017.

The chart alongside details the NAV and the daily closing share price of the Company compared with that of the FTSE AIM All-Share Index. Over recent months, many of the better performing AIM-listed stocks have been larger than those held in this Company. However, it is anticipated that over the longer term, the share prices of many smaller AIM stocks will also perform well. Since over 80% of the holdings in the Company's portfolio are listed on the AIM exchange, it is believed that the return of the FTSE AIM All-Share Index is the most relevant for comparison purposes. A more detailed explanation of the Company's performance in the first half of the year is contained in the Investment Manager's Report on page 12.

NAV correlation v FTSE 100 Index v MSCI Europe (ex UK) Index

Source: Bloomberg 30 April 2015 to 31 October 2017.

Many of the mainstream international indices comprise multi-national companies in a range of sectors that are fairly uniform in each geography. For example, a major oil company in the US or Europe is similar to a major oil company in the UK, so the daily movements of the FTSE 100 and the MSCI Europe (ex UK) Indices are relatively correlated. Although the holdings in MINI are listed in the UK, the fact that the stocks are not part of the mainstream indices and operate in a wider range of industry sectors means the daily movements of the Company's NAV are relatively lowly correlated with the daily movements of the FTSE 100 Index. Please note this data only extends over the period since launch of the Company in April 2015, which is less than the 36-month period that is the industry norm for such data.

Chairman's Statement

Andy Pomfret Chairman

This Report covers the six-month period ended 31 October 2017 for Miton UK Microcap Trust plc.

Half-year Returns

Over the half year, the best returns in the AIM market were generated by some of the larger AIM-listed stocks. The FTSE AIM All-Share Total Return Index rose 8.5% over the half year to October. Returns on many other areas were more modest, with the FTSE SmallCap (excluding Investment Trusts) Total Return Index up 5.0% and the FTSE All-Share Total Return Index up 5.9%. The Company's NAV appreciated by 1.8% over the half year. An explanation for the lesser return on the Company's NAV in the half year is outlined in the Investment Manager's Report on page 12.

The Company was launched at the end of April 2015, and since that time, the NAV has risen by 33.6%, which compares with a return of 33.3% on the FTSE SmallCap (excluding Investment Trusts) Total Return Index and 43.0% on the FTSE AIM All-Share Total Return Index over the same period. Interestingly, in spite of the strong rise of the mainstream indices immediately after the UK Referendum, the FTSE All-Share Total Return Index has only appreciated by 20.0% over the two and a half year period.

As a result of the strategy of investing in smaller AIM stocks with the potential for growth, the portfolio does not hold many companies trading on significant dividend yields, so the revenue per share is not expected to be a large part of the return in the early years of the Company's life. Revenue per share was 0.17p over the half year.

Outlook

Both larger and smaller companies find it easier to generate growth when the wider economy is expanding as well. However, one of the overlooked features of microcap stocks is their greater ability to buck the wider economic trend when growth is more subdued.

The key point is that, during the period of globalisation when growth was plentiful, some microcap advantages were not appreciated. Now that the UK economy is slowing, however, these factors are becoming more important again. Certainly, it is interesting to note that since the Company was first launched, the best returns in the UK equity market have come from the smaller company indices in spite of a significant devaluation of sterling during this period.

"We continue to believe that the long-term approach adopted by Miton UK MicroCap Trust plc remains well placed to generate premium returns."

The MINI investment strategy was set with slower global growth in mind. During the more challenging periods in the past, it has often been the greater vibrancy of the smallest quoted companies that has driven premium returns. Specifically, many of the Company's holdings have been selected for their ability to invest for productivity improvement and ultimately provide attractive cash paybacks. Therefore, in spite of the UK slowdown, we continue to believe that the long-term approach adopted by Miton UK MicroCap Trust plc remains well placed to generate premium returns.

Andy Pomfret

Chairman 14 December 2017

Investment Manager's Report

Who are Miton?

Miton Trust Managers Limited is the fund manager of the Company and is a wholly-owned subsidiary of Miton Group plc, a UK-based fund management company listed on the AIM exchange.

The day-to-day management of the Company's portfolio is carried out by Gervais Williams and Martin Turner, who have decades of experience researching many of the smallest UK quoted stocks.

Gervais Williams

Gervais joined Miton in March 2011 and is Senior Executive Director of the group. He has been an equity portfolio manager since 1985, including 17 years as Head of UK Smaller Companies and Irish Equities at Gartmore. He won the Grant Thornton Investor of the Year Award in 2009 and 2010, and was awarded Fund Manager of the Year 2014 by What Investment?

Martin Turner

Martin joined Miton in May 2011. Martin and Gervais have had a close working relationship since 2004, and their complementary expertise and skills led to their backing a series of successful companies. Martin qualified as a Chartered Accountant with Arthur Anderson, and has extensive experience at Rothschild, Merrill Lynch and Collins Stewart, where as Head of Small/Mid Cap Equities his role covered their research, sales and trading activities.

Gervais and Martin are part of a team of four Miton fund managers principally researching UK-quoted stocks, with each manager having a record of delivering premium returns. They are a close-knit and agile team, open-minded in their thinking. This is important at all times, but at the current time of changing political and economic dynamics, this aspect is likely to be particularly relevant.

How should progress be measured?

During globalisation, equity market returns have been so good for so long that it has become customary for funds to measure their progress compared to the performance of the mainstream indices. Unfortunately, an unwanted side effect has been that most UK equity portfolios are now dominated by the largest 350 stocks listed on the London Stock Exchange.

As outlined at the top of page 5, we at Miton believe that it is in clients' interests to invest over a wider opportunity set. Therefore, most Miton strategies in the UK are much more wide ranging.

Although the returns on MINI will be set in the context of the returns of comparative indices, the ultimate measure of success will be the ability of the Company's holdings to generate productivity improvements and cashflow.

How is the investment strategy implemented?

As noted earlier in this Half-year Report, we believe that corporate cashflow and dividend growth is often dependent on productivity improvement. We find the following five factors particularly helpful when selecting productive investments with attractive risk/reward ratios for the Company.

Turnover growth – Although some companies can succeed in growing their profits without turnover growth, in general, sustainable long-term growth comes from those that grow their turnover. This can be via an innovative new service or through introducing a superior product. Even in times of economic stagnation, this type of improvement can generate ongoing turnover growth.

Sustained margins – Extra turnover growth may not lead to additional corporate cashflow if profit margins decline. The best kinds of productivity improvement should reduce the cost of goods, as well as justifying a better market price. Alongside this, we are looking for companies that have the potential to sustain their profit margins through outstanding customer service. This may be especially important should profit margins come under sustained pressure in the future.

Management of risk – All investment carries risks, but often companies managing the fastest growth are obliged to take the greatest risks. In general, we find that many companies can generate attractive returns for investors through growing at a less hectic pace, and therefore can do so with less downside risk.

Better balance sheets – Given the exceptionally low interest rates over the last decade, many corporates have taken on extra debt. However, these liabilities can constrain the opportunities of the company, particularly should they become due at a time of economic setback.

We prefer to invest in companies with net cash balances or those with modest debt relative to the headroom on the facility. Those with under-geared balance sheets can take greater advantage of any economic setback to improve their market position disproportionately, whereas those fully drawn on their facilities tend to have fewer options.

Low entry valuations – The upside potential on an investment is often greater when the valuation on entry is modest. In general, we favour stocks where the overall market capitalisation reflects some of the problems of the past in preference to those that are already reflecting some of the excitement about the future.

With few institutional investors, or indeed sell side analysts, actively researching the smallest quoted companies in the UK, there are plenty of quoted companies with, what we believe, are low entry valuations.

MiFID II and Key Information Document

Because microcaps are small, it is important that broker research is published so that market participants are aware of the scale of their prospects. A very significant part of this is carried out by their brokers as their nominated advisers and funded by the quoted business itself. For that reason, the cost of independent external research has been modest over recent years, amounting to less than 0.02% of the NAV. Our budget for the current year remains well below this level.

From 3 January 2018, as AIFM we will issue a Key Information Document ("KID") on behalf of the Company, which covers the Company's returns over a range of different projected outcomes. For a new Company like ours, the data is projected from the relatively short period since issue. Over the coming years, the longer data set should lead to the KID data becoming more pertinent to the overall strategy of the Company.

How has the Company done over the half year?

The devaluation of sterling after the UK Referendum has led to a pick up in inflation in 2017. During the half year under review, this led UK consumer expenditure to come under pressure, since UK wages have not kept up with inflation. Therefore, the growth of the UK economy has faltered and fallen behind many others.

Generally, it might be assumed that multi-national companies would be better placed for this scenario. However, many of the smaller company indices have performed equally well over the period, as there has been a period of catch-up after smaller companies underperformed the largest stocks in 2016.

Over the half year to October 2017, the FTSE SmallCap (excluding Investment Trusts) Total Return Index rose 5.0%, and the FTSE AIM All-Share Total Return Index rose 8.5%. Meanwhile, the FTSE All-Share Total Return Index rose 5.9%.

The Company's NAV rose just 1.8% in the half-year period. The reason for the differential between the Company's return and that of the FTSE AIM All-Share Index in particular is that some of the largest stocks on the AIM exchange were the principal contributors to the strong performance of the FTSE AIM All-Share Index in the period. For example, Hutchinson China appreciated 62% in the six-month period and, being around £3bn in scale, added 2.0% to the overall return of the Index alone. At a time when the momentum in some of these growth stocks has been so substantial, investors have overlooked many of the microcap stocks. For this reason, we still feel many of the Company's holdings remain well placed to enjoy a period of performance catch up in due course.

Several of the portfolio holdings have performed very strongly in the half year. For example, 10 stocks have appreciated by more than 50% in the six months, with Yu Group, Wey Education and IQE contributing the greatest to the overall return. Elsewhere, the share prices of several other holdings that had already performed well, fell back given the absence of any further significant newsflow. For example, Kromek Group and Atlantis Resources detracted from returns over the half year in spite of their longterm potential being largely unchanged. Since the half-year end, it is gratifying to see the price of Kromek Group recover sharply.

The portfolio remains invested principally in microcap stocks with promising prospects – although one or two stocks have grown to be somewhat larger. The portfolio is well diversified in terms of stock specific risk across a broad range of industry sectors. At the end of October 2017, the Company had 130 holdings.

What about the future?

There are headwinds ahead as the UK concludes negotiations on our exit from the EU. Concurrently, UK consumer expenditure may be subdued for some time. Both of these factors may affect the prospects of both larger and microcap stocks.

It is natural to assume at times like this that the largest multinational stocks may enjoy the best of the opportunities, but when growth is scarce, corporate agility and nimbleness becomes particularly important. That is why microcaps sometimes buck the wider economic trend and why microcap stocks have often generated the greatest outperformance at times of economic challenge.

Although the UK economy may not grow as well as others for a period, this need not imply that a UK microcap strategy has lost its relevance. If anything, with world productivity stagnating over the last 10 years, we believe it has become even more important to back individual companies with attractive capex opportunities. That is why the Company was set up. Interestingly, there are not many ways that global investors can access plentiful smallness in quoted stocks other than in the UK.

Gervais Williams and Martin Turner

14 December 2017

Portfolio Information as at 31 October 2017

			Valuation	% of
Rank	Company	Sector & main activity	£'000	net assets
1	Yu Group	Utilities	3,898	3.5
2	Crossrider	Consumer Services	3,184	2.9
3	Wey Education	Industrials	2,376	2.1
4	Cerillion	Technology	2,275	2.0
5	Kromek Group	Health Care	2,059	1.8
6	Frontier IP Group	Industrials	1,982	1.8
7	IQE	Technology	1,948	1.7
8	Autins Group	Consumer Goods	1,801	1.6
9	Alpha FX Group	Financial Services	1,782	1.6
10	Atlantis Resources	Oil & Gas	1,755	1.6
	Top 10 investments		23,060	20.6
11	Zotefoams	Basic Materials	1,729	1.6
12	Ethernity Networks	Technology	1,684	1.5
13	Fishing Republic	Consumer Goods	1,682	1.5
14	Science in Sport	Consumer Goods	1,663	1.5
15	Conygar Investment Company	Financial Services	1,609	1.5
16	Amino Technologies	Technology	1,602	1.4
17	Seeing Machines Limited	Technology	1,566	1.4
18	CML Microsystems	Technology	1,503	1.3
19	Brighton Pier Group	Consumer Services	1,502	1.3
20	Scientific Digital	Health Care	1,452	1.3
	Top 20 investments		39,052	34.9
21	Fulcrum Utility Services	Utilities	1,361	1.2
22	Totally	Health Care	1,297	1.2
23	Walker Crips Group	Financial Services	1,293	1.2
24	Bilby	Industrials	1,287	1.2
25	Ingenta	Technology	1,275	1.1
26	Eland Oil & Gas	Oil & Gas	1,266	1.1
27	Marlowe	Industrials	1,239	1.1
28	Avesoro Resources	Basic Materials	1,165	1.0
29	Cloudcall Group	Technology	1,148	1.0
30	BATM Advanced Communications	Technology	1,145	1.0
	Top 30 investments		51,528	46.0
31	Mercantile Ports & Logistics	Industrials	1,140	1.0
32	Ideagen	Technology	1,135	1.0
33	Cropper (James)	Basic Materials	1,122	1.0
34	Charles Taylor	Industrials	1,113	1.0
35	FairFX Group	Financial Services	1,104	1.0
36	Inspired Energy	Industrials	1,079	1.0
37	Stride Gaming	Consumer Services	1,075	1.0
38	WYG	Industrials	1,072	1.0
39	7digital Group	Consumer Services	1,068	0.9
40	Cello Group	Consumer Services	1,063	0.9
	Top 40 investments		62,499	55.8
	Balance held in 90 equity instruments		44,877	40.1
	Total investment portfolio		107,376	95.9
	Other net current assets		4,629	4.1
Net assets			112,005	100.0

Portfolio exposure by sector

1	Technology	23.8%
2	Industrials	19.0%
3	Financial Services	13.3%
4	Consumer Goods	10.5%
5	Health Care	8.1%

6	Consumer Services	7.3%
7	Basic Materials	7.3%
8	Oil & Gas	5.7%
9	Utilities	5.0%

Portfolio by asset allocation

1	AIM	87.7%
2	Other UK Equities	4.3%
3	FTSE SmallCap Index	4.1%
4	FTSE Fledgling Index	3.1%

• International Equities 0.8%

Portfolio by spread of investment income to 31 October 2017

• AIM 80.3%
• FTSE SmallCap Index 10.0%
• FTSE Fledgling Index 6.1%
• Other UK Equities 3.6%

Estimated annual income by sector1

• Industrials 31.5%
• Financial Services 24.7%
• Technology 18.8%
• Basic Materials 7.4%

5	Consumer Services	6.7%
6	Consumer Goods	6.0%
7	Utilities	4.9%

Interim Management Report and Directors' Responsibility Statement

Interim Management Report

The important events that have occurred during the period under review, the key factors influencing the financial statements and the principal risks and uncertainties for the remaining six months of the financial year are set out in the Chairman's Statement on pages 8 and 9 and the Investment Manager's Report on pages 10 to 13.

The principal risks facing the Company are substantially unchanged since the date of the Annual Report and Accounts for the year ended 30 April 2017 and remain as set out in that report on pages 18 and 19.

Risks faced by the Company include, but are not limited to, investment and strategy, reliance on third parties, share price volatility and liquidity/marketability risk, costs of operation, regulatory risk/change in tax status, market risk, liquidity risk and credit and counterparty risk.

Responsibility Statement

The Directors confirm that to the best of their knowledge:

• the condensed set of financial statements has been prepared in accordance with International Accounting Standard ("IAS") 34, Interim Financial Reporting, as adopted by the European Union; and gives a true and fair view of the assets, liabilities, financial position and profit of the Company; and
• this Half-year Report includes a fair review of the information required by:
• a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
• b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Company during that period; and any changes in the related party transactions that could do so.

This Half-year Report was approved by the Board of Directors on 14 December 2017 and the above responsibility statement was signed on its behalf by Andy Pomfret, Chairman.

Condensed Income Statement

for the half year to 31 October 2017

			Half year to 31 October 2017			Half year to 31 October 2016			Year ended 30 April 2017
	Note	Revenue return £'000	Capital return £'000	Total £'000	Revenue return £'000	Capital return £'000	Total £'000	Revenue return £'000	Capital return £'000	Total £'000
Gains on investments held at fair value through profit or loss		–	2,726	2,726	–	3,747	3,747	–	16,113	16,113
Foreign exchange (losses)/gains		–	(2)	(2)	–	–	–	–	20	20
Income	2	688	–	688	839	–	839	1,531	–	1,531
Management fee	8	(133)	(400)	(533)	(112)	(336)	(448)	(235)	(705)	(940)
Other expenses		(263)	–	(263)	(236)	–	(236)	(471)	–	(471)
Return on ordinary activities before finance costs and taxation		292	2,324	2,616	491	3,411	3,902	825	15,428	16,253
Finance costs	9	–	–	–	–	1,969	1,969	–	1,969	1,969
Return on ordinary activities before taxation		292	2,324	2,616	491	5,380	5,871	825	17,397	18,222
Taxation		–	–	–	–	–	–	(3)	–	(3)
Return on ordinary activities after taxation		292	2,324	2,616	491	5,380	5,871	822	17,397	18,219
Basic and diluted		pence	pence	pence	pence	pence	pence	pence	pence	pence
return:
Per Ordinary share	3	0.17	1.36	1.53	0.35	3.81	4.16	0.53	11.24	11.77

The total column of this statement is the Income Statement of the Company prepared in accordance with International Financial Reporting Standards ("IFRS"), as adopted by the European Union. The supplementary revenue return and capital return columns are presented in accordance with the Statement of Recommended Practice issued by the Association of Investment Companies ("AIC SORP").

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the period.

Condensed Statement of Changes in Equity for the half year to 31 October 2017

	Note	Share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Capital reserve £'000	Revenue reserve £'000	Total £'000
As at 30 April 2017		223	86,986	–	23,099	938	111,246
Total comprehensive income: Net return for the period		–	–	–	2,324	292	2,616
Transactions with shareholders recorded directly to equity:
Cancellation of Ordinary shares	5	(2)	(1,241)	2	–	–	(1,241)
Equity dividends paid	4	–	–	–	–	(616)	(616)
As at 31 October 2017		221	85,745	2	25,423	614	112,005
As at 30 April 2016		160	54,183	–	5,702	347	60,392
Total comprehensive income:
Net return for the period		–	–	–	5,380	491	5,871
Transactions with shareholders recorded directly to equity:
Conversion of C shares	5	54	27,430	–	–	–	27,484
Issue of Ordinary shares		1	456	–	–	–	457
Expenses of share issue*		–	(13)	–	–	–	(13)
Equity dividends paid	4	–	–	–	–	(231)	(231)
As at 31 October 2016		215	82,056	–	11,082	607	93,960
As at 30 April 2016		160	54,183	–	5,702	347	60,392
Total comprehensive income:
Net return for the period		–	–	–	17,397	822	18,219
Transactions with shareholders recorded directly to equity:
Conversion of C Shares	5	54	27,430	–	–	–	27,484
Issue of Ordinary shares		9	5,448	–	–	–	5,457
Expenses of share issue*		–	(75)	–	–	–	(75)
Equity dividends paid	4	–	–	–	–	(231)	(231)
As at 30 April 2017		223	86,986	–	23,099	938	111,246

* Costs directly attributable to issue of Ordinary shares.

Condensed Balance Sheet

as at 31 October 2017

Note	31 October 2017 £'000	31 October 2016 £'000	30 April 2017 £'000
Non-current assets:
Investments held at fair value through profit or loss	107,376	91,636	107,979
Current assets:
Trade and other receivables	536	736	178
Cash at bank and cash equivalents	5,869	1,857	3,245
	6,405	2,593	3,423
Total assets	113,781	94,229	111,402
Liabilities and equity
Liabilities:
Trade and other payables	1,776	269	156
Total liabilities	1,776	269	156
Equity: Share capital 5	221	215	223
Share premium account	85,745	82,056	86,986
Capital reserve	25,423	11,082	23,099
Capital redemption reserve	2	–	–
Revenue reserve	614	607	938
Total equity	112,005	93,960	111,246
Total liabilities and equity	113,781	94,229	111,402
	pence	pence	pence
Net asset value per Ordinary share 6	65.44	57.03	64.27

Condensed Statement of Cash Flows

for the half year to 31 October 2017

	Half year to 31 October 2017 £'000	Half year to 31 October 2016 £'000	Year ended 30 April 2017 £'000
Operating activities:
Net return before taxation	2,616	5,871	18,222
Increase in investments	(2,726)	(3,747)	(16,113)
Purchase of investments	(12,823)	(22,159)	(39,339)
Sale of investments	17,376	9,970	22,694
Decrease/(increase) in trade and other receivables	39	(504)	(12)
Increase/(decrease) in trade and other payables	1	(504)	(78)
Add back finance costs	–	(1,969)	(1,969)
Withholding tax paid	–	–	(3)
Net cash inflows/(outflows) from operating activities	4,483	(13,042)	(16,598)
Financing activities:
Ordinary shares issued	–	457	5,457
Expenses of Ordinary share issue	–	(14)	(72)
Cancellation of Ordinary shares	(1,241)	–	–
Equity dividends paid	(616)	(231)	(231)
Expenses of C share issue	–	(21)	(19)
Net cash (outflows)/inflows from financing activities	(1,857)	191	5,135
Increase/(decrease) in cash and cash equivalents	2,626	(12,851)	(11,463)
Reconciliation of net cash flow movement in funds:
Cash and cash equivalents at the start of the period	3,245	14,708	14,708
Net cash inflow/(outflow) from cash and cash equivalents	2,626	(12,851)	(11,463)
Exchange rate movements	(2)	–	–
Cash at the end of the period	5,869	1,857	3,245

Notes to the Condensed Financial Statements

1 Significant Accounting Policies

Basis of preparation

The condensed financial statements of the Company have been prepared in accordance with IFRS as adopted by the European Union, which comprise standards and interpretations approved by the International Accounting Standards Board ("IASB"), and as applied in accordance with the provisions of the Companies Act 2006. The accounting policies and methods of computation followed in these half-year financial statements are consistent with the most recent annual financial statements for the year ended 30 April 2017.

The functional currency of the Company is pounds sterling because this is the currency of the primary economic environment in which the Company operates. The financial statements are also presented in pounds sterling rounded to the nearest thousands, except where otherwise indicated.

The half-year statements have been prepared in accordance with IAS 34, Interim Financial Reporting.

The financial information contained in this Half-year Report does not constitute statutory accounts as defined in Section 435(1) of the Companies Act 2006. The financial information for the period ended 31 October 2017 has not been audited or reviewed by the Company's Auditor. The information for the period ended 31 October 2016 was reviewed by the Company's Auditor but was not audited. The figures and financial information for the year ended 30 April 2017 are an extract from the latest published audited financial statements, which have been filed with the Registrar of Companies. The report of the Auditor on those financial statements was unqualified and did not contain a statement under either Section 498(2) or 498(3) of the Companies Act 2006.

Going concern

The Directors have made an assessment of the Company's ability to continue as a going concern and are satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future (being a period of 12 months from the date these financial statements were approved). Furthermore, the Directors are not aware of any material uncertainties that may cast significant doubt upon the Company's ability to continue as a going concern, having taken into account the liquidity of the Company's investment portfolio and the Company's financial position in respect of its cash flows, borrowing facilities and investment commitments (of which there are none of significance). Therefore, the financial statements have been prepared on the going concern basis and on the basis that approval as an investment trust company will continue to be met.

2 Income

	Half year to 31 October 2017 £'000	Half year to 31 October 2016 £'000	Year ended 30 April 2017 £'000
Income from investments:
UK dividends	535	675	1,244
Unfranked dividend income	150	160	283
Bank interest	3	–	–
Underwriting commission	–	4	4
Total income	688	839	1,531

3 Return per Ordinary Share

Returns per share are based on the weighted average number of shares in issue during the period. Normal and diluted return per share are the same as there are no dilutive elements on share capital.

	Half year to 31 October 2017			Half year to 31 October 2016			Year ended 30 April 2017
	Revenue	Capital	Total	Revenue	Capital	Total	Revenue	Capital	Total
Net profit (£'000)	292	2,324	2,616	491	5,380	5,871	822	17,397	18,219
Weighted average number of shares in issue			171,298,703			141,184,463			154,839,150
Return per share (pence)	0.17	1.36	1.53	0.35	3.81	4.16	0.53	11.24	11.77

4 Dividends per Ordinary Share

	Half year to 31 October 2017		Half year to 31 October 2016		Year ended 30 April 2017
	£'000	pence	£'000	pence	£'000	pence
Amounts recognised as distributions to equity holders in the period:
Final dividend for the year ended 30 April 2016	–	–	231	0.14	231	0.14
Final dividend for the year ended 30 April 2017	616	0.36	–	–	–	–
	616	0.36	231	0.14	231	0.14

5 Called-up Share Capital

	Half year to 31 October 2017		Half year to 31 October 2016		Year ended 30 April 2017
	Number	£'000	Number	£'000	Number	£'000
Ordinary shares of £0.001 each
Opening balance	173,086,001	173	109,990,000	110	109,990,000	110
C share conversion	–	–	–	–	53,927,917	54
Subscriptions	–	–	53,927,917	54	9,168,084	9
Redemptions	(1,934,487)	(2)	850,000	1	–	–
	171,151,514	171	164,767,917	165	173,086,001	173
	Half year to 31 October 2017 Number	£'000	Half year to 31 October 2016 Number	£'000	Year ended 30 April 2017 Number	£'000
Management shares of £1 each	50,000	50	50,000	50	50,000	50

On 15 May 2017, the Company redeemed 1,934,487 Ordinary shares pursuant to its voluntary redemption facility. The Ordinary shares were redeemed at a price of 64.13 pence per Ordinary share, costing £1.241 million including expenses.

As at 31 October 2017, there were 171,151,514 Ordinary shares and 50,000 Management shares in issue.

6 Net Asset Value per Share

Ordinary shares

The NAV per Ordinary share and the NAV attributable at the period end were as follows:

	Net asset value per Ordinary share 31 October 2017 pence	Net assets attributable 31 October 2017 £'000	Net asset value per Ordinary share 31 October 2016 pence	Net assets attributable 31 October 2016 £'000	Net asset value per Ordinary share 30 April 2017 pence	Net assets attributable 30 April 2017 £'000
Basic and diluted	65.44	112,005	57.03	93,960	64.27	111,246

NAV per Ordinary share is based on net assets at the period end and 171,151,514 Ordinary shares, being the number of Ordinary shares in issue at the period end (31 October 2016: 164,767,917 Ordinary shares; 30 April 2017: 173,086,001 Ordinary shares).

Management shares

Net assets of £1.00 per Management share is based on net assets at the period end of £50,000 and attributable to 50,000 Management shares at the period end. The shareholders have no right to any surplus capital or assets of the Company.

7 Transaction Costs

During the period, expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within 'gains on investments' in the Income Statement. The total costs were as follows:

	Half year to 31 October 2017 £'000	Half year to 31 October 2016 £'000	Year ended 30 April 2017 £'000
Costs on acquisitions	7	25	38
Costs on disposals	30	13	28
	37	38	66

These transaction costs are dealing commissions paid to stockbrokers and stamp duty, a Government tax paid on transactions (which is zero when dealing on the AIM/ISDX exchanges). A breakdown of these costs is set out below:

	Half year to 31 October 2017 £'000	% of average monthly net assets in the period	Half year to 31 October 2016 £'000	% of average monthly net assets in the period	Year to 30 April 2017 £'000	% of average monthly net assets in the period
Costs paid in dealing commissions	37	0.03	30	0.03	56	0.06
Costs of stamp duty	–	–	8	0.01	10	0.01
	37	0.03	38	0.04	66	0.07

The average monthly net assets for the six months to 31 October 2017 was £110,392,000 (six months to 31 October 2016: £90,052,000; year to 30 April 2017: £95,965,000).

These costs do not include the costs of investing capital and the bid-offer spread on securities in the portfolio. Investments are valued at fair value which is bid value for listed securities. Certain holdings may have been acquired at a price higher than the bid price.

8 Management Fee

	Half year to 31 October 2017			Half year to 31 October 2016		Year ended 30 April 2017
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Management fee	133	400	533	112	336	448	235	705	940

The Investment Manager is entitled to receive from the Company in respect of its services provided under the Management Agreement, a management fee payable monthly in arrears calculated at the rate of 1% per annum of the market capitalisation as at the relevant calculation date.

In addition to the basic management fee, and for so long as a Redemption Pool is in existence, the Investment Manager is entitled to receive from the Company a fee calculated at the rate of 1% per annum of the net asset value of the Redemption Pool on the last business day of the relevant calendar month.

The Investment Manager has agreed that, for so long as it remains the Company's investment manager, it will rebate such part of any management fee payable to it so as to help the Company maintain an ongoing charges ratio of 2% or lower. In accordance with the Directors' policy on the allocation of expenses between income and capital, in each financial year, 75% of the management fee payable is expected to be charged to capital and the remaining 25% to income.

At 31 October 2017, an amount of £92,000 (31 October 2016: £155,000; 30 April 2017: £87,000) was outstanding and due to Miton Trust Managers Limited in respect of management fees.

9 Finance Costs

	Half year to 31 October 2017			Half year to 31 October 2016			Year ended 30 April 2017
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Net loss allocated to C shares	–	–	–	–	(1,991)	(1,991)	–	(1,969)	(1,969)
Income attributable to C shares	–	–	–	–	22	22	–	–	–
	–	–	–	–	(1,969)	(1,969)	–	(1,969)	(1,969)

10 Fair Value Hierarchy

The Company measures fair values using the following hierarchy that reflects the significance of the inputs used in making the measurements. The fair value is the amount at which the asset could be sold in an ordinary transaction between market participants, at the measurement date, other than a forced or liquidation sale.

Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset as follows:

• Level 1 Valued using quoted prices, unadjusted in active markets.
• Level 2 Valued by reference to valuation techniques using observable inputs for the asset or liability other than quoted prices included in level 1.
• Level 3 Valued by reference to valuation techniques using inputs that are not based on observable market data for the asset or liability.

The tables below set out fair value measurement of financial assets and financial liabilities in accordance with the fair value hierarchy into which the fair value measurement is categorised.

Financial assets

	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Financial assets at fair value through profit or loss at 31 October 2017
Equity investments	106,775	572	29	107,376
	106,775	572	29	107,376
	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Financial assets at fair value through profit or loss at 31 October 2016
Equity investments	91,443	146	47	91,636
	91,443	146	47	91,636
	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Financial assets at fair value through profit or loss at 30 April 2017
Equity investments	107,618	332	29	107,979
	107,618	332	29	107,979

Reconciliation of level 3 movements – financial assets

	As at	As at	As at
	31 October 2017	31 October 2016	30 April 2017
	Level 3	Level 3	Level 3
	£'000	£'000	£'000
Opening fair value investments	29	–	–
Transfer from level 2	–	62	62
Sale proceeds	–	(15)	(33)
Closing fair value of investments	29	47	29

Pure Wafer is considered a level 3 investment at 31 October 2017 as the fair value of this investment is based on anticipated future cash returns.

11 Transactions with the Investment Manager and Related Parties

The amounts paid and payable to the Investment Manager pursuant to the management agreement are disclosed in note 8. There were no other identifiable related parties at the half-year end.

Investment Objective and Policy

Investment Objective

The investment objective of the Company is to provide shareholders with capital growth over the long term.

Investment Policy

The Company invests primarily in the smallest companies, measured by their market capitalisation, quoted or traded on an exchange in the United Kingdom at the time of investment. It is likely that the majority of the microcap companies held in the Company's portfolio will be quoted on AIM and will typically have a market capitalisation of less than £150m at the time of investment. The Company may also invest in debt, warrants or convertible instruments issued by such companies and may invest in, or underwrite, future equity issues by such companies.

The Company may utilise derivative instruments including index-linked notes, contracts for differences, covered options and other equity-related derivative instruments for efficient portfolio management, gearing and investment purposes. Any use of derivatives for investment purposes will be made on the basis of the same principles of risk spreading and diversification that apply to the Company's direct investments, as described below. The Company will not enter into uncovered short positions.

If companies in the portfolio achieve organic growth or grow through corporate activity such as acquisitions, and consequently have a market capitalisation that would place them outside the investable universe, the Investment Manager will not be obliged to sell those holdings, but the proportion of the portfolio in such companies will be carefully monitored by the Investment Manager and the Board so that the overall investment policy to invest in the smallest quoted or traded companies is not materially altered.

The Company's portfolio is expected to be diversified by industry and market of activity. No single holding will represent more than 15% of Gross Assets at the time of investment and, when fully invested, the portfolio is expected to have over 120 holdings although there is no guarantee that will be the case and it may contain a lesser number of holdings at any time.

The Company will have the flexibility to invest up to 10% of its Gross Assets at the time of investment in unquoted or untraded companies, or in any one unquoted or untraded company.

The Company will invest no more than 10% of Gross Assets at the time of investment in other investment funds.

Borrowing

The Company may deploy borrowing to enhance long-term capital growth. Gearing will be deployed flexibly up to 15% of the Net Asset Value, at the time of borrowing. In the event this limit is breached as a result of market movements, and the Board considers that borrowing should be reduced, the Investment Manager shall be permitted to realise investments in an orderly manner so as not to prejudice shareholders.

No material change will be made to the investment policy without the approval of shareholders by ordinary resolution.

29

Shareholder Information

Capital Structure

The Company's share capital consists of Ordinary shares of £0.001 each ("Ordinary shares") with one vote per share and non-voting Management shares of £1 each ("Management shares"). The Ordinary shares shall be redeemable in accordance with the Articles of Association of the Company. From time to time, the Company may issue C ordinary shares of £0.01 each ("C shares") with one vote per share.

As at 31 October 2017 and the date of this report, there are 171,151,514 Ordinary shares in issue, none of which are held in treasury, and 50,000 Management shares.

Redemption of Ordinary Shares

The Company has a voluntary redemption facility through which shareholders are entitled to request the redemption of all or part of their holding of Ordinary shares on an annual basis. The next Redemption Point for the Ordinary shares will be 30 April 2018. Redemption Request forms are available upon request from the Company's Registrar.

Shareholders submitting valid requests for the redemption of Ordinary shares will have their shares redeemed at the Redemption Price. The Directors may elect, at their absolute discretion, to calculate the Redemption Price applying on any redemption point by reference to the Dealing Value per Ordinary share or by reference to a separate Redemption Pool.

The Board may, at its absolute discretion, elect not to operate the annual redemption facility on any given Redemption Point, or to decline in whole or part any redemption request, although the Board does not generally expect to exercise this discretion, save in the interests of shareholders as a whole.

A redemption of Ordinary shares may be subject to either income tax or capital gains tax. In particular, private shareholders that sell their shares via the redemption mechanism could find they are subject to income tax on the gains made on the redeemed shares rather than the more usual capital gains tax on the sale of their shares in the market. However, individual circumstances do vary, so shareholders who are in any doubt about the redemption or the action that should be taken, should consult their stockbroker, accountant, tax adviser or other independent financial adviser.

Full details of the redemption facility are set out in the Company's Articles of Association or are available from the Secretary.

April 2018 Redemption Point

The following are the relevant dates for the April 2018 Redemption Point:

29 March 2018	Latest date for receipt of Redemption Requests for certificated shares
3.00 pm on 29 March 2018	Latest date for receipt of Redemption Requests and TTE (Transfer to Escrow) instructions for uncertificated shares via CREST
5.00 pm on 30 April 2018	Redemption Point
By 15 May 2018	Company to notify Redemption Price and dispatch redemption monies; or
	If the redemption is to be funded by way of a Redemption Pool, Company to notify the number of shares being redeemed. Notification of Redemption Price and dispatch of redemption monies to take place as soon as practicable thereafter.
By 30 May 2018	Balance certificates to be sent to shareholders

Share Dealing

Shares can be traded through your usual stockbroker.

Share Prices

The Company's Ordinary shares are listed on the London Stock Exchange.

Share Register Enquiries

The register for the Ordinary shares is maintained by Link Asset Services. In the event of queries regarding your holding, please contact the Registrar on 0871 664 0300 (calls cost 12p per minute plus network charges) or email enquiries@linkgroup.co.uk.

Changes of name and/or address must be notified in writing to the Registrar: Link Asset Services, Shareholder Services Department, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU.

Investment Manager: Miton Trust Managers Limited

The Company's Investment Manager is Miton Trust Managers Limited, a wholly-owned subsidiary of Miton Group plc. Miton Group is a leading multi-asset and equity fund management specialist listed on the AIM market for smaller and growing companies. The Investment Manager has also been appointed as the Company's Alternative Investment Fund Manager under the Alternative Investment Fund Managers' Directive.

As at 31 October 2017, the Miton Group had £3.64bn of assets under management.

Members of the fund management team invest in their own funds and are significant shareholders in the Miton Group.

Investor updates in the form of monthly factsheets are available from the Company's website, www.mitongroup.com/micro.

Directors and Advisers

Directors (all non-executive)

Andy Pomfret Peter Dicks Jan Etherden Ashe Windham, CVO

Secretary and Registered Office

Link Company Matters Limited Beaufort House 51 New North Road Exeter EX4 4EP

Telephone: 01392 477500

Investment Manager and Alternative Investment Fund Manager

Miton Trust Managers Limited Paternoster House 65 St Paul's Churchyard London EC4M 8AB

Company website

www.mitongroup.com/micro

Auditor

Ernst & Young LLP 25 Churchill Place Canary Wharf London E14 5EY

Company Administrator

Link Alternative Fund Administrators Limited Beaufort House 51 New North Road Exeter EX4 4EP

Depositary

BNY Mellon Trust & Depositary (UK) Limited BNY Mellon Centre 160 Queen Victoria Street London EC4V 4LA

Registrar and Transfer Office

Link Asset Services Shareholder Services Department The Registry 34 Beckenham Road Beckenham Kent BR3 4TU

Telephone: 0871 664 0300 (calls will cost 12p per minute plus network charges)

Email: enquiries@linkgroup.co.uk Website: www.linkassetservices.com

Solicitor

Stephenson Harwood LLP 1 Finsbury Circus London EC2M 7SH

Stockbroker

Peel Hunt LLP Moor House 120 London Wall London EC2Y 5ET

An investment company as defined under Section 833 of the Companies Act 2006.

Registered in England No. 09511015.

A member of the Association of Investment Companies.

Notes

Source: Morningstar 30 April 2015 to 31 October 2017.

www.mitongroup.com

Paternoster House 65 St Paul's Churchyard London EC4M 8AB

Use the QR app on your phone to go to Miton UK MicroCap Trust plc website.