## CT UK Capital and
## Income Investment
## Trust PLC
## Report and Accounts 2022
## Formerly BMO Capital and Income
## Investment Trust PLC
Forward-looking statements




## Contents
Overview Financial Report
   
   
 
Chairman’s Statement 4  
 
Strategic Report  
Fund Manager’s Review 9  
 
  Notice of Annual General Meeting 
 

|   | Other Information |
| --- | --- |
| List of Investments 23 |   |
| Manager’s Investment Philosophy and Process 24 | How to Invest 90 |
|   |   |
| Principal Risks and Future Prospects 30 |   |


  
 
Governance Report
Financial calendar
 
Directors’ Report 40
Fourth interim dividend for 2022 19 December 2022
 

|   | Annual General Meeting 9 March 2023 |  |
| --- | --- | --- |
| Directors’ Remuneration Report 49 | First interim dividend for 2023 | March 2023 |
|   | Interim results for 2023 announced May 2023 |  |

 
Second interim dividend for 2023 June 2023
 
Third interim dividend for 2023 September 2023
 
Final results for 2023 announced November 2023
Independent Auditors’ Report  Fourth interim dividend for 2023 December 2023







Report and Accounts 2022 | 1
## Company Overview
## 
## 
## • 
## 
## 
## • 
##  and grown at more than twice the
+
## 
## • 
## 
## 
## 
## institutional investors who seek growth over the longer-term in capital
## 
## 
## Visit our website at ctukcapitalandincome.com
## DIVIDEND
## HERO

Potential investors are reminded that the value of investments and the income from them may go down as well as up and investors may not receive back the full amount
invested. Tax benefits may vary as a result of statutory changes and their value will depend on individual circumstances.
+  


2  
Overview

Overview

# Financial Highlights
## for the year ended 30 September 2022

11.80p

Ordinary dividends –
29th consecutive
annual increase

The dividends for the year are a
1.7% increase on the prior year.

(10.5)%

Share price total return*

The share price total return for
the year was -10.5%. The share
price at 30 September 2022 was
280.0p.

(13.1)%

Net Asset Value per
share total return*

The Net Asset Value per share
total return for the year was
-13.1%, underperforming the
Benchmark FTSE All-Share Index
which returned -4.0%.

0.8%

Shares ended the
year at a premium* of
0.8%

The shares traded at an
average discount to NAV of
1.8% over the year.

### The longer-term rewards

In the last twenty years CT UK Capital and Income Investment Trust PLC has turned a £1,000 investment, with dividends reinvested (and net of expenses), into £4,411 compared with £4,230 from its Benchmark, the FTSE All-Share Index with notional dividends reinvested.

### £1,000 Investment, with dividends reinvested at 30 September

![img-0.jpeg](img-0.jpeg)

The ordinary dividend has increased every year since launch and over the last twenty years is up 122.9% or 4.1% compound per year, compared with inflation of 65.5% or 2.6% compound per year.

### Annual Dividend Progression for CT UK Capital and Income Investment Trust

![img-1.jpeg](img-1.jpeg)

*See Alternative Performance Measures on pages 91 and 92 for explanation.

Report and Accounts 2022 | 3
## Chairman’s Statement
## “Notwithstanding continuing global and domestic economic and political pressures
## and uncertainties, the Board considers that your Company remains well placed to
## take advantage of opportunities to deliver attractive returns over the medium and
## longer-term.”
## Jonathan Cartwright, Chairman
 

 
 
 
 
 
 
 

 
 

 
110 130
120
105
110
100
100
95
90
90
80

| 85 |  |  | 70 |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  | Sep 22Jul 22May 22Mar 22Jan 22Nov 21Sep 21 |  |  |  | Sep 22Sep 21Sep 20Sep 19Sep 18Sep 17 |
|  | CT UK Capital and Income - share price total return* |  |  | CT UK Capital and Income - share price total return* |  |  |
|  | CT UK Capital and Income - NAV total return* |  |  | CT UK Capital and Income - NAV total return* |  |  |
|  |  |  |  |  |  |  |
|  |  |  |  |  | Rebased to 100 at 30 September 2017Rebased to 100 at 30 September 2021 |  |

*See Alternative Performance Measures on pages 91 and 92 for explanation.
4  
Chairman’s Statement
  Chairman’s StatementOverview Auditors’ Report
 
contrast to the previous year when performance was very strong in 
 
 
 and the share price total
 

Strategic Report Governance Report Financial Report Notice of Meeting
 
 
of this year’s reversal clearly rolls through to our medium and longer- 
 of investment trusts is that it allows companies such as ours to
 
 years and then to draw down from this Reserve when circumstances
 
 

 
 
 

Revenue, Earnings and Dividends 

 
 
 to continue to extend this record and the strength of our Revenue
of growth over two years is from the low point of portfolio dividend 
 


 
220 580
540
500
195
460
420
170 380
340
300
145 260
220
180
120
140
100

| 95 |  |  |  |  |  | 60 |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Sep 12 |  | Sep 14 Sep 16 Sep 18 |  | Sep 20 | Sep 22 | Sep 97 |  | Sep 02 Sep 07 Sep 12 |  | Sep 17 | Sep 22 |  |
|  | CT UK Capital and Income - share price total return* |  |  |  |  |  | CT UK Capital and Income - share price total return* |  |  |  |  |  |
|  | CT UK Capital and Income - NAV total return* |  |  |  |  |  | CT UK Capital and Income - NAV total return* |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  | Other Information |
|  |  |  | Rebased to 100 at 30 September 2012 |  |  |  |  |  | Rebased to 100 at 30 September 1997 |  |  |  |

*See Alternative Performance Measures on pages 91 and 92 for explanation.
Report and Accounts 2022 | 5
Share Rating 

 2012 0.80
is very similar to the average level at which the shares traded in the 2013 0.62
 2014 0.66
2015 0.64
 2016 0.64
 2017 0.59
 2018 0.58
 2019 0.58
 2020 0.58
 2021 0.59
 0.59
2022
 0.0 0.2 0.4 0.6 0.8 1.0
Source: Columbia Threadneedle Investments
important to note that the effect of these activities is also to increase
*See Alternative Performance Measures on pages 91 and 92 for explanation.

 Balance Sheet and Gearing
 
 
 
 

 



2 

1
to have a much greater impact on the net investment return than the
0

-1

-2

-3 
-4
Responsible Investment
-5

-6 
Jul 22 Sep 22May 22Mar 22Jan 22Sep 21 Nov 21
an important part of the investment process as your Manager has
Source: Columbia Threadneedle Investments

*See Alternative Performance Measures on pages 91 and 92 for explanation.

Costs 
 management of the portfolio and its engagement with our investee
 

 
 

 

6  
Chairman’s Statement
Directorate Change  Chairman’s StatementOverview Auditors’ Report
 
 

 
 

 AGM
Strategic Report Governance Report Financial Report Notice of Meeting
 “AGM”
 
 

As a further part of this plan a search company was commissioned 

 
 

 
 
 
 
 

 

 


 
 
 

 
 
 

 
 
 gain a deeper understanding of investors’ views and sentiment towards
 

 
 noted that most respondents invest for the longer-term with retirement
 
 
 took the time to complete the survey and provide comments and
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 
 
Report and Accounts 2022 | 7
 
 

Ownership of the Manager 
 
“BMO GAM EMEA” 
 

 
 
 
 

 low valuation and attractive dividend yield should give some good
 

 

 remains well placed to take advantage of opportunities to deliver
 
 


 Jonathan Cartwright
 Chairman
30 November 2022

 and its trading instrument display


emphasised and received assurances from senior management




Outlook











8  
Strategic Report
Chairman’s StatementOverview Auditors’ Report
## Fund Manager’s Review
## 
## market and we believe the stocks within our portfolio offer an attractive combination
## 
## Julian Cane, Fund Manager Strategic Report Governance Report Financial Report Notice of Meeting
 
 5

particularly given some of the macroeconomic and geopolitical events
4


3


2


 1

 0
monetary conditions to help ward off the effects of the pandemic and
 UK Government Bond 10 Year Yield


 
 

 
have driven up energy prices while many food prices have risen in 
 

 
 
 
 
 
dampen economic activity and therefore having a generally negative 
 
Other Information
 
companies forecast to have stronger growth and greater longevity 
 
Report and Accounts 2022 | 9
Sep 20Sep 19Sep 18Sep 17 Sep 21 Sep 22
FTSE 100, FTSE 250 and FTSE Small Cap Total Return 


110

105

100

95

90

85

80

75

70
Mar 22Jan 22Nov 21Sep 21 May 22 Jul 22 Sep 22
Individual Stock Performance
 

 

 
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 
 
 
 
 short-term concerns or cyclical issues and ignoring the company’s
 
 
 
 

 
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
 

 
 
 


Weightings and Returns by Size for the Portfolio and FTSE
All-Share Index 
FTSE

Portfolio All-Share Portfolio Index


|  | Average | Average |  | Total |  |  | Total |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Weight | Weight | Return |  | + | Return |  | + |  |
| FTSE 100 56.2 80.7 -4.0 1.6 |  |  |  |  |  |  |  |  |  |

115

FTSE 250 32.6 15.8 -25.3 -24.3

FTSE Small Cap 1.8 3.2 -12.0 -17.9

FTSE AIM 5.0 0.0 -11.8 -37.0
the share prices after these sharp falls do not recognise the longer-
Other 4.4 0.3 -10.1 -46.3

+ Returns for the year ended 30 September 2022

Source: Columbia Threadneedle Investments
10  
Strategic Report
Chairman’s StatementOverview Auditors’ Report
Table A: Absolute performance of stocks held during the year
Portfolio Average Total Return to Portfolio Average Total Return to
10 Strongest share prices Weight (%) the Company (%) 10 Weakest share prices Weight (%) the Company (%)
Beazley 3.7 52.7 Close Brothers Group 1.8 -37.2
Shell 2.3 42.1 Melrose Industries 1.6 -40.4
BP 1.7 33.1 Howden Joinery 2.0 -42.2
British American Tobacco 1.6 32.7 Sirius Real Estate 1.5 -44.1
Strategic Report Governance Report Financial Report Notice of Meeting
Compass 2.6 20.1 FDM 0.6 -48.4
AstraZeneca 4.8 13.7 Vistry Group 2.7 -48.8
Secure Income REIT 2.6 13.7 Intermediate Capital 4.1 -49.5
Rio Tinto 3.5 10.9 Countryside Partnerships 2.2 -60.5
National Grid 1.4 10.3 Bridgepoint 0.2 -61.7
Ultra Electronics 0.8 7.9 XP Power 1.0 -66.5
Source: Columbia Threadneedle Investments
Table B: Relative to the Benchmark Index

|  |  |  |  |  |  | Total |  |  |  |  |  |  |  |  | Total |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Portfolio |  |  | Average |  | Return | Contribution |  |  | Portfolio |  |  | Average |  | Return | Contribution |  |
|  | Average |  |  | Weight |  | to the | To Relative |  |  | Average |  |  | Weight |  | to the | To Relative |  |
|  | Weight |  | Relative to |  | Company |  | Performance |  | Bottom 10 | Weight |  | Relative to |  | Company |  | Performance |  |
| Top 10 Contributors |  | (%) | the Index (%) |  |  | (%) |  | (%) | Contributors |  | (%) | the Index (%) |  |  | (%) |  | (%) |

Beazley 3.7 3.6 52.7 1.7 Sirius Real Estate 1.5 1.4 -44.1 -0.7
Prudential – -1.3 – 0.6 Close Brothers Group 1.8 1.7 -37.2 -0.8
Secure Income REIT 2.6 2.6 13.7 0.5 Howden Joinery 2.0 1.8 -42.2 -0.9
Scottish Mortgage
– -0.6 – 0.4 HSBC – -4.2 – -1.0
Investment Trust
Compass 2.6 1.3 20.1 0.3 Glencore – -2.4 – -1.0
Experian 0.4 -0.8 6.2 0.3 XP Power 1.0 1.0 -66.5 -1.0
Flutter Entertainment – -0.7 – 0.3 Vistry Group 2.7 2.6 -48.8 -1.5
Ocado – -0.2 – 0.3 Shell 2.3 -4.1 42.1 -1.6
Countryside
Ashtead – -0.9 – 0.3 2.2 2.1 -60.5 -2.0
Partnerships
Entain – -0.4 – 0.2 Intermediate Capital 4.1 3.9 -49.5 -2.2
Source: Columbia Threadneedle Investments
 
 

shares with the strongest and weakest performance shown in the 
 economy or recession and falling house prices is shown in the poor
 
 

Portfolio Turnover
 
Other Information
 investments with the potential to produce attractive returns for
 
 
Report and Accounts 2022 | 11
to trade aggressively around short-term price anomalies, but to invest for the long-term in high-returning businesses where the compounding of those returns over time subsequently drives the share price and dividend to Shareholders. A natural consequence of this style of investment is that the level of transactions within the portfolio will be fairly low, driven by a limited number of factors: if the share price has become over-valued, if another, more attractively valued investment is available, or if our original investment thesis is proven to be incorrect.

Total sales from the portfolio last year were £28.9m and total new investments (excluding share buy backs) were £26.4m and the number of investee companies in the portfolio reduced from 50 to 47. Compared to average assets of £343.2m, the rate of turnover at 7.7% was low.

### Revenue and Earnings Per Share

Our income has continued to recover from the low point that was caused by the COVID-19 pandemic. However, this year's growth is not just about a bounce back, but a number of companies in our portfolio have increased their dividends due to the ongoing strength of their own businesses.

The following table shows the ten companies whose dividends contribute the most to our income. The strength of the growth in dividends from Vistry Group and Beazley is due to the pandemic-driven non-payment or restricted payment of dividends in the prior period, so the apparent strong growth is more a normalisation of dividend payments than a reflection of underlying improvement. However, the rate of growth in dividends from OSB and Intermediate Capital is a reflection of the underlying progress of these businesses. Of the two dividend cuts, Unilever reflects a movement in the foreign exchange rate (the dividend was held flat in euros, but this translated to a cut in sterling), while GSK stems from the demerger of Haleon.

The table also shows the dividend yield of these companies as at 30 September 2022. With the exception of Beazley (where dividend payments are still normalising post-pandemic), Unilever and LXI REIT (where its dividend payments should have some inflation-linking), the yields are high relative to the Index and, for the most part, relative to their own histories. It is a very unusual situation for the management teams of those companies to be confident enough to increase their dividends, in some cases substantially, yet for the stock market to take such a fundamentally different view. After weak share price performance, the dividend yields on many of these shares are now substantially above the dividend yield from the FTSE All-Share Index.

### Dividend Growth and Yield from the Ten Largest Contributors to Income

|   | % increase in dividends per share | dividend yield as at 30.09.22  |
| --- | --- | --- |
|  Rio Tinto | 7.2% | 10.8%  |
|  OSB | 53.6% | 7.1%  |
|  Legal & General | 5.0% | 8.6%  |
|  Vistry Group | 200.0% | 10.2%  |
|  Phoenix | 2.9% | 9.4%  |
|  Intermediate Capital | 35.7% | 7.7%  |
|  Unilever | -3.3% | 3.6%  |
|  GSK | -13.8% | 6.6%  |
|  Beazley | n/a | 2.3%  |
|  LXI REIT | 14.6% | 4.1%  |

Source: Columbia Threadneedle Investments

### Valuation

The most straightforward way to look at the valuation of the UK stock market is through examination of its price / earnings multiple and dividend yield. On this evidence, UK shares are trading at a below average multiple of earnings and an above average dividend yield. This is, of course, far too simplistic to conclude that the shares are cheap, as it is only future earnings and dividends that will allow us to reach that conclusion with hindsight, but it is a fairly good indication that the negative factors mentioned above have been recognised by investors generally and hence priced into the stock market.

It is also instructive to look at the valuation of UK shares in the context of some other assets and as the chart on page 13 shows, for the last decade or so, UK shares have had a significantly higher yield than either UK government bonds or cash. However, the bank base rate has been increasing and bond yields rising (as bond prices have been falling), such that the yields of the three assets have started to converge. This may, in turn, be the start of a transition back to a period such as existed for decades prior to 2008, when equities consistently yielded less than bonds or cash as investors then recognised that the return from equities came not only from their immediate dividend yield, but from growth in both the dividend and capital value.

As active investors we are not aiming to invest in all companies across the UK stock market, but in companies which should, over time, generate stronger returns, both in capital and income, than the Index. These companies should have stronger pricing power and greater ability to control their own future than the average company. Over time, this should provide better returns than the Index and also help to provide some protection against inflation.

12 | CT UK Capital and Income Investment Trust PLC
Strategic Report

# FTSE All-Share price/earnings multiple

![img-2.jpeg](img-2.jpeg)

# FTSE All-Share Dividend Yield (%)

![img-3.jpeg](img-3.jpeg)

# Yields from investment assets (%)

![img-4.jpeg](img-4.jpeg)

# Outlook

There is a vital distinction to be made between the outlook for the UK and world economies on the one hand and the UK stock market on the other. Whilst it might reasonably be thought that a growing economy is necessary for a strong stock market, this is not necessarily the case. At least in the short-term, returns from the stock market are more driven by changes in valuation multiples than by earnings growth and furthermore, the earnings of many companies are not linked solely or directly to the domestic economy. This may be either as those companies operate internationally, or as their domestic operations may be affected by factors markedly different to the make-up of domestic GDP.

The immediate forecast for the UK economy is not very attractive. The Bank of England is currently warning that the outlook for the UK economy remains 'very challenging' with the possibility of the longest recession on record if interest rates have to increase to 5%. Against a backdrop of inflation running currently above 10%, this is not impossible. Fortunately, it seems plausible that inflation will start to come down quite rapidly, but the Bank of England's 'cure' for inflation (raising interest rates) seems ill-placed against the major causes of the problem, which stem from food and energy costs soaring as a result of Russia's war in Ukraine, while some supply chains are still recovering post the pandemic. Inflation does not appear to have been caused by excess domestic demand, so in this sense, increasing the cost-of-living further with higher interest rates appears to increase the probability of a deeper and longer recession.

Facing a substantial fiscal deficit stemming from the UK's response to the pandemic and the concern of further disruption in the UK Government bond market, the current UK Government is also determined to get closer to balancing its books. In more normal times, this aspiration would be laudable, but against a backdrop of the cost-of-living crisis and a stagnant or recessionary economy, this will need very careful execution in order to avoid making a difficult situation even worse.

It is fairly rare for domestic and international geo-politics to have as direct an impact on stock market returns as they did last year and although there are clearly no guarantees, it is certainly to be hoped that this coming year is less eventful than last.

Fortunately, the outlook described above is well known by investors and arguably already reflected in the valuation of the UK stock market. We believe the stocks within our portfolio offer an attractive combination of good quality and low valuation that justifies optimism about future returns.

**Julian Cane**
**Fund Manager**
**30 November 2022**

Report and Accounts 2022 | 13

Strategic Report

Financial Services

Financial Services

Financial Services

Financial Services
## Purpose, Strategy and Business Model
Purpose and strategy Alignment of values and culture
“the 
Company” 
 

 “UNPRI”
 
 
The investment philosophy and processes underpinning this strategy 
are set out on pages 24  annual assessment of its performance and in determining whether

 
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
Business model 

 Responsible investment impact

 

 
 
 
 

 indirect impact occurs through the investments that it makes and this
 
 
“the Manager”
Manager evaluation
 
 
 


 
 on which the decision to reappoint the Manager for another year are
 
14  
Strategic Report
Fund Manager and management of the assets  Chairman’s StatementOverview Auditors’ Report
 
 
 
 


Managing risks and opportunities 
Strategic Report Governance Report Financial Report Notice of Meeting
 
risks and uncertainties and so the performance of the Manager is 
 
 
 
 
 “the AGM”
 
 
 
 

 
 

 
 

 The Manager also has in place a programme of visits designed to foster
 good relations with wealth managers and underlying investors in promoting
 
 
 
“the Custodian”“the
Depositary”
The principal policies that support the strategy are set out from page







Communications and marketing with key stakeholders



Other Information
Report and Accounts 2022 | 15
## “We believe in the power of
## engaged long-term ownership
## as a force for positive change.”
16  
Strategic Report
Chairman’s StatementOverview Auditors’ Report
## Key Performance Indicators
## The Board assesses its performance in meeting the Company’s objective against the following key
## measures. Commentary can be found in the Chairman’s Statement and Fund Manager’s Review.
Strategic Report Governance Report Financial Report Notice of Meeting
Total return performance
1 Year 3 Years 5 Years
% % %
This is used to measure the performance of the portfolio in terms of capital and
NAV per share total return* (13.1) (5.4) 5.1 income growth and can be compared to the return of the Benchmark Index. The
Manager is responsible for the performance of the portfolio.
Benchmark Index: FTSE All-Share (4.0) 2.4 11.3
This is used to measure the return to Shareholders in terms of the capital growth and
Share price total return* (10.5) (3.4) 4.9 the dividends they have received and can be compared to the return of the Benchmark
Index.

Compound annual dividend growth

|  | 1 Year |  | 3 Years |  | 5 Years |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | % |  | % |  | % |  |
| Company’s annual dividend growth 1.7 1.2 2.1 |  |  |  |  |  |  | This shows the Company’s dividend growth which can be compared to the changes in |

the UK Consumer Price Index (“CPI”).
 10.1 4.5 3.5


2022 2021 2020
% % %
This is the difference between the share price and the NAV per share. It is an indicator
Premium/(discount) to NAV* 0.8 (2.0) (0.3)
of excess supply over demand for the Company’s shares in the case of a discount and
Average (discount)/premium to NAV
(1.8) (1.6) 0.4 the excess demand over supply in the case of a premium.
during the year
Source: Columbia Threadneedle Investments

2022 2021 2020
% % %
This is a measure of the cost of running the Company as a percentage of the average
Ongoing charges* 0.59 0.59 0.58 
Ongoing Charges of competitor investment vehicles.
Source: Columbia Threadneedle Investments
Other Information
* See Alternative Performance Measures on pages 91 and 92 for explanation.
Report and Accounts 2022 | 17
## Twenty Largest Holdings

|  |  |  | 2022 | 2022 | 2021 |
| --- | --- | --- | --- | --- | --- |
|  |  | % of total |  | Value | Value |
| 2022 2021 |  | investments |  | £’000s | £’000s |
|   | OSB Group  |  |  |  |  |

  




2 3 AstraZeneca 
  

proving successful and producing strong growth now with further potential in

3 4 Diageo 
  



4  Unilever 
  




  Beazley 
  




  Rio Tinto 
  



 – LXi REIT 
  –




 20 RELX 
  




9  Legal and General 
  




  Compass 
  



18  
Strategic Report
Chairman’s StatementOverview Auditors’ Report
Strategic Report Governance Report Financial Report Notice of Meeting

|  |  |  | 2022 | 2022 | 2021 |
| --- | --- | --- | --- | --- | --- |
|  |  | % of total |  | Value | Value |
| 2022 2021 |  | investments |  | £’000s | £’000s |
|  2 | Intermediate Capital  |  |  |  |  |

  

It has experienced good demand and generated strong returns for many years


   
  




  Coca-Cola HBC 
  



   
  



  Burford Capital 
  




  Phoenix 
  

Increased scale drives operational and capital efficiencies and diversification

 30 BP 
  



 9 
  




  LondonMetric Property 
  



20 24 Forterra 
  



Other Information
The value of the twenty largest holdings represents 67.1% (30 September 2021: 63.6%) of the Company’s total investments.
*Quoted on the Alternative Investment Market in the UK.
Report and Accounts 2022 | 19
## Investment Portfolio by Sector
Performance
Performance of this sector
of this in the FTSE Average Average FTSE Impact on
sector in the All-Share Portfolio All-Share relative
portfolio Index weighting weighting performance
% % % % %
Energy
     










existing operations whilst governments appear ever more


Basic Materials
     







Industrials
     






its share price during the year allowed us to start a new








20  
Strategic Report
Chairman’s StatementOverview Auditors’ Report
Strategic Report Governance Report Financial Report Notice of Meeting
Performance
Performance of this sector
of this in the FTSE Average Average FTSE Impact on
sector in the All-Share Portfolio All-Share relative
portfolio Index weighting weighting performance
% % % % %
Consumer Staples
     







strongly and we have added to the investment over the course

Health Care
     








Consumer Discretionary
The rise in inflation and interest rates driving the cost of living     




We think the fundamental outlook for the operation of these
three companies remains attractive and their share prices



Telecommunications
We continue not to have any investments in the –    

telecommunications products and services has increased

operating in this area have generally not found a way to turn
this demand and growth into attractive returns for

Other Information


Report and Accounts 2022 | 21
Performance
Performance of this sector
of this in the FTSE Average Average FTSE Impact on
sector in the All-Share Portfolio All-Share relative
portfolio Index weighting weighting performance
% % % % %
Utilities
     









Financials
     











Technology
     



Real Estate
     





from inflation due to the nature of most of the leases it has

The figures shown in the first two columns compare the total return of the group of investments held within the portfolio in each

  
22  
Strategic Report
Chairman’s StatementOverview Auditors’ Report
## List of Investments
Strategic Report Governance Report Financial Report Notice of Meeting

|  | 30 September 2022 |  |  | 30 September 2022 |  |
| --- | --- | --- | --- | --- | --- |
|  |  | Value |  |  | Value |
| Quoted investments Holding |  | £’000s | Quoted investments Holding |  | £’000s |
| UNITED KINGDOM – EQUITIES |  |  | EUROPE (EX UK) – EQUITIES |  |  |
| AstraZeneca   |  |  | Heineken   |  |  |

  
   EUROPE (EX UK) TOTAL EQUITY 
  
   TOTAL INVESTMENTS 318,796
  
The number of investments in the portfolio is 47 (2021: 50).
  
   *Quoted on the Alternative Investment Market in the UK.
  
Investments shown in italics are new additions to the portfolio during the year.
  
  

  
  
Diageo  
  
Experian  
FDM  
Ferguson  
Forterra  
  
  
  
  
  
  
Intertek  
  
LondonMetric Property  
  
  
Melrose Industries  
  
  
  
Phoenix  
  
Rio Tinto  
Round Hill Music Royalty Fund  
  
  
  
  
  
  
   Other Information
  
UNITED KINGDOM TOTAL EQUITIES 
Report and Accounts 2022 | 23
## Manager’s Investment Philosophy
## and Process
## 
## 
## between market prices and a conservative assessment of a business’s intrinsic value.
 
 
 
 
 
 
 
 
 


This philosophy leads naturally to long-term investment thinking and 
 
The Investment Process Focuses on Three Aspects for Each Company
### • Understandable
### • Durable competitive
advantages
### • Attractive business model
### • Strong sustainability
characteristics
### Q u a l i t y
### • Margin of safety • Proven operators
### • Present value of future • Responsible capital
 allocators
### • Sustainable superior • Aligned interests
returns
### • Appropriate incentives
### t
### • ESG score embedded
### • Strong governance n
### in proprietary valuation e
### V
### a method m
### l e
### u g
### a a
### t n
### i o
### n a
### M
24  
Strategic Report
  Chairman’s StatementOverview Auditors’ Report
 
 
 with in-depth reviews and retesting of the original investment thesis
 particularly if the company or its share price do not perform as initially
 
 
Strategic Report Governance Report Financial Report Notice of Meeting
 
 
important issues examined are a thorough assessment of the 
 
 
 
 
 
 
to realise this does not work for all companies in all sectors so other 
 
 

 Julian Cane
Fund Manager
 30 November 2022

Implementation of the Investment Process
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Report and Accounts 2022 | 25
## Our Approach to Responsible Investment
## 
## 
Our approach Responsible ownership
 
 
 


 shareholders that they are applying appropriate oversight on material
 
 
 

The primary purpose of this report is to provide you with a clear
 Active use of our voting rights is also an important component of
 
 

•  
•  
• how we have performed against those measures through 


We recognise the importance of disclosing information that is 
 
in a consistent way from year to year in order that our progress can actively with the management of investee companies to encourage
 “ESG”

Our governance responsibilities the investment industry in its consideration of these issues and has
 
 

 
 “UNPRI”
 


26  
Strategic Report
ESG and the investment process  Chairman’s StatementOverview Auditors’ Report
 
 
 
 
 
 
 
Strategic Report Governance Report Financial Report Notice of Meeting
 
 
goals/ 
 
 
## Engagement
Issues raised with companies on engagement
Climate Change 24
Environmental Stewardship 15
Human Rights 10
Labour Standards 11
Public Health 7
Corporate Governance 19
Source: Columbia Threadneedle Investments
 
 
 The Manager’s strategic approach to engagement helps to achieve
 
 
 These are instances of change in company practice which they
 
 
 engagement and milestones achieved in the reporting period are set
Other Information
 
Report and Accounts 2022 | 27
Examples in the reporting period
BP



##  


##  

 





Ibstock


##  
Pennon Group





Unilever




28  
Strategic Report
  Chairman’s StatementOverview Auditors’ Report
 
 
 
 in the further raising of those standards – indeed under the previous
 

 
Strategic Report Governance Report Financial Report Notice of Meeting
 
 

 
 
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150



 100
considerations around climate change risks and opportunities in its

50
Tons COe / sales $m



 0
2022

CT UK Capital and Income Investment Trust PLC
 FTSE All-Share Source: MSCI ESG

150

100


0 
50


2023
In 2023 the Manager will continue its engagement on climate 
 
Other Information
 
 
Report and Accounts 2022 | 29
## Principal Risks and Future Prospects
## The Board has carried out a robust assessment of the Company’s principal and emerging risks and
## the disclosures in the Annual Report that describe the principal risks, the procedures in place to
## identify emerging risks and explain how they are being managed or mitigated.
The principal risks together with their mitigations are set out in 
 
 


 


Principal Risks Mitigation Actions taken on Principal Risks in the year
Macroeconomic and geopolitical risk including the possibility of  At each meeting of the Board, the Directors consider and discuss the investment
prolonged recession in the United Kingdom and the impact of the  performance of the Company with Julian Cane, the Company’s Fund Manager. The
war in Ukraine. changes in the macroeconomic and geo-political environment. The Company maintains a portfolio of Board held its annual strategy meeting in September 2022. At this meeting, after due
 
Increase in overall risk during the year. At the November 2022 Audit and Risk Committee meeting, the Directors reviewed
Forward looking stress tests ranging from moderate to extreme scenarios are provided by the Manager to the updated forward looking stress tests prepared by the Manager providing support for
Board to support the Five-Year Horizon Statement. the Five-Year Horizon Statement disclosed on page 32.
Unfavourable markets or asset allocation, sector and stock  At each meeting of the Board, the Directors consider and discuss the investment
selection and use of gearing and derivatives are inappropriate view notwithstanding the current market volatility. Investment policy, performance, revenue and gearing are performance of the Company with Julian Cane, the Company’s Fund Manager. The
giving rise to investment underperformance as well as impacting reviewed at each Board meeting. The Manager’s Performance and Risk Oversight team provides independent Board held a strategy meeting in September 2022 which considered, amongst
capacity to pay dividends. oversight on investment risk management. The Board regularly considers operating costs along with other topics, investment performance and wider economic issues.
underlying dividend income and the implications for the dividend payment capacity of the Company taking
No change in overall risk during the year. into account revenue reserves.
Errors, fraud or control failures at service providers or loss of data The Board receives regular control reports from the Manager covering risk and compliance including oversight The Manager continues to strengthen and develop its Risk, Compliance and Internal
through increasing cyber threats or business continuity failure could of third party service providers. The Board has access to the Manager’s Risk Manager and requires any Control functions including IT security. Supervision of third party service providers
damage reputation or investors’ interests or result in losses.  has been maintained by the Manager and includes assurances regarding IT
liable for loss of any of the Company’s securities and cash held in custody. security and cyber threat. The Depositary oversees custody of investments and cash
No change in overall risk during the year. and reports to the Company in accordance with the Alternative Investment Fund
Managers Directive (“AIFMD”).
Inappropriate business or marketing strategy particularly in To gauge investor sentiment, the Board holds an investor satisfaction survey which is conducted every The Board agreed to the continuing appointment of the Manager, which has continued
relation to investor needs or sentiment giving rise to a share price  to deliver on the Company’s objective. At each Board meeting the marketing activities
discount to NAV per share. meeting to consider the Company’s strategy and performance together with opportunities and threats to of the Manager are reported. This can include details of the level of Child Trust Funds
its business. The appointment of the Manager is also reviewed annually in terms of sustainable long-term reaching maturity and the decisions, if any, taken by their holders. To encourage the
No change in overall risk during the year. growth in capital and income, which includes the growing recognition of the importance of the application of retention of these maturing funds, the Manager has introduced a Lifetime ISA and
high standards of ESG practice. Share buybacks can be employed to help moderate discount volatility, while 
share issues can be made when the shares are trading at a premium. At each Board meeting the Directors Further proposals to encourage retention are being investigated by the Manager.
receive an update on the marketing activities undertaken by the Manager. This includes details of the level of During the year 757,819 shares were bought back at a small discount to NAV of which
maturing Child Trust Funds and the decisions, if any, taken by their holders. The Company’s Broker provides 175,000 shares were subsequently re-issued at a small premium. Since the year end
periodic updates to the Board relating to the Company’s trading in the wider market. no further share issuance or buybacks has occurred. These actions moderated share
price volatility and enhanced NAV per share for continuing Shareholders.
30  
Strategic Report
 Chairman’s StatementOverview Auditors’ Report

## “The Company operates
Through a series of connected stress tests ranging from moderate to
## within a robust regulatory 

## environment. The Company 
## retains title to all assets
• 
Strategic Report Governance Report Financial Report Notice of Meeting
• 
## held by the Custodian. Cash

## is held with banks approved 
• 
## and regularly reviewed by

• 
## the Manager.”



Principal Risks Mitigation Actions taken on Principal Risks in the year

Macroeconomic and geopolitical risk including the possibility of  At each meeting of the Board, the Directors consider and discuss the investment 
prolonged recession in the United Kingdom and the impact of the  performance of the Company with Julian Cane, the Company’s Fund Manager. The 
war in Ukraine. changes in the macroeconomic and geo-political environment. The Company maintains a portfolio of Board held its annual strategy meeting in September 2022. At this meeting, after due frame for measuring and assessing medium to long-term investment
  
At the November 2022 Audit and Risk Committee meeting, the Directors reviewed 
Forward looking stress tests ranging from moderate to extreme scenarios are provided by the Manager to the updated forward looking stress tests prepared by the Manager providing support for 
Board to support the Five-Year Horizon Statement. the Five-Year Horizon Statement disclosed on page 32.
Unfavourable markets or asset allocation, sector and stock  At each meeting of the Board, the Directors consider and discuss the investment
selection and use of gearing and derivatives are inappropriate view notwithstanding the current market volatility. Investment policy, performance, revenue and gearing are performance of the Company with Julian Cane, the Company’s Fund Manager. The
giving rise to investment underperformance as well as impacting reviewed at each Board meeting. The Manager’s Performance and Risk Oversight team provides independent Board held a strategy meeting in September 2022 which considered, amongst
capacity to pay dividends. oversight on investment risk management. The Board regularly considers operating costs along with other topics, investment performance and wider economic issues.
underlying dividend income and the implications for the dividend payment capacity of the Company taking
into account revenue reserves.
Errors, fraud or control failures at service providers or loss of data The Board receives regular control reports from the Manager covering risk and compliance including oversight The Manager continues to strengthen and develop its Risk, Compliance and Internal
through increasing cyber threats or business continuity failure could of third party service providers. The Board has access to the Manager’s Risk Manager and requires any Control functions including IT security. Supervision of third party service providers
damage reputation or investors’ interests or result in losses.  has been maintained by the Manager and includes assurances regarding IT
liable for loss of any of the Company’s securities and cash held in custody. security and cyber threat. The Depositary oversees custody of investments and cash
and reports to the Company in accordance with the Alternative Investment Fund
Managers Directive (“AIFMD”).
Inappropriate business or marketing strategy particularly in To gauge investor sentiment, the Board holds an investor satisfaction survey which is conducted every The Board agreed to the continuing appointment of the Manager, which has continued
relation to investor needs or sentiment giving rise to a share price  to deliver on the Company’s objective. At each Board meeting the marketing activities
discount to NAV per share. meeting to consider the Company’s strategy and performance together with opportunities and threats to of the Manager are reported. This can include details of the level of Child Trust Funds
its business. The appointment of the Manager is also reviewed annually in terms of sustainable long-term reaching maturity and the decisions, if any, taken by their holders. To encourage the
growth in capital and income, which includes the growing recognition of the importance of the application of retention of these maturing funds, the Manager has introduced a Lifetime ISA and
high standards of ESG practice. Share buybacks can be employed to help moderate discount volatility, while 
share issues can be made when the shares are trading at a premium. At each Board meeting the Directors Further proposals to encourage retention are being investigated by the Manager.
receive an update on the marketing activities undertaken by the Manager. This includes details of the level of During the year 757,819 shares were bought back at a small discount to NAV of which
maturing Child Trust Funds and the decisions, if any, taken by their holders. The Company’s Broker provides 175,000 shares were subsequently re-issued at a small premium. Since the year end
Other Information
periodic updates to the Board relating to the Company’s trading in the wider market. no further share issuance or buybacks has occurred. These actions moderated share
price volatility and enhanced NAV per share for continuing Shareholders.
Report and Accounts 2022 | 31
Five-Year Horizon Statement
 
 
 volatility in stockmarkets and economic disruption when making this

• 
 
 

•  
 
 
 
 
 
 
 

•  
 
for measuring and assessing medium to longer-term investment
 

•  

 
 

•  
 
• 

• 


32  
Strategic Report
Chairman’s StatementOverview Auditors’ Report
## Promoting the Success of the Company
## 
Strategic Report Governance Report Financial Report Notice of Meeting
 
 

 “the Bank and the
Custodian”“the Depositary”
•  “the Broker”
•  “the Registrar”
•  receives regular reports from them and evaluates them to ensure
 
• 
 
•  
 
•  

 
 
 


 
 
 
 
 
 

 
 

 Dividends

 
 
decisions taken are set out in the Fund Manager’s Review on pages 9 
 providing some resilience to pay dividends in years when there is a
 
 
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 
“SDGs” 

Report and Accounts 2022 | 33



Share issuance and buy-backs





Board succession planning










 




Retail investors





remains committed to its savings plans and its relationship with its


34  
Strategic Report
Chairman’s StatementOverview Auditors’ Report
## Policy Summary
Strategic Report Governance Report Financial Report Notice of Meeting
Investment 
 
 
and other stakeholders can understand the scope of its investment 
 

 

 
 
 
 
 
 
of relative short-term underperformance giving rise to adverse 
 
 


 
 
 
 

 
invest in securities listed on the Alternative Investment Market investment policy and the underlying policies during the course of
“AIM” 


 
 
 
 
 
 
Other Information


Report and Accounts 2022 | 35
Dividend Board diversity
 The policy towards the appointment of non-executive Directors is
 
 
revenue reserves is made whenever necessary to help meet any 


 
 
 

 
 

 
 

Premium/Discount
 
 
moderate any premium at which the shares have traded in relation 
 

 
 




Board Gender as at 30 September 2022


Number of
 Number of Percentage of senior positions

Board Members the Board on the Board

Men 3 50% 2

(3) (4)
 Women 3 50% –
(1) The Company has opted not to disclose against the number of Directors in executive
management as this is not applicable for an investment trust.
Taxation
(2) Composed of the Chair and the Senior Independent Director.
The policy towards taxation is one of full commitment to complying
(3) This meets the Listing Rules target of 40%.

(4) The positions of the Chairs of the Audit and Risk, Nomination and Remuneration
 


Sharon Brown, the Chair of Audit and Risk will be held by a man.
“Section 1158”
Following the retirement of Jonathan Cartwright, the position of Chair will be held by a
woman. This will meet the Listing Rules target of 1.









36  
Strategic Report
  Chairman’s StatementOverview Auditors’ Report
Board Ethnic Background as at 30 September 2022

Number of 
Number of Percentage of senior positions 

Board Members the Board on the Board

White British
or other white
Jonathan Cartwright

| (including | 6 100% 2 |  |  |  |
| --- | --- | --- | --- | --- |
| minority-white |  |  | Chairman |  |
| groups) |  |  | 30 November 2022 | Strategic Report Governance Report Financial Report Notice of Meeting |
| Mixed/Multiple | (3) |  |  |  |
|  | – | – – |  |  |

Ethnic Groups
(1) The Company has opted not to disclose against the number of Directors in executive
management as this is not applicable for an investment trust.
(2) Composed of the Chair and the Senior Independent Director.
(3) This Listing Rule target is 1.




will continue to take diversity into account as part of its succession

Integrity and business ethics

insofar as it applies to any Directors or employee of the Manager




Prevention of the facilitation of tax evasion





Modern Slavery Act 2015

customers and does not provide goods or services in the normal



Other Information
Report and Accounts 2022 | 37
## Directors
Jonathan Cartwright, Chair, was appointed Sharon Brown, Chair of the Audit and Risk
 Committee,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Patrick Firth, Non-Executive Director, was















38  
Governance Report
Chairman’s StatementOverview Auditors’ Report
Strategic Report Governance Report Financial Report Notice of Meeting
Jane Lewis, Chair of the Nomination and  Senior Independent
Remuneration Committee, was appointed on Director, 
 
 
 
 
 
 
 
 a non-executive director of Fidelity Asian
 
 
 
 
Management Limited in investment trust




Nicky McCabe, Chair of the Management
Engagement Committee, was appointed to



as she was formerly Head of Product and
Investment Trusts at Fidelity International






No Director holds a directorship elsewhere in common with other members of the Board.
Other Information

Nomination and Remuneration Committee.
All Directors with the exception of Jonathan Cartwright are members of the Audit and Risk
Committee.
Report and Accounts 2022 | 39
# Directors' Report

The Directors submit the Report and Accounts of the Company for the year ended 30 September 2022. The Directors' biographies, Corporate Governance Statement; the Report of the Nomination and Remuneration Committee; the Directors' Remuneration Report; the Report of the Audit and Risk Committee Report and the Report of the Management Engagement Committee form part of this Directors' Report.

## Statement regarding Report and Accounts

The Directors consider that following advice from the Audit and Risk Committee, the Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company's position and performance, business model and strategy. The Audit and Risk Committee has reviewed the draft Report and Accounts for the purposes of this assessment. The market outlook for the Company can be found on page 13. Principal risks can be found on page 30 with further information on page 78.

Shareholders will be asked to approve the adoption of the Report and Accounts at the AGM (Resolution 1).

## Results and dividends

The results for the year are set out in the attached accounts. The Company's dividend payments are set out below.

### Dividends paid in the year ended 30 September 2022

|   | £'000s  |
| --- | --- |
|  Fourth of four interims for the year ended 30 September 2021 of 3.75p per share | 4,019  |
|  First of four interims for the year ended 30 September 2022 of 2.65p per share | 2,841  |
|  Second of four interims for the year ended 30 September 2022 of 2.65p per share | 2,839  |
|  Third of four interims for the year ended 30 September 2022 of 2.65p per share | 2,833  |
|   | **12,532**  |

As explained in the Chairman's Statement, the Board has declared a fourth interim dividend of 3.85 pence per share. This will be paid on 19 December 2022 to Shareholders on the register on 9 December 2022. This dividend, together with the other three interim dividends paid during the year makes a total dividend of 11.80 pence per

share. This represents an increase of 1.7% over the 11.60 pence per share paid in respect of the previous year.

As dividends are paid quarterly in March, June, September and in December, the Company does not pay a final dividend in February that would otherwise require formal Shareholder approval at the AGM. Formal approval will therefore be sought at the AGM to continue quarterly payments. (Resolution 2).

## Company status

The Company is a public limited company and an investment company as defined by section 833 of the Companies Act 2006. The Company is limited by shares and is registered in England and Wales with company registration number 02732011. It is subject to the FCA's listing rules, UK legislation and regulations including company law, financial reporting standards, taxation law and its own articles of association.

The Company is exempt from Streamlined Energy and Carbon Reporting Disclosures as it has consumed less than 40,000 Kwh of energy in the United Kingdom during the year.

## Taxation

As set out on page 36 and in note 7 to the accounts as an investment trust, the Company is exempt from UK Corporation Tax on its worldwide dividend income and from UK Corporation Tax on any capital gains arising from the portfolio of investments, provided it complies at all times with section 1158 of the Corporation Tax Act 2010. Dividends received from investee companies domiciled outside the UK are subject to taxation in those countries in accordance with relevant double taxation treaties.

## Accounting and going concern

The financial statements, starting on page 63, comply with current UK financial reporting standards, supplemented by the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" ("SORP"). The

40 | CT UK Capital and Income Investment Trust PLC
Governance Report
  Chairman’s StatementOverview Auditors’ Report
 
 
 
 
 
 
 
Strategic Report Governance Report Financial Report Notice of Meeting
 
concern the Directors have therefore considered these in addition 
 
 
 
 


 Issue and buyback of shares
 
 
 
 
 

 
 
 
 
 
 
 
 

 
 
 
existence for at least twelve months from the date of the approval 

  
 


Capital structure 
 
 
 

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


Report and Accounts 2022 | 41
 
 
 
“Scotiabank” 
 Resolutions 5 to 9

 Resolution 5 
 

 
 
 
 

Remuneration Report
 Resolution 6
 
 
 
 
 
 

and experience necessary for the effective stewardship of the Resolution 7
 
 sector experience as she was formerly Head of Product and
that this policy will continue for the three-year period ending at Investment Trusts at Fidelity International as well as a director and
 
Resolutions 3 and 4 

As detailed on page 49 the Directors’ fees are reviewed each 

 Resolution 8
 
 
 
 
The previous increase to Directors’ annual remuneration occurred
 Resolution 9 concerns the election of Patrick Firth who was

 
 

Director re-elections 
 
 
 
 
 

42  
Governance Report
  Chairman’s StatementOverview Auditors’ Report
 
 
 
 


 Although the Depositary has delegated the safekeeping of all
Strategic Report Governance Report Financial Report Notice of Meeting
 
 
 
 
in force throughout the period under review and remains in place 
 demonstrate that the loss has arisen as a result of an external
 
 
 
Statement as to disclosure of information to the auditors The Manager’s fee
 
 
 
unaware and they have taken all the steps a Director might 

 AGM
 

Appointment of auditor and auditor’s remuneration
 Authority to allot shares and sell shares from treasury
 
 Resolutions 12 and 13 are similar in content to the authorities
auditor and resolutions proposing their re-appointment and for the 
 
 
Resolutions 10 and 
11 

Safe custody of assets 

“Custodian” Resolution 12
 
Manager in accordance with the provisions of the management 
 authority to allot securities up to an aggregate nominal amount of
  

Depositary 

Other Information
“Depositary” Resolution 13 empowers the Directors to allot such securities for
 
 
Report and Accounts 2022 | 43
 
 
 within four months of the date on which the resolution was
 
  
 

 Form of proxy
 
 
that they will mainly use them to satisfy demand from participants 
 
 
no circumstances would the Directors use them to issue or sell 
any shares from treasury unless the existing shares in issue are
 Form of direction
 

Authority for the Company to purchase its own shares 

Resolution 14  
  
 
 
 

 Recommendation
 
 
 
 
 
 

 By order of the Board
 Columbia Threadneedle Investment Business Limited
 Secretary
 30 November 2022




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Resolution 15





44  
Governance Report
Chairman’s StatementOverview Auditors’ Report
## Corporate Governance Statement
Strategic Report Governance Report Financial Report Notice of Meeting
Introduction 
 
 “AIC Code”
 Articles of association

 

 The Board
 
“UK 
Code” 

 
•  
•  
•  


 
 
 
 
 
 
 
 
 

 
 
 

 
 and  
AIFMD Each Director has a signed letter of appointment to formalise the
“AIF” 
 
Other Information
 
appoint a Depositary and an Alternative Investment Fund Manager 
“AIFM”
Report and Accounts 2022 | 45
Director attendance – year ended 30 September 2022
Nomination and

|  | Annual General |  | Audit and Risk |  |  | Management | Remuneration |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  | (1) |  |  |  | (1) |
| Board |  | Meeting | Committee |  | Engagement Committee |  | Committee |  |

No. of meetings
Jonathan Cartwright 5 1 3 1 2
Sharon Brown 5 1 3 1 2
(2) (2)
Patrick Firth 2 N/A N/A N/A N/A
Jane Lewis 5 1 3 1 2
Nicky McCabe 5 1 3 1 2
 5 1 3 1 2
(1) Prior to 1 December 2021 was named Nomination Committee
(2) All meetings attended since appointment on 21 July 2022
 Board effectiveness
 

 

 
 
 considers that the appraisal process is a constructive means of
 
 
 
 
 

 Independence of Directors
 
 
 

Appointments none has a past or current connection with the Manager and
 
 
takes place for new appointees and all Directors are encouraged 

 
 
 
 

 
 
46  
Governance Report
 Chairman’s StatementOverview Auditors’ Report







Strategic Report Governance Report Financial Report Notice of Meeting






Relations with Shareholders




















By order of the Board
Columbia Threadneedle Investment Business Limited
Secretary
30 November 2022
Other Information
Report and Accounts 2022 | 47
## Report of the Nomination and
## Remuneration Committee
 
 
 
 
 
 
 

•  
particularly in terms of succession planning and the experience and 

  
•  
•  
 
• the reappointment of those Directors standing for re-election at 
 
•  

•  
 
• 
in accordance with the provisions of the Act and the policy and Diversity and tenure
 
•  
•  
 
Composition of the Committee Committee evaluation
 
 appraisal process completed in accordance with standard governance

Succession planning 
 

 Nomination Committee
 

 
 
 


 Jane Lewis
Chair of the Nomination and Remuneration Committee
48  
30 November 2022
Governance Report

# Directors' Remuneration Report

Dear Shareholder,

I am pleased to introduce the Directors' Remuneration Report for the year ended 30 September 2022. This report sets out the Company's forward looking Directors' Remuneration Policy and the Remuneration Report which describes how this policy has been applied during the year. I would welcome any comments you may have.

Directors' Remuneration Policy

The Board's policy is to set Directors' remuneration at a level commensurate with the skills and experience necessary for the effective stewardship of the Company and the expected contribution of the Board as a whole in continuing to achieve the investment objective. The policy aims to be fair and reasonable in relation to comparable investment trusts and other similar sized financial companies. Time committed to the Company's affairs and the role that individual Directors fulfil in respect of Board and Committee responsibilities are taken into account. The policy also provides for the Company's reimbursement of all reasonable travel and associated expenses incurred by the Directors in attending Board and committee meetings, including those treated as a benefit in kind subject to tax and national insurance. The Directors are not eligible for bonuses, pension benefits, share options, long-term incentive schemes or other benefits. This policy was last approved by Shareholders in February 2020 with 93.1% voting in favour and 6.9% against. The policy will be put to Shareholders for renewal at the AGM to be held on 9 March 2023. The Board has not received any views from Shareholders in respect of the levels of Directors' remuneration.

The Company's articles of association limit the aggregate fees payable to the Board to a total of £250,000 per annum. Within that limit, it is the responsibility of the Board as a whole to determine and approve the Directors' fees, following a recommendation from the Nomination and Remuneration Committee.

The fees are fixed and are payable in cash, quarterly in arrears. The fees are reviewed each year. Following this review the Board agreed that the annual remuneration of the Chairman will increase from £38,500 to £40,500, the Chairman of the Audit and Risk Committee from £31,000 to £32,500, the Senior Independent Director from £27,000 to £28,500 and other Directors from £25,500 to £27,000. These increases were effective from 1 October 2022. The previous increase to Directors' annual remuneration occurred on 1 October 2021.

The Board is composed solely of non-executive Directors, none of whom has a service contract with the Company. Each new Director is provided with a letter of appointment. There is no provision for compensation upon early termination of appointment. The letters of appointment are available for inspection at the Company's registered office during business hours and will be available for 15 minutes before and during the forthcoming AGM.

The dates on which each Director was appointed to the Board and was last re-elected by Shareholders are set out on pages 38 and 39. Each Director's appointment is subject to election at the first Annual General Meeting and continues thereafter subject to re-election at each subsequent Annual General Meeting. The appointment can be terminated on one month's notice. All the Directors, with the exception of Sharon Brown, will stand for re-election at the AGM on 9 March 2023.

The fees for specific responsibilities are set out in the table below.

Annual fees for Board Responsibilities

|  For the year ending 30 September | 2023 £'000s | 2022 £'000s | 2021 £'000s  |
| --- | --- | --- | --- |
|  Chairman | 40.5 | 38.5 | 37.0  |
|  Director | 27.0 | 25.5 | 24.5  |
|  Senior Independent Director | 28.5 | 27.0 | 26.0  |
|  Audit and Risk Committee Chairman | 32.5 | 31.0 | 30.0  |

Report and Accounts 2022 | 49

Governance Report

Governance Report

Governance Report
 
At 30 September 2022 2021 Taxable


|  |  |  |  |  | Fees |  |  |  | Total |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Number of shares held |  | Number of shares held |  |  |  |  |  |  |  |
|  |  |  |  | £’000s |  |  | £’000s | £’000s |  |
|  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |

Jonathan Cartwright 6,218 6,218
Director 2022 2021 2022 2021 2022 2021
Sharon Brown 1,500 1,500
Jonathan Cartwright 38.5 37.0 0.1 - 38.6 37.0
Patrick Firth* – n/a
Sharon Brown 31.0 30.0 4.8 0.5 35.8 30.5
Jane Lewis 3,095 3,095
(2)
Patrick Firth 5.0 n/a 0.4 n/a 5.4 n/a
Nicky McCabe 3,420 3,420
Jane Lewis 25.5 24.5 2.0 0.3 27.5 24.8
 8,500 8,500
(3)
Nicky McCabe 25.5 18.4 1.8 - 27.3 18.4
As at 30 September 2022 the shareholding of the Company’s fund manager, Julian Cane, was
(4)
 27.0 24.9 0.1 - 27.1 24.9
324,122 shares (2021: 313,437 shares).
The Company’s register of Directors’ interests contains full details of Directors’ Total (5)
152.5 155.3 9.4 0.9 161.9 156.2
shareholdings.
(1) Comprises amounts reimbursed for expenses incurred in carrying out
*Appointed as a Director with effect from 21 July 2022.

contributions.
(2) Appointed as a Director with effect from 21 July 2022.
 (3) Appointed as a Director with effect from 1 January 2021.
(4) Appointed Senior Independent Director on 14 July 2021.

(5) Increased year on year as a result of a return to normal business travel on
 behalf of the Company post COVID-19.

 

Policy implementation
 Fees annual percentage change

2022 2021 2020


|  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Director |  |  |  |  |  |  |  |
|  | Jonathan Cartwright |  |  |  |  | (1) |  |  |
|  |  |  | +4.1 +37.0 |  |  |  |  | n/a |
|  | Sharon Brown |  | +3.3 – +3.4 |  |  |  |  |  |
|  | Jane Lewis |  | +4.1 – +2.1 |  |  |  |  |  |
| Directors’ remuneration report |  |  |  | (2) |  |  |  |  |
|  |  |  | +8.4 |  |  | +1.6 +2.1 |  |  |
| The Directors who served during the year received the following |  |  |  | (3) |  |  |  |  |
|  | Nicky McCabe |  | +38.6 |  |  | n/a n/a |  |  |

amounts for services as non-executive Directors for the years
Patrick Firth n/a n/a n/a

(1) Appointed as a non-executive Director on 26 November 2019, became Chair with
 effect from 1 April 2020. Increase reflects the first full year in the role.
(2) Appointed Senior Independent Director on 14 July 2021, increase reflects the first

full year in the role.
(3) Appointed as a Director with effect from 1 January 2021, increase reflects the first
full year with the Company.



Relative importance of pay
Actual Expenditure 2022 2021 
Year ended 30 September £’000s £’000s Change
Aggregate Directors’ fees 152.5 155.3 -1.8
(1)
Management and other expenses 2,110.0 1,979.0 6.6
Dividends paid to Shareholders 12,532.0 12,424.0 0.9
(1) Includes Directors’ remuneration.
50  
Governance Report

### Company performance

The Board is responsible for the Company's investment strategy and performance. The management of the investment portfolio is delegated to the Manager. An explanation of the performance of the Company for the year ended 30 September 2022 is given in the Chairman's Statement and Fund Manager's Review.

A comparison of the Company's performance over the required ten-year period is set out in the graph. This shows the total return (assuming all dividends are re-invested) to ordinary Shareholders against the Benchmark.

**Shareholder total return vs Benchmark total return over ten years (rebased to 100 at 30 September 2012) (%)**

![img-5.jpeg](img-5.jpeg)

Source: Refinitiv Eikon

**Chair of the Nomination and Remuneration Committee** 30 November 2022**

Report and Accounts 2022 | 51

Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report | Government Report
## Report of the Audit and Risk Committee
## The primary responsibilities of the Audit and Risk Committee (the “Committee”) are to ensure the
## 
## and risk management processes.
Role of the Committee 
 
 

 
 when assessing going concern the Directors have considered this in
 

 
 of the going concern principle is detailed in note 20 to the Financial

• The audited annual results statement and Report and Accounts
and the unaudited half-yearly results statement and Report and 
 
•  
•  
 
  
 “Directive”
• The effectiveness of the external audit process and the current 
 
• The policy on the engagement of the external auditor to supply 
 
•  
•  
 
 
• 
 Composition of the Committee

 
  
 

As noted within Principal Risks and Future Prospects on page 30 the 
 

 
 
 
52  
Governance Report
 The systems of internal controls are designed to manage rather than Chairman’s StatementOverview Auditors’ Report
 
 
 

 
 management infrastructure and the report on policies and procedures
 “ISAE/AAF
Strategic Report Governance Report Financial Report Notice of Meeting
 Report”
 
 
 “ISAE”

Management of risk 

 
 
 control policies and procedures with respect to the management of its

 
 
 
 and evaluate any failings and weaknesses within the Manager’s control
 environment and those extending to any outsourced service providers
 

 
 
 
 
 


Internal controls 
 
 
 

 
 
 
 
 
 

 
 the Committee
Other Information
 
 

Report and Accounts 2022 | 53

Matter Action

 
 
 
 
 
errors in the valuation could have a 
 

Misappropriation of Assets
Misappropriation or non-existence 
 
 
 
 


Income Recognition
Incomplete or inaccurate income 
recognition could have an adverse 
 set at the start of the year and discussed the accounting treatment of special dividends with the
 

 
 
 

 Non-audit services

 
 
 

 • the provision of the services would contravene any regulation or
 
 • 
 
 • 
 
 • 
 


Auditor assessment and independence 
 

 

 Sharon Brown
Chair of the Audit and Risk Committee
30 November 2022
54  
Governance Report
Chairman’s StatementOverview Auditors’ Report
## Report of the Management
## 
Strategic Report Governance Report Financial Report Notice of Meeting
 Manager reappointment
 
 
performance of and the fee paid to the Manager for the services it Manager continued to commit the necessary resources in all areas
provides under the management agreement together with the terms 
 
 
 
 

 
 

Nicky McCabe
Composition of the Committee Chair of the Management Engagement Committee
 30 November 2022


Manager and supplier evaluation process







detailed reports and views from the Fund Manager on investment

comprehensive performance and risk management schedules to








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Report and Accounts 2022 | 55
## Statement of Directors’ Responsibilities
 
 


 
 
 
 
 


 Statement under Disclosure Guidance and Transparency
 Rule 4.1.12
 
 
•  • 
 
•  
 • 
•  
 
 
•  • 
 
 
•  
 



On behalf of the Board
 Jonathan Cartwright
Chair

30 November 2022





56  
Governance Report
Chairman’s StatementOverview Auditors’ Report
## Management and Advisers
Strategic Report Governance Report Financial Report Notice of Meeting
The Manager The Secretary and the Company’s The Depositary
  
  
  
 Exchange House
  The Registrars
  
 
   
  
under a management agreement with the    

 The Auditors The Legal Counsel
  
 
The Manager also acts as the Alternative  

The Bank The Broker
Julian Cane Fund Manager and director of  
  
  

The Custodian
Marrack Tonkin Head of Investment Trusts 
 
 

Scott McEllen Represents the Manager as



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Other Information
Report and Accounts 2022 | 57
## Independent Auditors’ Report
## Independent auditor’s report to the members of CT UK Capital and Income Investment Trust PLC
 
 
•  

•  Conclusions relating to going concern
 
•  
 

 
‘Company’ • Evaluating the appropriateness of the Directors’ method of
 assessing the going concern in light of market volatility and
 
 
 
 • Assessing the appropriateness of the Directors’ assumptions
 
 The Financial Reporting Standard applicable 
in the UK and Republic of Ireland  
 • Reviewing the loan agreements and covenant calculations and

Basis for opinion 
 • 
 assessment on the survey results to assess the likelihood of
 

 
 
opinion is consistent with the additional report to the Audit and Risk 
 

Independence 

 
 
 or draw attention to in relation to the Directors’ statement in the
The period of total uninterrupted engagement including retenders 
 

 
 
 
58  
Independent Auditors’ Report
Chairman’s StatementOverview Auditors’ Report
Overview
2022 2021
Key audit matters Valuation and ownership of quoted investments
##  
Revenue recognition
##  
Materiality Overall materiality 
Strategic Report Governance Report Financial Report Notice of Meeting
£2.9m (2021:£3.5m) based on 1% (2021: 1%) of £0.64m based on 5% (2021: 5%) of net revenue returns attributable to equity
NAV 
items impacting the revenue returns to the Shareholders.
An overview of the scope of our audit Key audit matters
 
 
 
 
 
 
 



Key audit matter How the scope of our audit addressed the key audit matter
 The investment portfolio at the year end comprised We responded to this matter by testing the valuation and ownership of the whole portfolio of
ownership of quoted investments which are carried at fair value quoted investments. We performed the following procedures:
quoted of  • 
investments
 • Assessed if there were contra indicators, such as liquidity considerations, to suggest bid
 price is not the most appropriate indication of fair value by considering the realisation

performance. As the Manager is responsible for valuing period for individual holdings;


• Recalculated the valuation by multiplying the number of shares held per the statement
potential risk of overstatement of investment valuations.
obtained from the custodian by the valuation per share;
Further, there is a risk that the Company does not legally
• 
own the investments at the year end.
custodian regarding all investments held at the balance sheet date.
For these reasons and given the investment is the
Key observations:

Based on our procedures performed we did not identify any matters to suggest that the
time. Therefore, we consider the valuation and ownership
valuation and ownership of investments was not appropriate.
of investment as the key audit matter.
Revenue Dividend income arises from the investment portfolio and We performed the following procedures:
recognition is a key factor in demonstrating the performance of the
• We derived our own expectation of total expected income based on the investment holding
portfolio.
and records of distributions from independent sources.


• We cross checked the portfolio against corporate actions and special dividends and

as it is the key driver of dividend returns to investors and
challenged if these had been appropriately accounted for as revenue or capital.
judgement is required in determining the allocation of
• We analysed the population of dividend receipts to identify any unusual items that could
income to revenue or capital.
indicate a capital distribution, for example where a dividend represented a particularly high
yield and investigated the underlying basis of those distributions.
• We traced a sample of dividend income received through from the nominal ledger to bank.
Key observations:
Other Information
Based on our procedures performed we did not identify any matters to suggest that the
recognition of the revenue was not appropriate.
Report and Accounts 2022 | 59
Our application of materiality 
 
 
 
 


 
 

 2022 £m 2021 £m
Materiality 2.9 3.5
Basis for determining materiality 1% of NAV 1% of NAV
Rationale for the Benchmark As an investment trust, the NAV is the key measure of As an investment trust, the NAV is the key measure of
applied  
Performance materiality 2.2 2.6
Basis for determining Performance materiality was set at 75% of materiality. The Performance materiality was set at 75% of materiality. The
performance materiality level of performance materiality applied was set after having level of performance materiality applied was set after having
considered a number of factors including the expected total considered a number of factors including the expected total
value of known and likely misstatements and the level of value of known and likely misstatements and the level of
transactions in the year. transactions in the year.
 
 
 
 
 
 
 
 
 
 
 
 


Reporting threshold
 Corporate governance statement
 
 
 
 
 
## Other information 
 
information comprises the information included in the Annual Report 
 
60  
Independent Auditors’ Report
Chairman’s StatementOverview Auditors’ Report
Going concern and longer-term viability • The Directors’ statement with regards to the appropriateness of adopting the going concern basis of

• The Directors’ explanation as to their assessment of the Company’s prospects, the period this assessment
covers and why the period is appropriate.
Other Code provisions • Directors’ statement on fair, balanced and understandable;
• 
• The section of the Annual Report that describes the review of effectiveness of risk management and
internal control systems ; and
• The section describing the work of the Audit and Risk Committee. Strategic Report Governance Report Financial Report Notice of Meeting
Other Companies Act 2006 reporting


Strategic report and Directors’ report In our opinion, based on the work undertaken in the course of the audit:
• 

• the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal
requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the

Directors’ remuneration In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Matters on which we are required to We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires
report by exception us to report to you if, in our opinion:
• adequate accounting records have not been kept, or returns adequate for our audit have not been received
from branches not visited by us; or
• 
agreement with the accounting records and returns; or
• 
• we have not received all the information and explanations we require for our audit.
Responsibilities of Directors 
 
 
 
 
 
 

 

 Extent to which the audit was capable of detecting irregularities,
 including fraud
 
 

Other Information
 
statements 
 
Report and Accounts 2022 | 61
We gained an understanding of the legal and regulatory framework 
 
 procedures performed and the further removed non-compliance with
 
 

 
  
 

 Use of our report

We focused on laws and regulations that could give rise to a material 
 
 
•  
 
•  
relating to the existence of any non-compliance with laws and 

•  
•  For and on behalf of BDO LLP, Statutory Auditor
London, United Kingdom

30 November 2022
• reviewing the calculation in relation to investment trust
 
 

misstatement including fraud and considered the fraud risk areas in


• 
• 

• 
• 
• 
supporting documentation and evaluating whether there was




alert to any indications of fraud or non-compliance with laws and



of not detecting a material misstatement due to fraud is higher than

62  
Financial Report
Chairman’s StatementOverview Auditors’ Report
## Income Statement
Strategic Report Governance Report Financial Report Notice of Meeting
for the year ended 30 September

|  |  |  |  | 2022 |  |  | 2021 |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Revenue notes | Capital notes |  |  |  |  |  |  |
|  |  | Revenue | Capital | Total | Revenue | Capital | Total |
|  |  | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |
|  | 10 (Losses)/gains on investments – (57,259) (57,259) – 89,657 89,657 |  |  |  |  |  |  |

Foreign exchange (losses)/gains (1) – (1) (4) 13 9

| 3 17 | Income 14,495 – 14,495 12,697 58 12,755 |
| --- | --- |
| 4 4 | Management fee (714) (714) (1,428) (721) (721) (1,442) |
| 5 5 | Other expenses (680) (1) (681) (535) (2) (537) |

 13,100 (57,974) (44,874) 11,437 89,005 100,442
6 6 Finance costs (192) (192) (384) (114) (114) (228)
Net return before taxation 12,908 (58,166) (45,258) 11,323 88,891 100,214
7 7 Taxation (18) – (18) (13) – (13)
17 17 Net return attributable to Shareholders 12,890 (58,166) (45,276) 11,310 88,891 100,201
8 8 Return per share – basic and diluted 12.03p (54.29p) (42.26p) 10.56p 82.95p 93.51p

guidance published by the AIC.
All revenue and capital items in the above statement derive from continuing operations.


Other Information
Report and Accounts 2022 | 63
## Statement of Changes
for the year ended 30 September 2022

|  |  |  | Share |  | Capital |  |  |  |  | Total |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Share | premium |  | redemption |  | Special | Capital | Revenue | Shareholders’ |  |
|  | capital | account |  |  | reserve | reserve | reserve | reserve |  | funds |
| Notes | £’000s |  | £’000s |  | £’000s | £’000s | £’000s | £’000s |  | £’000s |

Balance at 30 September 2021 26,822 141,374 4,146 4,432 168,366 10,735 355,875
Movements during the year ended 30 September 2022:

| 9 | Dividends paid – – – – – (12,532) (12,532) |
| --- | --- |
| 16 | Ordinary shares issued from treasury – 21 – 568 – – 589 |
| 16 | Ordinary shares bought back and held in treasury – – – (2,358) – – (2,358) |
| 16 | Costs relating to broker – (15) – – – – (15) |

Net return attributable to Shareholders – – – – (58,166) 12,890 (45,276)
Balance at 30 September 2022 26,822 141,380 4,146 2,642 110,200 11,093 296,283
for the year ended 30 September 2021

|  |  |  | Share |  | Capital |  |  |  |  | Total |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Share | premium |  | redemption |  | Special | Capital | Revenue | Shareholders’ |  |
|  | capital | account |  |  | reserve | reserve | reserve | reserve |  | funds |
| Notes | £’000s |  | £’000s |  | £’000s | £’000s | £’000s | £’000s |  | £’000s |

Balance at 30 September 2020 26,677 139,814 4,146 4,434 79,475 11,849 266,395
Movements during the year ended 30 September 2021:

|  | 9 | Dividends paid – – – – – (12,424) (12,424) |
| --- | --- | --- |
| 15,16 |  | Ordinary shares issued 145 1,549 – – – – 1,694 |
|  | 16 | Ordinary shares issued from treasury – 29 – 443 – – 472 |
|  | 16 | Ordinary shares bought back and held in treasury – – – (445) – – (445) |
|  | 16 | Costs relating to broker – (18) – – – – (18) |

Net return attributable to Shareholders – – – – 88,891 11,310 100,201
Balance at 30 September 2021 26,822 141,374 4,146 4,432 168,366 10,735 355,875
The notes on pages 67 to 83 
64  
Financial Report
Chairman’s StatementOverview Auditors’ Report
## Balance Sheet
Strategic Report Governance Report Financial Report Notice of Meeting
at 30 September
2022 2021
Notes £’000s £’000s
Fixed assets
10 Investments 318,796 378,420
Current assets
11 Debtors 5,106 1,087
14 Cash and cash equivalents 906 1,813
Total current assets 6,012 2,900
Current liabilities
12 Creditors: amounts falling due within one year (4,525) (445)
13,14 Bank loan (24,000) (25,000)
Total current liabilities (28,525) (25,445)
Net current liabilities (22,513) (22,545)
Total assets less current liabilities 296,283 355,875
Capital and reserves

| 15 | Share capital 26,822 26,822 |
| --- | --- |
| 16 | Share premium account 141,380 141,374 |
| 16 | Capital redemption reserve 4,146 4,146 |
| 16 | Special reserve 2,642 4,432 |
| 17 | Capital reserve 110,200 168,366 |
| 17 | Revenue reserve 11,093 10,735 |

Total Shareholders’ funds 296,283 355,875
18 Net Asset Value per ordinary share – pence 277.66 331.70


Other Information
Jonathan Cartwright, Chair
Report and Accounts 2022 | 65
## Statement of Cash Flows
for the year ended 30 September

|  | 2022 | 2021 |
| --- | --- | --- |
| Notes | £’000s | £’000s |
| 19  (2,241) (2,038) |  |  |

Dividends received 14,133 12,279
Interest received 9 15
Interest paid (376) (227)
 11,525 10,029
Investing activities
Purchase of investments (22,303) (42,713)
Sale of investments 25,189 39,028
Other capital charges (1) (2)
 2,885 (3,687)
 14,410 6,342
Financing activities
9 Equity dividends paid (12,532) (12,424)
15,16 Net proceeds from issuance of new shares – 1,694
16 Net proceeds from issuance of shares held in treasury 589 472
16 Broker costs associated with share issues and buybacks (15) (18)
16 Costs of shares bought back and held in treasury (2,358) (445)
13,14 (Repayment)/drawdown of bank loan (1,000) 5,000
 (15,316) (5,721)

| 14 | Net movement in cash and cash equivalents (906) 621 |
| --- | --- |
| 14 | Cash and cash equivalents at the beginning of the year 1,813 1,183 |
| 14 | Effect of movement in foreign exchange (1) 9 |
| 14 | Cash and cash equivalents at the end of the year 906 1,813 |

Represented by:
Cash at bank 36 3
Short-term deposits 870 1,810
906 1,813

66  
Financial Report
Chairman’s StatementOverview Auditors’ Report
## Notes to the Accounts
Strategic Report Governance Report Financial Report Notice of Meeting
1. General information









2. 
 Going concern







 Basis of accounting










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

Report and Accounts 2022 | 67


 Principal accounting policies

 Financial instruments












 








 Debt Instruments





 Foreign currency






68  
Financial Report
 Income Chairman’s StatementOverview Auditors’ Report






Strategic Report Governance Report Financial Report Notice of Meeting





 


– 

– 

– 
 Taxation






 Dividends payable





 Share capital

 

– 
Other Information
Report and Accounts 2022 | 69
 Capital Redemption Reserve
The nominal value of ordinary share capital purchased and cancelled is transferred out of called-up share capital and into the capital

 

– 
– 



– 
– 
– 
– 


– 
– 
Revenue reserve


 Use of judgements and estimates
















70  
Financial Report

| 3. Income |  |  | Chairman’s StatementOverview Auditors’ Report |
| --- | --- | --- | --- |
|  | 2022 | 2021 |  |
|  | £’000s | £’000s |  |

Income from investments:
UK dividend income 13,742 10,877
(1)
UK dividend income – special dividends 114 1,285
Overseas dividend income 364 286
Property income distributions 266 234 Strategic Report Governance Report Financial Report Notice of Meeting
14,486 12,682
Other income:
Interest on cash and cash equivalents 9 1
(2)
Underwriting Commission – 14
9 15
Total income 14,495 12,697
(1) Special dividends classified as revenue in nature in accordance with note 2(c)(xv).
(2) As at 30 September 2022 there was no outstanding sub-underwriting contracts (2021: none outstanding).

4. Management fee
2022 2021
Revenue Capital Total Revenue Capital Total
£’000s £’000s £’000s £’000s £’000s £’000s
Management fee 714 714 1,428 721 721 1,442






5. Other expenses
2022 2021
Revenue Capital Total Revenue Capital Total
£’000s £’000s £’000s £’000s £’000s £’000s
Auditors’ remuneration:
(1)
– for audit services 43 – 43 32 – 32
(2)
Directors’ fees for services to the Company 153 – 153 155 – 155
Directors’ and Officers’ liability insurance 10 – 10 8 – 8
Loan commitment fee 11 – 11 6 – 6
(3)
Marketing 126 – 126 78 – 78
Professional fees 98 – 98 67 – 67
Printing and postage 75 – 75 62 – 62
Registrars’ fees 28 – 28 27 – 27
Other Information
Subscriptions and listing fees 55 – 55 51 – 51
Sundry expenses 81 1 82 49 2 51
Total other expenses 680 1 681 535 2 537
All expenses are stated gross of irrecoverable VAT, where applicable.
(1) Total Auditors’ remuneration for 2022 audit services, exclusive of VAT amounts to £35,000 (2021: £27,000).
(2) See the Directors’ Remuneration Report on pages 49 to 51.
(3) 2022 marketing figure increase is the result of an under accrual brought forward from the prior year. Report and Accounts 2022 | 71
## 6. Finance costs

|   | Revenue £'000s | Capital £'000s | 2022 Total £'000s | Revenue £'000s | Capital £'000s | 2021 Total £'000s  |
| --- | --- | --- | --- | --- | --- | --- |
|  Loan interest | 190 | 190 | 380 | 113 | 113 | 226  |
|  Overdraft interest | 2 | 2 | 4 | 1 | 1 | 2  |
|  Total finance cost | 192 | 192 | 384 | 114 | 114 | 228  |

Finance costs have been allocated 50% to capital reserve in accordance with the Company's accounting policy.

## 7. Taxation on ordinary activities

### (a) Analysis of tax charge for the year

|   | Revenue £'000s | Capital £'000s | 2022 Total £'000s | Revenue £'000s | Capital £'000s | 2021 Total £'000s  |
| --- | --- | --- | --- | --- | --- | --- |
|  Overseas taxation | 18 | - | 18 | 13 | - | 13  |
|  Total taxation charge (see note 7(b)) | 18 | - | 18 | 13 | - | 13  |

The tax assessed for the year is lower than the standard rate of corporation tax in the UK (19%) (2021: same). Factors affecting the taxation charge are set out below.

### (b) Factors affecting the current tax charge for the year

|   | Revenue £'000s | Capital £'000s | 2022 Total £'000s | Revenue £'000s | Capital £'000s | 2021 Total £'000s  |
| --- | --- | --- | --- | --- | --- | --- |
|  Net return on ordinary activities before taxation | 12,908 | (58,166) | (45,258) | 11,323 | 88,891 | 100,214  |
|  Return on ordinary activities multiplied by the effective rate of corporation tax of 19% (2020: 19%) | 2,452 | (11,052) | (8,600) | 2,151 | 16,889 | 19,040  |
|  Effects of: |  |  |  |  |  |   |
|  Dividends | (2,752) | - | (2,752) | (2,409) | (11) | (2,420)  |
|  Excess expenses not utilised in the year | 300 | 172 | 472 | 258 | 159 | 417  |
|  Overseas taxation not relieved | 18 | - | 18 | 13 | - | 13  |
|  Capital returns | - | 10,880 | 10,880 | - | (17,037) | (17,037)  |
|  Total taxation (see note 7(a)) | 18 | - | 18 | 13 | - | 13  |

The potential deferred tax asset of £6.6 million based on the future 25% Corporation Tax rate in respect of unutilised expenses and unrelieved overseas taxation at 30 September 2022 (2021: £6.5 million) has not been recognised as it is unlikely that these expenses will be utilised.

## 8. Return per share

|   | Revenue | Capital | 2022 Total | Revenue | Capital | 2021 Total  |
| --- | --- | --- | --- | --- | --- | --- |
|  Net return attributable to equity Shareholders - £'000s | 12,890 | (58,166) | (45,276) | 11,310 | 88,891 | 100,201  |
|  Return per share - pence | 12.03 | (54.29) | (42.26) | 10.56 | 82.95 | 93.51  |

Both the revenue and capital returns per share are based on a weighted average of 107,131,967 ordinary shares in issue during the year (2021: 107,151,511).

72 | CT UK Capital and Income Investment Trust PLC
Financial Report

| 9. Dividends |  |  | Chairman’s StatementOverview Auditors’ Report |
| --- | --- | --- | --- |
|  | 2022 | 2021 |  |
| Dividends on ordinary shares Register date Payment date | £’000s | £’000s |  |

Fourth of four interims for the year ended 30 September 2020 of 3.75p per share 04-Dec-20 17-Dec-20 – 4,007
First of four interims for the year ended 30 September 2021 of 2.65p per share 12-Mar-21 31-Mar-21 – 2,837
Second of four interims for the year ended 30 September 2021 of 2.60p per share 11-Jun-21 30-Jun-21 – 2,790
Third of four interims for the year ended 30 September 2021 of 2.60p per share 03-Sep-21 30-Sep-21 – 2,790
Fourth of four interims for the year ended 30 September 2021 of 3.75p per share 03-Dec-21 17-Dec-21 4,019 – Strategic Report Governance Report Financial Report Notice of Meeting
First of four interims for the year ended 30 September 2022 of 2.65p per share 11-Mar-22 31-Mar-22 2,841 –
Second of four interims for the year ended 30 September 2022 of 2.65p per share 10-Jun-22 30-Jun-22 2,839 –
Third of four interims for the year ended 30 September 2022 of 2.65p per share 02-Sep-22 30-Sep-22 2,833 –
12,532 12,424




2022
£’000s
Net revenue return attributable to Shareholders 12,890
First of four interims for the year ended 30 September 2022 of 2.65p per share (2,841)
Second of four interims for the year ended 30 September 2022 of 2.65p per share (2,839)
Third of four interims for the year ended 30 September 2022 of 2.65p per share (2,833)
(1)
Fourth of four interims for the year ended 30 September 2022 of 3.85p per share (4,108)
Transferred to revenue reserve 269
(1) Based on shares in issue and their entitlement to the dividend at 29 November 2022.
Other Information
Report and Accounts 2022 | 73
10. Investments

|  |  |  | 2022 |  |  |  |  | 2021 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | (1) |  |  |  | (1) |  | (2) |  |
| Level 1 |  | Level 3 | Total | Level 1 |  | Level 3 |  | Total |
| £’000s |  | £’000s | £’000s | £’000s |  | £’000s |  | £’000s |

Cost brought forward 256,643 – 256,643 246,295 – 246,295
Gains/(losses) brought forward 121,777 – 121,777 38,548 – 38,548
Fair value of investments brought forward 378,420 – 378,420 284,843 – 284,843
(2)
Transferred to Level 3 – – – (1,432) 1,432 –
Purchases at cost 26,398 – 26,398 42,713 – 42,713
Sales proceeds (28,876) – (28,876) (38,978) – (38,978)
Gains/(losses) on investments sold in year 5,781 – 5,781 7,860 (1,432) 6,428
(Losses)/gains on investments held at year end (62,927) – (62,927) 83,414 – 83,414
Fair value of investments at 30 September 318,796 – 318,796 378,420 – 378,420
Cost at 30 September 260,060 – 260,060 256,643 – 256,643
Gains at 30 September 58,736 – 58,736 121,777 – 121,777
Fair value of investments at 30 September 318,796 – 318,796 378,420 – 378,420
2022 2021
£’000s £’000s
Gains on investments sold in year 5,781 6,428
(Losses)/gains on investments held at year end (62,927) 83,414
Investment transaction costs (113) (185)
Total (losses)/gains in year (57,259) 89,657
(1) The hierarchy of investments is described in note 2(c)(i) and below
Level 1 includes investments listed on any recognised stock exchange or quoted on AIM in the UK.
Level 3 includes any unquoted investments.
(2) Ahtium PLC was written off as at 30 September 2021 as a result of bankruptcy first announced in 2018.



11. Debtors
2022 2021
£’000s £’000s
Accrued income 1,318 983
Investments sold awaiting settlement 3,687 –
Prepayments 16 21
Overseas taxation recoverable 85 83
5,106 1,087
12. Creditors: amounts falling due within one year
2022 2021
£’000s £’000s
Management fee 318 382
Investments purchased awaiting settlement 4,095 –
Loan interest 9 1
Accruals 103 62
4,525 445
74  
Financial Report

| 13. Loans |  |  | Chairman’s StatementOverview Auditors’ Report |
| --- | --- | --- | --- |
|  | 2022 | 2021 |  |
|  | £’000s | £’000s |  |

Sterling loans: falling due after more than one year 24,000 25,000



Strategic Report Governance Report Financial Report Notice of Meeting

14. Analysis of changes in net debt

|  |  |  | 2022 |  |  |  | 2021 |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Cash | Bank loans |  | Total | Cash | Bank loans |  | Total |
| £’000s |  | £’000s | £’000s | £’000s |  | £’000s | £’000s |

Net debt brought forward 1,813 (25,000) (23,187) 1,183 (20,000) (18,817)
Cash-flows:
Repayment/(drawdown) of bank loan – 1,000 1,000 – (5,000) (5,000)
Net movement in cash and cash equivalents (906) – (906) 621 – 621
Non-cash:
Effect of movement in foreign exchange (1) – (1) 9 – 9
Net debt carried forward 906 (24,000) (23,094) 1,813 (25,000) (23,187)
15. Share capital
2022 2021
Total Listed Held in Treasury Issued and fully paid Issued and fully paid
Number £’000s Number £’000s Number £’000s Number £’000s
Ordinary shares of 25 pence each
Balance brought forward 107,289,022 26,822 – – 107,289,022 26,822 106,709,268 26,677
Ordinary shares issued – – – – 579,754 145
Ordinary shares issued from – – (175,000) (44) 175,000 44 150,000 38
treasury
Ordinary shares bought back & – – 757,819 189 (757,819) (189) (150,000) (38)
held in treasury
Balance at 30 September 107,289,022 26,822 582,819 145 106,706,203 26,677 107,289,022 26,822





Other Information
Report and Accounts 2022 | 75
16. Reserves

|  | Share |  | Capital |  |
| --- | --- | --- | --- | --- |
| Premium |  | Redemption |  | Special |
| account |  |  | Reserve | Reserve |
| £’000s |  |  | £’000s | £’000s |

Balance brought forward as at 1 October 2021 141,374 4,146 4,432
Ordinary shares issued from treasury – – 568
Ordinary shares bought back and cancelled or held in treasury (net of costs) – – (2,346)
Stamp duty – – (12)
Premium on issue of shares from treasury 21 – –
Broker costs associated with the issue of new shares (15) – –
Balance carried forward as at 30 September 2022 141,380 4,146 2,642
Balance brought forward as at 1 October 2020 139,814 4,146 4,434
Ordinary shares issued from treasury – – 443
Ordinary shares bought back and cancelled or held in treasury (net of costs) – – (443)
Stamp duty – – (2)
Premium on issue of shares 1,549 – –
Premium on issue of shares from treasury 29 – –
Broker costs associated with the issue of new shares (18) – –
Balance carried forward as at 30 September 2021 141,374 4,146 4,432
17. Other reserves

| Capital reserve |  |  | Capital reserve |  | Capital reserve |  | Revenue |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  | – realised |  | – unrealised |  |  | – total | reserve |
|  |  | £’000s |  | £’000s |  | £’000s | £’000s |

Movements during the year ended 30 September 2022:
Gains on investments sold in year 5,781 – 5,781 –
Losses on investments held at year end – (62,927) (62,927) –
Transaction costs – (113) (113) –
Management fee (see note 4) (714) – (714) –
Finance costs (see note 6) (192) – (192) –
Other capital charges (1) – (1) –
Revenue return – – – 12,890
Return attributable to Shareholders 4,874 (63,040) (58,166) 12,890
Dividends paid in year (see note 9) – – – (12,532)
Balance at 30 September 2021 46,589 121,777 168,366 10,735
Balance at 30 September 2022 51,463 58,737 110,200 11,093



76  
Financial Report

# **18. Net Asset Value per ordinary share**

|   | 2022 | 2021  |
| --- | --- | --- |
|  Net asset value per share – pence | 277,66 | 331,70  |
|  Net assets attributable at the year end – (£'000s) | 296,283 | 355,875  |
|  Number of ordinary shares in issue at the year end | 106,706,203 | 107,289,022  |

# **19. Reconciliation of total return before taxation to net cash flows from operating activities**

|   | 2022 £'000s | 2021 £'000s  |
| --- | --- | --- |
|  Net return on ordinary activities before taxation | (45,258) | 100,214  |
|  Adjustments for non-cash flow items, dividend income and interest expense: |  |   |
|  Losses/(gains) on investments (note 10) | 57,146 | (89,842)  |
|  Foreign exchange movements | 1 | (9)  |
|  Non-operating expenses of a capital nature (note 5) | 1 | 2  |
|  Dividend income receivable (note 3) | (14,486) | (12,682)  |
|  Interest receivable | (9) | (15)  |
|  Interest payable (note 6) | 384 | 228  |
|  Decrease/(increase) in other debtors | 3 | (16)  |
|  (Decrease)/increase in other creditors | (23) | 82  |
|   | 43,017 | (102,252)  |
|  Cash outflows from operating activities before dividends received and interest paid | (2,241) | (2,038)  |

# **20. Going concern**

In assessing the going concern basis of accounting the Directors have had regard to the guidance issued by the Financial Reporting Council. They have also considered the Company's objective, strategy and policy, the current cash position of the Company, the availability of the loan facility and compliance with its covenants and the operational resilience of the Company and its service providers. At present the global economy is suffering considerable disruption due to the effects of the COVID-19 pandemic, inflationary concerns and the war in Ukraine and the Directors have given serious consideration to the consequences for this Company. The Company has a number of banking covenants and at present the Company's financial position does not suggest that any of these are close to being breached. The primary risk is that there is a very substantial decrease in the Net Asset Value of the Company in the short to medium-term. The Directors have considered the remedial measures that are open to the Company if such a covenant breach appears possible. As at 29 November 2022, the last practicable date before publication of this report, borrowings amounted to £24 million. This is in comparison to a Net Asset Value of £324 million. In accordance with its investment policy the Company is invested mainly in readily realisable, FTSE All-Share listed securities. These can be realised, if necessary, to repay the loan facility and fund future dividend payments.

The Company operates within a robust regulatory environment. The Company retains title to all assets held by the Custodian. Cash is held with banks approved and regularly reviewed by the Manager and the Board.

As referred to in the Chairman's Statement on page 7 and the Directors' Report on page 44, resolution 15 proposing the continuation of the Company will be put to Shareholders at the forthcoming Annual General Meeting on Thursday 9 March 2023. The Directors are recommending that Shareholders vote "for" this resolution. After making enquiries, and with regard to the nature of the Company's shareholder base and business, the Directors have a reasonable expectation that Shareholders will support this resolution.

Accordingly, based on this information the Directors believe that the Company has the ability to meet its financial obligations as they fall due for a period of at least twelve months from the date of approval of these financial statements. Accordingly, these financial statements have been prepared on a going concern basis.

Report and Accounts 2022 | 77

Financial Report

Financial Reports

Financial Reports
21. Financial Risk Management
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
 Market risks














Currency Exposure





|  |  |  | 2022 |  | 2021 |
| --- | --- | --- | --- | --- | --- |
|  | Average for |  |  | Average for |  |
| At 30 September |  | the year At 30 September |  |  | the year |

Euro 1.140 1.180 1.163 1.145
US dollar 1.117 1.280 1.348 1.369
78  
Financial Report
The following calculations demonstrate the approximate effect of a weakening or strengthening of sterling against other currencies and are Chairman’s StatementOverview Auditors’ Report

– 
– 

– 
– 

Strategic Report Governance Report Financial Report Notice of Meeting


Weakening of sterling by 10% against other currencies

|  |  |  |  |  |  |  | 2022 |  |  | 2021 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  | Adjusted |  | Net return |  |  | Net return |  |
|  | Sterling |  | income, assets |  | attributable to |  |  | attributable to |  |  |
|  | equivalent | 10% weakened | and liabilities |  | Shareholders |  |  | Shareholders |  |  |
| Local currency Return Local currency | £’000s | sterling fx rate |  | (£’000s) |  | (£’000s) |  |  | (£’000s) |  |

Euro Revenue 833 731 1.0256 812 81 61
Euro Capital 4,539 3,983 1.0256 4,426 443 778
US Dollar Revenue 233 209 1.0053 232 23 12
US Dollar Capital 5,693 5,096 1.0053 5,663 567 604
Net Total Return attributable to Shareholders 1,114 1,455
Shares in issue 106,706,203 107,289,022
NAV per share - pence 1.04 1.36
Strengthening of sterling by 10% against other currencies

|  |  |  |  |  |  |  |  | 2022 |  |  | 2021 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  | Adjusted |  | Net return |  |  | Net return |  |
|  | Sterling |  |  | income, assets |  | attributable to |  |  | attributable to |  |  |
|  | equivalent | 10% strengthened |  | and liabilities |  | Shareholders |  |  | Shareholders |  |  |
| Local currency Return Local currency | £’000s |  | sterling fx rate |  | (£’000s) |  | (£’000s) |  |  | (£’000s) |  |

Euro Revenue 833 731 1.2535 665 (66) (49)
Euro Capital 4,539 3,983 1.2535 3,621 (362) (637)
US Dollar Revenue 233 209 1.2287 190 (19) (9)
US Dollar Capital 5,693 5,096 1.2287 4,633 (463) (494)
Net Total Return attributable to Shareholders (910) (1,189)
Shares in issue 106,706,203 107,289,022
NAV per share - pence (0.85) (1.11)


Other Information
Report and Accounts 2022 | 79



|  | Short-term |  | Cash and cash |  |  |  | Short-term |  |  | Short-term |  |  | Net monetary |  |  |  |  | Net |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | debtors |  | equivalents |  | creditors – other |  |  | creditors – loans |  |  | (liabilities)/assets |  |  | Investments |  | exposure |  |
| 2022 |  | £’000s |  |  | £’000s |  |  | £’000s |  |  | £’000s |  |  | £’000s |  | £’000s | £’000s |  |

Sterling 5,021 906 (4,525) (24,000) (22,598) 309,802 287,204
Other 85 – – – 85 8,994 9,079
Total 5,106 906 (4,525) (24,000) (22,513) 318,796 296,283

|  | Short-term |  | Cash and cash |  |  |  | Short-term |  |  | Short-term |  |  | Net monetary |  |  |  |  | Net |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | debtors |  | equivalents |  | creditors – other |  |  | creditors – loans |  |  | (liabilities)/assets |  |  | Investments |  | exposure |  |
| 2021 |  | £’000s |  |  | £’000s |  |  | £’000s |  |  | £’000s |  |  | £’000s |  | £’000s | £’000s |  |

Sterling 1,004 1,813 (445) (25,000) (22,628) 366,063 343,435
Other 83 – – – 83 12,357 12,440
Total 1,087 1,813 (445) (25,000) (22,545) 378,420 355,875
Interest rate exposure


| Within | More than |  | 2022 | Within | More than | 2021 |
| --- | --- | --- | --- | --- | --- | --- |
| one year |  | one year | Total | one year | one year | Total |
| £’000s |  | £’000s | £’000s | £’000s | £’000s | £’000s |

Exposure to floating rates:
Cash and cash equivalents 906 – 906 1,813 – 1,813
Loans (24,000) – (24,000) (25,000) – (25,000)
Net exposure (23,094) – (23,094) (23,187) – (23,187)










|  |  | 2022 |  |  | 2021 |
| --- | --- | --- | --- | --- | --- |
| Increase | Decrease |  | Increase | Decrease |  |
| in rate |  | in rate | in rate |  | in rate |
| £’000s |  | £’000s | £’000s |  | £’000s |

Revenue return (222) 222 (214) 214
Capital return (240) 240 (250) 250
Total return (462) 462 (464) 464
NAV per share – pence (0.43) 0.43 (0.43) 0.43
80  
Financial Report
Other market risk exposures Chairman’s StatementOverview Auditors’ Report






Strategic Report Governance Report Financial Report Notice of Meeting


|  |  | 2022 |  |  | 2021 |
| --- | --- | --- | --- | --- | --- |
| Increase | Decrease |  | Increase | Decrease |  |
| in value | in value |  | in value | in value |  |
| £’000s |  | £’000s | £’000s |  | £’000s |

Capital return 63,759 (63,759) 75,684 (75,684)
NAV per share – pence 59.75 (59.75) 70.54 (70.54)
 Liquidity risk












|  | Three | More than three |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  | months | months but less |  | More than |  |  |
|  | or less | than one year |  |  | one year | Total |
| 2022 | £’000s |  | £’000s |  | £’000s | £’000s |

Current liabilities – others 4,525 – – 4,525
Loans 24,000 – – 24,000
28,525 – – 28,525

|  | Three | More than three |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  | months | months but less |  | More than |  |
|  | or less | than one year |  | one year | Total |
| 2021 | £’000s |  | £’000s | £’000s | £’000s |

Current liabilities – others 445 – – 445
Loans 25,000 – – 25,000
25,445 – – 25,445
Other Information
Report and Accounts 2022 | 81
 
 Credit risk and counterparty exposure





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
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
 



 Capital risk management






22. Transactions with related parties and Manager






82  
Financial Report
23. AIFMD Chairman’s StatementOverview Auditors’ Report





Gross Commitment
Strategic Report Governance Report Financial Report Notice of Meeting
Leverage exposure method method
Maximum limit 200% 200%
Actual 108% 108%



24. 



Other Information
Report and Accounts 2022 | 83
# Ten Year Record (Unaudited)

All Company data are based on assets, liabilities, earnings and expenses as reported in accordance with the Company's accounting policies and is unaudited but derived from the audited Accounts or specified third party data providers.

## Assets

at 30 September

|  £'000s | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  Total assets (before debt) | 203,079 | 244,708 | 251,387 | 256,876 | 297,027 | 332,463 | 347,472 | 348,149 | 286,395 | 380,875 | **320,283**  |
|  Loans | 7,967 | 20,000 | 20,000 | 20,000 | 25,000 | 20,000 | 20,000 | 10,000 | 20,000 | 25,000 | **24,000**  |
|  Net assets | 195,112 | 224,708 | 231,387 | 236,876 | 272,027 | 312,463 | 327,472 | 338,149 | 266,395 | 355,875 | **296,283**  |

## Net Asset Value (NAV)

at 30 September

|   | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  NAV per share – pence | 222.0 | 251.4 | 251.8 | 250.5 | 281.1 | 317.1 | 324.0 | 329.0 | 249.7 | 331.7 | **277.7**  |

## Total Returns$^{(1)}$

(rebased to 100 at 30 September 2012)

|   | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  NAV per share | 100.0 | 117.7 | 122.3 | 126.6 | 147.7 | 172.6 | 182.2 | 191.9 | 151.6 | 208.8 | **181.5**  |
|  Middle market price per share | 100.0 | 116.4 | 123.4 | 127.2 | 148.3 | 171.7 | 180.7 | 186.4 | 148.5 | 201.2 | **180.1**  |
|  FTSE All-Share Index | 100.0 | 118.9 | 126.2 | 123.3 | 144.0 | 161.2 | 170.7 | 175.3 | 146.2 | 186.9 | **179.5**  |

## Returns excluding dividends$^{(1)}$

(rebased to 100 at 30 September 2012)

|   | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  NAV per share | 100.0 | 113.2 | 113.4 | 112.8 | 126.6 | 142.8 | 145.9 | 148.2 | 112.5 | 149.4 | **125.1**  |
|  Middle market price per share | 100.0 | 112.0 | 114.4 | 113.5 | 127.3 | 142.4 | 145.0 | 144.1 | 110.4 | 144.1 | **124.2**  |
|  FTSE All-Share Index | 100.0 | 114.8 | 117.8 | 111.2 | 125.2 | 135.0 | 137.6 | 135.4 | 109.4 | 135.4 | **125.5**  |

(1) See Alternative Performance Measures on pages 91 and 92 for explanation.

84 | CT UK Capital and Income Investment Trust PLC
Financial Report

# **Share Price**  
at 30 September

|   | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  Middle market price per share – pence | 225.5 | 252.5 | 258.0 | 256.0 | 287.0 | 321.0 | 327.0 | 325.0 | 249.0 | 325.0 | **280.0**  |
|  Premium/(discount) to NAV – % | 1.6 | 0.4 | 2.5 | 2.2 | 2.1 | 1.2 | 0.9 | (1.2) | (0.3) | (2.0) | **0.8**  |
|  Share price high – pence | 227.0 | 269.0 | 271.8 | 277.0 | 289.8 | 327.5 | 350.0 | 337.0 | 358.0 | 339.0 | **343.5**  |
|  Share price low – pence | 195.0 | 222.8 | 248.0 | 233.8 | 234.8 | 274.0 | 309.5 | 276.5 | 193.8 | 237.5 | **273.0**  |

# **Revenue**  
for the year ended 30 September

|   | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  Available for ordinary shares (£'000s) | 8,715 | 9,941 | 9,575 | 9,475 | 10,785 | 11,459 | 11,710 | 13,426 | 8,758 | 11,310 | **12,890**  |
|  Return per share – pence | 10.01 | 11.26 | 10.56 | 10.10 | 11.26 | 11.71 | 11.70 | 13.12 | 8.34 | 10.56 | **12.03**  |
|  Dividends per share – pence | 9.00 | 9.45 | 9.85 | 10.10 | 10.30 | 10.65 | 10.95 | 11.40 | 11.50 | 11.60 | **11.80**  |

# **Revenue Performance**  
(rebased to 100 at 30 September 2012)

|   | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  Return per share | 100.0 | 112.5 | 105.5 | 100.9 | 112.5 | 117.0 | 116.9 | 131.1 | 83.3 | 105.5 | **120.2**  |
|  Dividends per share | 100.0 | 105.0 | 109.4 | 112.2 | 114.4 | 118.3 | 121.7 | 126.7 | 127.8 | 128.9 | **131.1**  |
|  CPI | 100.0 | 102.7 | 103.9 | 103.8 | 104.8 | 107.9 | 110.5 | 112.4 | 113.0 | 116.5 | **128.3**  |

# **Cost of running the Company (Ongoing charges)$^{(1)}$**  
for the year ended 30 September

|   | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  Expressed as a percentage of average net assets: |  |  |  |  |  |  |  |  |  |  |   |
|  Ongoing charges | 0.80 | 0.62 | 0.66 | 0.64 | 0.64 | 0.59 | 0.58 | 0.58 | 0.58 | 0.59 | **0.59**  |

# **Gearing$^{(1)}$**  
at 30 September

|   | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  Net gearing % | 1.22 | 3.81 | 4.43 | 10.32 | 9.32 | 4.81 | 4.51 | 1.71 | 7.06 | 6.52 | **7.79**  |

(1) See Alternative Performance Measures pages 91 and 92 for explanation

## Analysis of Ordinary Shareholders (Unaudited)

|  Category | Holding % at 30 September 2022 | Holding % at 30 September 2021  |
| --- | --- | --- |
|  CT Savings Plans | **79.5** | 79.5  |
|  Retail Investors (excluding those investing through CT Savings Plans) | **9.6** | 9.4  |
|  Institutions | **6.1** | 6.2  |
|  Intermediaries | **4.8** | 4.9  |
|   | **100.0** | 100.0  |

Source: Columbia Threadneedle Investments

Report and Accounts 2022 | 85

Financial Report
## Notice of Annual General Meeting
 Special Resolutions:
 
 
 

Ordinary Resolutions:



 
 To receive and adopt the Directors’ Report and Accounts “Act”
 
 
  
 commencing on the date of the passing of this resolution
 

 

 To approve the Directors’ Remuneration Report for the year


“relevant period”
  
  

 
this power make offers or enter into agreements which would
 

  the expiry of the relevant period and notwithstanding such

 
in pursuance of such offers or agreements as if such power
 


treasury shares as if in the opening sentence of this resolution
  
 

 


“Act”
“Act”




“Rights”
“ordinary shares”

and in such manner as the Directors may from time to time
on the date of the passing of this resolution and expiring at




 
 
 “relevant period” 
time prior to the expiry of this authority make offers or enter 




of the relevant period and notwithstanding such expiry the



pursuance of such offers or agreements as if such authority



the higher of the last independent trade and the highest current

86  
Notice of Meeting
  Chairman’s StatementOverview Auditors’ Report
 
 power of attorney or other authority under which the proxy appointment



 
 
 
 


  
conferred prior to the expiry of such authority which will or may  Strategic Report Governance Report Financial Report Notice of Meeting







Special Business 


 
ordinary resolution

  


By Order of the Board 

Columbia Threadneedle Investment Business Limited,

Secretary 

30 November 2022




 
Exchange House

Primrose Street 

London EC2A 2NY

Registered number: 02732011



Notes:

  
 
 
 
 
appointed to exercise the rights attached to a different share or shares 
 
   
 
 
 
 
  
 you will need to have agreed to Proxymity’s associated terms and
 
 
 
  
 
 
 
 
 
 
  
  Other Information
 where full instructions for the procedure 
 
 
Report and Accounts 2022 | 87
 
 
regardless of whether it constitutes the appointment of a proxy or is 
an amendment to the instruction given to a previously appointed proxy





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
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 
 
 




 

















   
 
 

  
ceasing to hold office since the previous meeting at which annual 
 
 


















  

or
  

  



88  
Other Information
Chairman’s StatementOverview Auditors’ Report
## Information for Shareholders
Strategic Report Governance Report Financial Report Notice of Meeting
 Share dealing
 
 
 
  for a range of dealing
 

 Common reporting standards
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Performance information information annually to the local tax authority on the tax
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AIC Exchange of Information – information for account holders 
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Electronic communications
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Other Information
Report and Accounts 2022 | 89
## How to Invest
One of the most convenient ways to invest in CT UK Capital and Income Investment Trust PLC is through one of the savings plans run by Columbia
Threadneedle Investments.
CT Individual Savings Account (ISA) Charges
You can use your ISA allowance to make an annual tax Annual management charges and other charges apply according to the type of
efficient investment of up to £20,000 for the current tax year plan.
with a lump sum from £100 or regular savings from £25 a
Annual account charge
month. You can also transfer any existing ISAs to us whilst
ISA/LISA: £60+VAT
maintaining the tax benefits.
GIA: £40+VAT
JISA/JIA/CTF: £25+VAT
CT Junior Individual Savings Account (JISA)*
You can pay the annual charge from your account, or by direct debit (in addition to
A tax efficient way to invest up to £9,000 per tax year for
any annual subscription limits).
a child. Contributions start from £100 lump sum or £25 a
month. JISAs or CTFs with other providers can be transferred Dealing charges
to Columbia Threadneedle Investments. £12 per fund (reduced to £0 for deals placed through the online Columbia
Threadneedle Investor Portal) for ISA/GIA/LISA/JIA and JISA. There are no dealing
CT Lifetime Individual Savings Account (LISA) charges on a CTF.
For those aged 18-39, a LISA could help towards purchasing Dealing charges apply when shares are bought or sold but not on the reinvestment
your first home or retirement in later life. Invest up to £4,000 of dividends or the investment of monthly direct debits. Government stamp duty of
for the current tax year and receive a 25% Government bonus 0.5% also applies on the purchase of shares (where applicable).
up to £1,000 per year. Invest with a lump sum from £100 or The value of investments can go down as well as up and you may not get back
regular savings from £25 a month. your original investment. Tax benefits depend on your individual circumstances
and tax allowances and rules may change. Please ensure you have read the
CT Child Trust Fund (CTF)* full Terms and Conditions, Privacy Policy and relevant Key Features documents
If your child already has a CTF, you can invest up to £9,000 before investing. For regulatory purposes, please ensure you have read the Pre-
per birthday year, from £100 lump sum or £25 a month. sales Cost & Charges disclosure related to the product you are applying for, and
CTFs with other providers can be transferred to Columbia the relevant Key Information Documents (KIDs) for the investment trusts you want
Threadneedle Investments. to invest into, these can be found at ctinvest.co.uk/documents.
How to Invest
CT General Investment Account (GIA)
To open a new Columbia Threadneedle Investments plan, apply online at
This is a flexible way to invest in our range of Investment
ctinvest.co.uk Online applications are not available if you are transferring an existing
Trusts. There are no maximum contributions, and investments
plan with another provider to Columbia Threadneedle Investments, or if you are
can be made from £100 lump sum or £25 a month.
applying for a new plan in more than one name but paper applications are available at
ctinvest.co.uk/documents or by contacting Columbia Threadneedle Investments.
CT Junior Investment Account (JIA)
This is a flexible way to save for a child in our range of

| Investment Trusts. There are no maximum contributions, and | New Customers: |  |
| --- | --- | --- |
| the plan can easily be set up under bare trust (where the | Call: 0800 136 420** ( | ) |
| child is noted as the beneficial owner) or kept in your name |  invest@columbiathreadneedle.com |  |

if you wish to retain control over the investment. Investments
Existing Plan Holders:
can be made from a £100 lump sum or £25 a month per
Call: 0345 600 3030** ( )
account. You can also make additional lump sum top-ups at
any time from £100 per account.  investor.enquiries@columbiathreadneedle.com
By post: Columbia Threadneedle Management Limited
*The CTF and JISA accounts are opened by parents in the child’s name
PO Box 11114
and they have access to the money at age 18. **Calls may be recorded or
monitored for training and quality purposes. Chelmsford CM99 2DG
You can also invest in the trust through online dealing platforms for private investors
that offer share dealing and ISAs. Companies include: Barclays Stockbrokers, EQi,
Halifax, Hargreaves Lansdown, HSBC, Interactive Investor, Lloyds Bank, The Share Centre
##  ctinvest.co.uk
0345 600 3030
monitored for training and quality purposes.
© 2022 Columbia Threadneedle Investments. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies. Financial promotions are issued for marketing and information
purposes by Columbia Threadneedle Management Limited, authorised and regulated in the UK by the Financial Conduct Authority. 195600 (06/22) UK
90  
Other Information
Chairman’s StatementOverview Auditors’ Report
## Alternative Performance Measures
Strategic Report Governance Report Financial Report Notice of Meeting
“APMs”


Premium or Discount –




| 30 September |  | 30 September |  |
| --- | --- | --- | --- |
|  | 2022 |  | 2021 |
|  | pence |  | pence |

Net Asset Value per share (a) 277.66 331.70
Share price per share (b) 280.00 325.00
Premium or (Discount) (c= (b-a)/a) (c) 0.8% (2.0%)
Gearing –






| 30 September |  | 30 September |  |
| --- | --- | --- | --- |
|  | 2022 |  | 2021 |
|  | £’000 |  | £’000 |

Loan 24,000 25,000
Less cash and cash equivalents (906) (1,813)
Total (a) 23,094 23,187
Net Asset Value (b) 296,283 355,875
Gearing (c = a/b) (c) 7.79% 6.52%
Other Information
Report and Accounts 2022 | 91
Ongoing Charges – 





|  | 30 September |  | 30 September |  |
| --- | --- | --- | --- | --- |
|  |  | 2022 |  | 2021 |
| Ongoing charges calculation |  | £’000 |  | £’000 |

Management fees 1,428 1,442
Other expenses 680 535
Broker fee 15 18
Less loan arrangement fees (16) (6)
Ad-hoc non-recurring expenses (80) (37)
Total (a) 2,027 1,952
Average daily net assets (b) 343,168 331,180
Ongoing charges (c = a/b) (c) 0.59% 0.59%
Total Return –


Net Asset Value Share price
NAV/Share price per share at 30 September 2021 (pence) 331.70 325.00
NAV/Share price per share at 30 September 2022 (pence) 277.66 280.00
Change in the year (16.3%) (13.8%)
Impact of dividend reinvestments 3.2% 3.3%
Total return for the year (13.1%) (10.5%)
92  
Other Information
Chairman’s StatementOverview Auditors’ Report
## Glossary of Terms
Strategic Report Governance Report Financial Report Notice of Meeting
AAF Report –

Administrator –
AIC –
AIC Code – 
AIM –
AIFMD – AIFs
AIFM

CT UK Capital and Income Investment Trust PLC – the “Company
CT Savings Plans – 


Benchmark –Index





Closed-end company –


Cum-dividend –

Custodian – 


Other Information
Depositary – 

Report and Accounts 2022 | 93


Derivative –



Distributable Reserves –



Dividend Dates –record
payment
ex-dividend

Fund Manager – 
GAAP – 

 
 


 




ISAE Report – 
Leverage – 





Manager –

 



94  
Other Information
Non-executive Director – Chairman’s StatementOverview Auditors’ Report



Open-ended investment vehicle –

Strategic Report Governance Report Financial Report Notice of Meeting
Price/earnings multiple –

Registrar –


SORP – 

SSAE16 –

 


Other Information
Report and Accounts 2022 | 95
Warning to Shareholders – Beware of Share Fraud.
Fraudsters use persuasive and high-pressure tactics to lure investors into scams. They may offer to sell to you shares that turn out to be worthless or
non-existent, or to buy your shares at an inflated price in return for an upfront payment following which the proceeds are never received.
If you receive unsolicited investment advice or requests:
• Check the Financial Services Register from fca.org.uk to see if the person or firm contacting you is authorised by the FCA
• Call the Financial Conduct Authority (“FCA”) on 0800 111 6768 if the firm does not have contact details on the Register or you are told they are out
of date
• Search the list of unauthorised firms to avoid at fca.org.uk/scams
• Consider that if you buy or sell shares from an unauthorised firm you will not have access to the Financial Ombudsman Service or Financial Services
Compensation Scheme
• Think about getting independent financial and professional advice
If you are approached by fraudsters please tell the FCA by using the share fraud reporting form at fca.org.uk/scams where you can find out more
about investment scams. You can also call the FCA Consumer Helpline on 0800 111 6768. If you have already paid money to share fraudsters you
should contact Action Fraud on 0300 123 2040.
96  
## CT UK Capital and Income
## Investment Trust PLC
## Report and Accounts
## 2022
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