Invesco Annual Financial Report Year Ended 31 December 2025 # Invesco Bond Income Plus Limited ## Income you can set your clock by† ![img-0.jpeg](img-0.jpeg) --- # Investment Objective The Company's investment objective is to seek to obtain capital growth and high income from investment, predominantly in high-yielding fixed-interest securities. ## Investment Policy The Company seeks to provide a high level of dividend income relative to prevailing interest rates mainly through investment in bonds and other fixed-interest securities. The Company also invests in equities and other equity-like instruments consistent with the overall objective. ## Contents ![img-1.jpeg](img-1.jpeg) Strategy ![img-2.jpeg](img-2.jpeg) Governance ## Overview: Financial Information and Performance Statistics ...3 Chairman's Statement ...6 ## Strategic Report: Portfolio Managers' Report ...9 Business Review ...11 ## Investments: Geographic and Industry Analyses ...21 Currency Exposure ...22 Bond Rating Analysis ...23 Investments in Order of Valuation ...24 Directors ...33 Directors' Report ...34 The Company's Corporate Governance Framework ...37 Corporate Governance Statement ...38 Audit & Risk Committee Report ...41 Directors' Remuneration Report ...43 Directors' Responsibilities Statement ...45 --- 1 # 3 Financial ![img-3.jpeg](img-3.jpeg) Shareholder Independent Auditor's Report ...47 Statement of Comprehensive Income ...52 Statement of Changes in Equity ...53 Balance Sheet ...54 Statement of Cash Flows ...55 Notes to the Financial Statements ...56 Notice of Annual General Meeting ...74 Shareholder Information ...76 Advisers and Principal Service Providers ...77 Glossary of Terms and Alternative Performance Measures ...78 Alternative Investment Fund Managers Directive Disclosures ...82 --- Invesco Bond Income Plus Limited ![img-4.jpeg](img-4.jpeg) # Strategy ## Overview: Financial Information and Performance Statistics ...3 Chairman's Statement ...6 ## Strategic Report: Portfolio Managers' Report ...9 Business Review ...11 ## Investments: Geographic and Industry Analyses ...21 Currency Exposure ...22 Bond Rating Analysis ...23 Investments in Order of Valuation ...24 --- # Financial Information and Performance Statistics Total Return Statistics$^{(1)(2)}$ with dividends reinvested Change for the year (%) ● 2025 ● 2024 Net asset value - total return with dividends reinvested 8.7% 8.5% Share price - total return with dividends reinvested 8.0% 8.8% Capital Statistics | At 31 December | 2025 | 2024 | % change | | --- | --- | --- | --- | | Net assets (£'000) | 410,275 | 345,799 | +18.6 | | Net asset value per ordinary share$^{(2)}$ | 172.87p | 170.87p | +1.2 | | Share price$^{(1)}$ | 175.00p | 174.00p | +0.6 | | Premium$^{(2)}$ | 1.2% | 1.8% | | | Gearing$^{(2)}$: | | | | | - gross gearing | 9.3% | 13.1% | | | - net gearing | 2.8% | 9.9% | | Performance Statistics | Year Ended 31 December | 2025 | 2024 | % change | | --- | --- | --- | --- | | Revenue earnings per ordinary share | 13.07p | 12.08p | | | Capital earnings per ordinary share | 1.08p | 1.57p | | | Total earnings per ordinary share | 14.15p | 13.65p | | | Dividend per ordinary share for the year | 12.2500p | 11.6875p | +4.8 | | Ongoing Charges Ratio$^{(2)}$ | 0.88% | 0.89% | | (1) Source: LSEG Data & Analytics. (2) Alternative Performance Measure (APM). See Glossary of Terms and Alternative Performance Measures on pages 78 to 81 of the financial report for details of the explanation and reconciliations of APMs. $^{1}$ Front Page - Capital at risk. Income not guaranteed. --- Ten Year Record | Year to 31 December | Dividends on ordinary shares | | Ongoing charges % | Net Assets £'000 | Net asset value per ordinary share p | Share price p | | --- | --- | --- | --- | --- | --- | --- | | | Amount £'000 | Rate p | | | | | | 2016 | 8,995 | 10.0000 | 1.01 | 174,193 | 189.32 | 191.00 | | 2017 | 9,429 | 10.0000 | 0.98 | 186,634 | 195.40 | 199.50 | | 2018 | 9,648 | 10.0000 | 0.98 | 173,489 | 178.69 | 175.00 | | 2019 | 9,870 | 10.0000 | 1.02 | 192,186 | 192.11 | 197.00 | | 2020 | 10,173 | 10.0000 | 0.99 | 197,675 | 194.29 | 189.75 | | 2021^{(1)(2)} | 16,452 | 10.7500 | 0.87 | 326,730 | 193.82 | 187.25 | | 2022 | 19,127 | 11.2500 | 0.86 | 281,089 | 162.20 | 166.00 | | 2023 | 20,556 | 11.5000 | 0.91 | 304,629 | 168.58 | 171.00 | | 2024 | 23,168 | 11.6875 | 0.89 | 345,799 | 170.87 | 174.00 | | 2025 | 27,299 | 12.2500 | 0.88 | 410,275 | 172.87 | 175.00 | (1) On 19 May 2021 and following a contractual scheme of reconstruction, after which 66,836,392 new ordinary shares were issued for net proceeds of £130,092,000 to the shareholders of Invesco Enhanced Income Limited, in lieu of their investment in that Company. (2) Following the merger and with effect from 19 May 2021 the management fee was reduced from an annual fee of 0.75% to 0.65% of total assets less current liabilities. ## Ten Year Total Return All figures rebased to 100 at 31 December 2015. ![img-5.jpeg](img-5.jpeg) Source: LSEG Data & Analytics. --- | ![img-6.jpeg](img-6.jpeg) | | | | --- | --- | --- | --- 6 ![img-7.jpeg](img-7.jpeg) # Chairman's Statement ## Highlights - Net asset value ('NAV') and share price total returns with dividends reinvested for the year of 8.7% and 8.0% respectively(1). - Shares traded at a premium for majority of 2025 leading to a strong demand for shares resulting in 34.95m shares being issued, raising gross proceeds of £60.50m. - In addition strong issuance demand continued in 2026 with a further 20.12m shares issued, including a successful placing and retail offer, raising £34.97m in gross proceeds. - Dividend increased to 12.25p per share for 2025. Dividend target of 12.25p per share unchanged for 2026. - Dividend continues to be fully covered by current year net revenue along with revenue reserve growth. (1) Alternative Performance Measure ('APM'). See Glossary of Terms and Alternative Performance Measures on pages 78 to 81 of the financial report for details of the explanation and reconciliations of APMs. High yield markets benefitted from a largely favourable macroeconomic and political environment in 2025. Modest economic growth and subdued inflation allowed central banks to continue to ease monetary policy and in the UK the Bank of England reduced interest rates on four occasions while in the USA the Federal Reserve implemented three rate cuts in 2025. In contrast to 2024 politics took more of a backseat although President Trump's 'Liberation Day' tariff announcements on 2 April 2025 did result in a bout of market nervousness. High yield markets made good progress and credit spreads - a key barometer of market confidence - settled around the lower end of their historical ranges. ## Performance The Company's NAV and share price total returns for the year were 8.7% and 8.0%, respectively. The 8.7% NAV return was higher than both the 7.4% achieved by the ICE Bank of America Merrill Lynch European High Yield Index ('the Index') and the average return of 7.3% for funds in the Investment Association Sterling Strategic Bond Sector. The Company's investment performance continues to compare favourably with the Index over the longer term. For the five and ten years to the end of 2025 the Company's NAV total return was 23.9% and 76.5% respectively compared to total returns of 25.4% and 68.6% for the Index. ## Income Account It is pleasing to report that we were once again able to increase the dividend paid to shareholders. We announced a dividend for 2025 of 12.25p per share, a 4.8% increase on the 11.6875p per share for 2024. Our dividend yield of 7% comfortably exceeded the rate of inflation and the dividend was 1.07x covered by earnings. The dividend was paid in four instalments, with the fourth dividend payment on the 20 February 2026 in the form of an interim dividend. Paying the final instalment in the form of an interim dividend means that it can be made earlier than would be the case had we declared a final dividend since this would require approval at the Annual General Meeting later in the year. We expect to continue the Company's long record of providing shareholders with a high level of income relative to interest rates in 2026 and our dividend target of 12.25p per share remains unchanged. The Company's long-term success in providing shareholders with a consistently high level of income is the result of our Manager's rigorous investment process and expertise in managing high yield portfolios. Moreover, we are able to enhance returns by making use of the powers available to us as an investment company, for example in our use of gearing which I discuss in more detail later in this Statement. Lastly, we retained our position as the largest company in our Association of Investment Companies ('AIC') sector and our size means that we are in a relatively good position to spread the costs of running the Company. ## Discount/Premium The vast majority of investment trusts have traded at wide discounts to their NAV's since the start of 2022. Despite this backdrop, demand for the Company's shares remained very encouraging and our share price remained at a healthy premium to NAV throughout 2025, ending the year at a premium of 1.2%. Where the Board is able to reduce the gap between our share price and NAV we will take action and in 2025 we continued to issue shares to meet the strong demand for shares. We issued a total of 34,950,000 shares during the year and since the start of 2026 we have issued a further 20,122,588 shares, including a successful placing of 14.37 million shares in February. Invesco Bond Income Plus Limited is the product of the merger in May 2021 between City Merchants High Yield Trust Limited and Invesco Enhanced Income Limited and as we approach the fifth anniversary of the merger it is extremely pleasing to be able to report that the --- Company has grown its shares in issue by a total 40.8% in the period following the merger. New shares are issued at a small premium to NAV which ensures that existing shareholders are not disadvantaged while the growth in the Company also benefits shareholders by increasing the liquidity of our shares. ## Ongoing Charges A key objective for the Board is to ensure that the costs incurred in managing the Company are competitive and we use the Company's ongoing charges ratio (OCR) to measure these costs. Details of the OCR can be found on page 12. The OCR for the year was 0.88% compared to 0.89% in the previous year. The growth in our shares in issue discussed in the previous paragraphs provides a further benefit to shareholders in that it allows us to spread the Company's fixed costs over a larger base and hence to place downward pressure on our OCR. I am pleased to report that our OCR remains the lowest within our AIC sector (Debt - Loans and Bonds). ## Gearing The degree to which the portfolio is geared is determined by the Portfolio Managers according to their assessment of the opportunities and risks within the high yield market. The maximum amount of borrowing is 30% of total assets and throughout the year the Company maintained a geared portfolio. As at 31 December 2025 gross gearing was 9.3% (13.1% as at the 31 December 2024). Net gearing was 2.8% at year-end compared to 9.9% at the start of the year. Our preferred method of gearing remains the use of repurchase agreements ('repo agreements'), which are described in more detail on page 12. ## The Board In June this year I will complete nine years with the Board and consequently, in accordance with good corporate governance practice, I will not seek re-election at the 2026 AGM. As a result of our succession planning and subject to regulatory approval, I am delighted to report that Mark Bridgeman will succeed me as Chair. Mark will be appointed to the Board following the conclusion of the 2026 AGM. Mark's background is in investment management and he will bring extensive financial and leadership qualities to the Board. I have no doubt that the Company will continue to flourish under his leadership. I would like to take this opportunity in what is my final Chairman's Statement to thank all colleagues past and present who have ensured that my time with the Company has been enjoyable and rewarding. ## Marketing, Investor Engagement and Communication A primary focus for your Board, both last year and continuing into the current year, is to raise the Company's profile and expand the pool of investors familiar with its investment proposition and strong track record. Ultimately, the Board aims to grow the Company's size, which is expected to enhance share liquidity and reduce the ongoing charges ratio. As part of this focus, over the last 12 months the Board has reviewed the Company's marketing and communications strategy and refreshed the value proposition and agreed improvements to the Company's dedicated page on the Investment Manager's website at www.invesco.co.uk/bips. Engaging with our shareholders is of utmost importance. Over the past year, your Investment Manager has actively sought opportunities to meet with shareholders and prospective investors, both virtually and in person, to discuss the Company's strategy, performance, and outlook. We greatly value the feedback received. Should you wish to communicate with the Board or the Investment Manager, please reach out via email at investmenttrusts@invesco.com. If you have not already done so, we encourage you to sign up for updates on the Company, its portfolio, and insights from your Portfolio Managers. You can do this by scanning the QR code below with your smartphone or device, visiting the Company's dedicated page on the Investment Manager's website at https://digitalservices.invesco.com/uk/en/investment-trusts-subscriptions, or by contacting Invesco directly at investmenttrusts@invesco.com. ![img-8.jpeg](img-8.jpeg) ## AGM The AGM will be held on 17 June 2026 at 9.30am at the Jersey offices of our Company Secretary. Further details of the AGM arrangements can be found on page 35. ## Outlook The immediate outlook for high yield securities is overshadowed by events in the Middle East. On 28 February 2026 the US and Israel launched coordinated strikes against the Iranian leadership and key strategic assets. Iran responded with widespread missile and drone attacks and the consequent disruption to oil supplies resulted in a surge in oil prices and a growing risk of rising inflation. At the time of writing it is unclear how or when the conflict will be resolved and hence it is extremely difficult to reach any firm conclusions on the outlook for global economy and financial markets. There is a clear risk Iran may prevent shipping resuming through the Gulf for an extended period with the result that inflation would be higher and economic growth lower in 2026. On the other hand if military action is concluded and the disruption to shipping turns out to be short lived then I would expect the global economic backdrop in 2026 to be broadly supportive for corporate earnings, balance sheets and credit quality. The Company began 2026 with a relatively conservative exposure to risk compared to its history. Net gearing is low and the overall credit exposure is tilted towards higher quality bonds and well diversified, giving some resilience to potential shocks. Together with this lower-risk starting point, the Company's closed ended structure makes it well positioned to take advantage of a sell-off when good quality bonds could be available at deeply discounted prices, locking in returns for the future. Furthermore, in an uncertain world a regular, dependable source of income is key for our shareholders and despite the challenging geopolitical outlook I have no doubt that your Company will continue to meet this requirement in 2026. ## Tim Scholefield Chairman 31 March 2026 --- | ![img-9.jpeg](img-9.jpeg) | | | | --- | --- | --- | --- 9 ![img-10.jpeg](img-10.jpeg) ## Portfolio Managers' Report ### Q&A #### Portfolio Manager **Rhys Davies, CFA, Fund Manager** Rhys is a fund manager for the Invesco Fixed Interest Europe team, based in our Henley office. He began his investment career with Invesco in 2002, moving to the Henley Fixed Interest team in 2003. He became a fund manager in 2014. He manages high yield credit portfolios. He holds a BSc (Honours) in Management Science from the University of Manchester Management School. He is a CFA charterholder. ![img-11.jpeg](img-11.jpeg) ## Deputy Portfolio Manager **Edward Craven, FCA, Fund Manager** Edward is a fund manager for the Invesco Fixed Interest Europe team, based in our Henley office. He began his career with KPMG in 2003. In 2008 he moved to The Royal Bank of Scotland, where he worked in structured finance. He joined the team at Invesco in 2011 as a credit analyst and became a fund manager in 2020, managing multi-asset and high yield funds. He holds a Master's degree in Physics from the University of Bath. He is an FCA qualified chartered accountant. ## What happened in the bond markets in 2025? Investment in corporate bonds in 2025 was rewarded with a return well above cash and UK government bonds. For a third year, high yield bonds delivered returns that were positive and higher than investment grade. However, returns were lower than in 2023 and 2024 and there was less incremental return for investors who chose to take more credit risk. Total return for European High Yield was 7.4% (1), compared to 4.3% for cash (2) and 5% for UK gifts (3). The sterling investment grade market returned 7.0% (4). Most of this 7.4% came from income. The return from price appreciation was relatively modest. Over the course of the year, the yield to maturity of the high yield index fell from 6.1% to 5.8%. It peaked near 9% in 2022. The credit spread tightened from 3.2% to 2.8%. Again, this change is relatively modest - it was 6.8% in 2022. In 2024 the average bond price in the index rose from 92.0 to 97.8. In 2025 it rose from 97.8 to 98.6. While the high yield market as a whole outperformed investment grade, lower credit quality did not outperform within high yield. Spreads tightened more for higher-quality BB than for lower-quality B rated bonds. In fact, B spreads widened slightly. So within high yield, prudence was rewarded. The return of 7.4% for high yield is a reminder of the potential of bonds to deliver attractive total returns in the world of higher yields we have inhabited since 2022. The fundamental backdrop for the market was strong. Interest rates fell. Both the Bank of England and the European Central Bank cut four times (a total of 1% for each). The market has priced in expectation of another one or two cuts from the Bank of England this year. The ratio of debt to earnings and the interest coverage ratio for European high yield companies were steady and comfortably within the historical range (5). Issuance of bonds rose, but so did demand. Money has been flowing into the market steadily for more than two years (6). Viewed in the context of these factors, it makes sense that indicators of the risk premium in corporate debt, for example the iTraxx XOVER index, are at multi-year lows. But it is worth remembering that this support has persisted, almost unbroken, through a year of rapid and unusual political change. Investors appear to have shown remarkable sang-froid in the face of increased and volatile trade tariffs, military action and geopolitical volatility in the Middle East and challenges to the post-World War II system of global alliances. ## How did the company perform? Over the 12 months to 31 December 2025 the share price rose from 174.00p to 175.00p. With dividends reinvested, the Company delivered a share price total return of 8.0%. The net asset value per share total return with dividends reinvested was 8.7%. ## What drove this return? Our portfolio is focused on higher yielding bonds, but with a substantial allocation to investment grade. The starting yield in 2025 for European high yield bonds was 6.1% and for sterling investment bonds 5.6%. These yields provided the base for our returns, which were then enhanced by bond and market selection, our leverage strategy and our trading. (1) ICE BofA European Currency High Yield Index, hedged to GBP. (2) UK Treasury Bills 3 Months. (3) ICE BofA UK Gift Index. (4) ICE BofA Sterling Corporate Index. (5) JP Morgan, High Yield Talking Points - High Yield Issuer Fundamentals, 20 January 2026. (6) JP Morgan, European Credit Fund Flows, 9 January 2026. --- The parts of the portfolio which made the biggest contributions to return were, as usual, high yield corporate bonds and subordinated financial securities. Subordinated bank debt was one of the strongest parts of the market. Although we have become more cautious as valuations have risen, reducing our overall allocation, we added to positions in some high yielding, smaller bank names. Across the corporate high yield market, we exercised caution on valuation. The ability to use gearing to increase income is a key feature of the closed-ended structure of the investment trust. Gearing allows us to add credit exposure. We use it as a tool for our general management approach - seeking to align the level of risk with our view of the level of available reward. As valuations have continued to rise over the last couple of years, we have moderated the level of gearing. At the end of 2024, gross borrowing was 13.1% and net gearing was 9.9%. At the end of 2025, the equivalent numbers were 9.3% and 2.8%. We manage our leverage in line with our view of market value. This boosted returns in 2025. 2025 was a generally strong period for our markets, but it was not without its moments! In particular, markets were weak in the build-up to and immediate aftermath of the US import tariff announcements in April. This was a quite short-lived sell-off, but we used it to add to positions, both bonds we already held and others we had chosen not to buy on the terms on which they were originally offered to the market. This allowed us to enhance yield and boost our total return. Looking at the individual securities which made the largest positive contributions to returns, financials feature - both smaller banks we added, such as Atom and United Trust Bank (UTB), and names bought in April, such as Aviva. Amongst the biggest detractors there is less of a sector bias. Some lost value due to poorer operational performance (for example, the transport company Mobico Group), others to changes in their business environment (for example, gaming name 888.com, hit by changes to UK gambling taxation). One additional factor which helped our returns was the decision to slightly increase the portfolio's sensitivity to interest rate changes. Our modified duration averaged 3.8 over the year, which meant that we benefitted more from government bond yields and the falling rate environment than the general high yield market. ## How have you managed your asset allocation? We seek to align our level and type of risk to the reward available in the market. As credit markets rallied strongly in 2023 and 2024, we reduced our exposure to credit risk. Our allocation to high yield rated bonds fell from 80% in late-2022 to 68% at the end of 2024. Investment grade rose. With the much more modest change in the level of yield in 2025, our allocations have been more stable, high yield (bonds rated BB+ and below) declining from 65% to 58%. Investment grade has increased more modestly from 27% to around 30%. Duration remains slightly higher than the high yield market. Also, with a view to aligning risk with reward in a more highly valued market, we have reduced gross portfolio leverage from 13.1% to 9.3%. One risk we have held a bit more of in the last couple of years is liquidity risk. As a closed-ended vehicle, the trust does not face the redemption risk of an open-ended fund. We therefore feel that it is more appropriate in this portfolio to hold some bonds from smaller bond deals, where there is consequently likely to be less market liquidity if we want to sell. We have increased our allocations to bonds in this category over the past several quarters, to about 7% of our portfolio. The compensation for this risk is higher coupons. Index Credit Default Swaps are a useful tool to manage credit risk by taking long or short exposure to a broad range of underlying bonds, as opposed to buying or selling individual bonds in the portfolio. We have used them over the course of 2025 to reduce credit risk, as part of our wider strategy of holding a more defensive portfolio in an environment of tighter credit spreads. ## How is Environmental, Social and Governance ('ESG') integrated in the investment process? The portfolio is not bound by any specific ESG criteria. However, ESG factors are important in our credit analysis and our investment decisions. We incorporate ESG considerations in our process when we research companies, when we engage with companies and as part of ongoing monitoring. Our credit analysts assign an ESG rating to issuers they cover. One of the resources we benefit from as part of the wider Invesco team is the data and the expertise of the Invesco ESG team. The ESG team provides a wide range of services to us, including portfolio monitoring and meetings with managers to assess portfolios, along with support for meetings with companies and deep knowledge on particular ESG issues. Our analysts have worked hard over several years to assess and monitor the ESG factors relating to the companies they cover. In 2025, our team had 70 ESG engagements - either meetings dedicated to ESG issues or ESG discussions within wider meetings. These interactions tend to cover a wide range of topics across environmental, social and governance and vary from name to name. For example, Invesco's recent engagement with Anglian Water focused on environmental issues such as pollution incidents and compliance with wastewater investigations. With Diageo, the meeting covered emissions, biodiversity initiatives and recycling. Governance questions tend to feature more for high yield investors than they might for others, due to the higher proportion of privately owned companies. ## How is the bond market looking as we begin 2026? Entering 2026, we viewed the market as well-supported but also quite fully valued. Corporate earnings were growing and leverage and debt-affordability metrics were far from stressed levels. In this environment, supply of bonds was high but was matched by demand as money flowed into the asset class. We had a broadly positive macroeconomic outlook, although perhaps not so rosy as many economic commentators. Of greater concern was the tight level of credit spreads, on a historical basis, and the potential for these to widen in 2026. The outbreak of military conflict in the Persian Gulf has added a great deal of risk to the economic outlook. This has been reflected in some market weakness, but we think there is potential for more. Disruption in energy supplies impacts inflation directly. Expectations for interest rates have already risen substantially. For how long the conflict persists is a crucial unknown. It will have a bearing on the size of the inflationary impulse and on the extent to which growth is affected as well as inflation. Credit spreads in our market have widened in recent weeks but they are still relatively low. We are confident that we can deliver the income needed for the trust's dividends while still aligning risk with reward prudently. As set out earlier in this report, our portfolio is relatively conservative, with substantial investment grade exposure and less leverage. This positioning was built on the view we have had for some time - that valuations were high and the reward for risk was not very attractive. We think it will serve us well in the higher risk environment we now face, offering some protection. If we see further weakness, either due to a general heightening in risk-aversion or the deterioration of corporate fundamentals, we will be eager to assess opportunities to add exposure to credit-worthy bonds at attractive yields. ## Rys Davies ## Edward Craven Portfolio Managers 31 March 2026 --- 11 # Business Review ## Purpose, Business Model and Strategy ### Invesco Bond Income Plus Limited is a Jersey domiciled investment company which is listed on the London Stock Exchange The Company's purpose is to generate returns over the long-term for its shareholders by investing their pooled capital to achieve the Company's investment objective through the application of its investment policy (set out below) and with the aim of spreading investment risk. The strategy the Board follows to achieve the objective is to set investment policy and risk guidelines, together with investment limits, and to monitor how they are applied. The business model the Company has adopted to achieve its objective is to contract investment management and administration to appropriate external service providers, who are subject to oversight by the Board. The principal service providers are: - Invesco Fund Managers Limited (the 'Manager') to manage the portfolio in accordance with the Board's strategy; and - JTC Fund Solutions (Jersey) Limited (the 'Company Secretary') to provide company secretarial, compliance and general administration services. In addition to the management and administrative functions of the Manager and the Company Secretary, the Company has contractual arrangements with Computershare Investor Services (Jersey) Limited to act as registrar and the Bank of New York Mellon (International) Limited ('BNYMIL') as depository and custodian. The Board has oversight of the Company's service providers, and monitors them on a formal and regular basis. The Board has a collegiate culture and pursues its fiduciary responsibilities with independence, integrity and diligence, taking advice and outside views as appropriate and constructively challenging and interacting with service providers, including the Manager. The portfolio managers responsible for the day-to-day management of the portfolio are Rhys Davies, Portfolio Manager and Edward Craven, Deputy Portfolio Manager, supported by the wider fixed interest team. The Company is an alternative investment fund for the purposes of the Alternative Investment Fund Managers Directive. ## Investment Objective and Policy ### Investment Objective The Company's investment objective is to seek to obtain capital growth and high income from investment, predominantly in high-yielding fixed-interest securities. ### Investment Policy The Company seeks to provide a high level of dividend income relative to prevailing interest rates mainly through investment in bonds and other fixed-interest securities. The Company also invests in equities and other equity-like instruments consistent with the Investment Objective. This Investment Policy should be read in conjunction with the descriptions of Investment Style, Investment Limits, Derivatives and Currency Hedging, and Borrowings set out below. ### Investment Style The Manager seeks to ensure that the portfolio is diversified, having regard to the nature and type of securities (including duration, credit rating, performance and risk measures and liquidity) and the geographic and industry sector composition of the portfolio. The Company may hold both illiquid securities (for example, securities where trading volumes are relatively low and unlisted securities) and concentrated positions (for example, where a high proportion of the Company's total assets are comprised of a relatively small number of investments). ### Investment Limits - the Company may invest in fixed-interest securities, including but not restricted to preference shares, loan stocks (convertible and redeemable), corporate bonds and government stocks, up to 100% of total assets; - investments in equities may be made up to an aggregate limit of 20% of total assets; - the aggregate value of holdings of shares and securities in a single issuer or company, including a listed investment company or trust, will not exceed 15% of the value of the Company's investments; and - investments in unlisted investments will not exceed 10% of the Company's total assets for individual holdings and 25% in aggregate. All the above limits are measured at the time a new investment is made. ## Derivatives and Currency Hedging The Company may enter into derivative transactions (including options, futures, contracts for difference, credit derivatives and interest rate swaps) for the purposes of efficient portfolio management. The Company will not enter into derivative transactions for speculative purposes. Efficient portfolio management may include reduction of risk, reduction of cost and enhancement of capital or income through transactions designed to hedge all or part of the portfolio, to replicate or gain synthetic exposure to a particular investment position where this can be done more effectively or efficiently through the use of derivatives than through investment in securities or to transfer risk or obtain protection from a particular type of risk which might attach to portfolio investments. The Company may hedge against exposure to changes in currency rates to the full extent of any such exposure. ## Borrowings The Company's borrowing policy is determined by the Board, which has set a maximum of 30% of the Company's total assets. This limit may be varied from time to time in the light of prevailing circumstances, but has not been changed since the Company's incorporation in its current form. The Manager has discretion to --- borrow within the limit set by the Board. Any borrowings are covered by investments in matching currencies to manage exposure to exchange rate fluctuations. The Board has reviewed the methods of financing available to the Company including repo financing whereby a company participates in sale and repurchase arrangements in connection with its portfolio. Under these arrangements, a company sells fixed interest securities and is contractually obliged to repurchase them at a fixed price on a fixed date, whilst retaining economic exposure to the securities sold. The difference between the (lower) sale price and the later purchase price is the cost (effectively interest) of the repo financing. Our preferred method of gearing remains the use of repurchase agreements and such repo financing agreements are in place and may be used subject to the aggregate 30% ceiling. At the year end, the sum borrowed using this method was £38.0 million (2024: £45.1 million). This represents gross gearing of 9.3% with cash and cash equivalents including margin of 6.5% giving net gearing of 2.8% (2024: gross gearing of 13.1% with cash and cash equivalents including margin of 3.2% giving net gearing of 9.9%)(1). ## Key Performance Indicators The Board reviews performance by reference to a number of Key Performance Indicators which include the following: - Performance - Dividends - Premium/Discount - Ongoing Charges Ratio ## Performance As the Company's objective is to seek to obtain capital growth and high income, the performance is best measured in terms of total return. There is no single index against which the Company's performance may be meaningfully assessed. Therefore, the Board refers to a variety of relevant data and this is reflected in both the Chairman's Statement and the Portfolio Managers' Report on pages 6 to 10. The Manager has a long-term horizon and consequently the Board pays close attention to returns over three and five years in its assessment of investment performance. As explained in the Chairman's Statement, the Board has noted the performance in the year and is satisfied with the longer term performance of the portfolio. ## Ten Year Total Return Graph All figures rebased to 100 at 31 December 2015. ![img-12.jpeg](img-12.jpeg) Source: LSEG Data & Analytics. ## Dividends and Dividend Payment Policy Dividends form a key component of the total return to shareholders and the Company has adopted a dividend policy to target an annualised dividend of 12.25p per share for 2026. In the year under review all 4 interim dividends paid to shareholders were 3.0625p totalling 12.25p. Dividends paid over the last ten years are shown in the table on page 4. The Board's Dividend Payment Policy is to pay dividends on a quarterly basis in May, August, November and February in respect of each accounting year. The timing of these regular three-monthly payments means that shareholders do not have an opportunity to vote on a final dividend. Recognising the importance of shareholder engagement, and although not required by any regulation, shareholders are given an opportunity to vote on this policy at the forthcoming AGM. ## Premium/Discount The Board monitors the price of the Company's shares in relation to their net asset value and the premium/discount at which the shares trade. Powers are taken each year to issue and buy back shares, which can assist short term management, however the level of discount or premium is mostly a function of investor sentiment and demand for the shares, over which the Board may have limited influence. The ideal would be for the shares to trade close to their net asset value. The following graph shows the premium/discount through the year. The Company's shares traded at a premium for the majority of the year, with the shares only trading at a discount during certain very limited periods of time due to market factors, but ended the year at a premium of 1.2%. ![img-13.jpeg](img-13.jpeg) Source: LSEG Data & Analytics. ## Ongoing Charges Ratio The expenses of managing the Company are carefully monitored by the Board. The standard measure of these is the ongoing charges ratio (OCR), which is calculated by dividing the sum of such expenses over the course of the year, including those charged to capital, by the average net asset value. This ongoing charges ratio provides a guide to the effect on performance of annual operating costs. The Company's ongoing charges ratio for the current year was 0.88%, compared to 0.89% for the previous year. Your Board continues to believe that costs remain competitive compared to those of similar products. ## Investment Process At the core of the portfolio managers' philosophy is a belief in active investment management. They seek to invest where they see the potential for attractive returns and to avoid risks that they do not think are well rewarded. Fundamental principles drive a genuinely active investment approach, with a strong emphasis on value. The investment process comprises four key elements to deliver the information the portfolio managers use to make their decisions: - top down, macroeconomic analysis - examining the factors that shape the economy; - credit analysis using internal and external research with a view to maximising returns from acceptable and understood credit risk exposure; - value assessment, considering the risk/return profile of any bond in relation to cash, core government bonds and the rest of the fixed interest universe; and (1) Alternative Performance Measure (APM). See Glossary of Terms and Alternative Performance Measures on pages 78 to 81 of the financial report for details of the explanation and reconciliations of APMs. --- - risk considerations, analysing all holdings to allow for a comprehensive understanding of risks involved to ensure diversification of the portfolio. The portfolio managers enter into the majority of positions with a view to holding them until their call or maturity date and their investment process is based on making investments where the yield to maturity or call appears to them to be at least an adequate reward for the risk. The nature of the high yield market and the Company's mandate mean that there will be occasions when the value the portfolio managers assessed in an investment is fully realised by the market. On these occasions, they may exit the position before maturity. The portfolio managers believe that it is good investment practice to try and keep the level of turnover low, whilst at the same time recognising that this should not at any time act as a deterrent to effective portfolio management. Turnover will generally be very low due to the long term nature of many of the holdings, and given the closed end nature of the Company, the portfolio managers are not presented with regular daily inflows and outflows which require managing. The portfolio managers also consider environmental, social and governance ('ESG') factors details of which are given on pages 17 to 20. ## Internal Control and Risk Management The Directors have overall responsibility for the Company's system of internal controls and are responsible for reviewing the effectiveness of these controls. This includes safeguarding of the Company's assets. The Directors have carried out a robust assessment of the principal and emerging risks facing the Company, including those that would threaten its business model, future performance, solvency and liquidity. The Audit & Risk Committee (the 'Committee'), on behalf of the Board, has established an ongoing process for identifying and assessing the risks to which the Company is exposed by reference to a risk control summary, which maps the risks, mitigating controls in place, and monitoring and reporting of relevant information to it. The review of the risk control summary also incorporated a robust assessment of new and emerging risks for monitoring purposes. As part of the process, the Committee has identified five risk categories: strategic; investment management; third party service providers; regulation and corporate governance; and operational. An explanation of these categories follows. ## Strategic Risk The Board sets the Company's strategy, including setting its objective and how this should be achieved. The Board assesses the performance of the Company in the context of the market and macro conditions and gives direction to, and monitors, the Manager's actions, and those of other third parties, on behalf of the Company. ## Investment Management Risk Investment management covers management of the portfolio together with cash management, gearing and hedging, all being areas the portfolio managers can control, and which generate the Company's investment performance. ## Third Party Service Providers Risk The Company has no employees and its Directors are appointed on a non-executive basis. The Company is reliant on Third Party Service Providers ('TPPs') for its executive functions. The Company's most significant TPPs are the Manager, to which portfolio management is delegated as well as certain administrative services including accounting and marketing and the Company Secretary. Other significant TPPs are the depository, custodian, registrar, external auditor and corporate broker. ## Regulation and Corporate Governance Risk The Company is required to comply with many regulations. For the year under review these included but were not limited to, the provisions of the Companies (Jersey) Law 1991, the UK Listing Rules, the Alternative Investment Fund Managers Directive, the Market Abuse Regulation, the FCA's Disclosure Guidance and Transparency Rules, the UK Corporate Governance Code, the AIC Corporate Governance Code and Statement of Recommended Practice and International Financial Reporting Standards ('IFRS') Accounting Standards as adopted by the European Union. ## Operational Risk Operational risk covers the day to day operational matters mainly at the Manager, but also at other TPPs. A matrix of the risks, set out according to their assessed risk levels after mitigation, enables the Directors to concentrate on those risks that are most significant, and also forms the basis of the list of principal risks and uncertainties on pages 14 and 15. The ratings take into account the Board's risk appetite and the ongoing monitoring by the Manager. Oversight of the control environment is based on the Company's relationship with its TPPs, all of which have clearly defined lines of responsibility, delegated authority, and control procedures and systems. The Company's main TPPs, the Manager, Fund Accounting and the Company Secretary, all have, a 'Three Lines of Defence Model', which is embedded into their risk management systems. The effectiveness of the Company's internal control and risk management system is reviewed at least twice a year by the Committee. The Committee received and considered, together with representatives of the Manager, reports in relation to operations and systems of internal controls of the Manager, Company Secretary, accounting administrator, custodian and registrar. The Committee also receives regular reports from the Company Secretary's compliance officer and the Manager's internal audit and compliance departments. The Committee also received a comprehensive and satisfactory report from the depository at the year end Committee meeting. The Company's risk management policies and procedures for financial instruments are set out in note 19 on pages 63 to 70. Due diligence is undertaken before any contracts are entered into with any third party service provider. The Manager regularly reviews, against agreed service standards, the performance of TPPs through formal and informal meetings, and by reference to third party independently audited control reports. The results of the Manager's reviews are reported to and reviewed by the Committee. These various reports and reviews did not identify any significant failings or weaknesses which were relevant to the Company during the year and up to the date of this Annual Financial Report. If any had been identified, the required remedial action would have been taken. Reporting to the Board at each board meeting comprises, but is not limited to: financial reports, including any hedging and gearing; performance against relevant indices and the Company's peers; the portfolio managers' review, including of the market, the portfolio, transactions and prospects; revenue forecasts; and investment monitoring against investment guidelines. The portfolio managers are permitted discretion within these investment guidelines, which are set by the Board. Compliance with the guidelines is monitored daily by the Manager. Any proposed variation to these guidelines is referred to the Board for consideration and approval. The Board, through the Management Engagement Committee, formally reviews the performance of the Manager, the Company Secretary and the other key TPPs annually. The Board has reviewed and accepted both the Manager's and Company Secretary's whistleblowing policy under which staff of both Invesco Fund Managers Limited ('the Manager') and JTC Fund Solutions (Jersey) Limited ('the Company Secretary') can, in confidence, raise concerns about possible improprieties or irregularities in matters affecting the Company. | 13 --- 14 # Principal Risks and Uncertainties The Board has carried out a robust assessment of the risks facing the Company, including those that would threaten its business model, future performance, solvency and liquidity. As part of this process, the Board conducted a full review of the Company's risk control summary and considered new and emerging risks. These are not necessarily principal risks for the Company, but may have the potential to be in the future. In carrying out this assessment, the Board considered the emerging risks facing the Company including geopolitical risks and uncertainties such as the ongoing conflicts in Ukraine and the Middle East, uncertain economic outlook, especially in Europe, USA & the UK as a result of geo-political tensions, evolving cyber threats (including risks associated with Artificial Intelligence) and ESG, including climate risk. The principal risks that follow are those identified by the Board as the most significant after consideration of mitigating factors and not intended to cover all the risk categories as shown in the Internal Control and Risk Management section on page 13. | Category and Principal Risk Description | Mitigating Procedures and Ongoing Controls | | --- | --- | | **Strategic Risk** | | | **Market and Political Risk** The Company invests primarily in fixed interest securities, the majority of which are traded on global security markets. The principal risk for investors in the Company is a significant fall and/or a prolonged period of decline in these markets. This could be triggered by unfavourable developments globally and/or in one or more regions, such as the current conflicts in Ukraine and the Middle East and other geopolitical tensions and uncertainties and their impact on the global economy. Since the end of the accounting year, conflict in the Middle East has significantly escalated with the US and Israel launching coordinated strikes against Iran. This escalation has contributed to increased market volatility and disruptions to global energy supply routes. Market risk also arises from movements in foreign currency exchange rates and interest rates. | An explanation of market risk and how this is addressed is given in note 19.1 to the financial statements. The Portfolio Managers' Report summarises particular macro economic factors affecting performance during the year and the portfolio managers' views on those most relevant to the outlook for the portfolio. The Directors continue to monitor developments closely during this period of heightened uncertainty and are actively assessing any potential implications for the Company. | | **Regulatory or Fiscal Changes** The Company is incorporated in Jersey which is a low tax jurisdiction subject to global scrutiny. Any adverse global regulatory or fiscal measures taken against such low tax jurisdictions, could negatively impact the Company. | The Board receives regular reports from the Manager and Company Secretary which highlight any proposed changes to the regulatory/fiscal regimes which might impact the Company. In 2024, Jersey received a positive report from MoneyVal, the Council of Europe's permanent monitoring body. MoneyVal concludes that Jersey's effectiveness in preventing financial crime is among the highest level found in jurisdictions evaluated around the world. More information can be found here: https://www.gov.je/News/2024/Pages/Jersey%E2%80%99sStrengthInCombattingFinancialCrimeIsRecognised.aspx | | **Wide Discount leading to Shareholder Dissatisfaction** The Company's shares are subject to market movements and can trade at a premium or discount to NAV. Should the Company's shares trade at a significant discount compared to its peers, then shareholder dissatisfaction may result if shareholders cannot realise the value of their investment close to NAV, with the ultimate risk that arbitragers join the share register. | The Board receives regular reports from both the Manager and the Company's corporate broker on the Company's share price performance and level of discount (or premium), together with regular reports on marketing and meetings with shareholders and prospective investors. The Board recognises the importance of the Company's scale in terms of the aggregate value of its shares in the market ('market cap') in creating liquidity and the benefit of a wide shareholder base, and seeks authority to both issue and buy back shares to assist with market volatility. The foundation to this lies in solid investment performance and an attractive level of dividend. | --- Category and Principal Risk Description Mitigating Procedures and Ongoing Controls # Third Party Service Providers Risk ## Unsatisfactory Performance by TPPs Failure by any service provider to carry out its obligations to the Company in accordance with the terms of its appointment could have a materially detrimental impact on the operations of the Company and affect its ability to pursue successfully its investment policy and expose it to reputational risk. Disruption to the accounting, payment systems or custody records could prevent the accurate reporting and monitoring of the Company's financial position. Details of how the Board monitors the services provided by the Manager and the other TPPs, and the key elements designed to provide effective internal control, are included in the internal control and risk management section on page 13. ## Cyber Risk The Company's operational structure means that cyber risk (information technology and physical security, including risks associated with Artificial Intelligence) predominantly arises at its TPPs. This cyber risk includes fraud, sabotage or crime perpetrated against the Company or any of its TPPs. The Audit & Risk Committee on behalf of the Board periodically reviews TPPs' service organisation control reports and meets with representatives of the Manager's Investment Management, Compliance, Internal Audit and Investment Trust teams as well as the Company Secretary's senior staff and Compliance team. The Board receives periodic updates on the Manager's and the Company Secretary's information security arrangements. The Board monitors TPPs' business continuity plans and testing - including their regular 'live' testing of workplace recovery arrangements. ## Business Continuity Risk Impact of a major event, such as Covid-19, on the operations of the service providers, including any prolonged disruption. The Manager's and other TPPs, business continuity plans are reviewed on a regular basis and the Directors are satisfied that the Manager has in place robust plans and infrastructure to minimise the impact on its operations so that the Company can continue to trade, meet regulatory obligations, report and meet shareholder requirements. The Board receives periodic reports from the Manager and TPPs on business continuity processes and has been provided with assurance from them all insofar as possible that measures are in place for them to continue to provide contracted services to the Company. ## Viability Statement This Company is an investment company whose business consists of investing the pooled funds of its shareholders to provide them with capital growth and a high income over the long term, predominantly from a portfolio of high yielding fixed income securities. Long term for this purpose is considered to be at least five years and the Directors have assessed the Company's viability over that period. However, the life of the Company is not intended to be limited to that or any other period. The main risks to the Company's continuation is a significant fall in markets or a prolonged period of decline due to political uncertainty or other macro factors outside the Company's control. This could lead to shareholder dissatisfaction through failure to meet the Company's investment objective, through poor investment performance or the investment policy not being appropriate in prevailing market conditions, any of which could affect the demand for and liquidity of the Company's shares. Accordingly, market and political/fiscal risks, are deemed by the Board to be the key principal risks of the Company and are given particular consideration in the continuing assessment of its long term viability. The Company's investment objective and policy are kept under review. The continued relevance of the investment objective and policy are underlined by the Company's annual continuation vote. Last year over 99% of the votes registered were in favour of continuation and the Board has no reason to believe that the continuation resolution will not be passed at the forthcoming and subsequent AGMs. Performance derives from returns for risk taken. The Portfolio Managers' Report on pages 9 and 10 sets out the current investment strategy of the portfolio managers. Whilst there has been an increase in the credit quality of the portfolio during the year, it remains the case that the portfolio continues to contain a high level of relatively high-yielding non-investment grade bonds and these carry a higher risk of default than investment grade paper. This is discussed further in note 19 to the financial statements. The Board has adopted investment limits within which the portfolio managers operate. The Directors and the portfolio managers constantly monitor the portfolio, its ratings and default risk. A bond rating analysis of the portfolio at the year end is shown on page 23. Exposure is weighted towards higher quality issuers where the risk of default is considered to be more remote. Performance has been strong for many years through different, and difficult, market cycles - as shown by the ten year total return performance graph on page 12. The investment policy has been stress tested by market events in recent times by both global and domestic events such as the pandemic and the conflicts in Ukraine and the Middle East. These events affected performance, but at no time in the past did they threaten the viability of the Company. Whilst past performance may not be indicative of performance in the future, the investment policy has been consistent throughout those past periods. Performance and demand for the Company's shares are not things that can be forecast. Indeed, whilst recent geopolitical and macroeconomic events may impact the Company, there are no current indications that performance or demand for the Company's shares may be permanently affected by such events over the next five years so as to affect the Company's viability. The Company is permitted to borrow up to a maximum of 30% of the Company's total assets and currently has no long-term debt | 15 --- obligations. Current borrowing is in the form of repo financing spread over a number of good quality counterparties whose credit-standing is reviewed periodically by the Manager. There is a maximum limit allowed with any one counterparty, and the repo entered into must have a maturity tenor of three months or less. Debt levels have been stress tested with more than adequate debt cover in place. As described in note 19.2 to the financial statements on pages 67 to 68 liquidity risk is not viewed by the Directors as a significant risk. The majority of the Company's assets are readily realisable and amount to many times the value of its short term liabilities and annual operating costs. Based on the above analysis, the Directors confirm that they have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the five year period of their assessment and the Directors consider that the Company's investment strategy will continue to serve shareholders well over the longer term. ## Investment Management As noted earlier, the Manager provides investment management and certain administrative services to the Company. The agreement is terminable by either party giving no less than three months' prior written notice and subject to earlier termination without compensation in the event of a material breach of the agreement or the insolvency of either party. The management fee is payable quarterly in arrears and is equal to 0.1625% of the value of the Company's total assets under management less current liabilities at the end of the relevant quarter. In addition, the Manager was paid a fee of £103,000 during the year for marketing services (2024: £103,000). The portfolio managers responsible for the day-to-day management of the portfolio are Rhys Davies, Portfolio Manager and Edward Craven, Deputy Portfolio Manager. ## The Manager's Responsibilities The Directors have delegated to the Manager the responsibility for the investment management activities of the Company, for seeking and evaluating investment opportunities and for analysing the accounts of investee companies. The Manager has full discretion to manage the assets of the Company in accordance with the Company's stated objectives and policies as determined from time to time by the Board and approved by shareholders. Within the guidelines specified by the Board, the Manager has discretion to make purchases and sales, make and withdraw cash deposits, enter into underwriting commitments and exercise all rights over the investment portfolio. The Manager also advises on currency exposures and borrowings. ## Assessment of the Manager The performance of the Manager is reviewed continuously by the Board and the ongoing requirements of the Company and services received are assessed annually with reference to key performance indicators as set out on page 12. The Management Engagement Committee is responsible for reviewing the Manager. Based on its recent review of activities, the Board believes that the continuing appointment of Invesco Fund Managers Limited remains in the best interests of the Company and its shareholders. ## Financial Position The Company's balance sheet on page 54 shows the assets and liabilities at the year end. The Company has repo financing agreements in place, with an amount of £38.0 million (2024: £45.1 million) borrowed at year end, representing gross gearing of 9.3% (2024: 13.1%) and net gearing of 2.8% (2024: 9.9%), after taking cash and cash equivalents including margin into account, as at 31 December 2025. ## Performance and Future Development The performance and future development of the Company depend on the success of the Company's investment strategy. A review of the Company's performance, market background, investment activity and strategy during the year, together with the investment outlook are provided in the Chairman's Statement and Portfolio Managers' Report on pages 6 to 10. ## Annual Continuation Vote The Articles of Association of the Company require that unless an ordinary resolution is passed at or before the Annual General Meeting ('AGM') each year releasing the Directors from the obligation to do so, the Directors shall convene a general meeting within six months of the AGM at which a special resolution would be proposed to wind up the Company. Having reviewed the performance of the Company, the Directors have no reason to believe that a resolution to release them from that obligation will not be passed at the AGM to be held later in the year. Further details can be found in note 2 (a) (ii) on page 56. ## Substantial Holdings in the Company The Company has been notified of the following holdings of 3% and over of the Company's ordinary share capital carrying unrestricted voting rights: | Fund Manager/Registered Holder | As at | | As at | | As at | | | --- | --- | --- | --- | --- | --- | --- | | | 28 February 2026 | | 31 December 2025 | | 31 December 2024 | | | | Holding | % | Holding | % | Holding | % | | Hargreaves Lansdown, stockbrokers (EO) | 49,293,992 | 19.19 | 44,928,699 | 18.96 | 38,088,524 | 18.83 | | Interactive Investor (EO) | 36,794,502 | 14.33 | 34,140,629 | 14.41 | 25,386,222 | 12.55 | | AJ Bell, stockbrokers (EO) | 24,666,816 | 9.60 | 20,817,911 | 8.79 | 14,946,175 | 7.39 | | Invesco* | 17,540,155 | 6.83 | 17,540,155 | 7.40 | 17,540,155 | 8.67 | | Redmayne Bentley, stockbrokers | 15,540,868 | 6.05 | 14,683,425 | 6.20 | 10,622,010 | 5.25 | | Charles Stanley | 10,891,138 | 4.24 | 10,515,903 | 4.44 | 10,063,995 | 4.98 | | HSDL, stockbrokers (EO) | 8,803,620 | 3.43 | 8,325,810 | 3.51 | 6,976,268 | 3.45 | EO: Execution only. * Held across a number of Invesco Funds. Invesco is not considered a related party. For further information see Related Party Transactions and Transactions with Manager note 23 on page 72. --- # Board's Duty to Promote the Success of the Company The Directors have a fiduciary duty to act, in good faith, for the benefit of shareholders taken as a whole. In the UK, section 172 of the Companies Act 2006 seeks to codify this duty and to widen the responsibility to incorporate the consideration of wider relationships that are necessary for the Company's sustainability. Although the Company is not incorporated in the UK, its ordinary shares are listed on the London Stock Exchange, hence the Board deems it appropriate for the Company to report against this UK statutory duty, being that the Directors have a duty to promote the success of the Company, whilst also having regard to certain broader matters, including the need to engage with employees, service providers, customers and others, and to have regard to their interests. This is reflected in the summary of the Board's responsibilities on pages 38 and 39. In fulfilling these duties, and in accordance with the Company's nature as an investment company with no employees and no customers in the traditional sense, the Board's principal concern has been, and continues to be, the interests of the Company's shareholders taken as a whole. Notwithstanding this, the Board has a responsible governance culture and also has due regard for broader matters so far as they apply. In particular, the Board engages with the Manager and Company Secretary at every Board meeting and the Management Engagement Committee also reviews the Company's relationships with these and other service providers, such as the registrar, corporate broker, depositary and custodian, at least annually. The assessment of the Manager consequent to these reviews is set out above. The Company formally communicates with its shareholders at least three times a year providing information about shareholder meetings, dividend payments and half-yearly and annual financial results. As set out on page 34, the Company uses a number of methods to engage with its shareholders via regular communications such as the monthly factsheet and through investor events and other media channels. The annual general meeting of the Company provides shareholders with the opportunity to attend and meet with the Directors and the Manager. The Company's AGM will be held on 17 June 2026 at 9.30am at the offices of JTC Fund Solutions (Jersey) Limited. Shareholders are welcome to attend the AGM in person. Shareholders who cannot attend in person are encouraged to submit their votes by proxy. # Board Diversity The Company's policy on diversity is set out on page 39, under the section 'Nomination and Remuneration Committee'. The Board considers diversity, including the balance of skills, knowledge, experience, gender and ethnicity amongst other factors when reviewing its composition and appointing new directors. The Board continues to recognise the importance of having a range of skilled, experienced individuals with the right knowledge represented on the Board in order to allow it to fulfil its obligations. In view of its relatively small size, the Board will continue to ensure that all appointments are made on the basis of merit against the specification prepared for each appointment. In doing so, the Board will seek to meet the targets set out in the FCA's UK Listing Rule 6.6.6R (9)(a), which are summarised below. In accordance with UK Listing Rule 6.6.6R (9), (10) and (11) the Board has provided the following information in relation to its diversity as at 31 December 2025, being the financial year-end of the Company. The information included in the tables below has been obtained following confirmation from the individual Directors. ## Board Gender as at 31 December 2025 | | Number of Board members | Percentage of the Board | Number of senior positions on the Board | Number in executive management^{A} | Percentage of executive management^{A} | | --- | --- | --- | --- | --- | --- | | Men | 2 | 40% | 1 | n/a | n/a | | Women | 3 | 60%^{B} | 1^{C,D} | n/a | n/a | A the Company does not disclose the number of directors in executive management as this is not applicable for an investment trust. B meets the target of 40% as set out in UKLR 6.6.6R (9)(a)(i). C the positions of Senior Independent Director and Chair of the Audit & Risk Committee are held by the same woman (Heather MacCallum). The latter position is not currently defined as a senior position under LR 9.8.6R (9)(a)(ii). D meets the target of 1 as set out in UKLR 6.6.6R (9)(a)(iii). ## Board Ethnic Background as at 31 December 2025 | | Number of Board members | Percentage of the Board | Number of senior positions on the Board | Number in executive management^{A} | Percentage of executive management^{A} | | --- | --- | --- | --- | --- | --- | | White British or other White (including minority-white groups) | 4 | 80% | 2 | n/a | n/a | | Minority ethnic | 1^{B} | 20% | 0 | n/a | n/a | A the Company does not disclose the number of directors in executive management as this is not applicable for an investment trust. B meets the target of 1 as set out in UKLR 6.6.6R (9)(a)(iii). There have been no changes since the year end that have affected the Company's ability to meet the targets set in UKLR 6.6.6R (9)(a). # Modern Slavery Act 2015 The Company is an investment vehicle and does not provide goods or services in the normal course of business, or have customers. Accordingly, the Directors consider that the Company is not required to make any slavery or human trafficking statement under the Modern Slavery Act 2015. # Sustainability-related Matters In relation to the portfolio, the Company has delegated the management of the Company's investments to the Manager. The Manager's approach to investment stewardship and to the use of sustainability-related information is outlined in its UK Stewardship Code Report, which sets out a number of principles that are intended to be considered in the context of its responsibility to manage investments in the financial interests of shareholders. A greenhouse gas emissions statement is included in the Directors' Report on page 34. --- The Manager forms part of the Invesco Ltd group, which is a signatory to, the United Nations Principles for Responsible Investment ('PRI'), Invesco scored four stars for its Investment & Stewardship Policy in its most recent PRI assessment. In addition, Invesco is an active member of the UK Sustainable Investment and Finance Association as well as a supporter of the Task Force on Climate-related Financial Disclosure ('TCFD') since 2019 and Invesco's latest iteration of its Global TCFD Report is available at https://www.invesco.com/content/dam/invesco/emea/en/pdf/ivz_global-tcfd-report.pdf. The Manager's investment team may take sustainability-related information (including selected environmental, social and governance data) into account as one input among many when evaluating investments, where relevant to the investment thesis and the Company's objectives. Third-party data and ratings may inform analysis but do not determine investment decisions. Investment professionals are supported by the Manager's investment stewardship function, which provides research and engagement support. Regarding stewardship, the Board considers that the Company has a responsibility as an investor towards ensuring that appropriate standards of corporate governance are maintained in the companies in which it invests. To achieve this, the Board does not seek to intervene in daily management decisions, but aims to support high standards of governance and, where necessary, will take the initiative to ensure those standards are met. The Company's stewardship functions have been delegated to the Manager. The Manager has adopted a clear and considered policy towards its responsibility as an investor on behalf of the Company. As part of this policy, the Manager takes steps to satisfy itself about the extent to which the companies in which it invest look after shareholders' value and comply with local recommendations and practices, such as the UK Corporate Governance Code. The Manager is also a signatory of the Financial Reporting Council's Stewardship Code, which seeks to improve the quality of engagement between institutional investors and companies to help improve long-term returns to shareholders and the efficient exercise of governance responsibilities. A copy of the current Manager's UK Stewardship Code Report can be found at https://www.invesco.com/content/dam/invesco/emea/en/pdf/2024-uk-stewardship-code-report.pdf ## How the investment team incorporates sustainable investing in its process The Invesco Fixed Income team ('IFI'), of which the portfolio managers are a part, has managed ESG-aware portfolios for more than two decades and their approach has consistently evolved. Exclusion based screening once dominated the ESG landscape, but has since been augmented by positive selection-based criteria for holdings as well as embedding decarbonisation objectives. This reflects how industry dynamics have changed and how the appetite for more sophisticated and targeted sustainability-linked outcomes has grown among clients. IFI believes that evaluating ESG criteria leads to better long-term risk-adjusted returns. With this in mind, IFI looks for a combination of materiality, momentum, and engagement. Materiality means being clear about the ESG considerations that have the potential to most impact an issuer's ability to meet its debt obligations. IFI integrate these ESG considerations into their fundamental research processes by providing an independent assessment of each investment, complementing third-party ESG ratings and expanding the investable universe to include issuers that lack external coverage. IFI maintain global standards for research and investment decision-making, allowing ESG considerations to be applied across asset classes where appropriate and enhancing comparability across multi-sector fixed income portfolios. Momentum means using expert analysis to determine which issuers are outpacing their peers in terms of making progress on ESG considerations. IFI believes that a link may exist between positive momentum in ESG characteristics and improving creditworthiness, which is potentially advantageous for fixed income prices and investment returns. Engagement means encouraging momentum by working with Invesco's Sustainable Investing Services team and other experts to engage with issuers to provide our views on matters such as strategy, transparency, capital allocation and ESG concerns. IFI view active ownership as a vital element of our fiduciary responsibilities to clients. The fixed income landscape is broad and varied. It encompasses government securities issued by countries, securitised debt, loans undertaken by private companies, and many other forms of asset. Geographical, structural, and regulatory differences mean that data availability, ESG factors, and management engagement levels are highly diverse. As a result, while the underlying approach taken by IFI to ESG is consistent, the path to arriving at an ESG-based assessment differs to account for the constraints and challenges posed by a particular asset class. It is important to highlight that integration is an ongoing strategic effort and these approaches will continue to evolve. ## ESG overview Although ESG integration forms part of the investment process, the Company is not managed to sustainable ESG objectives, constraints or outcomes. The portfolio managers' approach is centred on macroeconomic and corporate credit research and focuses on fundamental valuation to support the active management of portfolios. The Manager has always incorporated ESG analysis into its investment research because it believes that non-financial risks can have a material impact on credit risk and by identifying those risks, it can improve its credit risk assessment and produce better risk-adjusted returns in portfolios. The core objective of the Manager's ESG approach is to assess issuers' performance across environmental, social and governance factors and to determine where those risks are potentially material or mispriced. The fixed income universe is broad and varied. Geographical, structural and regulatory differences mean that data availability, ESG awareness and management engagement levels can vary greatly. As a result, while the investment team's commitment to ESG risk assessment is constant, the path to arriving at an ESG-based assessment necessarily differs to account for the constraints and challenges of different circumstances. ## Common Principles for ESG Research The Invesco team's approach to ESG is based on a belief that incorporating material environmental, social and governance risks into a broader risk assessment, leads to better long-term risk-adjusted returns. In order to do this, the team considers materiality and momentum. ## ESG analysis for corporate bonds IFI's credit analysts are tasked with understanding the ESG drivers for the companies they cover and conducting ESG-based analysis along with their fundamental financial analysis. This applies across corporate credit research teams in North America, Europe, and Asia. IFI's corporate research follows the same set of standards globally, encompassing investment grade and high yield issuers, whether an issuer is based in a developed or an emerging market country. This approach is also applied to short-dated securities held in IFI-managed global liquidity products. Analysts are primarily focused on identifying risk factors that could be financially material, and these may be common to all industry participants or unique to a specific issuer. --- The starting point for ESG assessment is at the industry level. Global sector teams set out common ESG risk factors for each industry, and individual analysts work within this framework on each issuer in their coverage area, while also seeking to identify idiosyncratic ESG risks to which individual issuers might be exposed. IFI also use third-party research and data to provide broad market context and transparency. These external sources supplement our proprietary research and assist analysts in identifying areas or issues of interest where engagement with company management is warranted. We engage directly with companies to better understand their positions and their future intentions. IFI and industry participants' increased focus and engagement on ESG factors has resulted in material improvements in ESG-related issuer reporting and heightened management focus on governance practices. IFI has developed its own ESG methodology and grading system to provide clear and consistent outputs for portfolio managers. Each issuer receives a proprietary overall ESG grade, accompanied by sub-grades covering the three pillars of E, S and G. In addition, ESG momentum is captured through trend assessments, which add further useful information for portfolio managers in the same way that creditworthiness trend assessments do for fundamental credit ratings. All ESG research is stored on the Manager's research platform so that portfolio managers across asset classes may easily access it. IFI is committed to continuous innovation and improvement in its ESG corporate research process. For example, with the increased issuance of green bonds and growing client interest, we have recently developed specialised templates to aid in analysing such bonds. Within the investment team, ESG views are formed by credit analysts and feed into their fundamental investment recommendations. Analysts work with their colleagues at a sector level across our global platform to identify key ESG metrics per sector to consider when analysing individual companies. This all forms part of the toolkit which portfolio managers have at their disposal when constructing portfolios. IFI believes that evaluating ESG criteria leads to better long-term risk adjusted returns. IFI follows an investment approach that integrates ESG into the fundamental research carried out by Invesco's credit research analysts. Integrating ESG criteria into research provides an independent assessment of each investment's suitability for responsible investment strategies to complement ratings from third party providers or indeed, expand the investable universe for issuers not yet covered by external providers. ## External ESG resources Invesco has a range of third-party research and data available as an input to support the analysts in their ESG risk assessment. Examples: - MSCI ESG Scores, industry percentiles and weights - CDP carbon and scoring data - Sustainalytics Risk scores and category summary data - Global Compact compliance or violation fields (MSCI and Sustainalytics) - ISS Climate Solutions - Scope 1 to 3 emissions and science-based emission targets - Controversies - MSCI & Sustainalytics data feeds ## Invesco's Stewardship resources Invesco's Global Sustainable Investing Services team has resources in research, portfolio analytics and management engagement. Furthermore, Invesco's own proprietary developed tool - ESGCentral - brings together multiple external and internal datasets and maps them to portfolios and benchmarks to provide portfolio and issuer-level sustainability analytics and screening capabilities for strategies and clients that request such analysis. Availability varies by dataset, license, and mandate. In addition to portfolio views, ESGCentral can surface issuer-level analytics linked to portfolio holdings (and, where relevant, benchmark constituents). These issuer views provide snapshots of selected indicators, disclosures, and controversies (with source and date), peer comparisons and point-in-time vs historical perspectives. Issuer-level analytics are analytical reference views to support research and stewardship workflows; they do not impose firmwide criteria or generate compliance determinations. While disclosure levels vary greatly by the issuer due to sector, size and regional factors, these data analytics can provide a comprehensive picture of each issuer's performance. ## The importance of fundamental ESG analysis At the issuer level, data availability, disclosure rules and management engagement levels can vary across each global sector. Raw ESG data can sometimes present a partial or even misleading picture. When placed alongside the fact that issuers themselves have unique features in terms of business models, the weighting of ESG factors in each issuer assessment must be interpreted and understood in a broader context. In our research process, the qualitative judgement of the credit analyst is therefore central to determining whether an ESG factor is evolving in a manner that may compromise an issuer's financial indicators and ultimately, its creditworthiness. ## ESG in credit selection Once a credit analyst has undertaken their credit assessment, including that of the materiality and momentum of ESG risks, then credit research is presented to portfolio managers. The portfolio managers need to assess the type and materiality of any ESG risk and set that against the potential investment return in the context of the Company's objectives. Other than the exclusions related to certain types of munitions, there are no pre-determined rules on how securities are selected in light of any ESG risks. Each investment case is likely to have its own unique set of risks. The investment team's credit selection emphasises fund manager judgement and each case is considered on its own merits. ## Engagement with issuers Invesco engages directly with companies to better understand their positions and their future intentions and lobby for change where Invesco believe it is necessary. Although engagement as pure debt investors can be challenging, Invesco's ownership of both equity and debt can often be used to increase our voice as a stakeholder. Engagement is carried out on a case by case basis by relevant analysts and strategically with co-ordination through Invesco's Sustainable Investing Services Team. Invesco's Sustainable Investing Services Team is led by the Global Head of ESG. Reporting to the Global Head of ESG is the Director of ESG Research, who leads the ESG analyst team who in turn focus on ESG company engagement activity. Invesco has established a global process to ensure that its ESG-targeted engagements are a collaboration between its Sustainable Investing Services Team and the investment teams across Invesco who may have interest in the issuer: i. Internal assessment and coordination: the Sustainable Investing Services Team consults with the investment teams and reviews the ESG Engagement focus list and decides whether to: (a) gather feedback on a topic and provide that feedback to an issuer; (b) --- schedule a call with the issuer if it is deemed to be necessary; or (c) engage directly with the issuer and serve as a liaison. Invesco's Sustainable Investing Services Team will arrange contact between the relevant investment teams and issuers when and if it is deemed necessary. Any ESG engagement meeting is added to a centralised calendar that investment teams can access. ii. Research and follow up: the Sustainable Investing Services Research team conducts in-depth ESG research in preparation for these meetings and discusses with the relevant investment teams across Invesco to ensure that companies are questioned on the key ESG topics. The Sustainable Investing Services Team produces an Engagement Report for these meetings which is shared via the Bloomberg platform for all relevant investment teams to access. Invesco is also a member of several organisations that facilitate collective dialogue with companies and continues to assess other collective engagements that we would like to work more closely with in the future. ## ESG portfolio reviews Dedicated ESG-focused portfolio reviews are in place to complement the existing risk-return portfolio review process. Invesco's Global Sustainable Investing Services team leads each review meeting which is attended by fund managers and credit research analysts. Portfolios are reviewed on the basis of a wide range of ESG metrics on an absolute basis and also relative to benchmarks where appropriate. ESG portfolio monitoring includes measurement, based on Sustainalytics ESG research data, of total portfolio ESG risk and identification of holdings with the highest and lowest ESG risk. As of the end of 2025, holdings with the highest ESG risk were concentrated in the energy sector. The holdings with the lowest ESG risk were spread across several sectors. Invesco also carry out Carbon Footprint Analysis of the portfolio, in absolute terms and compared to the wider high yield market, using data from ISS Climate Solutions. ## Task Force on Climate-related Financial Disclosures ('TCFD') Whilst TCFD is currently not applicable to the Company, the Manager has produced a product level report on the Company in accordance with the Financial Conduct Authority's ('FCA') rules and guidance regarding the disclosure of climate-related financial information consistent with TCFD Recommendations and Recommended Disclosures. These disclosures are intended to help meet the information needs of market participants, including institutional clients and consumers of financial products, in relation to the climate-related impact and risks of the Manager's TCFD in-scope business. The product level report on the Company is available on the Manager's website at www.invesco.co.uk/bips. Key elements of the product level report include a scenario analysis of how climate change is likely to impact the portfolio valuation under net zero 2050, delayed transition and hothouse scenarios, and a discussion of the most significant drivers of performance under those scenarios. Invesco's Group Level Task Force on Climate-Related Financial Disclosures ('TCFD') is available on the Managers' Website at https://www.invesco.com/content/dam/invesco/emea/en/pdf/ivz_global-tcfd-report.pdf. In addition the Managers' Entity Level TCFD Report is available at https://www.invesco.com/content/dam/invesco/emea/en/pdf/IFML_and_IAML_tcfd-entity-level_report.pdf. The reports noted above are in the process of being updated for the period to 31 December 2025 and will be made available via the respective websites by 30 June 2026. --- # Classification of Investments by Geographical Location | | At 31 December 2025 | | | | | | --- | --- | --- | --- | --- | --- | | | United Kingdom % | North America % | Europe % | Other locations % | Total | | Fixed interest securities(1) | 33.8 | 5.9 | 43.4 | 0.1 | 83.2 | | Convertibles | 12.8 | - | 2.8 | - | 15.6 | | Preference | 1.2 | 0.4 | - | - | 1.6 | | Equities | - | - | 0.2 | - | 0.2 | | Credit Default Swaps | - | - | (0.6) | - | (0.6) | | Total | 47.8 | 6.3 | 45.8 | 0.1 | 100.0 | | | At 31 December 2024 | | | | | | --- | --- | --- | --- | --- | --- | | | United Kingdom % | North America % | Europe % | Other locations % | Total % | | Fixed interest securities(1) | 34.1 | 7.1 | 39.0 | - | 80.2 | | Convertibles | 14.4 | - | 2.8 | - | 17.2 | | Preference | 1.7 | 0.4 | - | - | 2.1 | | Equities | - | - | 0.8 | - | 0.8 | | Credit Default Swaps | - | - | (0.3) | - | (0.3) | | Total | 50.2 | 7.5 | 42.3 | - | 100.0 | (1) Fixed interest securities include both fixed and floating rate securities. The directors consider the floating rate securities held by the company to be fixed in nature due to their characteristics, including a predictable income stream. # Industry Analysis of Investments by Geographical Location | | At 31 December 2025 | | | At 31 December 2024 | | | | --- | --- | --- | --- | --- | --- | --- | | | United Kingdom % | Non-UK % | Total % | United Kingdom % | Non-UK % | Total % | | Financials | 33.0 | 11.1 | 44.1 | 30.0 | 16.7 | 46.7 | | Consumer Goods | 1.8 | 12.1 | 13.9 | 1.5 | 8.6 | 10.1 | | Consumer Services | 3.3 | 10.2 | 13.5 | 4.6 | 9.2 | 13.8 | | Utilities | 2.2 | 3.1 | 5.3 | 2.4 | 3.0 | 5.4 | | Basic Materials | 3.5 | 1.0 | 4.5 | 2.3 | 1.3 | 3.6 | | Telecommunications | 0.6 | 3.5 | 4.1 | 1.5 | 3.5 | 5.0 | | Oil and Gas | 0.3 | 3.6 | 3.9 | 0.8 | 2.3 | 3.1 | | Technology | - | 3.6 | 3.6 | - | 0.7 | 0.7 | | Health Care | 0.9 | 2.2 | 3.1 | 1.0 | 2.9 | 3.9 | | Industrials | 0.7 | 1.8 | 2.5 | 3.5 | 1.7 | 5.2 | | Government Bonds | 1.5 | 0.6 | 2.1 | 2.6 | 0.2 | 2.8 | | Derivative Instrument | - | (0.6) | (0.6) | - | (0.3) | (0.3) | | Portfolio Total | 47.8 | 52.2 | 100.0 | 50.2 | 49.8 | 100.0 | The percentages shown in the above tables are related to the value of investments of £417.8 million (2024: £375.7 million). --- # Currency Exposure Investments and cash, including and excluding currency hedging | | At 31 December 2025 Including Currency Hedging | | | | At 31 December 2024 Including Currency Hedging | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Sterling % | Other % | Total % | Excluding Hedging % | Sterling % | Other % | Total % | Excluding Hedging % | | Fixed interest(1)(2) | 37.7 | 44.2 | 81.9 | 82.2 | 35.5 | 43.4 | 78.9 | 78.5 | | Convertibles(2) | 13.5 | 1.8 | 15.3 | 15.4 | 15.1 | 1.8 | 16.9 | 16.8 | | Preference | 1.2 | 0.4 | 1.6 | 1.6 | 1.7 | 0.4 | 2.1 | 2.1 | | Equities | - | 0.2 | 0.2 | 0.2 | - | 0.8 | 0.8 | 0.8 | | Credit Default Swaps | - | (0.6) | (0.6) | (0.6) | - | (0.3) | (0.3) | (0.3) | | Portfolio Total | 52.4 | 46.0 | 98.4 | 98.8 | 52.3 | 46.1 | 98.4 | 97.9 | | Cash | 0.5 | 0.7 | 1.2 | 1.2 | 0.3 | 1.8 | 2.1 | 2.1 | | Portfolio and Cash Total | 52.9 | 46.7 | 99.6 | 100.0 | 52.6 | 47.9 | 100.5 | 100.0 | | Currency Hedging Forward currency sales | 38.6 | (38.2) | 0.4 | — | 30.8 | (31.3) | (0.5) | | | Net Currency Exposure | 91.5 | 8.5 | 100.0 | — | 83.4 | 16.6 | 100.0 | | (1) Fixed interest securities include both fixed and floating rate securities. The directors consider the floating rate securities held by the company to be fixed in nature due to their characteristics, including a predictable income stream. (2) Fixed interest (81.9%) includes 9.6% attributable to Additional Tier 1 bonds and Convertibles (15.3%) includes 6.3% attributable to Additional Tier 1 bonds at 31 December 2025 (31 December 2024: Fixed interest (78.9%) includes 10.2% attributable to Additional Tier 1 bonds and Convertibles (16.9%) includes 7.6% attributable to Additional Tier 1 bonds). --- # Bond Rating Analysis Standard and Poor's ("S&P") ratings. Where a S&P rating is not available, an equivalent average rating has been used. Investment grade is BBB- and above. For the definitions of these ratings see the Glossary of Terms and Alternative Performance Measures on page B1. | Rating | 2025 | | 2024 | | | --- | --- | --- | --- | --- | | | % of Portfolio | Cumulative Total % | % of Portfolio | Cumulative Total % | | Investment Grade: | | | | | | AAA | 0.2 | 0.2 | - | - | | AA+ | 0.2 | 0.4 | 0.2 | 0.2 | | AA | 1.5 | 1.9 | 2.6 | 2.8 | | A+ | 0.3 | 2.2 | 0.2 | 3.0 | | A | - | 2.2 | 0.1 | 3.1 | | BBB+ | 2.2 | 4.4 | 0.6 | 3.7 | | BBB | 17.4 | 21.8 | 19.0 | 22.7 | | BBB- | 8.2 | 30.0 | 4.0 | 26.7 | | Non-investment Grade: | | | | | | BB+ | 9.1 | 39.1 | 7.5 | 34.2 | | BB | 10.4 | 49.5 | 15.4 | 49.6 | | BB- | 8.7 | 58.2 | 13.6 | 63.2 | | B+ | 7.4 | 65.6 | 5.5 | 68.7 | | B | 12.0 | 77.6 | 14.1 | 82.8 | | B- | 5.7 | 83.3 | 4.9 | 87.7 | | CCC+ | 2.2 | 85.5 | 0.7 | 88.4 | | CCC | 2.2 | 87.7 | 0.7 | 89.1 | | CC | - | 87.7 | 2.1 | 91.2 | | NR (including equity and CDS) | 12.3 | 100.0 | 8.8 | 100.0 | | | 100.0 | | 100.0 | | | Summary of Analysis | | | | | | Investment Grade | 30.0 | | 26.7 | | | Non-investment Grade | 57.7 | | 64.5 | | | NR (including equity and CDS) | 12.3 | | 8.8 | | | Total | 100.0 | | 100.0 | | NR: not rated. CDS: Credit Default Swap --- # Portfolio of Investments in order of Market Valuation AT 31 DECEMBER 2025 | Issuer/issue | Rating(1) | Industry | Country of Incorporation | Market Value £'000 | % of Portfolio | | --- | --- | --- | --- | --- | --- | | Lloyds Banking Group | | Financials | UK | | | | 7.875% FRN Perpetual (AT1) | Baa3/BBB-/BBB | | | 7,200 | 1.7 | | 8.5% Cnv FRN Perpetual (AT1) | Baa3/BBB-/BBB | | | 3,275 | 0.8 | | 8.5% Cnv FRN 27 Mar 2071 (AT1) | Baa3/BBB-/BBB | | | 1,478 | 0.4 | | | | | | 11,953 | 2.9 | | Nationwide | | Financials | UK | | | | 7.875% FRN Perpetual (AT1) | Baa3/NR/BBB | | | 4,401 | 1.1 | | 10.25% Perpetual (CCDS) | NR/NR/NR | | | 3,911 | 0.9 | | 7.5% Cnv FRN Perpetual (AT1) | Baa3/BB+/BBB | | | 3,493 | 0.8 | | | | | | 11,805 | 2.8 | | Barclays | | Financials | UK | | | | 9.25% Cnv FRN Perpetual (AT1) | Ba1/BB+/BB | | | 5,334 | 1.3 | | FRN 14 Nov 2032 | Baa1/BBB/BBB | | | 3,825 | 0.9 | | 8.5% FRN Perpetual (AT1) | Ba1/BB+/BB | | | 965 | 0.2 | | 8.875% Cnv FRN Perpetual (AT1) | Ba1/BB+/BB | | | 767 | 0.2 | | | | | | 10,891 | 2.6 | | Aviva | | Financials | UK | | | | 6.875% Cnv FRN Perpetual | Baa2/NR/BBB | | | 5,782 | 1.4 | | 7.75% FRN Perpetual | Baa2/NR/BBB | | | 4,739 | 1.1 | | | | | | 10,521 | 2.5 | | Co-Operative Bank | | Financials | UK | | | | 11.75% 22 May 2034 | Baa2/NR/BBB | | | 4,129 | 1.0 | | 9.5% Cnv FRN 24 May 2028 (SNR) | Baa2/NR/BBB | | | 1,647 | 0.4 | | 6% FRN 06 Apr 2027 (SNR) | Baa2/NR/BBB | | | 1,421 | 0.3 | | 7.5% FRN 08 Jul 2026 | NR/BB-/BB | | | 1,008 | 0.3 | | | | | | 8,205 | 2.0 | | Eléctricité De France | | Utilities | France | | | | 7.375% FRN Perpetual | Ba2/B+/BB | | | 2,976 | 0.7 | | 5.875% Perpetual | Ba2/B+/BB | | | 1,804 | 0.4 | | 6% Perpetual | Baa1/BBB/BBB | | | 1,503 | 0.4 | | 7.5% FRN Perpetual | Ba2/B+/BB | | | 951 | 0.2 | | 5.625% FRN Perpetual | Ba2/B+/BB | | | 908 | 0.2 | | | | | | 8,142 | 1.9 | | Thames Water Finance | | Utilities | UK | | | | 7.75% 30 Apr 2044 | Caa3/CCC/CCC | | | 4,869 | 1.1 | | 8.25% 25 Apr 2040 (SNR) | Caa3/CCC/CCC | | | 2,024 | 0.5 | | 9.75% 10 Oct 2027 | B2/NR/B | | | 1,145 | 0.3 | | 0% 22 Mar 2027 | NR/NR/NR | | | 63 | 0.0 | | 4.625% 19 May 2026 (SNR) | NR/NR/NR | | | 20 | 0.0 | | | | | | 8,121 | 1.9 | | BNP Paribas | | Financials | France | | | | 9.25% FRN Perpetual (AT1) | Ba1/BBB-/BBB | | | 6,503 | 1.6 | | FRN Perpetual (AT1) | Ba1/BBB-/BBB | | | 1,358 | 0.3 | | | | | | 7,861 | 1.9 | | OSB | | Financials | UK | | | | 7.75% FRN Perpetual (AT1) | Ba2/NR/BB | | | 3,599 | 0.8 | | 8.875% Cnv 16 Jan 2030 (SNR) | Baa2/NR/BBB | | | 1,952 | 0.5 | | Cnv FRN 27 Jul 2033 | Baa3/NR/BBB | | | 1,653 | 0.4 | | | | | | 7,204 | 1.7 | | Engineering Ingegneria Informatica | | Technology | Italy | | | | 11.125% 15 May 2028 | B3/B-/B | | | 4,150 | 1.0 | | FRN Perpetual | B3/B-/B | | | 1,951 | 0.5 | | 8.625% 15 Feb 2030 (SNR) | B3/B-/B | | | 934 | 0.2 | | | | | | 7,035 | 1.7 | --- | Issuer/issue | Rating(1) | Industry | Country of Incorporation | Market Value £'000 | % of Portfolio | | --- | --- | --- | --- | --- | --- | | Market Bidco Finco | | Consumer Goods | UK | | | | 8.75% 31 Jan 2031 (SNR) | B1/B+/B | | | 3,943 | 1.0 | | 6.75% 31 Jan 2031 (SNR) | B1/B+/B | | | 3,032 | 0.7 | | | | | | 6,975 | 1.7 | | Ineos Quattro | | Basic Materials | UK | | | | 7.25% 31 Mar 2031 (SNR) | B2/BB-/BB | | | 2,999 | 0.7 | | 6.75% 15 Apr 2030 (SNR) | B3/BB-/BB | | | 1,602 | 0.4 | | 8.5% 15 Mar 2029 (SNR) | B3/BB-/BB | | | 1,038 | 0.2 | | 7.5% 15 Apr 2029 (SNR) | B2/BB-/BB | | | 754 | 0.2 | | 9.625% 15 Mar 2029 (SNR) | B3/BB-/BB | | | 309 | 0.1 | | | | | | 6,702 | 1.6 | | Jerrold Finco | | Financials | UK | | | | 7.875% 15 Apr 2030 | NR/BB/BB | | | 3,551 | 0.9 | | 7.5% 15 Jun 2031 (SNR) | NR/BB/BB | | | 3,067 | 0.7 | | | | | | 6,618 | 1.6 | | Techem | | Consumer Services | Germany | | | | FRN 15 Jul 2032 (SNR) | B2/B+/B | | | 6,592 | 1.6 | | Zapa Group | | Financials | UK | | | | 14.4% FRN 25 Nov 2033 | NR/NR/NR | | | 4,459 | 1.1 | | 12.875% FRN Perpetual (AT1) | NR/NR/NR | | | 2,120 | 0.5 | | | | | | 6,579 | 1.6 | | UK Treasury Bill | | Government Bonds | UK | | | | 0.5% 22 Oct 2061 | Aa3/AA/AA | | | 3,129 | 0.7 | | 3.75% 22 Oct 2053 | Aa3/AA/AA | | | 2,356 | 0.6 | | 4% 22 Oct 2063 | Aa3/AA/AA | | | 772 | 0.2 | | | | | | 6,257 | 1.5 | | Natwest | | Financials | UK | | | | 7.5% Cnv FRN Perpetual (AT1) | Baa3/NR/BBB | | | 3,665 | 0.9 | | 7.625% FRN Perpetual (AT1) | Baa3/NR/BBB | | | 1,475 | 0.4 | | Cnv FRN 6 Jun 2033 | Baa1/BBB+/BBB | | | 947 | 0.2 | | | | | | 6,087 | 1.5 | | Saffron Building Society | | Financials | UK | | | | Cnv FRN 19 Oct 2034 | NR/NR/NR | | | 5,996 | 1.4 | | Volkswagen Financial Services | | Consumer Goods | Netherlands | | | | 5.994% FRN Perpetual | Baa3/BBB-/BBB | | | 5,867 | 1.4 | | Atom | | Financials | UK | | | | Cnv FRN 08 Jan 2035 | NR/NR/NR | | | 5,663 | 1.4 | | Vodafone Group | | Basic Materials | UK | | | | 8% FRN Perpetual (SUB) | Ba1/BB+/BB | | | 5,450 | 1.3 | | 888.com | | Consumer Services | Gibraltar | | | | 10.75% 15 May 2030 (SNR) | B2/B-/B | | | 3,772 | 0.9 | | 8% 30 Sep 2031 (SNR) | B2/B-/B | | | 1,560 | 0.4 | | | | | | 5,332 | 1.3 | | Virgin Media O2 | | Telecommunications | Ireland | | | | 7.875% 15 Mar 2032 | NR/NR/NR | | | 5,159 | 1.2 | | Newcastle Building Society | | Financials | UK | | | | 12.25% Cnv FRN Perpetual | NR/NR/NR | | | 5,004 | 1.2 | | CPUK Finance | | Consumer Services | Jersey | | | | 7.875% 28 Aug 2055 | NR/B/B | | | 2,197 | 0.5 | | 6.875% 28 Aug 2032 | NR/B/B | | | 1,472 | 0.4 | | 4.5% 28 Aug 2027 | NR/B/B | | | 1,176 | 0.3 | | | | | | 4,845 | 1.2 | | UTB Partners | | Financials | UK | | | | 13% FRN Perpetual (AT1) | NR/NR/NR | | | 4,472 | 1.1 | | Kane Bidco | | Financials | Jersey | | | | 7.75% 15 Jul 2031 (SNR) | B1/B+/B | | | 2,852 | 0.7 | | FRN 15 Jul 2032 (SNR) | B1/B+/B | | | 1,547 | 0.4 | | | | | | 4,399 | 1.1 | | Legal & General | | Financials | UK | | | | 5.625% FRN Perpetual | Baa2/BBB/BBB | | | 4,379 | 1.1 | | DNO ASA | | Oil and Gas | Norway | | | | 9.25% 04 Jun 2029 (SNR) | NR/NR/NR | | | 2,510 | 0.6 | | 8.5% 27 Mar 2030 (SNR) | NR/NR/NR | | | 1,684 | 0.4 | | | | | | 4,194 | 1.0 | --- # Portfolio of Investments in order of Market Valuation (continued) | Issuer/issue | Rating(2) | Industry | Country of Incorporation | Market Value £'000 | % of Portfolio | | --- | --- | --- | --- | --- | --- | | Afos | | Technology | France | | | | 5% Var 18 Dec 2030 (SNR) | NR/CCC/CCC | | | 2,153 | 0.5 | | 9% Var 18 Dec 2029 | NR/B+/B | | | 1,996 | 0.5 | | | | | | 4,149 | 1.0 | | Waga Bond | | Consumer Services | Jersey | | | | 8.5% 15 Jun 2030 (SNR) | B2/B/B | | | | | | Punch Finance | | Consumer Services | UK | | | | 7.8755% 30 Dec 2030 (SNR) | B3/NR/B | | | 4,077 | 1.0 | | Ford Motor Credit | | Consumer Goods | USA | | | | 6.86% 05 Jun 2026 | Ba1/BBB-/BBB | | | 4,063 | 1.0 | | Lion/Polaris | | Consumer Goods | Luxembourg | | | | FRN 01 July 2029 (SNR) | B2/B/B | | | 4,026 | 1.0 | | Sainsbury's Bank | | Financials | UK | | | | 10.5% FRN 12 Mar 2033 | Ba1/NR/BB | | | 4,016 | 1.0 | | Deutsche Bank | | Financials | Germany | | | | FRN Perpetual (AT1) | Ba2/BB/BB | | | 3,446 | 0.8 | | 8.125% Cnv FRN Perpetual (AT1) | Ba2/BB/BB | | | 568 | 0.1 | | | | | | 4,014 | 0.9 | | Bertrand Franchise | | Consumer Goods | France | | | | FRN Perpetual (SNR) | B3/B-/B | | | 3,980 | 0.9 | | Fiber Bidco | | Industrials | Italy | | | | FRN 15 Jan 2030 (SNR) | B3/B-/B | | | 2,134 | 0.5 | | 5.125% 30 Jan 2032 (SNR) | Ba1/BB+/BB | | | 1,773 | 0.4 | | | | | | 3,907 | 0.9 | | Rino Mastrotto | | Consumer Goods | Italy | | | | FRN 31 Jul 2031 (SNR) | B2/B/B | | | 3,797 | 0.9 | | RL Finance | | Financials | UK | | | | 10.125% Cnv FRN Perpetual | Baa3/BBB/BBB | | | 3,741 | 0.9 | | Haleon | | Health Care | UK | | | | 9.5% Preference | NR/NR/NR | | | 3,654 | 0.9 | | Bayer | | Health Care | Germany | | | | 7% FRN Perpetual (SUB) | Ba1/BB+/BB | | | 1,917 | 0.5 | | 5.5% FRN Perpetual (SUB) | Baa3/BB+/BB | | | 1,713 | 0.4 | | | | | | 3,630 | 0.9 | | ING | | Financials | Netherlands | | | | 6.25% Cnv FRN 20 May 2033 | Baa2/BBB+/BBB | | | 3,604 | 0.9 | | IHD Verwaltungs | | Consumer Goods | Germany | | | | 6.75% 15 Nov 2029 (SNR) | Ba2/BB-/BB | | | 1,929 | 0.5 | | 8% 15 Nov 2032 (SNR) | Ba2/BB-/BB | | | 1,604 | 0.4 | | | | | | 3,533 | 0.9 | | ASG Finance Design | | Consumer Services | Ireland | | | | 9.75% 15 May 2029 (SNR) | NR/BB-/BB | | | 3,461 | 0.8 | | IM Group | | Consumer Services | France | | | | 8% 01 Mar 2028 (SNR) | Caa1/CCC+/CCC | | | 3,430 | 0.8 | | Pension Insurance | | Financials | UK | | | | 7.375% FRN Perpetual | NR/NR/BBB | | | 3,269 | 0.8 | | Telefonica | | Telecommunications | Netherlands | | | | FRN Perpetual | Ba2/BB/BB | | | 2,174 | 0.5 | | 6.75% FRN Perpetual (SUB) | Ba2/BB/BB | | | 868 | 0.2 | | | | | | 3,042 | 0.7 | | JP Morgan Chase | | Financials | USA | | | | FRN Perpetual (SNR) (AT1) | Baa1/BBB/BBB | | | 3,026 | 0.7 | | Maison | | Industrials | UK | | | | 6% 31 Oct 2027 (SNR) | NR/B/B | | | 2,974 | 0.7 | --- | Issuer/issue | Rating(1) | Industry | Country of Incorporation | Market Value £'000 | % of Portfolio | | --- | --- | --- | --- | --- | --- | | Grupo Antolin | | Consumer Goods | Spain | | | | 10.375% 30 Jan 2030 (SNR) | B3/B-/B | | | 2,952 | 0.7 | | Teva Pharmaceutical Finance | | Health Care | Netherlands | | | | 6.75% 01 Mar 2028 (SNR) | Ba1/BB+/BB | | | 2,315 | 0.6 | | 5.125% 09 May 2029 (SNR) | Ba1/BB+/BB | | | 585 | 0.1 | | | | | | 2,900 | 0.7 | | Pinewood Finance | | Consumer Services | UK | | | | 6% 27 Mar 2030 (SNR) | NR/BB+/BB | | | 2,855 | 0.7 | | BT | | Telecommunications | UK | | | | 8.375% FRN Perpetual | Ba1/BB+/BB | | | 2,672 | 0.6 | | ZF Group | | Consumer Goods | Netherlands | | | | 7% 12 Jun 2030 (SNR) | Ba2/BB-/BB | | | 1,836 | 0.4 | | 6.125% 13 Mar 2029 (SNR) | Ba2/BB-/BB | | | 452 | 0.1 | | 7.125% 14 Apr 2030 (SNR) | Ba2/BB-/BB | | | 375 | 0.1 | | | | | | 2,663 | 0.6 | | Codere New Topco | | Consumer Services | Luxembourg | | | | 11% PIK 31 Dec 2028 | NR/NR/NR | | | 1,707 | 0.4 | | A1 Shares | NR/NR/NR | | | 639 | 0.1 | | A2 Shares | NR/NR/NR | | | 302 | 0.1 | | | | | | 2,648 | 0.6 | | Allwyn Entertainment | | Consumer Services | UK | | | | 7.875% 30 Apr 2029 (SNR) | NR/BB/BB | | | 1,780 | 0.4 | | 7.25% 30 Apr 2030 | NR/BB/BB | | | 830 | 0.2 | | | | | | 2,610 | 0.6 | | Flora Food Management | | Consumer Goods | Netherlands | | | | 6.875% 02 Jul 2029 (SNR) | B2/B/B | | | 2,606 | 0.6 | | RLGH Finance Bermuda | | Financials | Bermuda | | | | 8.25% 17 Jul 2031 | Baa2/NR/BBB | | | 2,604 | 0.6 | | CaixaBank | | Financials | Spain | | | | 8.25% Cnv FRN Perpetual (AT1) | NR/BB+/BB | | | 2,526 | 0.6 | | Dana Financing Luxembourg | | Consumer Goods | Luxembourg | | | | 8.5% 15 Jul 2031 (SNR) | B1/BB-/BB | | | 2,508 | 0.6 | | Société Générale | | Financials | France | | | | 7.875% Cnv FRN Perpetual (AT1) | Ba2/BB/BB | | | 1,509 | 0.4 | | FRN Perpetual (AT1) | Ba2/BB/BB | | | 890 | 0.2 | | | | | | 2,399 | 0.6 | | Voyager Parent | | Consumer Services | USA | | | | 9.25% 01 Jul 2032 (SNR) | B1/B/B | | | 2,367 | 0.6 | | Boots Group Finco | | Health Care | USA | | | | 7.375% 31 Aug 2032 (SNR) | B1/B+/B | | | 1,447 | 0.4 | | 5.375% 31 Aug 2032 (SNR) | B1/B+/B | | | 901 | 0.2 | | | | | | 2,348 | 0.6 | | Petra Diamonds | | Basic Materials | UK | | | | 10.5% PIK 08 Mar 2026 | NR/B-/B | | | 2,289 | 0.6 | | Common Stock | NR/NR/NR | | | 55 | 0.0 | | | | | | 2,344 | 0.6 | | HSBC | | Financials | UK | | | | FRN 13 Nov 2034 (SUB) | Baa1/BBB+/BBB | | | 1,885 | 0.5 | | 5.25% 14 Mar 2044 | Baa1/BBB+/BBB | | | 444 | 0.1 | | | | | | 2,329 | 0.6 | | Eutelsat | | Telecommunications | France | | | | 9.75% 13 Apr 2029 (SNR) | Ba3/NR/BB | | | 2,304 | 0.6 | | DeepOcean | | Oil and Gas | Jersey | | | | 6% 08 Apr 2031 (SNR) | B1/BB-/BB | | | 2,234 | 0.5 | | New Frigoglass Group | | Industrials | Netherlands | | | | 11% PIK 27 Mar 2026 | NR/NR/NR | | | 1,145 | 0.3 | | 11% 20 Apr 2028 | NR/NR/NR | | | 877 | 0.2 | | 0% 27 Mar 2028 | NR/NR/NR | | | 187 | 0.0 | | Common Stock | NR/NR/NR | | | 5 | 0.0 | | | | | | 2,214 | 0.5 | | Heathrow Finance | | Financials | UK | | | | 6.625% 01 Mar 2031 (SNR) | B1/NR/B | | | 1,267 | 0.3 | | 4.125% 01 Sep 2029 (SNR) | B1/NR/B | | | 938 | 0.2 | | | | | | 2,205 | 0.5 | | Aston Martin | | Consumer Goods | Jersey | | | | 10.375% 31 Mar 2029 (SNR) | Caa1/CCC+/CCC | | | 1,821 | 0.4 | | 10% 31 Mar 2029 (SNR) | Caa1/CCC+/CCC | | | 346 | 0.1 | | | | | | 2,167 | 0.5 | --- # Portfolio of Investments in order of Market Valuation (continued) | Issuer/issue | Rating(1) | Industry | Country of Incorporation | Market Value £'000 | % of Portfolio | | --- | --- | --- | --- | --- | --- | | Beazley | | Financials | Ireland | | | | 5.875% 04 Nov 2026 | NR/NR/BBB | | | 2,147 | 0.5 | | Benteler International | | Consumer Goods | Austria | | | | 7.25% 15 Jun 2031 (SNR) | Ba3/BB-/BB | | | 2,089 | 0.5 | | Lancashire | | Financials | Bermuda | | | | 5.625% 18 Sep 2041 (FRN) | Baa3/BBB-/BBB | | | 2,087 | 0.5 | | MAHLE | | Consumer Goods | Germany | | | | 7.125% 15 Jul 2032 (SNR) | Ba2/BB-/BB | | | 1,607 | 0.4 | | 6.5% 02 May 2031 (SNR) | Ba2/BB-/BB | | | 453 | 0.1 | | | | | | 2,060 | 0.5 | | BP Capital | | Financials | UK | | | | 4.25% FRN Perpetual | A3/BBB/A | | | 2,037 | 0.5 | | Galaxy Bidco | | Financials | UK | | | | 8.125% 19 Dec 2029 (SNR) | B2/B/B | | | 2,036 | 0.5 | | Forvia | | Consumer Goods | France | | | | 8% 15 Jun 2030 (SNR) | B1/BB-/BB | | | 1,990 | 0.5 | | ContourGlobal | | Utilities | Luxembourg | | | | 6.75% 28 Feb 2030 (SNR) | NR/BB/BB | | | 1,946 | 0.5 | | Currents Group | | Basic Materials | Luxembourg | | | | 5.5% 15 May 2030 (SNR) | Ba3/BB-/BB | | | 1,937 | 0.5 | | Albion Finance | | Consumer Services | Luxembourg | | | | 7% 21 May 2030 (SNR) | B1/BB-/BB | | | 980 | 0.2 | | 5.375% 21 May 2030 (SNR) | B1/BB-/BB | | | 898 | 0.2 | | | | | | 1,878 | 0.4 | | Nexture | | Consumer Goods | Italy | | | | FRN 30 Jul 2032 (SNR) | B2/B/B | | | 1,872 | 0.4 | | Marb Bondco | | Consumer Services | UK | | | | 3.95% 29 Jan 2031 (SNR) | NR/BB+/BB | | | 1,804 | 0.4 | | Petroleos Mexicanos | | Oil and Gas | Mexico | | | | 9.5% 15 Sep 2027 (SNR) | B1/BBB/BB | | | 788 | 0.2 | | 6.95% 28 Jan 2060 (SNR) | B1/BBB/BB | | | 548 | 0.1 | | 6.75% 21 Sep 2047 (SNR) | B1/BBB/BB | | | 428 | 0.1 | | | | | | 1,764 | 0.4 | | TGS ASA | | Oil and Gas | Norway | | | | 8.5% 15 Jan 2030 (SNR) | Ba3/BB-/BB | | | 1,738 | 0.4 | | AA Bond Co | | Consumer Services | Jersey | | | | 7.375% 31 Jul 2050 (SNR) | NR/BBB/BBB | | | 1,353 | 0.3 | | 8.45% 31 Jul 2050 (SNR) | NR/BBB/BBB | | | 366 | 0.1 | | | | | | 1,719 | 0.4 | | Enel | | Utilities | Netherlands | | | | 7.75% 14 Oct 2052 (SNR) | Baa1/BBB/BBB | | | 1,716 | 0.4 | | Monitchem | | Basic Materials | Luxembourg | | | | 8.75% 01 May 2028 (SNR) | B3/B/B | | | 1,661 | 0.4 | | Stora Enso | | Industrials | Finland | | | | 7.25% 15 Apr 2036 | Baa3/NR/BBB | | | 1,645 | 0.4 | | Intesa | | Financials | Italy | | | | 6.375% Cnv FRN Perpetual (AT1) | Ba2/BB/BB | | | 1,642 | 0.4 | | Telecom Italia | | Telecommunications | Italy | | | | 7.875% 31 Jul 2028 (SNR) | Ba2/BB/BB | | | 1,053 | 0.3 | | 7.721% 04 Jun 2038 (SNR) | Ba2/BB/BB | | | 537 | 0.1 | | | | | | 1,590 | 0.4 | | Viridien | | Oil and Gas | France | | | | 10% 15 Oct 2030 (SNR) | B2/B/B | | | 1,567 | 0.4 | --- | Issuer/issue | Rating(1) | Industry | Country of Incorporation | Market Value £'000 | % of Portfolio | | --- | --- | --- | --- | --- | --- | | Genesis Energy | 8.875% 15 Apr 2030 (SNR) | Oil and Gas | USA | 1,563 | 0.4 | | Gatwick Airport Finance | 6% 21 Nov 2030 (SNR) | Financials | UK | 1,560 | 0.4 | | Morgan Stanley | Depositary Shares (AT1) | Financials | USA | 1,551 | 0.4 | | Quick Top | FRN 21 Mar 2030 (SNR) | Technology | Sweden | 1,518 | 0.4 | | Saturn Holdings | 9% FRN 26 Feb 2036 | Financials | UK | 1,511 | 0.4 | | Preem | 12% 30 Jun 2027 (SNR) | Oil and Gas | Sweden | 1,444 | 0.4 | | Ecclesiastical Insurance Office | 8.625% Preference | Financials | UK | 1,440 | 0.3 | | Altice | 5.625% 15 Jun 2032 (SNR) | Telecommunications | France | 958 | 0.2 | | | 7.25% 01 Nov 2029 (SNR) | Oil and Gas | France | 333 | 0.1 | | | Common Stock | Financials | UK | 135 | 0.0 | | Lottomatica | 4.875% 31 Jan 2031 (SNR) | Consumer Services | Italy | 1,404 | 0.3 | | FR Bondco | 6.875% 31 Oct 2032 (SNR) | Consumer Goods | France | 1,394 | 0.3 | | Vattenfall | 6.875% FRN Perpetual (SUB) | Utilities | Sweden | 1,375 | 0.3 | | Coventry Building Society | 8.75% Cnv FRN Perpetual (AT1) | Financials | UK | 1,370 | 0.3 | | GTCR | 8.5% 15 Jan 2031 (SNR) | Technology | Netherlands | 1,364 | 0.3 | | Valeo | 5.125% 20 May 2031 (SNR) | Consumer Goods | France | 1,348 | 0.3 | | Virgin Money | Cnv FRN 23 Aug 2029 (SNR) | Financials | UK | 1,332 | 0.3 | | Mobico Group | 4.875% 26 Sep 2031 (SNR) | Consumer Services | UK | 690 | 0.2 | | | FRN Perpetual | Financials | UK | 626 | 0.1 | | OEG Finance | 7.25% 27 Sep 2029 (SNR) | Oil and Gas | UK | 1,307 | 0.3 | | CIRSA Finance | 7.875% 31 Jul 2028 (SNR) | Consumer Services | Luxembourg | 1,282 | 0.3 | | John Lewis | 4.25% 18 Dec 2034 (SNR) | Consumer Services | UK | 1,272 | 0.3 | | Aegon | 5.625% FRN Perpetual | Financials | Bermuda | 1,256 | 0.3 | | Alexandrite Lake Lux Holdings | 6.75% 30 Jul 2030 (SNR) | Financials | Luxembourg | 1,254 | 0.3 | | Dynamo | 6.25% 15 Oct 2031 (SNR) | Consumer Goods | Germany | 1,209 | 0.3 | | Quilter | 8.625% FRN 18 Apr 2033 | Financials | UK | 1,116 | 0.3 | | Centrica | 7% 19 Sep 2033 (SNR) | Utilities | UK | 1,108 | 0.3 | | Commerzbank | 7.5% FRN Perpetual (AT1) | Financials | Germany | 1,093 | 0.3 | | Bank Of Ireland | 7.594% FRN 06 Dec 2032 | Technology | Italy | 1,046 | 0.2 | | FiberCop | 7.721% 04 Jun 2038 (SNR) | Technology | Italy | 1,004 | 0.2 | | Hammerson | 5.875% 08 Oct 2036 | Financials | UK | 1,000 | 0.2 | | Alpha Services & Holdings | 11.875% Cnv FRN Perpetual (AT1) | Consumer Goods | Greece | 970 | 0.2 | --- # Portfolio of Investments in order of Market Valuation (continued) | Issuer/issue | Rating(1) | Industry | Country of Incorporation | Market Value £'000 | % of Portfolio | | --- | --- | --- | --- | --- | --- | | Castello BC Bidco | | Consumer Services | Italy | | | | FRN 14 Nov 2031 (SNR) | B2/B/B | | | 879 | 0.2 | | Chesnara | | Financials | UK | | | | 8.5% FRN Perpetual | NR/NR/BBB | | | 867 | 0.2 | | Germany (Federal Republic Of) | | Government Bonds | Germany | | | | 2.5% 15 Feb 2035 | NR/AAA/AAA | | | 851 | 0.2 | | AXA | | Financials | France | | | | 6.379% FRN Perpetual | A2/BBB+/BBB | | | 850 | 0.2 | | B&M | | Consumer Services | Luxembourg | | | | 4% 15 Nov 2028 (SNR) | Ba1/BB+/BB | | | 833 | 0.2 | | Bausch & Lomb | | Consumer Services | USA | | | | FRN 15 Jan 2031 (SNR) | B1/NR/B | | | 813 | 0.2 | | National Bank Of Greece | | Financials | Greece | | | | Cnv FRN 28 Jun 2035 | Ba1/NR/BB | | | 777 | 0.2 | | CCO Holdings | | Telecommunications | USA | | | | 7.375% 01 Mar 2031 (SNR) | B1/BB-/BB | | | 759 | 0.2 | | US Treasury Note | | Government Bonds | USA | | | | 3.875% 15 Aug 2033 | Aa1/AA+/AA | | | 739 | 0.2 | | Zurich Finance | | Financials | Ireland | | | | 5.125% FRN 23 Nov 2052 | A1/A+/A | | | 710 | 0.2 | | CNP Assurances | | Financials | France | | | | 4.875% FRN Perpetual | Baa2/BBB/BBB | | | 693 | 0.2 | | Phoenix | | Financials | UK | | | | FRN Perpetual | NR/NR/BBB | | | 648 | 0.2 | | La Financière ATALIAN | | Consumer Services | France | | | | 8.5% PIK 30 Jun 2028 | Caa3/CCC+/CCC | | | 646 | 0.2 | | PGH Capital | | Financials | UK | | | | 5.375% 06 Jul 2027 | NR/NR/BBB | | | 624 | 0.1 | | Cerved | | Consumer Services | Italy | | | | FRN 15 Feb 2029 (SNR) | B3/B/B | | | 614 | 0.1 | | Nickel Industries | | Basic Materials | Australia | | | | 9% 30 Sep 2030 (SNR) | B1/NR/B | | | 611 | 0.1 | | UBS | | Financials | Switzerland | | | | 9.75% FRN Perpetual (AT1) | NR/NR/NR | | | 384 | 0.1 | | 4.5% FRN Perpetual (AT1) | NR/NR/NR | | | 171 | 0.0 | | | | | | 555 | 0.1 | | Spectrum Management | | Telecommunications | USA | | | | 4.5% 15 Sep 2042 (SNR) | Ba1/BBB-/BBB | | | 516 | 0.1 | | RAC Bond | | Consumer Goods | UK | | | | FRN 04 Nov 2046 (SNR) | NR/B+/B | | | 496 | 0.1 | | Peel Land & Property Investments | | Financials | UK | | | | 8.375% Var 30 Apr 2040 | NR/BBB/BBB | | | 494 | 0.1 | | Italy (Republic Of) | | Government Bonds | Italy | | | | 3.65% 01 Aug 2035 | Baa2/BBB/BBB | | | 443 | 0.1 | | Spain (Kingdom Of) | | Government Bonds | Spain | | | | 3.15% 30 Apr 2035 | NR/A+/A | | | 433 | 0.1 | | Kosmos Energy | | Oil and Gas | USA | | | | 7.75% 01 May 2027 (SNR) | Caa3/CCC+/CCC | | | 338 | 0.1 | | Total investments held at fair value through profit or loss | | | | 420,214 | 100.6 | --- # Portfolio of Investments in order of Market Valuation (continued) Derivative Instruments - Credit Default Swaps | Company | Nominal | Coupon % | Maturity Date | Market Value £'000 | % of Portfolio | | --- | --- | --- | --- | --- | --- | | iTraxx Europe Crossover Series 42 5% 5 Year Series 42 5% 5 Year | €6,000,000 €19,000,000 | 5.00 5.00 | 20 Dec 2030 20 Dec 2030 | (1,857) (586) | (0.5) (0.1) | | Total derivatives held at fair value through profit or loss | | | | (2,443) | (0.6) | | Total investments and derivatives held at fair value through profit or loss | | | | 417,771 | 100.0 | (1) Moody's/Standard & Poor's (S&P)/Equivalent average rating. Please see Credit Ratings Definitions on page 81 for further information. Abbreviations used in the above valuation: Cnv: Convertible FRN: Floating Rate Note SNR: Senior SUB: Subordinated Notes PIK: Payment in Kind Var: Variable CCDS: Core Capital Deferred Shares AT1: Additional Tier 1 bond --- Invesco Bond Income Plus Limited ![img-14.jpeg](img-14.jpeg) # Governance Directors ... 33 Directors' Report ... 34 The Company's Corporate Governance Framework ... 37 Corporate Governance Statement ... 38 Audit & Risk Committee Report ... 41 Directors' Remuneration Report ... 43 Directors' Responsibilities Statement ... 45 --- # Directors ![img-15.jpeg](img-15.jpeg) ## Tim Scholefield (Chairman) Tim Scholefield, a Director of the Company, joined the Board on 15 June 2017, and became Chairman on the same date. He was Head of Equities at Baring Asset Management until 2014. He now holds a portfolio of non-executive directorships including Aberdeen UK Smaller Companies Growth Trust Plc and Allianz Technology Trust plc. Tim contributes to the Company's long-term sustainable success by drawing on his considerable experience of the investment management industry and asset markets. He has extensive experience of the management and operation of investment trusts, and his independence from the Manager means that he is able to act as Chairman to lead the Board effectively. ![img-16.jpeg](img-16.jpeg) ## Heather MacCallum Heather MacCallum, a Director of the Company, joined the Board on 25 June 2019 and became Chair of the Audit & Risk Committee in September 2019 and Senior Independent Director in June 2023. She is a Chartered Accountant and was a partner with KPMG Channel Islands for 15 years before retiring from the partnership in 2016. She now holds a portfolio of non-executive directorships, including EPE Special Opportunities Limited. Heather contributes to the Company's long term sustainable success by drawing on her qualification as a Chartered Accountant and significant relevant experience as partner at KPMG Channel Islands. This allows her to effectively contribute and Chair the Company's Audit & Risk Committee. ![img-17.jpeg](img-17.jpeg) ## Christine Johnson Christine Johnson, a Director of the Company, joined the Board on 19 May 2021 following the merger with Invesco Enhanced Income Limited ('IPE'), and became Chair of the Management Engagement Committee on the same day. She was formerly Head of Fixed Income at Old Mutual Global Investors, Senior Fund Manager at HSBC Group (Halbis Capital Management) and Fund Manager at Investec Asset Management. She is currently a non-executive director of Golden Charter Trust, First Sentier Investors and Mainsheet Ventures UK. Christine's executive career provides her with an in-depth knowledge of investment management and in particular of the Fixed Income sector. Her other non-executive positions provide experience in a range of sectors and asset classes. ![img-18.jpeg](img-18.jpeg) ## Caroline Dutot Caroline Dutot, a Director of the Company, joined the Board on 15 December 2020. She is a founder of and Advocate at Ardent Chambers, a legal chambers based in Jersey. She has a specialist knowledge of compliance, governance and risk matters and provides advice and litigation services to individuals, boards, businesses, governments and regulators. She has long-standing experience of working with and for regulatory and public authorities, including the Attorney General in Jersey and the Jersey Financial Services Commission. Caroline brings to the Company her legal knowledge and specialism in compliance, governance and risk. She also brings her experience of working with regulatory and public authorities. ![img-19.jpeg](img-19.jpeg) ## Arun Kumar Sarwal Arun Kumar Sarwal, a Director of the Company, joined the Board on 11 June 2025. He has broad experience of global equities and fund management with over 35 years in the UK, Europe, and Asia. He is Chair of the Board at Tumelo and Audit Chair of Dunedin Income Growth Investment Trust plc and JPMorgan European Discovery Trust plc. He is a qualified Chartered Accountant, Fellow of The Association of Corporate Treasurers and Chartered Marketer. His previous roles include CEO of Broadridge Fund Communication Solutions and DST Global Solutions, COO at Scottish Widows Investment Partnership and global roles at ABN AMRO and Societe Generale. Arun brings commercial experience from C-Suite roles in companies in the financial sector, including investment and wealth management, in addition to his financial skills, from being an accountant and corporate treasurer. All Directors are non-executive and, in the opinion of the Board, are independent of the Manager. | 33 --- 34 # Directors' Report ## Business and Status The Company is a closed-end public investment company limited by shares incorporated in Jersey, Channel Islands on 19 December 2011, registered under the Companies (Jersey) Law 1991 (registered number 109714) and established as a Listed fund. It commenced trading on 2 April 2012 following the scheme of reconstruction and voluntary winding up of CMHYT PLC on 30 March 2012, as detailed in the prospectus dated 23 February 2012. On 19 May 2021 the Company merged with Invesco Enhanced Income Limited ('IPE'), effected by way of a shareholder approved contractual scheme of reconstruction by IPE and a transfer of assets. The Company is a collective investment fund under the Collective Investment Funds (Jersey) Law 1988 and is registered as an International Services Entity under the Goods and Services Tax (Jersey) Law 2007. ## Corporate Governance The Corporate Governance Statement set out on pages 38 to 40 is included in this Directors' Report by reference. ## Directors' Remuneration and Interests Details of the Directors' remuneration and interests in the Company are set out on pages 43 and 44 and are included in this Directors' Report by reference. ## Greenhouse Gas Emissions The Company has no employees or property, it does not combust any fuel or operate any facility. The Company does not purchase electricity, heat, steam or cooling for its own use. All services are outsourced on a fee basis that is independent of any energy expended on its behalf and it is not practical for the Company to attempt to quantify emissions in respect of such proxy energy use. Where possible, the Directors offset their carbon usage for travel to board meetings by the purchase of carbon credits from the Durrell Rewild Carbon scheme. ## Stated Capital and Rights Attaching to the Company's Ordinary Shares At the beginning of the year, the Company's stated capital consisted of 202,379,323 ordinary shares of no par value, allotted and fully paid. During the year, 34,950,000 ordinary shares of no par value (representing 17.3% of the number of shares in issue at the beginning of the year) were issued to Winterflood Securities Limited at a price range of 167.00p to 176.05p for total proceeds (net of commission) of £60,098,000. No shares were bought back during the year. As at 31 December 2025, the number of ordinary shares in issue (with voting rights) was 237,329,323. There are no shares in treasury. At an Extraordinary General Meeting of the Company, held on 12 February 2026, shareholders approved the renewal of authorities to issue up to 20% of the Company's shares on a non-pre-emptive basis. These authorities are valid until the conclusion of the 2026 AGM at which new authorities will be sought (see page 35 for further information). A further 20.12 million shares have been issued since 31 December 2025 and up to 27 March 2026, being the last practicable date prior to publication of the Annual Financial Report. These shares were issued at a price range of 171.84p to 176.43p for total proceeds (net of commission) of £34,794,000. This includes 14,372,588 shares issued as a result of a Placing and Retail Offer at a price of 173.28p for total proceeds (net of commission) of £24,780,000. No shares have been bought back since the year end. At a general meeting of the Company every member has one vote on a show of hands and on a poll one vote for each share held. The notice of general meeting will specify deadlines for exercising voting rights either by proxy or in person in relation to resolutions to be passed at the meeting. The Directors may restrict voting powers where shareholders fail to provide information with respect to interests in voting rights when so requested, may refuse to register any transfer of a share in favour of more than four persons jointly and can require certain US holders of shares to transfer their shares compulsorily. Save for the foregoing, there are no restrictions concerning the transfer of securities in the Company; no special rights with regard to control attached to securities; no agreements between holders of securities regarding their transfer known to the Company; and no agreements which the Company is party to that might affect its control following a successful takeover bid. ## Disclosures Required by UK Listing Rule 6.6.1R The above rule requires the Company to include certain applicable information in a single identifiable section of the Annual Financial Report. For this year, only one item of this information applies - disclosure around the issue of shares - and this is covered by note 16 on page 63 (stated capital). ## Relations with Shareholders and other Stakeholders Some examples of the Company's engagement with shareholders and other stakeholders are: Shareholders: The Board endeavours to provide shareholders with a full understanding of the Company's activities and reports formally to shareholders each year by way of the Half-Yearly and Annual Financial Reports. This is supplemented by the daily publication of the net asset value of the Company's ordinary shares and monthly factsheets. Shareholders who attend the AGM can meet the Board and the Manager and have the opportunity to hear directly from the Manager and ask questions. Shareholders can also visit the Company's section of the Manager's investment trust website, www.invesco.co.uk/bips to access copies of Half-Yearly and Annual Financial Reports, shareholder circulars, factsheets and Stock Exchange Announcements. There is a regular dialogue between the Board, the Manager and significant shareholders to discuss aspects of investment performance, governance and strategy and to listen to --- shareholders' views in order to help to develop an understanding of their issues. Meetings between the Manager and shareholders are reported to the Board, which monitors and reviews shareholder communications on a regular basis. Portfolio companies: The Manager engages with investee companies, particularly in relation to ESG matters and has also engaged with some investee companies in relation to restructuring. Corporate Broker: The Board and the Manager regularly engage with the Corporate Broker in relation to the sales strategy and marketing of the Company, in order to provide liquidity for investors. The Corporate Broker also supports the Manager by arranging webinars, roadshows and meetings to introduce the Manager to potential investors. Media: The Manager's Investor Relations team work with the mainstream press and social media platforms such as LinkedIn, to raise the Company's profile and that of the Portfolio Manager's. The success of this activity is measured by monitoring direct website hits, click-throughs from third party websites, as well as new investment in the Company via retail platforms. AIC: the Company is a member of the AIC, which looks after the interests of investment trusts and provides information to the market. Comprehensive information relating to the Company can be found on the AIC website. The Administrator, the Company Secretary, the Registrar, the Depositary/Custodian: In order to function as an investment trust with a listing on the London Stock Exchange, the Company relies on a diverse range of reputable advisers for support in meeting all relevant obligations. The Board maintains regular contact with its key external service providers and receives regular reporting from them, both through the Board and committee meetings, as well as outside of the regular meeting cycle. Their advice, as well as their needs and views are routinely taken into account. The Board (through the Management Engagement Committee) formally assesses their performance, fees and continuing appointment annually to ensure that the key service providers continue to function at an acceptable level and are appropriately remunerated to deliver the required level of service. The Audit & Risk Committee reviews and evaluates the financial reporting control environments in place at each service provider. ## Going Concern As set out in note 2(a)(ii) to the financial statements on page 56, the financial statements have been prepared on a going concern basis. The Directors consider this to be appropriate as the Company has adequate resources to continue in operational existence for a period of at least 12 months after approval of the financial statements. In reaching this conclusion, the Directors took into account the value of net assets covering the net current liability position at balance sheet date. the Company's Investment Policy; its risk management policies; the diversified portfolio of readily realisable securities which can be used to meet funding commitments; its revenue; risks relating to the continuation of the Company (as set out in the Viability Statement on page 15); the uncertain economic and geopolitical outlook, the conflicts in Ukraine and the Middle East; and the ability of the Company in the light of these factors to meet all its liabilities and ongoing expenses. ## Individual Savings Account ('ISA') The ordinary shares of the Company are qualifying investments under applicable ISA regulations. ## Business of the Annual General Meeting ('AGM') The following summarises the business of the forthcoming AGM of the Company, which is to be held at the offices of JTC Fund Solutions (Jersey) Limited at PO Box 1075, 28 Esplanade, St Helier, Jersey JE4 2QP on 17 June 2026 at 9.30am. The Notice of the AGM and related notes can be found on pages 74 and 75. Shareholders are welcome to attend the AGM in person. If you cannot attend in person please lodge your vote either electronically via the registrar's online portal or using the Form(s) of Proxy to appoint the Chairman of the General Meeting as your proxy to vote on your behalf. ## Ordinary Business: Resolution 1 is for members to receive this Annual Financial Report, including the financial statements and Auditor's Report. Resolution 2 is for members to approve the Directors' Remuneration Report. This is an advisory vote. Resolution 3 is for members to approve the Company's dividend payment policy which is set out on page 12. This is also an advisory vote. Resolution 4 is to approve the appointment of KPMG Audit Limited as the Company's auditor (see page 41 for further details). Resolution 5 is to authorise the Audit & Risk Committee to determine the auditor's remuneration. Resolution 6 is to re-elect Heather MacCallum as a Director of the Company. Resolution 7 is to re-elect Caroline Dutot as a Director of the Company. Resolution 8 is to re-elect Christine Johnson as a Director of the Company. Resolution 9 is to elect Arun Kumar Sarwal as a Director of the Company. Resolution 10 is to approve the continuation of the Company. The Company does not have a fixed life, but the Company's Articles of Association require that, unless an ordinary resolution to approve continuation of the Company is passed at or before the AGM each year, the Directors must convene a general meeting, to be held within six months of the AGM, at which a special resolution to wind up the Company would be proposed. Resolution 11 is to renew the Directors' authority to issue shares, up to 10% of the existing shares in issue at the time of the AGM, without pre-emption. This will allow shares to be issued to new shareholders without them first having to be offered to existing shareholders, thus broadening the shareholder base of the Company. This authority will not be exercised at a price below NAV so the interests of existing shareholders are not diluted and will expire at the AGM in 2027. There are no provisions of Jersey law which confer rights of pre-emption in respect of the allotment of shares, or require shareholder approval for issues of shares. The Articles, however, contain pre-emption rights in relation to allotments of shares for cash and the Directors expressed an intention in the Company's 2012 prospectus to request that the authority to allot shares for cash on a non-pre-emptive basis is renewed at each AGM. | 35 --- Resolution 12 seeks an additional authority to that in Resolution 11 for the Directors to issue shares up to a further 10% of the existing shares in issue at the time of the AGM. As noted above for Resolution 11, any shares issued in accordance with this additional authority would not be at a price below NAV and will expire at the AGM in 2027. This additional share issuance authority is aimed at ensuring that the Company is positioned to issue into market demand on a timely basis at minimal cost to shareholders in view of the high level of demand for the Company's shares over the year under review, with 34,950,000 ordinary shares issued over the period and a further 20,122,588 ordinary shares issued since the year end and up to 27 March 2026 (being the latest practicable date prior to the publication of this report). The Board believes that such issuance is beneficial for shareholders as it increases the capital base over which the Company's fixed costs are spread, reducing the Company's ongoing charges ratio and further minimising costs for shareholders. Resolution 13 is to renew the authority for the Company to purchase up to 14.99% of its own ordinary shares subject to the restrictions referred to in the notice of the AGM. This authority will expire at the AGM in 2027. These powers, if approved, will allow the Company to buy back shares at a discount to NAV. Your Directors are proposing that shares bought back by the Company either be cancelled or, alternatively, be held as treasury shares with a view to their resale, if appropriate, or later cancellation. Any resale of treasury shares will only take place on terms that are in the best interests of shareholders. Resolution 14 is to permit the Company to hold general meetings (other than annual general meetings) on 14 days' notice. In accordance with the requirements of the Articles, the Company will offer shareholders an electronic voting facility at each general meeting convened on such shorter notice period. The minimum notice period for annual general meetings will remain at 21 clear days, in accordance with the Articles. This authority would provide the Company with flexibility where action needs to be taken quickly but will only be used where the Directors consider it in the best interests of shareholders to do so and the matter is required to be dealt with expeditiously. JTC Fund Solutions (Jersey) Limited Company Secretary 31 March 2026 --- 37 # The Company's Corporate Governance Framework ## The Board and Committees Responsibility for good governance lies with the Board. The governance framework of the Company reflects the fact that as an investment company it has no employees and outsources investment management to the Manager, administration to JTC Fund Solutions (Jersey) Limited and other related services to external service providers. ## The Board Five non-executive directors ('NEDs') Chairman: Tim Scholefield Key objectives: - to set strategy, values and standards; - to provide leadership within a framework of prudent and effective controls which enable risk to be assessed and managed; and - to constructively challenge and scrutinise performance of all outsourced activities. ## Audit & Risk Committee All NEDs Chair: Heather MacCallum Key objectives: - to oversee financial reporting and the control environment; and - to review the effectiveness of the audit process and the independence and objectivity of the auditor. ## Nomination and Remuneration Committee All NEDs Chair: Caroline Dutot Key objectives: - to review regularly the Board's structure and composition and carry out an annual performance evaluation of the Chairman, the Board and committees; - to make recommendations for any new appointments and plan for the Board's succession; and - to set the remuneration policy of the Company. ## Management Engagement Committee All NEDs Chair: Christine Johnson Key objectives: - to review the performance of the Manager; and - to review other service providers. --- 38 # Corporate Governance Statement ## FOR THE YEAR ENDED 31 DECEMBER 2025 The Board is committed to maintaining high standards of Corporate Governance and is accountable to shareholders for the governance of the Company's affairs. The Directors have considered the principles and recommendations of the 2024 AIC Code of Corporate Governance ('AIC Code'). The AIC Code sets out a framework of best practice in respect of the governance of investment companies and has been endorsed by the Financial Reporting Council ('FRC') and is supported by the Jersey Financial Services Commission. The AIC Code closely reflects the principles and provisions of the FRC UK Corporate Governance Code ('UK Code'). The AIC Code is available from the Association of Investment Companies (www.theaic.co.uk). The Company has complied with the recommendations of the AIC Code. It has also complied with the provisions of the UK Code, except its provisions relating to: - the role of the chief executive; - executive directors' remuneration; and - the need for an internal audit function. For the reasons explained in the AIC Code, the Board considers these provisions are not relevant to the position of Invesco Bond Income Plus Limited, being an externally managed investment company with no executive employees and, in relation to the third, in view of the Manager having an internal audit function. All Directors are available to shareholders if they have concerns that cannot be resolved through contact with the Chairman, the Senior Independent Director or the Manager or for which such contact is inappropriate. The Board considers all Directors to be independent and thus all Directors are members of the respective Committees of the Board. Information on how the Company has applied the principles of the AIC Code and the UK Code follows: - the composition and operation of the Board and its committee functions are summarised below and on page 39, and on pages 41 and 42 in respect of the Audit & Risk Committee. - The Company's policy on diversity is set out on page 39. - The Company's approach to internal control and risk management is summarised on page 13. - The contractual arrangements with, and assessment of, the Manager are summarised on page 16. - The Company's capital structure and voting rights are summarised on page 34. - The most substantial shareholders in the Company are listed on page 16. - The rules concerning the appointment and replacement of directors are contained in the Company's Articles of Association and are discussed on page 39. There are no agreements between the Company and its directors concerning compensation for loss of office. Powers to issue or buy back the Company's shares, which are sought annually, and any amendments to the Company's Articles of Association require a special resolution to be passed by shareholders. ## The Board At the end of the financial year the Board comprised five Directors, all of whom were non-executive. The Board considers all of the Directors to be independent of the Company's Manager. The Directors have a range of financial, business, legal, regulatory and asset management skills as well as recent and relevant experience pertinent to the direction and control of the Company. Brief biographical details of the members of the Board are shown on page 33. During the year Tom Quigley retired from the Board and Arun Kumar Sarwal was appointed as a Director, both effective on 11 June 2025. ## Chairman of the Board The Chair of the Board is Tim Scholefield, an independent non-executive Director, who has no conflicting relationships. ## Senior Independent Director The Senior Independent Director is Heather MacCallum. ## Board Responsibilities The Directors have a duty to promote the success of the Company, taking into consideration the likely long-term consequences of any decisions; the need to foster the Company's business relationships with its Manager, other service providers and advisers; the impact of the Company's operations on the community and the environment; the desirability of the Company maintaining a reputation for high standards of business conduct; and the need to treat shareholders fairly. This is reported on in the Business Review on page 17. The Directors are equally responsible for the proper conduct of the Company's affairs and for promoting the success of the Company by directing and supervising its affairs within a framework of effective controls which enable risk to be assessed and managed. In addition, the Directors are responsible for ensuring that the Company's policies and operations are in the best interests of all its shareholders and that the interests of other stakeholders such as creditors are also properly considered. Board meetings follow a formal agenda, which includes a review of the investment portfolio with a report from the portfolio managers on the current investment position and outlook, performance against appropriate indices and the Company's peer group, asset allocation, gearing, cash management, revenue forecasts for the financial year, marketing and shareholder relations, corporate governance, compliance, regulatory changes and industry and other issues. The Board is committed to the prevention of corruption in the conduct of the Company's affairs and, taking account of the nature of the Company's business and operations, has put in place procedures that the Board considers adequate to prevent persons associated with it from engaging in bribery for and on behalf of the Company. The Board has a zero tolerance approach towards the facilitation of tax evasion. --- A formal schedule of matters reserved for decision by the Board has been established and is available at the Registered Office of the Company and on the Company's section of the Manager's website at www.invesco.co.uk/bips. The main responsibilities of the Board include: setting the Company's objectives, strategy and standards; ensuring that the Company's obligations to shareholders and others are understood and complied with; approving accounting policies and dividend policy; managing the capital structure; assessing risk and overseeing its mitigation; reviewing investment performance; approving loans and borrowing; and approving recommendations by the Audit & Risk Committee, the Nomination and Remuneration Committee and the Management Engagement Committee. There is an agreed procedure for Directors, in the furtherance of their duties, to take legal advice at the Company's expense up to an initial cost of £10,000, having first consulted the Chairman. ## Management Engagement Committee The Management Engagement Committee is chaired by Christine Johnson. The Committee comprises the full Board. The main responsibilities are to review the Company's Investment Management and Company Secretarial and Administration Agreements. The performance of the Manager in respect of investment performance and administration is reviewed formally against agreed standards and reported on page 16 under 'Assessment of the Manager'. The Committee is also responsible for the review of arrangements with other TPPs. The Committee has adopted appropriate terms of reference in respect of its responsibilities which are available at the registered office of the Company and on the Company's section of the Manager's website at www.invesco.co.uk/bips. ## Nomination and Remuneration Committee The fact that the Board is small in size and comprised entirely of independent non-executive Directors means that all Directors are members of the Nomination and Remuneration Committee. The Committee is chaired by Caroline Dutot. The main responsibilities of the Committee are to review the size, structure and skills of the Board, to make recommendations with regard to any changes considered necessary or new appointments, and to plan for the Board's succession. The Committee is also responsible for determining the Company's remuneration policy, taking into account all factors which are deemed necessary in order to ensure that members of the Board are provided with appropriate compensation. The Committee has written terms of reference which are reviewed regularly and clearly define its responsibilities and duties. The terms of reference will be available for inspection at the AGM and can be inspected at the registered office of the Company as well as on the Company's section of the Manager's website at www.invesco.co.uk/bips. The Board's policy on diversity is to seek to ensure that the Board's structure, size and composition, including the skills, knowledge, gender, ethnicity and experience of the Directors, are sufficient for the effective direction and control of the Company. This policy, which covers the Board and the Committees, together with the tenure principles set out in the next section, guides the Committee. During the year, as part of ongoing succession planning, Audelis, an independent external consultancy with no connection to the Company, was engaged to assist with the search for candidates in order to appoint a new Director to succeed Tom Quigley. The search requirements included a preference for a diverse range of candidates, including those with a strong background in listed investment trusts, with relevant accountancy and asset management experience. Following this process, the Nomination and Remuneration Committee recommended to the Board the appointment of Arun Kumar Sarwal. After due consideration Mr Sarwal was appointed to the Board with effect from 11 June 2025, being the strongest candidate with relevant knowledge, qualifications and experience. ## Appointment, Re-election and Tenure of Directors New Directors are appointed by the Board, following recommendation by the Nomination and Remuneration Committee. An independent external search consultancy may be used to assist in the selection of Directors. Care is taken to ensure that when a new Director is appointed there is a balance of skills and experience appropriate for the requirements of the Company and that new Directors have enough time available to devote to the affairs of the Company. The Board has formulated a programme of induction training for newly-appointed Directors. There are ongoing arrangements in place to ensure that Directors can keep up-to-date with new legislation, industry and regulatory matters and changing risks, including briefings from the Manager and the Company Secretary. No Director has a contract of employment with the Company. Directors' terms and conditions of appointment are set out in letters of appointment which are available for inspection at the registered office of the Company and on the Company's section of the Manager's website at www.invesco.co.uk/bips. The Articles of Association require that a Director shall retire and be subject to re-election at the first AGM after appointment and at least every three years thereafter. Thus, no Director serves a term of more than three years before re-election. A Director's tenure will normally be a maximum of three terms of three years, except that the Board may determine otherwise if it is considered that the continued service on the Board of an individual Director is in the best interests of the Company and its shareholders. The Board has resolved that in compliance with the 2024 AIC Code all Directors shall stand for annual re-election. An outline of the reasons why their contributions and skills continue to be important to the Company's long term sustainable success are included on page 33. The Chairman's tenure of office will also normally be for up to nine years, except that the Board may determine otherwise if it is considered that the continued service on the Board of a Chairman, who has in addition served a period of time as a Director, is in the best interests of the Company and its shareholders. The Articles of Association provide that the Directors may, by notice in writing, remove any Director from the Board. ## The Audit & Risk Committee The composition and activities of the Audit & Risk Committee are summarised in the Audit & Risk Committee Report on pages 41 and 42. ## Board, Committee and Directors' Performance Appraisal The Directors recognise the importance of the AIC Code's recommendations in respect of evaluating the performance of the Board as a whole, its Committees and individual Directors. The performance of the Board, Committees and Directors is assessed in the following terms: - attendance at Board and Committee meetings; - independence of Directors; - the ability of Directors to make an effective contribution to the Board and Committees through the diversity of skills and experience each Director brings to their role; and - the Board's ability to challenge the Manager's recommendations, suggest areas of debate and set the future strategy of the Company. The composition of the Board is reviewed annually as part of the appraisal of the Board, the Committees and the individual Directors. The Board has determined that, periodically and as appropriate, this review will be facilitated by an external agency. The last such externally facilitated review was conducted in 2022 and the next one will be undertaken in 2026. | 39 --- Heather MacCallum, as Senior Independent Director, was responsible for the performance evaluation of the Chairman, taking into account the views of the other Directors. The Board conducted its performance evaluation through questionnaires and discussion between the Directors and the Chairman. The results of this review confirmed that the Board and committees of the Board are effective, as are the individual Directors, and that the current directors provide a good range of experience and backgrounds and are independent of the Manager and Company Secretary. Accordingly, the Board recommends to shareholders the approval of AGM resolutions 6 to 9 relating to the election and re-election of the Directors. ## Attendance at Board and Committee Meetings The Board meets on a regular basis at least four times a year. The following table sets out the number of scheduled meetings of the Board and Committees held during the year and the number attended by each Director. In addition the Board held a number of ad-hoc meetings. | | Scheduled Board Meeting | Audit & Risk Committee Meeting | Nomination and Remuneration Committee Meeting | Management Engagement Committee Meeting | | --- | --- | --- | --- | --- | | Number of Meetings Held: | 4 | 2 | 2 | 1 | | Meetings Attended: | | | | | | Tim Scholefield (Chairman of the Board) | 4 | 2 | 2 | 1 | | Caroline Dutot (Chair of the Nomination & Remuneration Committee) | 4 | 2 | 2 | 1 | | Christine Johnson (Chair of the Management Engagement Committee) | 4 | 2 | 2 | 1 | | Heather MacCallum (Senior Independent Director & Chair of the Audit Committee) | 4 | 2 | 2 | 1 | | Tom Quigley(1) | 2 | 1 | 1 | 1 | | Arun Kumar Sarwal(2) | 4(3) | 2(3) | 2(3) | 1 | (1) Retired from the Board on 11 June 2025. (2) Appointed to the Board on 11 June 2025. (3) Attended one meeting as an observer prior to appointment to the Board. Regular contact is maintained between the Manager, including the portfolio managers, the Company Secretary and the Board between formal meetings. ## Conflicts of Interest A Director must avoid a situation where he/she has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the Company's interests. The Articles of Association of the Company give the Directors authority to approve conflicts and potential conflicts. The Directors are able to impose limits or conditions when giving authorisation if they think it is appropriate. Only Directors who have no conflict of interest in the matter being considered are able to take the relevant decision. Also, in taking the decision the Directors must act in a way they consider, in good faith, is most likely to promote the Company's success. The Directors have declared any potential conflicts of interest to the Company. Any potential conflicts of interest are entered onto the Company's Register of Potential Conflicts, which is kept at the Company's registered office and is reviewed regularly by the Board. The Directors must advise the Company Secretary as soon as they become aware of any potential conflicts of interest. ## The Company Secretary JTC Fund Solutions (Jersey) Limited was appointed with effect from 10 December 2019 as Company Secretary and Administrator. The Board has direct access to the advice and services of the Company Secretary, JTC Fund Solutions (Jersey) Limited, which is responsible for ensuring that Board and Committee procedures are followed and that applicable rules and regulations are complied with. The Company Secretary is also responsible to the Board for ensuring timely delivery of information and reports and that the statutory obligations of the Company are met. In addition, the Company Secretary is responsible for advising the Board through the Chairman on all governance matters. ## Stewardship The Company's portfolio predominantly comprises bonds, which rarely carry voting rights except in specific limited circumstances. The Company's stewardship functions have been delegated to the Manager which exercises the Company's voting rights on an informed and independent basis. To the extent that voting rights are exercisable, the Board considers that the Company has responsibility as an investor towards ensuring that votes are cast with a view to supporting high standards of corporate governance. A copy of the Manager's Stewardship Code can be found at www.invesco.co.uk. By order of the Board JTC Fund Solutions (Jersey) Limited Company Secretary 31 March 2026 --- # Audit & Risk Committee Report FOR THE YEAR ENDED 31 DECEMBER 2025 The Audit & Risk Committee, chaired by Heather MacCallum, comprises all of the Directors on the Board including the Chairman of the Board. The Board consider the Chairman of the Board to be independent and therefore Tim Scholefield has been appointed as a member of the Audit & Risk Committee. The Committee has written terms of reference that clearly define its responsibilities and duties. These can be inspected at the registered office of the Company and on the Company's section of the Manager's website at www.invesco.co.uk/bips. The Committee members consider that collectively they have substantial recent and relevant financial experience and competence relevant to the sector to discharge their responsibilities effectively. ## Audit & Risk Committee Responsibilities The responsibilities of the Audit & Risk Committee include: - evaluation of the effectiveness of the internal controls and risk management systems, including reports received on the operational controls of the Company's service providers and the Manager's and the Company Secretary's whistleblowing arrangements; - reviewing the Company's annual and half-yearly financial reports and announcements and ensuring compliance with relevant statutory and listing requirements and the appropriateness of accounting policies applied; - management of the relationship with the external auditor, including their appointment, remuneration, and the scope, effectiveness, independence and objectivity of their audit; and - ensuring, at the request of the Board, that the Company's Annual Financial Report taken as a whole is fair, balanced and understandable and provides the necessary information for shareholders to assess the Company's position and performance, business model and strategy. ## Audit & Risk Committee Activities The Committee met twice during the year. The Committee undertook a review of the Company's internal controls and risk management including the risk control summary used to identify the Company's top risks. The review process included consideration of emerging risks and procedures for their identification. The result of this work is reflected in the Internal Controls and Risk Management and Principal Risks and Uncertainties sections on pages 14 and 15. Particular attention was also given to reviewing controls and policies with respect to cyber security, ESG, the continuing impact of geopolitical and macroeconomic events on the Company and the investment portfolio. The business continuity practices of the Company's TPPs were also reviewed. Other activities undertaken by the Committee follow: The audit programme and timetable were drawn up and agreed with the auditor in advance of the financial year end. At this stage, matters for audit focus were discussed and agreed. These matters were given particular attention during the audit process and, among other matters, were reported on by the auditor in the audit report to the Committee. The report was considered by the Committee and discussed with the auditor and the Manager prior to approval and signature of the Company's Annual Financial Report. The Committee considered the content of the Company's Annual Financial Report, including the accounting policies applied, and recommended it to the Board. The Committee reviewed the auditor's independence, objectivity and effectiveness, the quality of the services provided to the Company and, together with the Manager, reviewed the Company's compliance with financial reporting and regulatory requirements as well as risk management processes. Representatives of the Manager's Compliance and Internal Audit Departments attended both meetings and would have met privately with the Committee if it was considered necessary. The depository also provided a satisfactory report to the Committee on their monitoring of the activities of the Company throughout the year. Representatives of the auditor, PricewaterhouseCoopers CI LLP, attended the Committee meeting at which the Company's draft Annual Financial Report was reviewed and were given the opportunity to speak to Committee members without the presence of representatives of the Manager. The Committee is satisfied that PricewaterhouseCoopers CI LLP has fulfilled its obligations to shareholders as independent auditor to the Company. The Committee conducted an audit tender process during the year. As a result the Committee recommended to the Board the appointment of KPMG Audit Limited ('KPMG') as the Company's auditor for the year ending 31 December 2026. The allocation of management fees and finance costs between revenue and capital is considered annually by the Committee which takes account of the long-term split of returns from the portfolio, yields, the objective of the Company and current market practice. The Audit & Risk Committee has also reviewed its own competence and effectiveness in the year and has assessed both to be satisfactory. 41 --- 42 # Accounting Matters and Significant Areas The Committee's review of the audit plan included identifying accounting estimates and accounting matters that were expected to require focus in relation to the Company's Annual Financial Report. The accounting estimates and accounting matters that were subject to specific consideration by the Committee follow: | Significant Area | How Addressed | | --- | --- | | Accuracy of the portfolio valuation | Actively traded listed investments are valued using exchange prices provided by third party pricing vendors. Any non-actively traded investments are reviewed relative to appropriate supporting evidence. The Board reviews detailed portfolio valuations on a regular basis throughout the year and receives confirmation from the Manager that the pricing basis is appropriate and in line with relevant accounting standards as adopted by the Company. | | Income recognition | Accrued income is calculated by the Manager and each stock line is reviewed to ensure that capital appreciation is not inappropriately attributed to revenue. The Board reviews revenue estimates and receives explanations from the Manager for any significant movements from previous estimates and, if applicable, prior year figures. The audit includes checks on completeness and accuracy of income. | The Committee was satisfied that these matters have been satisfactorily addressed through consideration of reports provided by, and discussed with, the Manager and the auditor. Following a thorough review process, the Audit & Risk Committee advised the Board that the Company's 2025 Annual Financial Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance and position, business model and strategy. # Auditor PricewaterhouseCoopers CI LLP ('PwC') has been the auditor of the Company since 2016. David Clare acted as engagement leader for the 2025 audit. The Committee evaluated the independence, performance and effectiveness of PwC. This included discussions with the Manager and review of the audit planning, execution and reporting, the quality of the audit work and the auditor's independence. The quality of audit service provision was satisfactory. It is the Company's policy normally not to seek substantial non-audit services from its auditor and no such services were supplied in 2025 (2024: none). Prior to any engagement for non-audit services, the Audit & Risk Committee considers whether the skills and experience of the auditor make them a suitable supplier of such services and to ensure that there is no threat to objectivity and independence in the conduct of the audit as a result. As highlighted in Company's annual report for the year ended 31 December 2024, in compliance with auditor rotation regulations the Committee undertook a competitive audit tender during the year. As part of the audit tender process, the Committee invited a number of firms, including PwC, to tender and set out their proposed terms and offering. These proposals were considered by the Committee and matters including the proposed audit approach, sector expertise, resourcing, quality assurance, results of recent FRC's Audit Quality Inspections and proposed fees were considered. Subsequent to this and following presentations by the audit teams of the short-listed firms, after due consideration, the Committee recommended to the Board the appointment of KPMG Audit Limited. The Board consequently invited KPMG to be the Company's auditor for the year ending 31 December 2026. PwC will resign after signing this year's Annual Financial Report. Resolutions appointing KPMG and authorising the Committee to determine their remuneration will be put to shareholders at the forthcoming AGM. # Internal Audit As the Company is an externally managed investment company with no executive employees and given that the Manager maintains an internal audit function with which the Committee regularly meets and from which it receives reports, the Company does not maintain its own internal audit function. Yours faithfully, Heather MacCallum Audit & Risk Committee Chair 31 March 2026 --- # Directors' Remuneration Report FOR THE YEAR ENDED 31 DECEMBER 2025 ## Remuneration Responsibilities All Directors are members of the Nomination and Remuneration Committee which is chaired by Caroline Dutot. Details of the Committee's responsibilities can be found on page 39. ## Directors' Remuneration Policy The Board's policy is that Directors' remuneration should be fair and reasonable by comparison with fees paid by other investment companies of similar size and complexity. The remuneration of the Chairman, Senior Independent Director and the Audit & Risk Committee Chair is set to reflect the extra responsibilities and time spent on their respective roles. The policy, which is approved annually by shareholders, was last approved at the Company's 2025 Annual General Meeting. Fees for Directors are determined by the Board within the aggregate limit stated in the Company's Articles of Association of £250,000 per annum. Directors do not have service contracts. Directors are appointed under letters of appointment, copies of which are available for inspection at the registered office of the Company and on the Manager's website. The same fees will apply to both current and new Directors. Directors are entitled to be reimbursed for any reasonable expenses properly incurred by them in connection with the performance of their duties and attendance at board and general meetings and committees. Directors are not eligible for bonuses, pension benefits, share options or other incentives or benefits. There are no agreements between the Company and its Directors concerning compensation for loss of office. The Company's Articles also provide that additional discretionary payments can be made for services which in the opinion of the Directors are outside the scope of the ordinary duties of a Director. The Company has no employees and consequently has no policy on the remuneration of employees. The Board will consider, where raised, shareholders' views on Directors' remuneration. ## Directors' Fee Rates As reported in last year's Directors' Remuneration Report directors' fees were increased from 1 January 2025 and the following rates applied: Chairman £46,000; Chair of the Audit & Risk Committee £39,000; and other Directors £32,000. The Senior Independent Director received a fee of £1,000 in addition to their base fee. The Nomination and Remuneration Committee further reviewed the level of fees at the end of the financial year to ensure that they were fair and reasonable compared to those of similar investment companies. The review also considered the increasing regulatory requirements (including those specific to the Channel Islands) and time commitments for Directors. As a result of this review, and in accordance with the Directors' Remuneration Policy, the Nomination and Remuneration Committee determined that directors' fees will be increased with effect from 1 January 2026 by an average of circa 13.5%. From 1 January 2026 Directors' fees will be paid at the following rates: Chairman £50,000; Chair of the Audit & Risk Committee £44,000; and other Directors £37,000. As noted above the Senior Independent Director will receive a fee of £1,500 in addition to their base fee. The total fees to be paid to the Directors during 2026 will remain within the current limit prescribed by the Company's Articles of Association. ## Chairman's Annual Statement on Directors' Remuneration For the year to 31 December 2025, the Directors were paid the fee rates in the table below. No additional discretionary payments were made in the current year (2024: nil). ## Annual Report on Directors' Remuneration ### Directors' Remuneration for the Year The Directors who served during the year received the following emoluments, all of which were in the form of fees: | | 2025 | 2024 | | --- | --- | --- | | | £ | £ | | Tim Scholefield - Chairman | 46,000 | 45,000 | | Heather MacCallum - Senior Independent Director & Chair of the Audit & Risk Committee | 40,000 | 39,000 | | Caroline Dutot - Chair of the Nomination & Remuneration Committee | 32,000 | 31,000 | | Tom Quigley(1) | 14,330 | 31,000 | | Christine Johnson - Chair of the Management Engagement Committee | 32,000 | 31,000 | | Arun Kumar Sarwal(2) | 17,753 | n/a | | Total | 182,083 | 177,000 | (1) Retired as a Director on 11 June 2025. (2) Appointed as a Director 11 June 2025. --- 44 # Directors' Interests The beneficial interests of the Directors in the ordinary share capital of the Company are shown below: | | 31 December 2025 Shares Held | 31 December 2024 Shares Held | | --- | --- | --- | | Tim Scholefield (Chairman) | 32,000 | 32,000 | | Heather MacCallum | 8,000 | 8,000 | | Caroline Dutot(1)(4) | 77,150 | - | | Tom Quigley(2) | - | 15,000 | | Christine Johnson | 2,547 | 2,539 | | Arun Kumar Sarwal(3)(4) | 24,238 | - | (1) Includes 57,140 shares held by a person closely associated with Caroline Dutot. (2) Retired as a Director on 11 June 2025. (3) Appointed as a Director on 11 June 2025. (4) Subsequent to the year end, Caroline Dutot and Arun Kumar Sarwal acquired 101 and 424 shares respectively via a dividend re-investment plan. Save as aforesaid, no Director had any other interests, beneficial or otherwise, in the shares of the Company during the year. No further changes to these holdings have been notified up to the date of this report. No connected person interests have been notified. Directors hold shares in the Company at their discretion. Share ownership is encouraged, but no guidelines have been set. No Director was a party to, or had any interests in, any contract or arrangement with the Company at any time during the period or at the year end other than in respect of indemnification and insurance as set out below. # Directors' Indemnification and Insurance The Company maintains a Directors' and Officers' liability insurance policy. The Company has entered into a Deed of Indemnity with each of the Directors by which, to the extent permitted by law and the Company's Articles of Association, the Company will indemnify them against liabilities incurred in connection with their office as Directors of the Company and fund reasonable expenditure incurred by them in defending proceedings brought against them in connection with their position as Directors of the Company. The indemnity does not apply to the extent that the costs are recoverable under the Directors' and Officers' liability insurance policy maintained by the Company or from any other insurance maintained by the Director. --- # Directors' Responsibilities Statement The Directors are responsible for preparing the Company's Annual Financial Report in accordance with applicable laws and regulations. The Companies (Jersey) Law 1991 requires the Directors to prepare financial statements for each financial period. Under that law the Directors have elected to prepare the financial statements in accordance with International Financial Reporting Accounting Standards issued by the International Financial Reporting Standards as adopted by the European Union ('IFRS' Accounting Standards as adopted by the EU). The financial statements are required by law to give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. International Accounting Standard 1 requires that financial statements present fairly for each financial year the Company's financial position, financial performance and cash flows. This requires the faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the International Accounting Standards Board's 'Framework for the preparation and presentation of financial statements'. In virtually all circumstances, a fair presentation will be achieved by compliance with all applicable IFRS Accounting Standards as adopted by the EU. In preparing these financial statements, the Directors are required to: - properly select and apply accounting policies and then apply them consistently; - present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; - provide additional disclosures when compliance with specific requirements in IFRS Accounting Standards are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and - make an assessment of the Company's ability to continue as a going concern. The financial statements have been prepared on a going concern basis. When considering this, the Directors took into account the annual shareholders' continuation vote (as explained in detail on page 56) and the following: the Company's investment objective and risk management policies, the nature of the portfolio and expenditure and cash flow projections. As a result, they determined that the Company has adequate resources, an appropriate financial structure, readily realisable fixed assets to repay current liabilities and suitable management arrangements in place to continue in operational existence for the foreseeable future. The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and which enable them to ensure that the accounts comply with the Companies (Jersey) Law 1991. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Under applicable law and regulations, the Directors are also responsible for preparing a Corporate Governance Statement and a Directors' Report that comply with that law and those regulations. The Directors of the Company, who are listed on page 33, each confirm to the best of their knowledge that: - the financial statements, which have been prepared in accordance with applicable accounting standards, give a true and fair view of the financial position and profit or loss of the Company; - this Annual Financial Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces; - this Annual Financial Report, 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; and - there is no relevant audit information of which the Company's auditor is unaware, and each Director has taken steps that they ought to have taken as a Director to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information. Signed on behalf of the Board of Directors Heather MacCallum Audit & Risk Committee Chair 31 March 2026 a. The directors have delegated responsibility for the maintenance and integrity of the Invesco Bond Income Plus Limited website to the Manager; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditor accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website. b. Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 45 --- Invesco Bond Income Plus Limited ![img-20.jpeg](img-20.jpeg) # Financial Independent Auditor's Report ... 47 Statement of Comprehensive Income ... 52 Statement of Changes in Equity ... 53 Balance Sheet ... 54 Statement of Cash Flows ... 55 Notes to the Financial Statements ... 56 --- Independent Auditor’s Report To the Members of Invesco Bond Income Plus Limited Report on the audit of the financial statements Our opinion In our opinion, the financial statements give a true and fair view of the financial position of Invesco Bond Income Plus Limited (the "company") as at 31 December 2025, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and have been properly prepared in accordance with the requirements of the Companies (Jersey) Law 1991. What we have audited The company's financial statements comprise: - the balance sheet as at 31 December 2025; - the statement of comprehensive income for the year then ended; - the statement of changes in equity for the year then ended; - the statement of cash flows for the year then ended; and - the notes to the financial statements, comprising material accounting policy information and other explanatory information. Basis for opinion We conducted our audit in accordance with International Standards on Auditing ("ISAs"). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements of the company, which includes those required by the Crown Dependencies' Audit Rules and Guidance. We have also fulfilled our other ethical responsibilities in accordance with these requirements. Our audit approach Overview Audit scope - The company is a closed-end investment company, incorporated and based in Jersey, with ordinary shares listed on the Main Market of the London Stock Exchange. - We conducted our audit of the financial statements using information provided by JTC Fund Solutions (Jersey) Limited (the "administrator") and Invesco Fund Managers Limited (the "manager"). Our audit work was performed in Jersey. We tailored the scope of our risk-based audit considering the types of investments held by the company, the accounting processes and controls, and the industry in which the company operates. Key audit matters - Valuation and ownership of investments. - Income recognition. Materiality - Overall materiality: £8,206,000 (2024: £3,457,000) based on 2% (2024: 1%) of net assets. - Performance materiality: £6,154,000 (2024: £2,593,000). The scope of our audit As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we considered where the directors made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud. | 47 --- 48 # Key audit matters Key audit matters are those matters that, in the auditor's professional judgement, were of most significance in the audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by the auditor, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. This is not a complete list of all risks identified by our audit. | Key audit matter | How our audit addressed the key audit matter | | --- | --- | | **Key audit matter** **Valuation and ownership of investments** Refer to note 2 (Principal Accounting Policies), note 11 (Investments Held at Fair Value Through Profit and Loss), and note 20 (Classification Under Fair Value Hierarchy) to the financial statements. The valuation and ownership of investments represent the principal element of the net asset value of the company as disclosed on the balance sheet in the financial statements. The valuation of investments drives several key performance indicators, such as net asset value, which is of significant interest to investors. 99% of the bond and equity portfolio by value are classified as either level 1 or level 2 in the fair value hierarchy. The nature of level 1 and level 2 investment valuations is not complex as they are based primarily on quoted prices from independent pricing sources. However, the magnitude of the amounts involved means that there is potential for material misstatement. If the recorded investments do not accurately reflect the company's actual holdings, this discrepancy could significantly affect the financial statements. | We obtained an understanding of, and evaluated, the design and implementation of key controls relevant to the valuation and ownership. We used independent third-party pricing sources to recalculate the valuation of all level 1 and level 2 positions within the bond and equity portfolio and compared it to the valuation performed by management. For the bond and equity portfolio, we obtained an independent third-party confirmation from the company's custodian and compared it to the company's investment ownership records. We have no material matters to report. | | **Income recognition** Refer to note 2 (Principal Accounting Policies) and note 4 (Income) to the financial statements. Income is earned primarily through bond interest income, with an immaterial amount of dividend income recognised in the year. The calculation and recognition of income receipts and accrued income is not considered to be complex. We identified the accuracy, occurrence and completeness of bond interest income to be an area of focus, because the incomplete or inaccurate recognition of income could have a material impact on the company's financial performance for the year. | We assessed the accounting policy for income recognition for compliance with applicable accounting standards and assessed whether income had been accounted for in accordance with the stated accounting policy. For a sample of bonds, we compared the interest rates from the accounting records to independent sources and recalculated the income recognised by the company; and recalculated interest accrued at the year-end. Using data analytic techniques, we matched revenue receipts from the general ledger system to receipts in the bank statement and investigated a sample of unmatched items. To address the risk of incomplete income recognition, our sample included interest received and accrued from bonds held at 31 December 2025, as well as bonds that had been purchased and sold during the year. We have no material matters to report. | | **How we tailored the audit scope** We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the financial statements as a whole, taking into account the structure of the company, the accounting processes and controls, the industry in which the company operates, and we considered the risk of climate change and the potential impact thereof on our audit approach. | | | **Materiality** The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole. | | --- Based on our professional judgement, we determined materiality for the financial statements as a whole as follows: | Overall materiality | £8,206,000 (2024: £3,457,000). | | --- | --- | | How we determined it | 2% (2024: 1%) of net assets. | | Rationale for benchmark applied | We believe that net assets is the most appropriate benchmark because this is the key metric of interest to investors. It is also a generally accepted measure used for companies in this industry. | We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality was $75\%$ (2024: $75\%$ ) of overall materiality, amounting to £6,154,000 (2024: £2,593,000) for the company financial statements. In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was appropriate. We agreed with the Audit & Risk Committee that we would report to them misstatements identified during our audit above £410,000 (2024: £173,000) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons. # Reporting on other information The other information comprises all the information included in the Annual Financial Report (the "Annual Report") but does not include the financial statements and our auditor's report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based on these responsibilities. # Responsibilities for the financial statements and the audit ## Responsibilities of the directors for the financial statements As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparation of the financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union, the requirements of Jersey law and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. ## Auditor's responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected. As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. 49 --- - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern over a period of at least 12 months from the date of approval of the financial statements. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. ## Use of this report This report, including the opinions, has been prepared for and only for the members as a body in accordance with Article 113A of the Companies (Jersey) Law 1991 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. ## Report on other legal and regulatory requirements ### Company Law exception reporting Under the Companies (Jersey) Law 1991 we are required to report to you if, in our opinion: - we have not received all the information and explanations we require for our audit; - proper accounting records have not been kept; or - the financial statements are not in agreement with the accounting records. We have no exceptions to report arising from this responsibility. ### Corporate governance statement The UK Listing Rules require us to review the directors' statements in relation to going concern, longer-term viability and that part of the corporate governance statement relating to the company's compliance with the provisions of the UK Corporate Governance Code specified for our review. Our additional responsibilities with respect to the corporate governance statement as other information are described in the Reporting on other information section of this report. The company has reported compliance against the AIC Corporate Governance Code (the "Code") which has been endorsed by the UK Financial Reporting Council as being consistent with the UK Corporate Governance Code for the purposes of meeting the company's obligations, as an investment company, under the UK Listing Rules of the FCA. Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance statement, included within the Business Review and Directors' Responsibilities Statement is materially consistent with the financial statements and our knowledge obtained during the audit, and we have nothing material to add or draw attention to in relation to: - The directors' confirmation that they have carried out a robust assessment of the emerging and principal risks; - The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and an explanation of how these are being managed or mitigated; - The directors' statement in the financial statements about whether they considered it appropriate to adopt the going concern basis of accounting in preparing them, and their identification of any material uncertainties to the company's ability to continue to do so over a period of at least 12 months from the date of approval of the financial statements; - The directors' explanation as to their assessment of the company's prospects, the period this assessment covers and why the period is appropriate; and - The directors' statement as to whether they have a reasonable expectation that the company will be able to continue in operation and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions. Our review of the directors' statement regarding the longer-term viability of the company was substantially less in scope than an audit and only consisted of making inquiries and considering the directors' process supporting their statements; checking that the statements are in alignment with the relevant provisions of the Code; and considering whether the statement is consistent with the financial statements and our knowledge and understanding of the company and its environment obtained in the course of the audit. --- In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance statement is materially consistent with the financial statements and our knowledge obtained during the audit: - The directors' statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides the information necessary for the members to assess the company's position, performance, business model and strategy; - The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and - The section of the Annual Report describing the work of the Audit & Risk Committee. We have nothing to report in respect of our responsibility to report when the directors' statement relating to the company's compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the UK Listing Rules for review by the auditors. David Clare For and on behalf of PricewaterhouseCoopers CI LLP Chartered Accountants and Recognised Auditor Jersey, Channel Islands 31 March 2026 --- # Statement of Comprehensive Income | | Notes | Year ended31 December 2025 | | | Year ended31 December 2024 | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | Revenue£'000 | Capital£'000 | Total£'000 | Revenue£'000 | Capital£'000 | Total£'000 | | Net gains on investments held at fair value through profit or loss | 11 | - | 3,548 | 3,548 | - | 2,093 | 2,093 | | Net gains on derivative instruments - forward currency contracts and CDS | 13 | - | 3,273 | 3,273 | - | 943 | 943 | | Exchange differences | | - | (2,717) | (2,717) | - | 1,965 | 1,965 | | Income | 4 | 30,853 | - | 30,853 | 26,370 | - | 26,370 | | Investment management fee | 5 | (1,230) | (1,230) | (2,460) | (1,090) | (1,090) | (2,180) | | Other expenses | 6 | (815) | (14) | (829) | (856) | (40) | (896) | | Profit before finance costs and taxation | | 28,808 | 2,860 | 31,668 | 24,424 | 3,871 | 28,295 | | Finance costs | 7 | (534) | (534) | (1,068) | (826) | (826) | (1,652) | | Profit before taxation | | 28,274 | 2,326 | 30,600 | 23,598 | 3,045 | 26,643 | | Tax on ordinary activities | 8 | (89) | - | (89) | (61) | - | (61) | | Profit after taxation | | 28,185 | 2,326 | 30,511 | 23,537 | 3,045 | 26,582 | | Earnings per ordinary share | 9 | 13.07p | 1.08p | 14.15p | 12.08p | 1.57p | 13.65p | The total columns of this statement represent the Company's statement of comprehensive income, prepared in accordance with International Financial Reporting Standards ('IFRS') Accounting Standards adopted by the European Union. The profit after taxation is the total comprehensive income. The supplementary revenue and capital columns are both prepared in accordance with the Statement of Recommended Practice issued by the Association of Investment Companies. All items in the above statement derive from continuing operations of the Company. No operations were acquired or discontinued in the year. The accompanying accounting policies and notes are an integral part of these financial statements. --- # Statement of Changes in Equity | | Notes | Stated Capital £'000 | Capital Reserve £'000 | Revenue Reserve £'000 | Total £'000 | | --- | --- | --- | --- | --- | --- | | At 31 December 2023 | | 316,793 | (22,018) | 9,854 | 304,629 | | Profit after taxation | | - | 3,045 | 23,537 | 26,582 | | Dividends paid | 10 | (514) | - | (21,660) | (22,174) | | Net proceeds from issue of new shares | 16 | 36,762 | - | - | 36,762 | | At 31 December 2024 | | 353,041 | (18,973) | 11,731 | 345,799 | | Profit after taxation | | - | 2,326 | 28,185 | 30,511 | | Dividends paid | 10 | (642) | - | (25,491) | (26,133) | | Net proceeds from issue of new shares | 16 | 60,098 | - | - | 60,098 | | At 31 December 2025 | | 412,497 | (16,647) | 14,425 | 410,275 | The accompanying accounting policies and notes are an integral part of these financial statements. --- # Balance Sheet | | Notes | At 31 December 2025 £'000 | At 31 December 2024 £'000 | | --- | --- | --- | --- | | Non-current assets | | | | | Investments held at fair value through profit or loss | 11 | 420,214 | 376,963 | | Current assets | | | | | Other receivables | 12 | 13,783 | 9,939 | | Derivative financial instruments - receivable | 13 | 1,729 | 415 | | Cash and cash equivalents | | 21,232 | 8,153 | | | | 36,744 | 18,507 | | Current liabilities | | | | | Other payables | 14 | (6,198) | (1,000) | | Derivative financial instruments - payable | 13 | (24) | (2,321) | | Securities sold under agreements to repurchase | 15 | (38,018) | (45,127) | | | | (44,240) | (48,448) | | Net current liabilities | | (7,496) | (29,941) | | Total assets less current liabilities | | 412,718 | 347,022 | | Non-current liabilities | | | | | Derivatives held at fair value through profit or loss | 13 | (2,443) | (1,223) | | Net assets | | 410,275 | 345,799 | | Capital and reserves | | | | | Stated capital | 16 | 412,497 | 353,041 | | Capital reserve | 17 | (16,647) | (18,973) | | Revenue reserve | 17 | 14,425 | 11,731 | | Total shareholders' funds | | 410,275 | 345,799 | | Net asset value per ordinary share | 18 | 172.87p | 170.87p | The financial statements were approved and authorised for issue by the Board of Directors on 31 March 2026. Signed on behalf of the Board of Directors Heather MacCallum Audit & Risk Committee Chair The accompanying accounting policies and notes are an integral part of these financial statements. --- # Statement of Cash Flows | | Year ended | | | --- | --- | --- | | | 31 December | 31 December | | | 2025 | 2024 | | Cash flow from operating activities | £'000 | £'000 | | Profit before finance costs and taxation | 31,668 | 28,295 | | Tax on overseas income | (89) | (61) | | Adjustment for: | | | | Purchases of investments | (164,225) | (139,225) | | Sales of investments | 129,737 | 99,926 | | | (34,488) | (39,299) | | Decrease from securities sold under agreements to repurchase | (7,109) | (2,941) | | Net gains through profit or loss on investments held at fair value | (3,548) | (2,093) | | Net movement from derivative instruments - forward currency contracts and CDS | (2,391) | 4,519 | | Increase in other receivables | (3,446) | (1,336) | | Increase in other payables | 80 | 101 | | Effect of foreign exchange rate changes | 545 | 135 | | Net cash outflow from operating activities | (18,778) | (12,680) | | Cash flow from financing activities | | | | Finance cost paid | (1,167) | (1,669) | | Net proceeds from issue of new shares - note 16 | 60,103 | 36,856 | | Dividends paid - note 10 | (26,133) | (22,174) | | Cost of shares issued - note 16 | (401) | (183) | | Net cash inflow from financing activities | 32,402 | 12,830 | | Net increase in cash and cash equivalents | 13,624 | 150 | | Cash and cash equivalents at start of the year | 8,153 | 8,138 | | Effect of foreign exchange rate changes | (545) | (135) | | Cash and cash equivalents at the end of the year | 21,232 | 8,153 | | Reconciliation of cash and cash equivalents to the Balance Sheet is as follows: | | | | Cash held at custodian | 5,114 | 7,903 | | Invesco Liquidity Funds plc - Sterling | 16,118 | 250 | | Cash and cash equivalents | 21,232 | 8,153 | | Cash flow from operating activities includes: | | | | Dividends received | 642 | 627 | | Interest received | 29,073 | 24,984 | | Reconciliation of net debt | | | | | | --- | --- | --- | --- | --- | | | At | | | At | | | 1 January 2025 | Cash flows | Non-cash movement | 31 December 2025 | | | £'000 | £'000 | £'000 | £'000 | | Cash and cash equivalents | 8,153 | 13,624 | (545) | 21,232 | | Securities sold under agreements to repurchase | (45,127) | 7,109 | - | (38,018) | | Total | (36,974) | 20,733 | (545) | (16,786) | --- # Notes to the Financial Statements ## 1. Principal Activity The Company is a closed-end investment company incorporated in Jersey and operates under the Companies (Jersey) Law 1991. The principal activity of the Company is investment in a diversified portfolio of high-yielding fixed-interest securities as set out in the Company's Investment Objective and Policy. ## 2. Principal Accounting Policies The principal accounting policies describe the Company's approach to recognising and measuring transactions during the year and the position of the Company at the year end. The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied during the current year and preceding year, unless otherwise stated. The financial statements have been prepared on a going concern basis as noted below. ### (a) Basis of Preparation #### (i) Accounting Standards Applied The financial statements have been prepared on a historical cost basis, except for the measurement at fair value of investments and derivatives, and in accordance with the applicable International Financial Reporting Standards as adopted by the European Union ('IFRS' Accounting Standards as adopted by the EU). The standards are those endorsed by the European Union and effective at the date the financial statements were approved by the Board. Where presentational guidance set out in the Statement of Recommended Practice (SORP) 'Financial Statements of Investment Trust Companies and Venture Capital Trusts', updated by the Association of Investment Companies in July 2022, is consistent with the requirements of IFRS Accounting Standards as adopted by the EU, the Directors have prepared the financial statements on a basis compliant with the recommendations of the SORP. The supplementary information which analyses the statement of comprehensive income between items of a revenue and a capital nature is presented in accordance with the SORP. #### (ii) Going Concern As explained on page 16, the Company has an Annual Continuation Vote and the Directors believe shareholders will vote for the Company to continue. Accordingly, the Directors have determined that the financial statements should and have been prepared on a going concern basis, which does not include any adjustments that might arise from cessation of the Company. The Articles of Association of the Company require that unless an ordinary resolution is passed at or before the Annual General Meeting ('AGM') each year releasing the Directors from the obligation to do so, the Directors shall convene a general meeting within six months of the AGM at which a special resolution would be proposed to wind up the Company. The directors plan on presenting an ordinary resolution at the forthcoming AGM for which a 50% majority is needed for a special resolution regarding continuance not to be held. If a special resolution was held regarding a continuation vote a 75% majority of the shareholders need to vote for the Company not to continue. Last year nearly 100% of the votes registered at the AGM were in favour of releasing the obligation to hold a continuation vote. Based upon the current financial performance and financial position of the Company including the net current liability position at the balance sheet date along with the AGM vote outcome last year and ongoing dialogue with investors, the Directors do not have any concerns regarding the outcome of the forthcoming ordinary resolution and hence do not consider there to be a material uncertainty over going concern. If a continuation vote was held and was unsuccessful, the basis of preparation would be switched at that date to a basis other than going concern and the NAV impacting adjustments would not be material as the majority of investments are Level 2, based on observable market prices and investments are classified as held at fair value through profit or loss. ### (iii) Adoption of New and Revised Standards There were no new nor revised standards and interpretations that became effective during the year having a significant impact on the amounts reported in these financial statements. During the year the following standards were issued but were not effective and the Company has chosen not to early adopt: - IFRS 18, 'Presentation and Disclosure in Financial Statements' - effective 1 January 2027 (early adoption is permitted). - Amendments to the Classification and Measurement of Financial Instruments - Amendments to IFRS 9 and IFRS 7 - effective 1 January 2026. --- (iv) Critical Accounting Estimates and Judgements The preparation of the financial statements may require the Directors to make estimations where uncertainty exists. It also requires the Directors to exercise judgement in the process of applying the accounting policies. The Directors, having taken into account the factors in note 2a(ii), judge it appropriate to continue to use the going concern basis to prepare the financial statements given the Annual Continuation Vote. The area requiring the most significant judgement and estimation in the preparation of the financial statements is: accounting for the value of Level 3 investments. Further details can be found in note 20 on pages 70 and 71. (b) Foreign Currency (i) Functional and Presentation Currency The financial statements are presented in sterling, which is the Company's functional and presentation currency and the currency in which the Company's stated capital and expenses are denominated, as well as a certain proportion of its income, assets and liabilities. (ii) Transactions and Balances Transactions in foreign currency, whether of a revenue or capital nature, are translated to sterling at the rate of exchange ruling on the date of such transactions. Foreign currency assets and liabilities are translated to sterling at the rates of exchange ruling at the balance sheet date. Foreign exchange gains and losses relating to non investments are presented in the statement of comprehensive income within 'exchange differences'. Foreign exchange gains and losses relating to the financial assets and liabilities carried at fair value through profit or loss are presented in the statement of comprehensive income within 'net gains on investments held at fair value through profit or loss'. All profits and losses, whether realised or unrealised, are recognised in the statement of comprehensive income and are taken to capital reserve or revenue reserve, depending on whether the gain or loss is capital or revenue in nature. (c) Financial Instruments (i) Recognition of Financial Assets and Financial Liabilities Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. These are offset if the Company has a legally enforceable right to set off the recognised amounts and interests and intends to settle on a net basis. (ii) Derecognition of Financial Assets Financial assets are derecognised when the contractual rights to the cash flows from the asset expire, or it transfers the right to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in the transferred financial asset that is created or retained by the Company is recognised as an asset. (iii) Derecognition of Financial Liabilities Financial liabilities are derecognised when the Company's obligations are discharged, cancelled or expired. (iv) Trade Date Accounting Purchases and sales of financial assets are recognised on trade date, being the date on which the Company commits to purchase or sell the assets. (v) Classification of Financial Assets and Financial Liabilities Financial assets Investments are classified as held at fair value through profit or loss as the investments are managed and their performance evaluated on a fair value basis in accordance with the Company's documented investment strategy and this is also the basis on which information about investments is provided internally to the Board. Financial assets held at fair value through profit or loss are initially recognised at fair value, which is taken to be their cost, with transaction costs expensed in the statement of comprehensive income, and are subsequently valued at fair value. Changes in fair value including the related foreign exchange gains and losses are recognised in the statement of comprehensive income under net gains and losses on investments. For investments that are actively traded in organised financial markets, fair value is determined by reference to stock exchange quoted bid prices at the balance sheet date. For investments that are not actively traded or where active stock exchange quoted bid prices are not available, fair value is determined by reference to a variety of valuation techniques including broker quotes and price modelling. Financial Liabilities Financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs and are subsequently measured at amortised cost using the effective interest method, where applicable. (d) Derivatives and Hedging Derivative instruments are valued at fair value in the balance sheet. Hedge accounting has not been adopted. Forward currency contracts entered into for hedging purposes are valued at the appropriate forward exchange rate ruling at the balance sheet date and any profits and losses are recognised in the statement of comprehensive income and taken to capital. The treatment of the earnings from credit default swaps depends upon the nature of the transaction. Both motives and circumstances are used to determine whether earnings should be treated as capital or revenue. Given that the primary rationale for holding credit default swaps is capital protection, any gains/(losses) and premiums paid are reflected within net gain/(losses) on derivative instruments and taken to capital. Prior to 1 January 2025 the expense element was reflected within revenue in other expenses within the statement of comprehensive income. | 57 | --- 58 # 2. Principal Accounting Policies (continued) ## (e) Cash and Cash Equivalents Cash and cash equivalents may comprise cash (including short term deposits which are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value) as well as cash equivalents, including money market funds. ## (f) Securities Sold Under Agreements to Repurchase ('repo financing') The Company participates in repo financing arrangements in connection with its investment portfolio. Under these arrangements, the Company sells fixed interest securities but is contractually obliged to repurchase them at a fixed price on a fixed date. Securities which are the subject of repo financing arrangements are included in investments in the balance sheet at their fair value and the associated liability is recognised at amortised cost, being the capital amounts owing under the repo financing arrangements. The difference between sale and repurchase prices for such transactions is reflected in the statement of comprehensive income over the lives of the transactions, within finance costs which is allocated 50% to capital and 50% to revenue (2024: 50% capital; 50% revenue). This accounting has been adopted because the repurchase price results in a lender's return for the transferee as the Company has retained substantially all the risks and rewards of ownership of the asset. ## (g) Income Recognition All income is recognised in the statement of comprehensive income. Interest income arising from fixed income securities classified as fair value through profit or loss is recognised in the statement of comprehensive income based on the contractual interest rate. Interest income is recognised as it accrues, using the coupon rate specified in the bond terms. Dividend income arises from equity investments held and is recognised on the date investments are marked 'ex-dividend'. Deposit interest is taken into account on an accruals basis. Special dividends are considered individually to ascertain the reason behind the payment. This will determine whether they are treated as income or capital in the statement of comprehensive income. ## (h) Expenses and Finance Costs All expenses are accounted for on an accruals basis and are recognised in the statement of comprehensive income. Investment management fees and finance costs are allocated 50% to capital and 50% to revenue (2024: 50% capital; 50% revenue) in accordance with the Board's expected long-term split of earnings, in the form of capital gains and income respectively, from the investment portfolio. Except for custodian dealing costs, all other expenses are charged through revenue. ## (i) Taxation Overseas interest and dividends are shown gross of withholding tax and the corresponding irrecoverable tax is shown as a charge in the statement of comprehensive income. ## (j) Dividends payable to shareholders Interim dividends are recognised in the period in which they are paid and are dealt with in the statement of changes in equity. ## (k) Stated Capital Stated Capital represents the total value of shares in issue, including net issue proceeds resulting from share issuances and if appropriate, payments as a result of share buybacks. Stated Capital can be used for distributions under the Companies (Jersey) Law 1991. Because the criteria in paragraphs 16C and 16D of IAS 32 Financial Instruments: Presentation, have been met, the stated capital of the Company is classified as equity even though there is a continuation vote. # 3. Segmental Reporting No segmental reporting is provided as the Directors are of the opinion that the Company is engaged in a single segment of business of investing in debt and, to a significantly lesser extent, equity securities. # 4. Income This note shows the income generated from the portfolio (investment assets) of the Company and income received from any other source. | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | Income from investments | | | | UK investment income - interest | 14,122 | 12,412 | | UK dividends | 367 | 436 | | Overseas investment income - interest | 15,806 | 13,067 | | Overseas dividends | 252 | 182 | | | 30,547 | 26,097 | | Other income | | | | Deposit interest | 199 | 212 | | Other income | 107 | 61 | | | 306 | 273 | | Total income | 30,853 | 26,370 | --- # 5. Investment Management Fee This note shows the fees paid to the Manager, which are calculated quarterly on the basis of the value of the assets being managed. | | 2025 | | | 2024 | | | | --- | --- | --- | --- | --- | --- | --- | | | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | | Investment management fee | 1,230 | 1,230 | 2,460 | 1,090 | 1,090 | 2,180 | Details of the investment management and secretarial agreement are given on page 35 in the Directors' Report. At 31 December 2025, £667,000 (2024: £562,000) was accrued in respect of the investment management fee. The management fee is payable quarterly in arrears and is equal to 0.1625% of the value of the Company's total assets under management less current liabilities at the end of the relevant quarter. # 6. Other Expenses The other expenses of the Company are presented below; those paid to the Directors and the auditor are separately identified. | | 2025 | | | 2024 | | | | --- | --- | --- | --- | --- | --- | --- | | | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | | Directors' remuneration(i) | 182 | - | 182 | 177 | - | 177 | | Auditors' fees(ii): - for audit of the Company's annual financial statements | 70 | - | 70 | 57 | - | 57 | | Other expenses(iii) | 563 | 14 | 577 | 622 | 40 | 662 | | | 815 | 14 | 829 | 856 | 40 | 896 | (i) The maximum Directors' fees authorised by the Articles of Association are £250,000 (2024: £250,000) per annum. The Directors' Remuneration Report on page 43, provides further information on Directors' fees. (ii) Auditor's fees include out of pocket expenses. There was a £6,500 additional fee in relation to Level 3 investments incurred in respect of the year to 31 December 2024 audit, paid in the year to 31 December 2025. (iii) Other expenses include: - custodian transaction charges of £3,000 (2024: £4,000). These are charged to capital. - legal and administrative fees of £11,000 related to the adoption of updated Articles of Association (2024: £36,000 share placing). These were charged to capital. - amounts due to JTC Fund Solutions (Jersey) Limited who acted as Administrator and Company Secretary to the Company under an agreement starting from 10 December 2019. The fee paid for company secretarial and administration services in the current year was £143,000 (2024: £139,000). - A fee of £103,000 was paid to the Manager for marketing services on behalf of the Company (2024: £103,000). - A premium of £38,000 was paid from revenue, during the year to 31 December 2024, on credit default swaps. From 1 January 2025 onwards premiums paid are reflected in capital within net gains on derivative instruments. Further details are shown in note 2(d) and note 13. # 7. Finance Costs Finance costs arise on any borrowing the Company has and comprises of interest due under repo financing, being the Company's preferred method of borrowing. | | 2025 | | | 2024 | | | | --- | --- | --- | --- | --- | --- | --- | | | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | | Interest due under repo financing | 534 | 534 | 1,068 | 826 | 826 | 1,652 | | | 534 | 534 | 1,068 | 826 | 826 | 1,652 | The Company has repo financing arrangements in place which were used during the year. For repos that are denominated in currencies where the interest rate is negative, the interest is receivable and has been netted against repo interest payable within finance costs, as they relate to borrowing costs. --- 60 # 8 Taxation As a Jersey investment company no tax is payable on capital gains and, as the Company principally invests in assets which do not result in a revenue tax, the only overseas tax arises on assets domiciled in countries with which Jersey has no double-taxation treaty. | | 2025 | 2024 | | --- | --- | --- | | | £'000 | £'000 | | Overseas taxation | 89 | 61 | The Company is subject to Jersey income tax at the rate of 0% (2024: 0%). The overseas tax charge consists of irrecoverable withholding tax suffered. # 9. Earnings per Ordinary Share Earnings per ordinary share is the amount of gain generated for the financial year divided by the weighted average number of ordinary shares in issue. The basic revenue, capital and total earnings per ordinary share is based on each of the earnings on ordinary activities after taxation and on 215,592,679 (2024: 194,765,138) ordinary shares, being the weighted average number of ordinary shares in issue throughout the year. # 10. Dividends on Ordinary Shares Dividends are usually paid from the income less expenses. Dividends are paid as an amount per ordinary share held. The fourth interim dividend shown below is based on shares in issue at the record date or, if the record date has not been reached, on shares in issue on the date the balance sheet is signed. The fourth interim dividend was paid after the balance sheet date. | | 2025 | | 2024 | | | --- | --- | --- | --- | --- | | | Pence | £'000 | Pence | £'000 | | Dividends paid and recognised in the year: | | | | | | Fourth interim | 3.0625 | 6,206 | 2.8750 | 5,212 | | First interim | 3.0625 | 6,294 | 2.8750 | 5,554 | | Second interim | 3.0625 | 6,677 | 2.8750 | 5,625 | | Third interim | 3.0625 | 6,956 | 2.8750 | 5,783 | | | 12.2500 | 26,133 | 11.5000 | 22,174 | Dividends paid in respect of the year have been charged to revenue except for £642,000 (2024: £514,000) which was charged to stated capital. This amount is equivalent to the cumulative income accrued on the new shares issued in the year. When new shares are issued there is an element of income accrued in the issuance price paid, with proceeds fully taken to capital. As a result, the accrued income element is then used as part of dividend payments from stated capital. This has the effect of reducing the amount of revenue used for dividend payments. | | 2025 | | 2024 | | | --- | --- | --- | --- | --- | | | Pence | £'000 | Pence | £'000 | | Dividends payable in respect of the year: | | | | | | First interim | 3.0625 | 6,294 | 2.8750 | 5,554 | | Second interim | 3.0625 | 6,677 | 2.8750 | 5,625 | | Third interim | 3.0625 | 6,956 | 2.8750 | 5,783 | | Fourth interim | 3.0625 | 7,372 | 3.0625 | 6,206 | | | 12.2500 | 27,299 | 11.6875 | 23,168 | The fourth interim dividend for 2025 was paid on 20 February 2026 to shareholders on the register on 16 January 2026. --- # 11. Investments Held at Fair Value Through Profit and Loss The portfolio is principally made up of investments which are listed and traded on regulated stock exchanges. Profits and losses are either: - realised, usually arising when investments are sold; or - unrealised, being the difference from cost of those investments still held at the year end. (a) Analysis of investment movement during the year | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | Opening book cost | 386,556 | 352,292 | | Opening investment holding losses | (9,593) | (16,759) | | Opening valuation | 376,963 | 335,533 | | Movements in year: | | | | Purchases at cost | 169,440 | 139,225 | | Sales - proceeds | (129,737) | (99,888) | | Net gains on investments held at fair value through profit or loss | 3,548 | 2,093 | | Closing valuation | 420,214 | 376,963 | | Closing book cost | 423,811 | 386,556 | | Closing investment holding losses | (3,597) | (9,593) | | Closing valuation | 420,214 | 376,963 | The Company received £129,737,000 (2024: £99,888,000) from investments sold in the year. The book cost of these investments when they were purchased was £131,942,000 (2024: £104,961,000) realising a loss of £2,205,000 (2024: £5,073,000). These investments have been revalued over time and until they were sold any unrealised profits/losses were included in the fair value of the investments. (b) Registration of investments The investments of the Company are registered in the name of the Company or in the name of nominees and held to the account of the Company. (c) Securities sold under agreements to repurchase Included in the valuation above are securities under agreements to repurchase which had a market value of £44,796,000 (2024: £51,461,000). Included within current liabilities are Securities sold under agreements to repurchase £38,018,000 (2024: £45,127,000), further details are shown in note 15. # 12. Other Receivables Other receivables are amounts which are due to the Company, such as income which has been earned (accrued) but not yet received and monies due from brokers for investments sold. | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | Margin held at brokers | 5,141 | 2,783 | | Proceeds due from issue of new shares | 658 | 260 | | Prepayments and accrued income | 7,984 | 6,896 | | | 13,783 | 9,939 | --- 62 # 13. Derivative Financial Instruments Derivative financial instruments are financial instruments that derive their value from the performance of another item, such as an asset or exchange rates. They are used to manage the risk associated with fluctuations in the value of certain assets and liabilities. The Company can use derivatives to manage its exposure to fluctuations in foreign exchange rates or to mitigate credit risk. Derivative financial instruments comprise forward currency contracts and credit default swaps. | | 2025 | 2024 | | --- | --- | --- | | Net derivative financial instruments | £'000 | £'000 | | Forward currency contracts: | | | | Forward currency contracts - receivable | 1,729 | 415 | | Forward currency contracts - payable | (24) | (2,321) | | | 1,705 | (1,906) | | | 2025 | 2024 | | | £'000 | £'000 | | Credit default swaps ('CDS'): | | | | Opening net CDS liabilities held at fair value as shown in balance sheet | (1,223) | - | | Movements in year : | | | | Purchases at cost | (4,539) | (1,356) | | Sales - proceeds | 3,494 | - | | Net realised gains relating to underlying price movements | 112 | - | | Net change in unrealised (losses)/gains relating to underlying price movements | (283) | 156 | | Add: Prior year notional interest arising on derivatives | 23 | - | | Less : Notional interest arising on derivatives | (27) | (23) | | Closing net CDS liabilities held at fair value as shown in balance sheet | (2,443) | (1,223) | Net gains on derivative instruments - forward currency contracts and CDS consists of: | | 2025 | 2024 | | --- | --- | --- | | | £'000 | £'000 | | Movement in derivative holding gains - forward currency contracts | 3,611 | (3,296) | | Net realised gains on derivative instruments - CDS | 112 | - | | Movement in derivative holding gains - CDS | (283) | 156 | | Premium paid - CDS(1) | (917) | - | | Net realised gains on derivative instruments - forward currency contracts | 750 | 4,083 | | Net gains on derivative instruments - forward currency contracts and CDS | 3,273 | 943 | (1) Premiums paid on CDS are reflected within net gains on derivative instruments and taken to capital. Prior to 1 January 2025 the expense element was reflected within revenue in note 6. # 14. Other Payables Other payables are amounts which must be paid by the Company, and include amounts owed to suppliers, such as the Manager and auditor, and any amounts due to brokers for the purchase of investments. | | 2025 | 2024 | | --- | --- | --- | | | £'000 | £'000 | | Amounts due to brokers | 5,215 | - | | Amounts payable relating to issue of new shares | 3 | 1 | | Accruals | 980 | 999 | | | 6,198 | 1,000 | # 15. Securities sold under agreements to repurchase | | 2025 | 2024 | | --- | --- | --- | | | £'000 | £'000 | | Securities sold under agreements to repurchase | 38,018 | 45,127 | During the year, the Company entered into repo financing arrangements whereby securities are sold under agreements to repurchase. Included within Investments Held at Fair Value Through Profit and Loss (note 11) are securities under agreements to repurchase which had a market value of £44,796,000 (2024: £51,461,000). Further details are shown in note 2(f) and note 19.3. --- # 16. Stated Capital The stated capital represents the total number of shares in issue and their attributed value. Stated capital can be used for distributions under Jersey Law. | | 2025 | | 2024 | | | --- | --- | --- | --- | --- | | | Number | £'000 | Number | £'000 | | Allotted ordinary shares of no par value: | | | | | | Brought forward | 202,379,323 | 353,041 | 180,702,596 | 316,793 | | Net issue proceeds | 34,950,000 | 60,098 | 21,676,727 | 36,762 | | Dividends paid from stated capital | | (642) | - | (514) | | | 237,329,323 | 412,497 | 202,379,323 | 353,041 | At 31 December 2025, the Company's stated capital consisted of 237,329,323 ordinary shares of no par value, allotted and fully paid. For the year to 31 December 2025, 34,950,000 (2024: 21,676,727) new ordinary shares were issued to the Company's corporate broker, Winterflood Securities Limited, for onward transmission to their clients. These shares were issued in tranches of various quantities throughout the year to satisfy secondary market demand. The gross issue proceeds were £60,502,000 (2024: £36,946,000), at an average price of 173.11p (2024: 170.44p), and the net proceeds after issue costs were £60,098,000 (2024: £36,762,000). The net proceeds included an aggregate amount of £232,000 (2024: £18,000) which arose from the income accrued component of the net asset value at the date of issue of the new shares. Subsequent to the year end and up to 27 March 2026 (being the latest practicable date prior to the publication of this report) 20,122,588 ordinary shares were issued at an average price of 173.78p. Because the criteria in paragraphs 16C and 16D of IAS 32 Financial Instruments: Presentation, have been met, the stated capital of the Company is classified as equity even though there is a continuation vote. # 17. Reserves This note explains the different reserves attributable to shareholders. The aggregate of the reserves and stated capital (see previous note) make up total shareholders' funds. The capital reserve includes unrealised net gains and losses on investments held at fair value through profit and loss, being the difference between cost and market value at the balance sheet date, as well as gains and losses on disposal of investments held at fair value through profit and loss. In addition, costs allocated to capital are recognised in the capital reserve. The revenue reserve shows the net revenue after payment of any dividend from the reserve. Both the capital and revenue reserves are distributable. # 18. Net Asset Value per Ordinary Share The Company's total net assets (total assets less total liabilities) are often termed shareholders' funds and are converted into net asset value per ordinary share by dividing by the number of shares in issue. The net asset value per share and the net asset values attributable at the year end were as follows: | | Net asset value per ordinary share | | Net assets attributable | | | --- | --- | --- | --- | --- | | | 2025 Pence | 2024 Pence | 2025 £'000 | 2024 £'000 | | Ordinary shares | 172.87 | 170.87 | 410,275 | 345,799 | Net asset value per ordinary share is based on net assets at the year end and on 237,329,323 (2024: 202,379,323) ordinary shares, being the number of ordinary shares in issue (excluding treasury) at the year end. # 19. Risk Management: Financial Assets and Liabilities Financial instruments comprise the Company's investment portfolio and derivative financial instruments (for the latter see note 13) as well as any cash, borrowings (i.e. securities sold under agreements to repurchase otherwise known as 'repo financing'), other receivables and other payables. The following note explains the risks that affect the Company's financial instruments and looks at the Company's exposure to these various risks. ## Risk Management Policies and Procedures The Business Review details the Company's approach to investment management risks on page 13 and the accounting policies in note 2 explain the Company's valuation basis for investments and currency. As an investment company, the Company invests in loan stocks, corporate bonds, government stocks, preference shares and equities which are held for the long-term in order to achieve the Company's Investment Objective in accordance with its Investment Policy. In pursuing these, the Company is exposed to a variety of risks that could result in either a reduction in the Company's net assets or a reduction in the profits available for payment as dividends. The Company's principal financial instruments at risk comprise its investment portfolio. Other financial instruments at risk include cash and cash equivalents, borrowings (including repo financing), other receivables and other payables that arise directly from the Company's operations. --- 64 # 19. Risk Management: Financial Assets and Liabilities (continued) The Company may enter into derivative transactions, including credit default swaps, for efficient portfolio management. Derivative instruments can be highly volatile and expose investors to a high risk of loss. Where used to hedge risk there is a risk that the return on a derivative does not exactly correlate to the returns on the underlying investment, obligation or market sector being hedged against. If there is an imperfect correlation, the Company may be exposed to greater loss than if the derivative had not been entered into. During the year the only derivatives entered into were forward currency contracts and credit default swaps. As at the year end, credit default swaps with a market value of £(2,443,000) were held by the Company (2024: £(1,223,000)). These risks and the Directors' approach to managing them are set out below, and have not changed from those applied in the comparative year. Risk management is an integral part of the investment management process. The Manager controls risk by ensuring that the Company's portfolio is appropriately diversified and the portfolio managers actively monitor both the ratings and liquidity of the fixed-interest securities taking into account the Company's financing requirements. In-depth and continual analysis of market and security fundamentals give the portfolio managers the best possible understanding of the risks associated with a particular security. The portfolio managers assess the exposure to market risk when making each investment decision, and monitor the overall level of market risk on the whole of the portfolio on an ongoing basis. High-yield fixed-interest securities are subject to a variety of risks, including credit risk (note 19.3). The day to day management of the investment activities, borrowings and hedging of the Company has been delegated to the Manager, and is the responsibility of the portfolio managers to whom the Board has given discretion to operate within set guidelines. Any proposed variation outside those guidelines is referred to the Board and the guidelines themselves are reviewed at every board meeting. ## 19.1 Market Risk Market risk arises from changes in the fair value or future cash flows of a financial instrument. Market risk comprises three types of risk: currency risk (note 19.1.1), interest rate risk (note 19.1.2) and other price risk (note 19.1.3). ### 19.1.1 Currency Risk The Company has assets, liabilities and income which are denominated in currencies other than sterling and movements in exchange rates will affect the sterling value of those items. #### Management of the Currency Risk The Board meets at least quarterly to assess risk and review investment performance. The portfolio managers monitor the Company's exposure to foreign currencies on a daily basis and exposure is reviewed by Directors at each Board meeting. The Company may use forward currency contracts to mitigate currency risk. In addition, non-sterling credit default swaps will either mitigate or increase currency risk depending on whether the Company has sold or bought the credit default swap as well as exchange movements. Repo financing is matched to the currency of the underlying assets, which minimises currency risk on the movement of exchange rates affecting the underlying investments. Non-sterling investments that are not pledged under repo financing can be hedged using forward currency contracts. All borrowings and derivative contracts are limited to currencies and amounts commensurate with asset exposure to those currencies. Income denominated in foreign currencies is converted to sterling on receipt. The Company does not use financial instruments to mitigate the currency exposure in the period between the time that income is included in the financial statements and its receipt. #### Currency Exposure The following table shows the fair values of the Company's monetary items that have foreign currency exposure at 31 December. Where the Company's investments (which are not monetary items) are priced in a foreign currency, they have been included separately in the analysis to show the overall level of exposure. | | Euro £'000 | US Dollar £'000 | | --- | --- | --- | | 31 December 2025 | | | | Investments at fair value through profit or loss that are monetary items (fixed and floating interest) | 128,645 | 66,355 | | Forward currency contracts | (92,958) | (69,411) | | Other receivables (due from brokers and dividends) | 5,828 | 1,494 | | Cash and cash equivalents | 2,081 | 715 | | Derivative liabilities held at fair value through profit or loss | (2,443) | - | | Other payables (due to brokers and accruals) | (133) | - | | Securities sold under agreement to repurchase | (34,939) | - | | Foreign currency exposure on net monetary items | 6,081 | (847) | | Investments at fair value through profit or loss (preference shares and equities) | 1,060 | 1,551 | | Total net foreign currency | 7,141 | 704 | --- 65 | | Euro £'000 | US Dollar £'000 | | --- | --- | --- | | 31 December 2024 | | | | Investments at fair value through profit or loss that are monetary items | | | | (fixed and floating interest) | 90,634 | 82,395 | | Forward currency contracts | (40,357) | (78,983) | | Other receivables (due from brokers and dividends) | 3,606 | 1,406 | | Cash and cash equivalents | 5,623 | 1,147 | | Derivative liabilities held at fair value through profit or loss | (1,223) | - | | Other payables (due to brokers and accruals) | (243) | - | | Securities sold under agreement to repurchase | (45,127) | - | | Foreign currency exposure on net monetary items | 12,913 | 5,965 | | Investments at fair value through profit or loss (preference shares and equities) | 2,795 | 1,678 | | Total net foreign currency | 15,708 | 7,643 | The above may not be representative of the exposure to risk during the year reported because the levels of monetary foreign currency exposure may change significantly throughout the year. ## Currency Sensitivity The effect on the Statement of Comprehensive Income and the net asset value that changes in exchange rates have on the Company's financial assets and liabilities is based on the following currencies. These changes have been calculated by reference to the volatility of exchange rates during the period using the standard deviation of currency fluctuations against the mean. | | 2025 | 2024 | | --- | --- | --- | | £/Euro | ±1.9% | ±1.2% | | £/US Dollar | ±3.0% | ±1.7% | The following sensitivity analysis is based on the Company's monetary foreign currency financial instruments held at the balance sheet date, taking account of any forward foreign exchange contracts that offset the effects of changes in currency exchange rates, and the income receivable in foreign currency in the year. If sterling had strengthened by the changes in exchange rates shown above, this would have had the following effect: | | Euro £'000 | US Dollar £'000 | | --- | --- | --- | | 2025 | | | | Effect on Statement of Comprehensive Income - profit/(loss) after taxation | | | | Revenue loss | (198) | (170) | | Capital loss | (22) | 12 | | Total loss after taxation for the year | (220) | (158) | | Effect on net asset value | -0.1% | 0.0% | If sterling had weakened by the same amounts, the effect would have been the converse. | | Euro £'000 | US Dollar £'000 | | --- | --- | --- | | 2024 | | | | Effect on Statement of Comprehensive Income - profit/(loss) after taxation | | | | Revenue loss | (89) | (103) | | Capital loss | (140) | (104) | | Total loss after taxation for the year | (229) | (207) | | Effect on net asset value | -0.1% | -0.1% | If sterling had weakened by the same amounts, the effect would have been the converse. In the opinion of the Directors, the above sensitivity analysis is not representative of the year as a whole, since the level of exposure changes frequently as part of the currency risk management process of the Company. --- 66 # 19. Risk Management: Financial Assets and Liabilities (continued) ## 19.1.2 Interest Rate Risk The Company is exposed to interest rate risk in a number of ways. Movements in interest rates may affect the fair value of fixed-interest rate securities, income receivable on cash deposits and floating rate securities, and interest payable on variable rate borrowings, including repo financing. Interest rate risk is related above all to long-term financial instruments. Whilst a significant proportion of the portfolio at both current and prior financial year ends contains securities designated as floating rate, many of these securities include a fixed interest rate period resulting in a more predictable income stream than their technical designation would suggest. ## Management of Interest Rate Risk The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account as part of the portfolio management and borrowings processes of the Manager. The Board reviews on a regular basis the investment portfolio and borrowings. This encompasses the valuation of fixed-interest and floating rate securities. When the Company has cash balances, they are held in variable rate bank accounts yielding rates of interest dependent on the base rate of the Custodian, the Bank of New York Mellon (International) Limited. Holdings in Invesco Liquidity Funds plc - Sterling are subject to interest rate changes. The Company has available repo financing arrangements it can use to finance investment activity, details of which are shown in notes 7 and 15. The Company uses these at levels approved and monitored by the Board. ## Interest Rate Exposure The following table shows the Company's exposure to interest rate risk at the balance sheet date arising from its monetary financial assets and liabilities. | | Within one year £'000 | More than one year £'000 | Total £'000 | | --- | --- | --- | --- | | 2025 | | | | | Exposure to floating interest rates: | | | | | Investments held at fair value through profit or loss | 1,008 | 202,375 | 203,383 | | Cash and cash equivalents(1) | 21,232 | - | 21,232 | | Margin held at brokers (including collateral pledged on CDS) | 5,141 | - | 5,141 | | | 27,381 | 202,375 | 229,756 | | Exposure to fixed interest rates: | | | | | Investments held at fair value through profit or loss | 7,375 | 201,675 | 209,050 | | Derivatives held at fair value through profit or loss | - | (2,443) | (2,443) | | Securities sold under agreements to repurchase | (38,018) | - | (38,018) | | | (30,643) | 199,232 | 168,589 | | Net exposure to interest rates | (3,262) | 401,607 | 398,345 | | | Within one year £'000 | More than one year £'000 | Total £'000 | | 2024 | | | | | Exposure to floating interest rates: | | | | | Investments held at fair value through profit or loss | - | 164,673 | 164,673 | | Cash and cash equivalents(1) | 8,153 | - | 8,153 | | Margin held at brokers (including collateral pledged on CDS) | 2,783 | - | 2,783 | | | 10,936 | 164,673 | 175,609 | | Exposure to fixed interest rates: | | | | | Investments held at fair value through profit or loss | 1,509 | 199,749 | 201,258 | | Derivatives held at fair value through profit or loss | - | (1,223) | (1,223) | | Securities sold under agreements to repurchase | (45,127) | - | (45,127) | | | (43,618) | 198,526 | 154,908 | | Net exposure to interest rates | (32,682) | 363,199 | 330,517 | (i) Includes £16,118,000 (2024: £250,000) held in Invesco Liquidity Fund plc - Sterling. --- The nominal interest rates on the investments at fair value through profit or loss are shown in the portfolio list on pages 24 to 31. The weighted average effective interest rate on these investments is 7.9% (2024: 7.6%). The weighted average effective interest rate on cash and cash equivalents is 3.21% (2024: 4.07%). ## Interest Rate Sensitivity The following table illustrates the sensitivity of the profit or loss after taxation for the year to a 3.25% (2024: 3.25%) increase in interest rates in regard to the Company's financial assets and financial liabilities. As future changes cannot be estimated with any degree of certainty, the sensitivity analysis is based on the Company's financial instruments held at the balance sheet date, with all other variables held constant. | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | Effect on Statement of Comprehensive Income - profit after taxation | | | | Revenue profit | 857 | 355 | | Capital loss | (52,169) | (47,570) | | Total loss after taxation for the year | (51,312) | (47,215) | | Effect on NAV per ordinary share | (25.4)p | (23.3p) | If interest rates had decreased by 3.25% (2024: 3.25%), this would have had an equal and opposite effect. The above exposure and sensitivity analysis are not representative of the year as a whole, since the level of exposure changes frequently as borrowings, which are predominantly from repo financing arrangements, can vary throughout the year. ## 19.1.3 Other Price Risk Other price risk includes changes in market prices, other than those arising from currency risk or interest rate risk, which may affect the value of the investment portfolio, whether by factors specific to an individual investment or its issuer, or by factors affecting the wider market. ### Management of Other Price Risk It is the portfolio managers' responsibility to manage the portfolio and borrowings in accordance with the investment objective and policy, and in accordance with the investment policy guidelines set by the Board. The Board manages the market price risks inherent in the investment portfolio by meeting regularly to monitor on a formal basis compliance with these. The Board also reviews investment performance. Because the Company's portfolio is the result of the portfolio managers' investment process, performance may not closely correlate with the markets in which the Company invests. The Company's exposure to other changes in market prices at 31 December on its investments is shown in the fair value hierarchy table on pages 70 and 71. ### Concentration of Exposure to Other Price Risks The Company's investment portfolio is not concentrated in any single country of domicile, however, it is recognised that an investment's country of domicile or listing does not necessarily equate to its exposure to the economic conditions in that country. ### Other Price Risk Sensitivity Excluding fixed interest securities and convertibles, at the year end the Company held other investments of £7,781,000 (2024: £11,032,000). The effect of a 10% increase or decrease in the fair values of these investments (including any exposure through derivatives) on the profit after taxation for the year is £778,000 (2024: £1,103,000). This level of change is considered to be reasonably possible based on the observation of market conditions during the financial year. ## 19.2 Liquidity Risk This is the risk that the Company may encounter difficulty in meeting its obligations associated with financial liabilities i.e. when realising assets or raising/replacing repo financing to meet financial commitments. A lack of liquidity in the portfolio may make it difficult for the Company to realise assets at or near their purported value in the event of a forced sale. ### Management of Liquidity Risk Liquidity risk is not viewed by the Directors as a significant risk because the majority of the Company's assets comprise readily realisable securities, although a lack of liquidity in non-investment grade securities may make it difficult to rebalance the Company's investment portfolio as and when the portfolio managers believe it would be advantageous to do so. On a daily basis the portfolio managers ascertain the Company's cash and borrowing requirements by reviewing future cash flows arising from purchases and sales of investments, interest and dividend receipts, expenses and dividend payments, and available financing (including repo financing). --- 68 # 19. Risk Management: Financial Assets and Liabilities (continued) ## 19.2 Liquidity Risk (continued) ### Liquidity Risk Exposure The contractual maturities of the financial liabilities at 31 December, based on the earliest date on which payment can be required, was as follows: | | 2025 | | | 2024 | | | | --- | --- | --- | --- | --- | --- | --- | | | Less than three months £'000 | More than one year £'000 | Total £'000 | Less than three months £'000 | More than one year £'000 | Total £'000 | | Amounts due to brokers (note 14) | 5,215 | - | 5,215 | - | - | - | | Accruals and amounts payable relating to issue of new shares (note 14) | 983 | - | 983 | 1,000 | - | 1,000 | | Derivative financial instruments - payable (note 13) | 24 | 2,443 | 2,467 | 2,321 | 1,223 | 3,544 | | Securities sold under agreements to repurchase (note 15) | 38,018 | - | 38,018 | 45,127 | - | 45,127 | | | 44,240 | 2,443 | 46,683 | 48,448 | 1,223 | 49,671 | ## 19.3 Credit Risk Credit risk is the risk that the failure of the counterparty to a transaction to discharge its obligation under that transaction could result in a loss to the Company. The Company's principal credit risk is the risk of default on the non-investment grade debt. The Company's other main credit risk arises from the repo financing arrangements whereby, if a counterparty failed to sell the required assets to the Company on the repurchase date, the Company would be left with the claim against the defaulting counterparty for the stock and, if applicable, any margin held by the counterparty and not returned. At the year end 57.7% (2024: 64.5%) of the Company's portfolio consisted of non-investment grade securities. To the extent that the Company invests in non-investment grade securities, the Company may realise a higher current yield than the yield offered by investment grade securities. On the other hand, investments in such securities involve a greater volatility of price and a greater risk of default by the issuers of such securities, with consequent loss of interest payments and principal. Non-investment grade securities are likely to be subject to greater uncertainties from exposure to adverse conditions and will be speculative with respect to an issuer's capacity to meet interest payments and repay principal in accordance with its obligations. Investment grade and non-investment grade securities totalled 87.7% (2024: 91.2%) of the portfolio at the year end. Adverse changes in the financial position of an issuer of such high-yield fixed-interest securities or in general economic conditions may impair the ability of the issuer to make payments of principal and/or interest or may cause the liquidation or insolvency of an issuer. The portfolio may be adversely affected if the Company's custodian suffers insolvency or other financial difficulties. The appointment of a depository has substantially lessened this risk. The Board reviews the custodian's annual controls report and the Manager's management of the relationship with the custodian. ### Management of and Exposure to Credit Risk Almost all of the Company's assets are subject to credit risk. Where the portfolio managers make an investment in a bond, corporate or otherwise, the credit rating of the issuer is also considered when assessing the risk of defaults. Investments in bonds are across a variety of industrial sectors and geographical markets to avoid concentration of credit risk. Counterparties for derivative transactions are also a source of credit risk. Transactions involving derivatives are entered into only with banks whose credit ratings are taken into account to minimise default risk. The credit ratings of the derivatives counterparties range from Aa3 through to Baa1. In addition, the Company may use credit default swaps to offset the credit risk of the portfolio. At the year end, credit default swaps with a market value of £(2,443,000) were held by the Company (2024: £(1,223,000)). Details of the Company's investments, including their credit ratings, are shown below. Credit risk for transactions involving derivatives and equity investments is minimised as the Company only uses approved counterparties. --- 69 | Rating | 2025 | | 2024 | | | --- | --- | --- | --- | --- | | | % of Portfolio | Cumulative Total % | % of Portfolio | Cumulative Total % | | Investment Grade: | | | | | | AAA | 0.2 | 0.2 | - | - | | AA+ | 0.2 | 0.4 | 0.2 | 0.2 | | AA | 1.5 | 1.9 | 2.6 | 2.8 | | A+ | 0.3 | 2.2 | 0.2 | 3.0 | | A | - | 2.2 | 0.1 | 3.1 | | BBB+ | 2.2 | 4.4 | 0.6 | 3.7 | | BBB | 17.4 | 21.8 | 19.0 | 22.7 | | BBB- | 8.2 | 30.0 | 4.0 | 26.7 | | Non-investment Grade: | | | | | | BB+ | 9.1 | 39.1 | 7.5 | 34.2 | | BB | 10.4 | 49.5 | 15.4 | 49.6 | | BB- | 8.7 | 58.2 | 13.6 | 63.2 | | B+ | 7.4 | 65.6 | 5.5 | 68.7 | | B | 12.0 | 77.6 | 14.1 | 82.8 | | B- | 5.7 | 83.3 | 4.9 | 87.7 | | CCC+ | 2.2 | 85.5 | 0.7 | 88.4 | | CCC | 2.2 | 87.7 | 0.7 | 89.1 | | CC | - | 87.7 | 2.1 | 91.2 | | NR (including equity and CDS) | 12.3 | 100.0 | 8.8 | 100.0 | | | 100.0 | | 100.0 | | | Summary of Analysis | | | | | | Investment Grade | 30.0 | 100.0 | 26.7 | 26.7 | | Non-investment Grade | 57.7 | | 64.5 | | | NR (including equity and CDS) | 12.3 | | 8.8 | | | Total | 100.0 | | 100.0 | | NR: not rated. The Company manages the credit risk inherent in repo financing by only dealing with good quality counterparties whose credit-standing is reviewed periodically by the Manager. There is a maximum limit allowed with any one counterparty, and the repo entered into must have a maturity tenor of three months or less. The Company has exposure to credit risk on securities pledged under repo financing held, with 4 counterparties, as follows (2024: 3 counterparties): | Counterparty | Rating | Location | Amounts borrowed under repo financing £'000 | 2025 Market value of securities pledged under repo financing £'000 | Net credit exposure to counter party £'000 | Amounts borrowed under repo financing £'000 | 2024 Market value of securities pledged under repo financing £'000 | Net credit exposure to counter party £'000 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Barclays | A1/A+ | UK | 3,573 | 4,201 | 628 | - | - | - | | BNP UK | A1/A+ | UK | 21,678 | 25,393 | 3,715 | 35,991 | 40,440 | 4,449 | | Morgan Stanley | A1/A- | UK | 6,444 | 7,576 | 1,132 | 4,852 | 5,977 | 1,125 | | HSBC | A1/A+ | UK | 6,323 | 7,626 | 1,303 | 4,284 | 5,044 | 760 | | | | | 38,018 | 44,796 | 6,778 | 45,127 | 51,461 | 6,334 | | Net credit exposure as % of net assets | | | | | 1.7% | | | 1.8 | | Name of counterparty Bank Of America | 2025 | | | 2024 | | | | --- | --- | --- | --- | --- | --- | --- | | | Counterparty country of incorporation United States | Receivable/ (payable) for derivatives £'000 (2,443) | Cash collateral pledged/ (received) £'000 3,289 | Counterparty country of incorporation United States | Receivable/ (payable) for derivatives £'000 (1,223) | Cash collateral pledged/ (received) £'000 2,021 | --- 70 # 19. Risk Management: Financial Assets and Liabilities (continued) ## 19.3 Credit Risk (continued) Cash balances are held with approved deposit takers only and are limited to a maximum of 4% of the Company's net asset value with any one deposit taker. Balances held with Invesco Liquidity Funds plc, a triple-A rated money market fund, are limited to a maximum of 10% of the Company's net asset value. At the balance sheet date the Company had £5.11 million (2024: £7.90 million) held at the custodian and £16.12 million held in Invesco Liquidity Funds plc - Sterling (2024: £0.25 million). There are no financial assets that are past due or impaired at the year end (2024: none). ## Fair Values of Financial Assets and Financial Liabilities Financial assets are either carried in the balance sheet at their fair value (investments and derivatives), or the balance sheet amount is a reasonable approximation of fair value (due from brokers, dividends receivable, accrued income, due to brokers, accruals and cash). Financial liabilities are carried at amortised cost except for derivatives, which as stated above are carried at fair value. # 20. Classification Under Fair Value Hierarchy The valuation techniques used by the Company are explained in the accounting policies note 2(c). The table that follows sets out the fair value of the financial instruments. The three levels set out in IFRS 7 hierarchy follow: Level 1 - The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date. Level 2 - Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly. Level 3 - Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability. Categorisation within the hierarchy is determined on the basis of the lowest level input that is significant to the fair value measurement of each relevant asset/liability. Normally investments would be valued using stock market active prices, with investments disclosed as Level 1 and this is the case for the quoted equity investments that the Company holds. However, the majority of the Company's investments are non-equity investments. Evaluated prices from a third party pricing vendor are used to price these securities, together with a price comparison made to secondary and tertiary evaluated third party sources. Evaluated prices are in turn based on a variety of sources including broker quotes and benchmarks. As a result, the Company's non-equity investments have been shown as Level 2 - recognising that the fair values of these investments are not as visible as quoted equity investments and their higher inherent pricing risk. However, this does not mean that the fair values shown in the portfolio valuation are not achievable at point of sale. | | Level 1 £'000 | Level 2 £'000 | Level 3 £'000 | Total £'000 | | --- | --- | --- | --- | --- | | 2025 | | | | | | Financial assets designated at fair value through profit or loss: | | | | | | Quoted Investments: | | | | | | - Fixed interest securities(1) | - | 338,116 | 1,332 | 339,448 | | - Convertibles | - | 64,695 | - | 64,695 | | - Government | - | 8,290 | - | 8,290 | | - Preference | 2,991 | - | 3,654 | 6,645 | | - Equities | 55 | 135 | 946 | 1,136 | | Derivative financial instruments: | | | | | | - Currency hedges | - | 1,705 | - | 1,705 | | - Credit default swaps | - | (2,443) | - | (2,443) | | Total for financial assets | 3,046 | 410,498 | 5,932 | 419,476 | A reconciliation of the fair value of Level 3 is set out below. | | 2025 £'000 | | --- | --- | | Opening fair value | 7,420 | | Transfers from Level 2 to Level 3(2) | 5 | | Purchases at cost | 308 | | Sales | | | - proceeds | (629) | | - net realised losses | (1,433) | | Movement in holding gains/(losses) | 261 | | Closing fair value of Level 3 | 5,932 | (i) Fixed interest securities include both fixed and floating rate securities. The directors consider the floating rate securities held by the Company to be fixed in nature due to their characteristics, including a predictable income stream. (ii) Frigoglass Common Stock was reclassified from Level 2 to Level 3 of the fair value hierarchy during the year. The transfer reflects reduced market observability of key valuation inputs, resulting in the fair value measurement now relying on significant unobservable inputs. --- Level 3 investments are investments for which inputs are unobservable (i.e. for which market data is unavailable). The Level 3 investments in the portfolio and their respective values at the year end were Haleon 9.5% Preference £3,654,000 (2024: £3,661,000), Frigoglass 11% PIK 27 Mar 2026 £1,145,000 (2024: £969,000), Frigoglass 0% 27 Mar 2028 £187,000 (2024: £nil), Frigoglass Common Stock £5,000 (2024: £5,000 shown as Level 2), Codere A1 Shares £639,000 (2024: £2,132,000) and Codere A2 Shares £302,000 (2024: £658,000). Haleon 9.5% Preference price is based on a single private indicative broker quote with no publicly observable market price available, therefore as the price is unobservable this investment has been classified as Level 3. Frigoglass 11% PIK 27 Mar 2026, Frigoglass 0% 27 Mar 2028: judgement involved assessing the seniority of this security (regarded as "Super Senior" in relation to the other Frigoglass traded debt securities) which would be a key consideration should the company fail, with a resultant higher price level compared to comparable Frigoglass traded debt securities, further justified by its short-term maturity. The Codere A1 and A2 securities, which were taken on as part of a second restructuring where the Portfolio Manager agreed to participate in short-term financing, are priced based on private indicative broker quotes as no publicly observable market price is currently available for these securities. Given the restricted nature of these quotes, being generally unobservable, that trading may not be visible due to trading taking place on the OTC market, a cautious judgement was applied, taking the lowest bid quote available. Any non-actively traded investments are reviewed relative to appropriate supporting evidence. The Board reviews detailed portfolio valuations on a regular basis throughout the year and receives confirmation from the Manager that the pricing basis is appropriate and in line with relevant accounting standards as adopted by the Company. The categorisation of an investment within the hierarchy is based upon the pricing transparency of the investment and does not necessarily correspond to the Directors' perceived risk of that investment. | | Level 1 £'000 | Level 2 £'000 | Level 3 £'000 | Total £'000 | | --- | --- | --- | --- | --- | | 2024 | | | | | | Financial assets designated at fair value through profit or loss: | | | | | | Quoted Investments: | | | | | | - Fixed interest securities(i) | - | 289,607 | 969 | 290,576 | | - Convertibles | - | 64,897 | - | 64,897 | | - Government | - | 10,458 | - | 10,458 | | - Preference | 4,513 | - | 3,661 | 8,174 | | - Equities | 63 | 5 | 2,790 | 2,858 | | Derivative financial instruments: | | | | | | - Currency hedges | - | (1,906) | - | (1,906) | | - Credit default swaps | - | (1,223) | - | (1,223) | | Total for financial assets | 4,576 | 361,838 | 7,420 | 373,834 | A reconciliation of the fair value of Level 3 is set out below. | | 2024 £'000 | | --- | --- | | Opening fair value | | | Securities resulting from restructure | 6,913 | | Purchases at cost | 3,694 | | Movement in holding gains/(losses) | (3,187) | | Closing fair value of Level 3 | 7,420 | (i) Fixed interest securities include both fixed and floating rate securities. The directors consider the floating rate securities held by the Company to be fixed in nature due to their characteristics, including a predictable income stream. ## 21. Capital Management The Company's capital, or equity, is represented by its net assets which are managed to achieve the Company's investment objective set out on page 11. The main risks to the Company's investments are shown in the Business Review under the 'Principal and Emerging Risks and Uncertainties' section on pages 14 and 15. These also explain that the Company is able to gear and that gearing will amplify the effect on equity of changes in the value of the portfolio. The Board can also manage the capital structure directly since it has taken the powers, which it is seeking to renew, to issue and buy-back shares and it also determines dividend payments. The Board regularly monitors the level of borrowing used by the Company and has imposed limits within which borrowings should be managed. Total equity at 31 December 2025, the composition of which is shown on the balance sheet on page 54, was £410,275,000 (2024: £345,799,000). --- 72 22. Contingencies, Guarantees and Financial Commitments Liabilities the Company is committed to honour but which are dependent on a future circumstance or event occurring would be disclosed in this note if any existed. There were no contingencies, guarantees or other financial commitments of the Company as at 31 December 2025 (2024: nil). 23. Related Party Transactions and Transactions with Manager A related party is a company or individual who has direct or indirect control or who has significant influence over the Company. Under IFRS Accounting Standards as adopted by the EU, the Company has identified the Directors and their dependents as related parties. Directors fees paid have been disclosed in the Directors' Remuneration Report on pages 43 and 44 with additional disclosure in note 6. Full details of Directors' interests are set out in the Directors' Remuneration Report on page 44. No other related parties have been identified. Invesco Fund Managers Limited and Invesco Asset Management Limited, both of which are wholly owned subsidiaries of Invesco Limited, provided investment management and administration services to the Company. Invesco Limited or its subsidiaries are not considered related parties as they do not have direct or indirect control nor significant influence over the Company. Details of the services and fees are disclosed in the Business Review and management fees payable are shown in note 5. 24. Post Balance Sheet Events Any significant events that occurred after the end of the reporting period but before the signing of the balance sheet will be shown here. There was a successful placing and Winterflood Retail Access Platform ("WRAP") retail offer, announced on 29 January 2026 raising total proceeds (net of commission) of £24,780,000. The Company has issued a total of 14,372,588 new ordinary shares of no par value in the capital of the Company at a price of 173.28p per New Share, representing a 0.75% premium to the cumincome NAV per Share as at 10 February 2026, being the last published NAV per Share prior to the close of the Placing and the WRAP Retail Offer. 7,710,707 New Shares were issued pursuant to the Placing and 6,661,881 New Shares were issued pursuant to the WRAP Retail Offer. --- Invesco Bond Income Plus Limited ![img-21.jpeg](img-21.jpeg) # Shareholder Notice of Annual General Meeting ...74 Shareholder Information ...76 Advisers and Principal Service Providers ...77 Glossary of Terms and Alternative Performance Measures...78 Alternative Investment Fund Managers Directive Disclosures...82 --- # Notice of Annual General Meeting THIS NOTICE OF ANNUAL GENERAL MEETING IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to what action to take, you should consult your stockbroker, solicitor, accountant or other appropriate independent professional adviser authorised under the Financial Services and Markets Act 2000. If you have sold or otherwise transferred all your shares in Invesco Bond Income Plus Limited, please forward this document and accompanying form of Proxy to the person through whom the sale or transfer was effected, for transmission to the purchaser or transferee. ## NOTICE OF ANNUAL GENERAL MEETING The Board are pleased to welcome shareholders to attend the AGM in person. If you cannot attend in person please lodge your vote either electronically via the registrar's online portal or using the Form(s) of Proxy to appoint the Chairman of the General Meeting as your proxy to vote on your behalf. NOTICE IS GIVEN that the Annual General Meeting ('AGM') of Invesco Bond Income Plus Limited ('the Company') will be held at 9.30am on 17 June 2026 at the offices of JTC Fund Solutions (Jersey) Limited, PO Box 1075, 28 Esplanade, St Helier, Jersey JE4 2QP for the following purposes: ### Ordinary Business 1. To receive the Annual Financial Report for the year ended 31 December 2025. 2. To approve the Directors' Remuneration Report. 3. To approve the Company's Dividend Payment Policy to pay four quarterly dividends to shareholders in May, August, November and February in respect of each accounting year. 4. To approve the appointment of KPMG Audit Limited as the Company's auditor. 5. To authorise the Audit & Risk Committee to determine the remuneration of the auditor. 6. To re-elect Heather MacCallum as a Director of the Company. 7. To re-elect Caroline Dutot as a Director of the Company. 8. To re-elect Christine Johnson as a Director of the Company. 9. To elect Arun Kumar Sarwal as a Director of the Company. ### Special Business To consider and if thought fit, to pass the following resolutions, of which resolution 10 will be proposed as an ordinary resolution and resolutions 11 to 14 will be proposed as special resolutions: 10. THAT, in accordance with Article 158 of the Company's Articles of Association, the Directors of the Company be and are hereby released from their obligation pursuant to such Article to convene a general meeting of the Company within six months of the AGM at which a special resolution would be proposed to wind up the Company. 11. THAT, pursuant to Article 14.1 of the Company's Articles of Association, the Directors be and are hereby empowered to issue shares, up to 10% of the existing shares in issue at the time of the AGM, without pre-emption. 12. THAT, pursuant to Article 14.1 of the Company's Articles of Association and in addition to any authority granted under Resolution 11 above, the Directors be and are hereby empowered to issue shares up to 10% of the existing shares in issue at the time of the AGM, without pre-emption. 13. THAT, pursuant to Article 8.2 of the Company's Articles of Association and Article 57 of the Companies (Jersey) Law 1991 as amended (the Law), the Company be generally and unconditionally authorised to make purchases of its issued ordinary shares of no par value (Shares) to be cancelled or held as treasury shares provided that: (i) the maximum number of Shares hereby authorised to be purchased shall be 14.99% of the Company's issued ordinary shares, this being 38,592,041 as at 27 March 2026 (being the latest practicable date prior to the publication of this Notice); (ii) the minimum price which may be paid for a Share is 1p; (iii) the maximum price which may be paid for a share must not be more than the higher of: (i) 5% above the average of the mid-market values of the Shares for the five business days before the purchase is made; and (ii) the higher of the price of the last independent trade in the shares and the highest then current independent bid for the Shares on the London Stock Exchange; (iv) any purchase of shares will be made in the market for cash prices below the prevailing net asset value per share (as determined by the Directors); (v) the authority hereby conferred shall expire on the earlier of the conclusion of the next AGM of the Company held after passing of this resolution or 15 months from the date of the passing of this resolution, whichever is the earlier. 14. THAT, the period of notice required for general meetings of the Company (other than AGMs) shall be not less than 14 days. Dated this 31 March 2026 By order of the Board JTC Fund Solutions (Jersey) Limited Company Secretary --- 75 # Notes: 1. A form of appointment of proxy accompanies this Annual Financial Report. A member entitled to attend and vote at the AGM is entitled to appoint one or more proxies to attend, speak and vote in his or her stead. Where more than one proxy is appointed, each proxy must be appointed to exercise the rights attached to a different share or shares. A proxy need not be a member of the Company. In order to be valid an appointment of proxy must be returned, duly executed and completed, by one of the following methods: - via Computershare's website http://www.eproxyappointment.com; or - in hard copy form by post, by courier or by hand to the Company's registrars, Computershare Investor Services (Jersey) Limited, C/O The Pavilions, Bridgwater Road, Bristol BS99 6ZY; or - in the case of CREST members, by utilising the CREST electronic proxy appointment service in accordance with the procedures set out below and, in each case, to be received by the Company not less than 48 hours before the time of the meeting. The appointment of a proxy (whether by completion of a form of appointment of proxy or other instrument appointing a proxy or any CREST Proxy Instruction) does not prevent a member from attending and voting at the AGM. 2. CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so by utilising the procedures described in the CREST Manual. CREST Personal Members or other CREST sponsored members and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a 'CREST Proxy Instruction') must be properly authenticated in accordance with Euroclear UK & Ireland Limited's specifications and must contain the information required for such instructions, as described in the CREST Manual. The message, regardless of whether it relates to the appointment of a proxy or to an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer's agent ID 3RA50 (Computershare) by the latest time for receipt of proxy appointments specified in this document. For this purpose, the time of receipt will be taken to be the time (as determined by the time stamp applied to the message by the CREST Applications Host) from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies through CREST should be communicated to the appointee through other means. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001. CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take or, if the CREST member is a CREST Personal Member or sponsored member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s), such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning the practical limitations of the CREST system and timings. 3. A person entered on the Register of Members at close of business 48 hours before the time of the AGM (a member) is entitled to attend and vote at the AGM pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001. Any changes to the Register of Members after such time and date shall be disregarded in determining the rights of any person to attend and/or vote at the AGM. If the AGM is adjourned, entitlement to attend and vote at the adjourned meeting, and the number of votes which may be cast thereat, will be determined by reference to the Company's Register of Members 48 hours before the time fixed for the adjourned meeting. 4. The schedule of matters for the Board and the terms of reference of the Audit & Risk Committee will be available at the AGM for at least 15 minutes prior to and during the AGM. 5. A copy of the Articles of Association is available for inspection at the Registered Office of the Company during normal business hours on any business day (excluding public holidays) and will also be available at the AGM for at least 15 minutes prior to and during the AGM. 6. Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member provided that they do not do so in relation to the same shares. 7. Any member attending the AGM has the right to ask questions. The Company must cause to be answered any such question relating to the business being dealt with at the AGM but no such answer need be given if: (a) to do so would interfere unduly with the preparation of the AGM or involve the disclosure of confidential information; (b) the answer has already been given on a website in the form of an answer to a question; or (c) it is undesirable in the interests of the Company or the good order of the AGM that the question be answered. 8. You may not use any electronic address (any address or number used for the purposes of sending or receiving documents or information by electronic means) provided in this Notice (or in any related documents including the proxy form) to communicate with the Company for any purposes other than those expressly stated. 9. As at 27 March 2026 (being the latest practicable date prior to the publication of this Notice) the Company's issued share capital consisted of 257,451,911 ordinary shares of no par value each carrying one vote. 10. A copy of the Notice as well as various other documents relating to the Company can be found at www.invesco.co.uk/bips. --- 76 # Shareholder Information The shares of Invesco Bond Income Plus Limited are quoted on the London Stock Exchange. ## Manager's Website Information relating to the Company can be found on the Manager's website, which can be located at www.invesco.co.uk/bips. The contents of websites referred to in this document, or accessible from links within those websites, are not incorporated in, nor do they form part of this Annual Financial Report. ## Net Asset Value ('NAV') Publication The Company's NAV is calculated on a daily basis and notified to the London Stock Exchange on the next business day. Estimated NAVs are published daily in the national newspapers as detailed under Share Price Listings. ## Share Price Listings The price of your shares can be found by accessing the Manager's website (see below). In addition, share price information can be found using the BIPS ticker code. ### Internet addresses Invesco www.invesco.co.uk/bips The Association of Investment Companies www.theaic.co.uk ## Financial Calendar In addition, the Company publishes information according to the following calendar: ### Announcements Annual financial reports April Half-yearly unaudited financial report August ### Ordinary Share Dividends Interim dividends payable May, August November, February ### Year End 31 December ## Dividend Re-Investment Plan The Registrar also manages a Dividend Re-Investment Plan for the Company. Shareholders wishing to re-invest their dividends should contact the Registrar as detailed on page 77. Shareholders holding shares via an investment platform or nominee arrangement should contact their platform provider or broker for information on how to reinvest their dividends. ## Annual General Meeting The Annual General Meeting will be held at 9.30am on 17 June 2026 at the offices of JTC Fund Solutions (Jersey) Limited, PO Box 1075, 28 Esplanade, St Helier, Jersey JE4 2QP. The Board are pleased to welcome shareholders to attend the AGM in person. If you cannot attend in person lodge your vote either electronically via the registrar's online portal or using the Form(s) of Proxy to appoint the Chairman of the General Meeting as your proxy to vote on your behalf. ## General Data Protection Regulation ('GDPR') The Company has a privacy notice which sets out what personal data is collected and how and why it is used. The privacy notice can be found at www.invesco.co.uk/investmenttrusts under the 'Literature' section, or a copy can be obtained from the Company Secretary whose correspondence address is found on the next page. ## Investment and pension scams are often sophisticated and difficult to spot ![img-22.jpeg](img-22.jpeg) ## Be a ScamSmart investor and spot the warning signs ### Fraudsters will often: - contact you out of the blue - apply pressure to invest quickly - downplay the risks to your money - promise tempting returns that sound too good to be true - say that they're only making the offer available to you or even ask you to not tell anyone else about it ![img-23.jpeg](img-23.jpeg) ## How to avoid investment and pension scams ### 1. Reject unexpected offers Scammers usually cold call, but contact can also come by email, post, word of mouth or at a seminar. If you've been offered an investment out of the blue, chances are it's a high risk investment or a scam. ### 2. Check the FCA Warning List Use the FCA Warning List to check the risks of a potential investment – you can also search to see if the firm is known to be operating without our authorisation. ### 3. Get impartial advice Get impartial advice before investing – don't use an adviser from the firm that contacted you. ## If you're suspicious, report it You can report the firm or scam to us by contacting our Consumer Helpline on 0800 111 6768 or using our reporting form using the link below. If you've lost money in a scam, contact Action Fraud on 0300 123 2040 or www.actionfraud.police.uk ! Be ScamSmart and visit www.fca.org.uk/scamsmart --- 77 # Advisers and Principal Service Providers ## Alternative Investment Fund Manager (Manager) Invesco Fund Managers Limited Perpetual Park Perpetual Park Drive Henley-on-Thames Oxfordshire RG9 1HH ☎ 01491 417 000 www.invesco.co.uk/investmenttrusts ## Manager's Website Information relating to the Company can be found on the Manager's website, at https://www.invesco.com/uk/en/investment-trusts/invesco-bond-income-plus-limited.html The contents of websites referred to in this document, or accessible from links within those websites, are not incorporated into, nor do they form part of, this annual report. ## Company Secretary, Administrator and Registered Office JTC Fund Solutions (Jersey) Limited PO Box 1075 28 Esplanade St Helier Jersey JE4 2QP Company Secretarial Contact: Claire Brazenall ☎ 01534 700000 invesco@jtcgroup.com ## General Data Protection Regulation The Company's privacy notice can be found at: www.invesco.co.uk/bips ## Corporate Broker Winterflood Investment Trusts Riverbank House 2 Swan Lane London EC4R 3GA ## Independent Auditor PricewaterhouseCoopers CI LLP 37 Esplanade St Helier Jersey JE1 4XA From 17 June 2026: KPMG Audit Limited 37 Esplanade St Helier Jersey JE2 3QE ## Depositary, Custodian & Banker The Bank of New York Mellon (International) Limited 160 Queen Victoria Street London EC4V 4LA ## Invesco Client Services Invesco has a Client Services Team available from 8.30am to 6.00pm every working day. Please feel free to take advantage of their expertise by ringing: ☎ 0800 085 8677 www.invesco.co.uk/investmenttrusts ## Registrar Computershare Investor Services (Jersey) Limited 13 Castle Street St Helier Jersey JE1 1ES ☎ +44 (0370) 707 4040 Shareholders who hold shares directly and not through a Savings Scheme or ISA and have queries relating to their shareholding should contact the Registrar's call centre on the above number. Calls are charged at the standard geographic rate and will vary by provider. Calls from outside the United Kingdom will be charged at the applicable international rate. Lines are open 8.30am to 5.30pm Monday to Friday (excluding UK public holidays). Shareholders holding shares directly can also access their holding details via Computershare's website: http://www.investorcentre.co.uk/je The Registrar provides an on-line share dealing service to existing shareholders who are not seeking advice on buying or selling via Computershare's website http://www.investorcentre.co.uk/je For queries relating to shareholder dealing contact ☎ +44 (0) 370 703 0084 Calls are charged at the standard geographic rate and will vary by provider. Calls from outside the United Kingdom will be charged at the applicable international rate. Lines are open 8.30am to 5.30pm Monday to Friday (excluding UK public holidays). --- 78 # Glossary of Terms and Alternative Performance Measures ## Alternative Performance Measure ('APM') An APM is a measure of performance or financial position that is not defined in applicable accounting standards and cannot be directly derived from the financial statements. The calculations shown in the corresponding tables are for years ended 31 December 2025 and 2024. The APMs listed here are widely used in reporting within the investment company sector and consequently aid comparability, providing useful additional information. ## Premium/(Discount) ('APM') Premium is a measure of the amount by which the mid-market price of an investment company share is higher than the underlying net asset value of that share. Discount, conversely, is a measure of the amount by which the mid-market price of an investment company share is lower than the underlying net asset value of that share. In this Annual Financial Report the premium/(discount) is expressed as a percentage of the net asset value per share and is calculated according to the formula set out below. If the shares are trading at a premium the result of the below calculation will be positive and if they are trading at a discount it will be negative. | | Page | | 2025 | 2024 | | --- | --- | --- | --- | --- | | Share price | 3 | a | 175.00p | 174.00p | | Net asset value per share | 54 | b | 172.87p | 170.87p | | Premium | | c = (a-b)/b | 1.2% | 1.8% | ## Gearing The gearing percentage reflects the amount of borrowings that a company has invested. This figure indicates the extra amount by which net assets, or shareholders' funds, would move if the value of a company's investments were to rise or fall. A positive percentage indicates the extent to which net assets are geared; a nil gearing percentage, or 'nil', shows a company is ungeared. A negative percentage indicates that a company is not fully invested and is holding net cash as described below. There are several methods of calculating gearing and the following has been used in this report: ### Gross Gearing ('APM') This reflects the amount of gross borrowings in use by a company and takes no account of any cash balances. It is based on gross borrowings as a percentage of net assets. | | Page | | 2025 | 2024 | | --- | --- | --- | --- | --- | | | | | £'000 | £'000 | | Securities sold under agreements to repurchase (repo financing) | 62 | | 38,018 | 45,127 | | Gross borrowings | | a | 38,018 | 45,127 | | Net asset value | 54 | b | 410,275 | 345,799 | | Gross gearing | | c = a/b | 9.3% | 13.1% | --- Net Gearing or Net Cash ('APM') Net gearing reflects the amount of net borrowings invested, i.e. borrowings less cash and cash equivalents (incl. investments in money market funds). It is based on net borrowings as a percentage of net assets. Net cash reflects the net exposure to cash and cash equivalents, as a percentage of net assets, after any offset against total borrowings. | | Page | 2025 £'000 | 2024 £'000 | | --- | --- | --- | --- | | Securities sold under agreements to repurchase (repo financing) | 62 | 38,018 | 45,127 | | Less: cash and cash equivalents including margin | 54 | (26,373) | (10,936) | | Net borrowings | a | 11,645 | 34,191 | | Net asset value | b | 410,275 | 345,799 | | Net gearing | c = a/b | 2.8% | 9.9% | Leverage Leverage, for the purposes of the Alternative Investment Fund Managers Directive (AIFMD), is not synonymous with gearing as defined above. In addition to borrowings, it encompasses anything that increases the Company's exposure, including foreign currency and exposure gained through derivatives. Leverage expresses the Company's exposure as a ratio of the Company's net asset value. Accordingly, if a Company's exposure was equal to its net assets it would have leverage of 100%. Two methods of calculating such exposure are set out in the AIFMD, gross and commitment. Under the gross method, exposure represents the aggregate of all the Company's exposures other than cash balances held in base currency and without any offsetting. The commitment method takes into account hedging and other netting arrangements designed to limit risk, offsetting them against the underlying exposure. Modified Duration Modified Duration is regarded as a measure of the volatility of a portfolio, as, with all other risk factors being equal, bonds with higher durations have greater price volatility than bonds with lower durations. Modified duration measures the change in the value of a bond (or portfolio) in response to a change in 100 basis-point (1%) change in interest rates. Therefore a 1% rise in interest rates leads to a 1% fall in the value of the bond or portfolio. Net Asset Value ('NAV') and NAV per share Also described as shareholders' funds, the NAV is the value of total assets less liabilities. Liabilities for this purpose include current and long-term liabilities. The NAV per share is calculated by dividing the net asset value by the number of ordinary shares in issue (see note 18 on page 63). For accounting purposes assets are valued at fair (usually market) value and liabilities are valued at par (their repayment - often nominal - value). Ongoing Charges Ratio ('APM') The ongoing administrative costs of operating the Company are encapsulated in the ongoing charges ratio, which is calculated in accordance with guidance issued by the AIC. The calculation incorporates charges allocated to capital in the financial statements as well as those allocated to revenue, but excludes non-recurring costs, transaction costs of investments, finance costs, taxation, and the costs of buying back or issuing shares. The ongoing charges ratio is the aggregate of these costs expressed as a percentage of the daily average net asset value reported in the year. | | Page | 2025 £'000 | 2024 £'000 | | --- | --- | --- | --- | | Investment management fee | 59 | 2,460 | 2,180 | | Other expenses | 59 | 829 | 896 | | Less: costs in relation to custody dealing charges, premium on credit default swaps (2024 only) and one off legal costs | | (48) | (146) | | Total recurring expenses | a | 3,241 | 2,930 | | Average daily net asset value | b | 367,408 | 328,860 | | Ongoing charges ratio % | c = a/b | 0.88% | 0.89% | Earnings The earnings generated in a period from the investments including the increase and decrease in the value of investments over time and the income received. --- 80 # Total Return Total return is the theoretical return to shareholders that measures the combined effect of any dividends paid together with the rise or fall in the share price or NAV. In this annual financial report these return figures have been sourced from LSEG Data & Analytics who calculate returns on an industry comparative basis. The figures calculated below are one year total returns, however the same calculation would be used for three and five year total returns where quoted in this report, taking the respective Net Asset Values and Share Prices period for the opening and closing periods and adding the impact of dividend reinvestments for the relevant periods. ## Net Asset Value Total Return ('APM') Total return on net asset value per share, with debt at market value, assuming dividends paid by the Company were reinvested into the shares of the Company at the NAV per share at the time the shares were quoted ex-dividend. Refer to the table below for the reconciliation to the NAV on pages 3 and 4. ## Share Price Total Return ('APM') Total return to shareholders, on a mid-market price basis, assuming all dividends received were reinvested, without transaction costs, into the shares of the Company at the time the shares were quoted ex-dividend. Refer to the table below for the reconciliation to the share price on page 3. | 2025 | Page | Net Asset Value | Share Price | | --- | --- | --- | --- | | As at 31 December 2025 | 3 | 172.87p | 175.00p | | As at 31 December 2024 | 3 | 170.87p | 174.00p | | Change in year | a | 1.2% | 0.6% | | Impact of dividend reinvestments^{(i)} | b | 7.5% | 7.4% | | **Total return for the year** | c = a+b | 8.7% | 8.0% | | 2024 | Page | Net Asset Value | Share Price | | --- | --- | --- | --- | | As at 31 December 2024 | 3 | 170.87p | 174.00p | | As at 31 December 2023 | 4 | 168.58p | 171.00p | | Change in year | a | 1.4% | 1.8% | | Impact of dividend reinvestments^{(i)} | b | 7.1% | 7.0% | | **Total return for the year** | c = a+b | 8.5% | 8.8% | (i) Total dividends paid during the year of 12.25p (2024: 11.50p) reinvested at the NAV or share price on the ex-dividend date. NAV or share price falls subsequent to the reinvestment date consequently further reduce the returns, vice versa if the NAV or share price rises. --- 81 # Credit Ratings Definitions The definitions for the credit ratings shown in the financial statements are as follows: ## Moody's Ratings ### Investment Grade Aaa: judged to be of the highest quality, with minimal credit risk. Aa1, Aa2, Aa3: judged to be of high quality and are subject to very low credit risk. A1, A2, A3: considered upper-medium grade and are subject to low credit risk. Baa1, Baa2, Baa3: subject to moderate credit risk. They are considered medium-grade and as such may possess certain speculative characteristics. ### Speculative Grade (non-investment grade) Ba1, Ba2, Ba3: judged to have speculative elements and are subject to substantial credit risk. B1, B2, B3: considered speculative and are subject to high credit risk. Caa1, Caa2, Caa3: judged to be of poor standing and are subject to very high credit risk. Ca: highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest. C: lowest rated class of bonds and are typically in default, with little prospect for recovery of principal or interest. WR: withdrawn rating. P: provisional. ### Standard & Poor's Ratings ### Investment Grade AAA: the best quality borrowers, reliable and stable (many of them governments). AA: quality borrowers, a bit higher risk than AAA. A: economic situation can affect finance. BBB: medium class borrowers, which are satisfactory at the moment. ### Non-investment Grade BB: more prone to changes in the economy. B: financial situation varies noticeably. CCC: currently vulnerable and dependent on favourable economic conditions to meet commitments. CC: highly vulnerable, very speculative. C: highly vulnerable, perhaps in bankruptcy or in arrears but still continuing to pay out on obligations. CI: past due on interest. R: under regulatory supervision due to the company's financial situation. SD: has selectively defaulted on some obligations. D: has defaulted on obligations and S&P believes that the company will generally default on most or all obligations. NR: not rated. Equivalent average rating is based on the following methodology of rating (using Moody's, Fitch and Standard & Poor's Ratings where applicable for each holding): - if one rating available, use that rating; - if two ratings, use the lower rating; - if three ratings, use the middle rating. --- # Alternative Investment Fund Managers Directive Disclosures ## Alternative Investment Fund Manager ('AIFM') and the Alternative Investment Fund Managers Directive (the 'AIFMD', the Directive) Invesco Fund Managers Limited ('IFML') was authorised as an AIFM, and appointed by the Company as such, with effect from 22 July 2014. IFML is an associated company of Invesco Asset Management Limited ('IAML'), the previous Manager, and IAML continues to manage the Company's investments under delegated authority from IFML. In accordance with the Directive, the Company qualifies as an Alternative Investment Fund ('AIF'). Amongst other things, the AIFMD requires certain information to be provided to prospective investors. This information can be found in the Company's section of the Manager's website (https://www.invesco.com/uk/en/investment-trusts/invesco-bond-income-plus-limited.html) in a downloadable document entitled 'AIFMD Investor Information'. There have been no material changes to this information in the year to 31 December 2025 or up to the date of this report. Any information requiring immediate disclosure pursuant to the Directive will be disclosed through a primary information provider. In addition, the Directive requires information in relation to the Company's leverage (both 'gross' and 'commitment' - see Glossary on page 79) and the remuneration of the Company's AIFM (IFML) to be made available to investors. Accordingly: - the leverage calculated for the Company at the year end was 153% for gross and 113% for commitment (2024: 158% and 124% respectively). The limits the AIFM has set for the Company remain unchanged at 300% and 250%, respectively; - the AIFM summary remuneration policy is available from the corporate policies section of the Manager's website (www.invesco.com/uk) and from the Company's Company Secretary, on request (see contact details on page 77); and - the AIFM remuneration paid for the year to 31 December 2025 is set out below. ## AIFM Remuneration ### Remuneration policy On 18 March 2016, Invesco Fund Managers Limited (the "Manager") adopted a remuneration policy consistent with the principles outlined in the European Securities and Markets Authority (ESMA) Guidelines, on sound remuneration policies under the AIFM Directive. The policy was revised in 2024, to include specificities for some Invesco EU regulated Management Companies. The Manager was not impacted by the changes. The purpose of the remuneration policy is to ensure the remuneration of the staff of the Manager is consistent with and promotes sound and effective risk management, does not encourage risk-taking which is inconsistent with the risk profiles, rules or instruments of incorporation of the Manager and of the AIF it manages and does not impair the Manager's compliance with its duty to act in the best interests of the AIF it manages. The Manager's summary remuneration policy is available from the corporate policies section of our website (www.invesco.co.uk). Paper copies of the full remuneration policy can be obtained for free from the registered office of the Manager, Invesco Fund Managers Limited, Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire, RG9 1HH, UK upon request. The remuneration policy is reviewed annually by the Compliance, Human Resources and Risk Management functions, who recommend any adjustments to ensure continued alignment of the policy with sound risk management. The board of directors of the Manager are responsible for the oversight of remuneration and for ensuring adherence to this policy through the Human Resources function. The Internal Audit function conducts regular testing of administration of the remuneration policy to assess its ongoing compliance with the Invesco Group's remuneration policies and procedures. The Manager does not employ any direct staff. All staff involved in the AIF related activities of IFML are employed and paid by various entities of the Invesco Ltd. Group. The aggregate total remuneration of Invesco staff involved in AIF related activities of the Manager in respect of performance year 2025 (1 January 2025 to 31 December 2025) is £1.57 million of which £0.97 million is fixed remuneration and £0.60 million is variable remuneration. The number of beneficiaries apportioned to AIFMD activities is 7. The Manager has identified individuals considered to have a material impact on the risk profile of the Manager or the AIF it manages ("Identified Staff"), who include board members of the Manager, senior management, heads of control functions, other risk takers and any employees receiving total remuneration that takes them into the same remuneration bracket as senior management and risk takers. The aggregate total remuneration paid to the Identified Staff of the Manager for AIF related activities for the performance year 2025 (1 January 2025 to 31 December 2025) is £0.84 million of which £0.55 million is paid to Senior Management and £0.29 million is paid to other Identified Staff. Please note that remuneration for AIFMD Identified Staff includes remuneration for staff employed by delegates. --- 83 # Invesco The Manager of Invesco Bond Income Plus Limited is Invesco Fund Managers Limited. Invesco Fund Managers Limited is a wholly owned subsidiary of Invesco Limited and is authorised and regulated by the Financial Conduct Authority. Invesco is one of the largest independent global investment firms, with funds under management of $2,257.7 billion.* Invesco aims to provide the highest returns available from markets, through active management, but in a controlled manner, conscious of the risks involved and within our clients’ objectives. * As at 28 February 2026. --- Invesco Bond Income Plus Limited Annual Financial Report 2025 # Income you can set your clock by† ![img-24.jpeg](img-24.jpeg) † Capital at risk. Income not guaranteed.