Miton UK MicroCap Trust plc

Report and Accounts for the

year ended 30 April 2022

A Trust accessing the inherent

vibrancy of the UK’s quoted

microcaps

Miton UK MicroCap Trust plc

Annual Report 2022

Numerous fund strategies

reﬂect the long-term trend of

declining bond yields...

Contents

The Company

1 Performance Summary

2 Strategy and Prospects

Strategic Report

6 Results for the Year to

30 April 2022

7 Financial Performance Indicators

8 Chairman’s Statement

12 Investment Manager’s Report

18 Business Model

19 Costs of Managing the Trust

20 Portfolio Information

22 Performance and Risks

26 Share Capital

27 S172 statement

30 Management and other Matters

Governance

32 Directors

33 Report of the Directors

36 Corporate Governance Statement

42 Audit and Management

Engagement Committee Report

45 Directors’ Remuneration Report

49 Statement of Directors’

Responsibilities

50 Independent Auditor’s Report

Company Accounts

57 Income Statement

58 Statement of Changes in Equity

59 Balance Sheet

60 Statement of Cash Flows

61 Notes to the Financial Statements

Shareholder Information

80 Redemption of Ordinary Shares

81 Shareholder Information

84 AIFMD Disclosures

85 Notice of Annual General Meeting

91 Glossary

94 Contact Details of the Advisers

Over the last 30 years, as long-dated bond

yields have declined, the value of all assets

have risen substantially.

In particular, the share prices of rapid-

growth technology stocks have typically

outperformed more traditional stocks.

This rising stock market trend has been

so persistent that many investors overlook

the dangers should these trendsreverse.

The Miton UK MicroCap Trust was set up

speciﬁcally because its returns should

not be closely correlated to the rise of

bondvaluations.

As the political agenda evolves towards

nationalism and away from globalisation,

this trend may actively favour UK-quoted

microcap stocks.

This Report and Accounts seeks to offer

greater insight into the Trust’s strategy

and its prospects.

Miton UK MicroCap Trust plc

Annual Report 2022

... whereas this Trust

offers participation

in a very different

opportunity set

Annual Report 2022

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Investment returns were

abundant duringglobalisation...

With its heritage of past inﬂation, the UK investment universe

principally comprises quoted businesses generating incremental

cash surpluses, together with a bias toward quoted microcaps that

can sustain growth even in times of unsettled global economies.

Globalisation led to a long period of global growth as a surge of

low-cost imports offset local inﬂation, in a trend that favoured

certain overseas stock markets because they comprised a much

higher proportion of highly ambitious unicorn businesses.

With renewed inﬂation, so-called unicorns are now at risk of

gettingcaught between two stools. In anticipation of major upside,

they often build businesses with substantial costs bases, but, with

rising interest rates, they may never get sufﬁcient sales to fund

their operations.

In the UK, quoted microcap stocks do not need large cost bases

to achieve their objectives as many of them participate in niche

industrysectors.

Speciﬁcally, many of these are immature markets with prospects

that are somewhat independent of the ﬂuctuations of the

globaleconomy.

The portfolio of the Miton UK Microcap Trust focuses on the

advantages of UK-quoted microcaps, which appear well placed

given the changing economic and market trends.

...but inﬂation changes everything,

and the Trust is well placed for

thechange

Miton UK MicroCap Trust plc

Annual Report 2022

The Board uses four Key Performance Indicators

(KPIs) to gauge the success or otherwise of the

Company’s strategy and its outcome for shareholders.

The Four Key

Performance

Indicators

Plentiful stock market trading volumes – Shareholders add to or reduce

their shareholding in the Trust via stock market transactions. In order to

make this as frictionless as possible, the Board aims to maintain a healthy

trading volume in the Trust’s shares. Over the past year, on average 0.21%

of the Company's shares were traded each day and, since issue, 0.24%

have been traded daily. The proportion of the daily turnover of shares

relative to the Trust’s market capitalisation compares favourably to the

peer group average of 0.16% (source: Peel Hunt).

The Trust’s valuation relative to its NAV – Prior to the Brexit referendum,

the Trust’s share price usually traded close to, or at a premium to, its daily

NAV. After the referendum, with the onset of the Brexit uncertainties,

the Company’s share price initially moved to a premium to NAV but

subsequently returned to a discount, which averaged 5.0% over the

period, compared to an average of 9.4% in the prior period.

Keeping costs competitive – On page 19 of this report, the ongoing

charges

1, 2

are set out at 1.41% (2021: 1.60%) of NAV over the year. The Board

pays careful attention to costs and, in the context of the Trust’s specialist

investment universe and the premium returns it has delivered since

issue, the Board believes that the Trust’s overall costs are reasonable.

The Company’s NAV total return – Over the year, the NAV total return of the

Trust was -13.1% (2021: 104.4%), which compares to -7.0% for the peer group*

(2021: 49.4%) and -5.8% for the Numis 1000 Index (2021: 76.7%). Further

details may be found in the Investment Manager’s Report. Since the

Company’s listing in April 2015, the NAV total return was 89.1% (2021: 118.0%),

which compares to 53.3% (2021: 87.3%) for the peer group and 63.2% for the

Numis 1000 Index (2021: 73.2%).

* The Company's peer group is the Association of Investment Companies UK Smaller Companies sector –

seeGlossary on page 91 for a list of constituents

1 The ongoing charges are calculated in accordance with AIC guidelines

2 Alternative Performance Measure (“APM”). Details provided in the Glossary on pages 91 to 93

Annual Report 2022

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The Miton UK Microcap Trust aims to deliver premium returns for shareholders through a portfolio of

stocks that are often well placed to generate surplus cash. This summary also highlights how downside

risks can be ameliorated by diversifying stock speciﬁc and portfolio risk.

The Trust’s capital is:

– invested in companies whose prospects are often somewhat independent of the general growth of

the economy… By their nature, microcaps often have relatively modest market shares, or operate in

immature markets. Therefore, their growth is not as reliant on the general growth of the economy

and they very often possess greater growth potential than some of their larger competitors.

– diversiﬁed across a broad universe of stocks... The Trust’s portfolio of microcaps are mostly listed on

the London Stock Exchange and on the Aquis Stock Exchange. By far the largest cohort are quoted on

the Alternative Investment Market (AIM). The portfolio may occasionally invest in stocks listed on other

exchanges such as the International Stock Exchange in the Channel Islands, although this is normally a

relatively small percentage of the portfolio.

– invested into those companies where plentiful cash surpluses are anticipated... Sometimes, after a

number of years of capital expenditure, the valuations of some quoted microcaps do not fully reﬂect the

quantum of their forthcoming cashﬂow surpluses, as few professional investors actively research them. As

these companies announce major improvements to their cashﬂow, their share prices tend to outperform.

– invested with a preference for those companies with strong balance sheets, standing on overlooked

valuations. Academic reviews of UK stock market data since 1955 conclude that listed companies in the

bottom two per cent by market capitalisation tend to deliver higher returns than those in all other size

bands. Furthermore, if this factor is combined with companies that stand on overlooked valuations, then

the returns can be even higher.

A summary of the nature of

the Trust’s portfolio

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Annual Report 2022

Miton UK MicroCap Trust plc

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The Miton UK MicroCap Trust plc is an investment trust quoted on the London Stock Exchange under the

ticker code MINI. It is referred to as the Company, MINI or the Trust in the text of this report. The Board, which

consists of four independent directors, appoints the Investment Manager (Premier Portfolio Managers

Limited, a wholly owned subsidiary of Premier Miton Group plc) and oversees all aspects of the Trust.

Following the Trust’s listing in April 2015, its net asset value (NAV) rose from 49.00p to 71.60p in June 2018. With

the uncertainties about the nature of any potential Brexit agreement, and the onset of the global pandemic,

the Company’s NAV fell to a nadir of 37.20p in March 2020, before recovering strongly. During the year under

review, the Company’s NAV has fallen from 104.83p to 91.05p. The Investment Manager continues to believe

that there is still plenty of scope for the actively managed portfolio to continue to deliver attractive returns.

Our objective

The Company invests principally in a portfolio of smaller UK quoted companies, generally with market

capitalisations of less than £150m. The primary objective is to generate capital growth through selecting

stocks that are expected to generate plentiful surplus cash in the short to the medium-term. As this comes

through and their share prices appreciate sharply, the Investment Manager tends to take proﬁts, with the

capital reinvested in other promising microcaps standing on overlooked valuations. Given that a major part

of the Company’s return is anticipated to comprise capital appreciation, the Trust’s annual dividend (if any)

will be a modest contributor to long-term returns.

Miton UK MicroCap Trust plc

Report and Accounts for the year ended 30 April 2022

Source: Morningstar

-20

100

Numis All-Share Numis Smaller

Companies

ex ICs + AIM

Numis 1000 IndexMINI NAV

Percent

-13.1

5.3

-5.8

-9.1

100

Numis All-Share Numis Smaller

Companies

ex ICs + AIM

Numis 1000 IndexMINI NAV

Percent

89.1

42.8

63.2

57.3

Total returns 12 months to 30 April 2022 Total returns since launch in April 2015



Miton UK MicroCap Trust plc

Annual Report 2022

Microcap share prices have the potential

to rise by multiples…

The nature of the Miton UK Microcap Trust strategy is that the share prices of quoted microcaps can rise

by multiples of their purchase price when they succeed. This feature may become more important as

trends change:

– During globalisation, economic slowdowns were addressed by boosting demand, enhancing

corporate growth and proﬁts. In this period, inﬂationary pressures were subdued principally due

to abundant imports of low-cost goods. Over these decades, supply exceeded demand, so when

economic growth slowed, central banks were able to address the problem by increasing demand –

typically through reducing interest rates or more latterly through ﬁnancial stimulus in the form of

Quantitative Easing.

When demand is boosted businesses tend to beneﬁt, as it drives additional sales and proﬁts. Overall,

the decades of globalisation were marked by a long period of ongoing sales and proﬁt growth, that

led many businesses to enjoy increased proﬁt margins.

– Over the last couple of years demand has increased. But with trade tariffs, COVID and the Russia-Ukraine

war the ability to supply has been impaired. Hence, central banks are currently obliged to bear down

on demand, to bring it back into balance with supply. Even prior to COVID, trade tariffs were starting to

scale back the ability of the global economy to supply. Subsequently, it has reduced further due to the

global pandemic and the Russia-Ukraine war. Excess demand relative to supply has now led to renewed

inﬂation, with central banks obliged to constrain demand, to bring it back into balance with supply.

Suppressing demand represents a major business challenge, as there are fewer sales to go around. As

sales fall away, it often sparks price wars, that drive down proﬁt margins. The risk is that there is a major

reduction in proﬁtability, with potential for insolvency for the over-levered.

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…which is important given that stock

markets may become more challenging

– The best chance of holding on to margin lies with businesses that deliver outstanding customer service.

With inﬂation, it appears that many businesses could come under margin pressure, as demand

moderates, and companies seek to hold on to customers, even if this involves cutting prices. In

these circumstances, businesses delivering poor customer service are often the most vulnerable.

Conversely, companies delivering not only good, but outstanding levels of customer service can

sometimes retain their customers even when others are offering similar services at lower prices.

– Given that most quoted companies notionally say they prioritise customer service, how can we

identify those that are genuine? Management teams genuinely interested in customer service are

normally diligent in collating the data and including it in their regular board packs. In our meetings

with management teams, we have long asked a series of detailed questions on this data, to differentiate

those who are genuinely interested in customer service versus those that say they are. Furthermore,

management teams that are truly aligned ensure they make it as easy as possible for front-line staff to

deliver service. For example, we often follow up by asking whether management actively make enquires

to identify staff problems, through regular staff surveys. These questions help the Trust to prioritise

portfolio holdings that have quoted microcap management teams demonstrating the ambition to deliver

outstanding customer service.

The bottom line is that many quoted microcaps in the Trust’s portfolio, have the potential to deliver

a multiple of their initial entry share prices, which may become a much more important feature for

investors should there be less upward momentum in asset valuations and stock markets in future.



Miton UK MicroCap Trust plc

Annual Report 2022

The Directors believe that integrating

environmental, social and governance (“ESG”)

factors into the investment process helps the Trust

achieve its objective of providing shareholders with

capital growth over the long term. They receive

regular reports on the Manager’s stewardship

activities and support the Manager’s emphasis on

helping UK quoted companies address the climate

change agenda and encouraging them to deliver

demonstrably socially useful outcomes.

Meeting management (and boards) is part of the

Manager’s due diligence process before investing

and, once invested, the Manager continues to meet

with companies as part of the portfolio monitoring,

alongside voting at shareholder meetings. ESG

matters are raised in discussions where relevant

as well as other subjects such as business strategy.

In the past year the directors have also met the

management of a number of companies held in

theportfolio.

The portfolio managers attended over 985 meetings

with companies during the period; a number of

meetings included discussion on climate related

topics such as carbon reduction as well as social

issues such as employee retention.

The portfolio managers will generally support

management when voting at shareholder meetings,

as they select companies for the portfolio on the

basis of their strong management, particularly in

the case of smaller companies where management

quality is critical for success.

The Trust has a clear sense of purpose…

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Helping UK quoted business to fund the climate

changeagenda…

The UK Government has set a legally binding

target – that the greenhouse gas emissions of the

economy are reduced to net zero, which will take

some decades of investment to achieve.

Some UK microcap business models are already

aligned with the climate change agenda. In a few

cases some are investing to sequester carbon and

sell their carbon credits to other industries, such

as transport, where it is more difﬁcult to eliminate

carbon emissions quickly. Whilst the Miton UK

Microcap Trust portfolio does have investments

in some of these companies, it is also recognised

that the much bigger task will be to help all other

businesses to reduce their carbon emissions.

At present, we are asking the management teams

to identify their scope 1 and scope 2 emissions so

they can plan to become low-carbon businesses in

the future. Premier Miton has partnered with CDP

(Climate Disclosure Project) to support this work.

In short, helping fund UK-quoted microcaps to

meet the climate change agenda ahead of others

underlines the Trust’s very clear sense of purpose.

Quoted companies that move ahead of others

should be well-placed to deliver superior returns.

…and being demonstrably socially useful

Stock exchanges are not just about

listing companies with investment plans, or

attracting savers willing to fund their capital

expenditure. A successful stock exchange must be

relevant to the local electorate as well. It does this

by creating extra employment, additional domestic

growth and an increase in the government tax take.

Overall, stock exchanges are favoured by politicians

because they are socially useful.

During the decades of globalisation, redundancies

resulting from major mergers were tolerated

because world growth and employment

prospects were plentiful. More recently, a change

in the political climate, combined with the global

pandemic, has led to a more nationalistic agenda.

Companies that shed labour on mergers, or favour

distant supply lines, together with those that pay tax

in offshore low-tax territories, are now coming under

much greater political scrutiny.

One of the advantages of investing in UK-quoted

microcaps is that young businesses tend to

create additional skilled roles, often in the UK.

Furthermore, younger corporates usually have

simple tax arrangements, so their success boosts the

exchequer's revenues. Hence, any additional political

scrutiny is not necessarily a constraint as the Trust’s

portfolio of UK-quoted microcaps already offers

demonstrable, social advantages. The microcap

sector has the potential to deliver socially useful

outcomes as well as premium returns.



Miton UK MicroCap Trust plc

Annual Report 2022

•

Over the year, the Ordinary Share NAV fell

from 104.83p on 30 April 2021 to 91.05p

on 30 April 2022, a negative total return

including dividends reinvested of 13.1%.

•

The Ordinary Share price fell from 104.50p

at 30 April 2021 to 86.50p at 30 April 2022,

a negative return of 17.2%. As at close of

business on 15 July 2022, the closest date

to this Report, the Ordinary Share NAV was

72.09p and the share price was 67.20p.

•

The net Revenue return was a positive return

of £159,000 this year, or 0.15p per share.

This compares to a loss of £169,000 last year,

or (0.14)p per share.

•

The Company offers all investors the

opportunity to redeem their shareholding

each year, which has the advantage of

clearing any overhanging sellers and is

designed to ensure that the market price

of the Company does not deviate too far

from the underlying NAV. Redemption

requests in relation to 14,614,199 Ordinary

Shares, or 13.3771% of the Company’s share

capital, at 30 April 2022, were received for

the 30 June 2022 Redemption Point and

are not reﬂected in the summary below. The

redemption mechanism is explained further

on page 80.

•

The Company does not have a formal

benchmark but, for comparison, it is

intended that the return on the Numis 1000

Index and the Morningstar Investment

Trust UK Smaller Companies sector will be

published on the monthly factsheet and in

the Company’s annual and interim reports.

Returns, however, may diverge from any of

these indices for a signiﬁcant period.

Results for the Year

to 30 April 2022

Summary of Results

Year to

30 April

2022

Year to

30 April

2021

Total net assets attributable to equity shareholders (£’000) 99,475 116,651

NAV per Ordinary Share* 91.05p 104.83p

Share price (mid) 86.50p 104.50p

Premium/(Discount) to NAV* (5.00)% (0.31)%

Investment income £1.0m £0.7m

Revenue return per Ordinary Share 0.15p (0.14)p

Total return per Ordinary Share* (13.77)p 49.51p

Ongoing charges

* 1.41% 1.60%

Ordinary Shares in issue 109,253,560 111,274,758

* Alternative Performance Measure (‘APM’). Details provided in the Glossary on pages 91 to 93.

# The ongoing charges are calculated in accordance with AIC guidelines.

Annual Report 2022

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Financial Performance Indicators

NAV v share price v Numis 1000 Index

0.0

50.0

100.0

150.0

200.0

250.0

Percent

MINI NAV

MINI Price TR

Numis SC

1000 Ex Invt

Cos TR

Apr 2015

Oct 2015

Apr 2016

Oct 2016

Apr 2017

Oct 2017

Apr 2018

Oct 2018

Apr 2019

Oct 2019

Apr 2020

Oct 2020

Apr 2021

Oct 2021

Apr 2022

Source: Morningstar from 30/04/2015 to 30/04/2022.

This chart details the NAV and the daily closing share price

of the Company. Prior to the Brexit referendum, the share

prices of microcaps generally appreciated well and the

NAV of the Trust rose. During the Brexit negotiations, many

asset allocators scaled back their UK weightings given the

uncertainties over the detail of the exit arrangements, and

this led to fewer buyers of smallcap stocks. This trend was

often more acute amongst microcap stocks, although the

prospects for quoted microcaps are often less dependent

on global growth than larger quoted companies, and

more recently this has led to renewed institutional interest

in the Trust’s strategy.

Revenue and dividend per share

Year to

30 April

2018

Period from

26 March 2015

to 30 April 2016

Year to

30 April

2017

Year to

30 April

2019

Year to

30 April

2020

-2

Revenue per share (H1)

Revenue per share (H2)

Year to

30 April

2022

Year to

30 April

2021

Final dividend per share

Annualised NAV total return

expressed in pence as %

of year end NAV

Source: Company from 30/04/2015 to 30/04/2022.

The revenue per share of the Trust was relatively strong

in the early years, as two of the portfolio holdings were

yielding 10% at purchase. After these were taken over, the

underlying dividend income of the portfolio has been at a

lower level, and often similar to the revenue costs each year.

Overall, it has always been anticipated that the major part

of the Trust’s longer term returns would come via capital

gain rather than dividend income. The chart alongside

highlights that the Trust’s return to date has indeed been

dominated by capital appreciation.

Average unweighted market capitalisation comparison: MINI v Numis Large Cap Index, Numis Smaller

Companies ex Investment Companies Index and Numis 1000 ex Investment Companies Index

MINI (£79m) Numis Large Cap

Index (£18.3bn)

Numis Smaller

Companies

ex ICs (£409m)

0.08

18.3

0.41

Numis 1000

ex ICs (£198m)

0.2

£bn

Source: Premier Miton, Numis.

The Trust pursues a clearly differentiated strategy,

illustrated by the fact that the average unweighted market

capitalisation of the holdings within its portfolio is £79m,

which compares to an average of £18.3bn for the Numis

Large Cap index, £409m for the Numis Smaller Companies

ex Investment Companies Index and £198m for the Numis

1000 Index ex Investment Companies. The Trust's portfolio

may therefore produce different returns from those of the

mainstream stock market indices. Please see glossary for

further details of these indices.



Miton UK MicroCap Trust plc

Annual Report 2022

“ ‘Elephants don’t gallop’ is an

old Stock Exchange maxim,

but microcaps can ﬂy!”

Ashe Windham

Chairman

This report, representing the fully audited results

for the Company for the year ending 30 April

2022, is my ﬁrst as your chairman. Andy Pomfret,

my predecessor, stepped down, as planned, on

31 December 2021. As we reported in an RNS at

the time, the Board would like to formally thank

Andy on behalf of all shareholders for directing the

Company with such skill and dedication since its

launch on 30 April 2015. The Company's success as

a distinctive pioneer in the microcap arena, with an

excellent return record, is due in no small part to

Andy's inspired leadership. We wish him well.

Performance

The investment objective of Miton UK MicroCap

Trust (MINI), as stated in our prospectus, is to

provide Shareholders with capital growth over

the long term. MINI has no formal benchmark.

Your Company ﬁrst traded on the London Stock

Exchange at the issue price of 50p on 30 April

2015. Over the seven years to 30 April 2022 the NAV

Total Return that MINI has produced is 89.05%.

This compares with the Numis All Share Index

(including Investment Companies) with a return

of 42.81% and the Numis Small Cap 1000 Index

(excluding Investment Companies) which was up

63.17%. Other comparators for this period include

the Numis Small Cap Plus AIM Index (excluding

Investment Companies) which produced a 57.34%

return whilst the NAV Total Return produced by

our peer group was 53.26%. Overall, therefore,

we are pleased with MINI’s strong longer

termperformance.

Total Returns since launch in April 2015

Over the past 12 months to 30 April 2022 we have

lagged our comparators producing a NAV Total

Return of a negative 13.14%, whilst the Numis Small

Cap 1000 Index (excluding Investment Companies)

fell 9.06%, our peer group

was down 6.95%, and

the Numis Small Cap 1000 Index (excluding

Investment Companies) registered a negative

5.78%. Over the year to April 2022, the strong dollar

and buoyant commodity prices have favoured

the largest stocks, thus the Numis All-Share Index

(excluding Investment Companies) rose 5.26%.

You may wonder why it is that we use the Numis

indices in all our communications. The answer is a

simple one: we are trying to save our shareholders

money as the FTSE indices charge a signiﬁcant

amount if we use their data. The Numis indices

were launched at the start of 1987. They have been

published continuously for 34 years, whilst they also

have a 32-year back-history to 1955. Since their launch,

the Numis indices have provided the deﬁnitive

benchmark for monitoring the performance of

Chairman’s Statement

1 The Company's peer group is the Association of Investment Companies UK Smaller Companies sector – see Glossary on page 92 for a list of constituents

100

Numis All-Share Numis Smaller

Companies

ex ICs + AIM

Numis 1000 IndexMINI NAV

Percent

89.1

42.8

63.2

57.3

Source: Premier Miton, Numis.

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smaller UK companies and we are delighted to be

using them for comparison purposes. Your directors

are pleased with MINI’s long term performance as it is

handsomely matching itsobjective.

Despite small caps being buoyant in early 2021,

there was excess of issuance in the second half of

2021 and small cap share prices drifted with small

cap stock market indigestion, made worse by the

invasion of Ukraine by Russia on 24 February 2022.

In the absence of small cap momentum, MINI

traded at an average discount of 6.2% over the year

to April 2022, and at a 4.0% discount since IPO given

the Brexit uncertainties and then the COVID-19

pandemic.

Generally, when small caps are out of favour,

MINI trades closer to NAV than most other small

cap investment trusts. Since the autumn small

cap stocks in the UK have been on a relentless

downward trend. Small cap stocks tend to get

caught in the early stages of a bear market as

selling is liable to be indiscriminate and the

liquidity in these stocks can be thin. We believe

that MINI is well positioned as its portfolio of

investments is largely composed of companies

which not only generate proﬁts, but also have

robust balance sheets. At the end of April 2022 MINI

had investments in 137 quoted companies, with a

weighted average market cap of £101 million, and

minimal debt overall. The weighted average Price/

Book ratio of the portfolio was 1.4x, considerably less

expensive than the 1.8x for the UK market as a whole

and with a dividend yield of 0.94%.

Earnings and Dividends

Earnings for the year were 0.15p per share

(2021: (0.14)p per share) on the revenue account.

Earnings on the capital account consisted of a loss

of 13.91p per share (2021: a gain of 49.65p per share).

Earnings on the revenue account remain depressed

as micro-cap companies would rather invest in

their businesses than reward shareholders at such

an early stage in their corporate lives. Revenue

this past year, however, was boosted by a special

dividend of 50p from CML Microsystems, which

added £74,000 to the account. As far as setting the

dividend is concerned, the Directors aim to give the

Investment Manager maximum ﬂexibility to follow

whichever course will lead to the best results for our

shareholders. Your Directors regard the dividend as

a useful by-product of the investment process but

not a target.

Our ambition is to continue to pay a small dividend

but rest assured that we will not plunder the capital

account in order to maintain it. This year, your Board

is recommending a ﬁnal dividend of 0.15p per

Ordinary Share. Subject to approval by shareholders

at the AGM, this will be paid on 30 September 2022 to

all shareholders on the register on 2 September 2022.

Board Succession Planning

We were delighted to welcome Davina Walter

as a Director of MINI on 10 August 2021. We have

engaged a ﬁrm of head hunters to track down a

replacement for Jan Etherden, who has decided

to retire from the Board by the end of 2022. Our

intention is to keep the Board at four members, but

there may be short periods when the number of

directors rises to ﬁve to ensure an efﬁcient handover

of responsibilities.

We are aware of the recent changes in that

the FCA has published a Policy Statement on

Diversity and inclusion on company boards and

executive management (PS22/3). These change

the Listing Rules and the Disclosure Guidance

and Transparency Rules. The new rules include

requirements for companies subject to Chapter15

of the Listing Rules to include a statement in their

annual reports and accounts as to whether the

Company has met the following targets on board

diversity as at a chosen reference date within its

accounting period:

•

At least 40% of individuals on the board are

women;

•

At least one of the senior positions on the

board is held by a woman, and

•

At least one individual on the board is from a

minority ethnic background.



Miton UK MicroCap Trust plc

Annual Report 2022

Chairman’s Statement continued

As an externally managed investment trust,

the Company does not have a CEO or CFO and

therefore the two relevant senior positions are Chair

and Senior Independent Director.

We have met the ﬁrst point and we hope, within the

next few years, to transition to a position where the

last two points are also complied with. The Board is

conscious of the directive which limits the term of

directors, aside from the chairman, to nine years. As

the Company has been in existence for seven years

succession planning has been an important topic

and we are trying to ensure a staggered departure

of directors so that our successors are not faced with

everyone’s term coming up at once.

Directors’ remuneration

The Directors are entitled to an increase in their

fees by the percentage uplift in CPI each spring.

The ﬁgure which applies to fees from 1 May 2022

is 9%. Recognising the need to show restraint, the

Directors have unanimously agreed to apply a 4.5%

uplift to their fees this year.

Responsible Investing

It is ironic that those managers who followed

environmental, social and governance (ESG)

principles to the letter, without any regard to a

more subtle approach, will have performed poorly

over the last few months since oil stocks, mining

stocks, tobacco stocks and defence stocks have all

performed well thanks to Putin’s ill judged invasion

of Ukraine. Happily, the Investment Manager has

taken a nuanced stance to ESG investing, and

has not shied away from all these sectors. Within

the oil sector, for instance, MINI has investments

in 10 carbon based energy holdings, including

Independent Oil and Gas, which has a zero carbon

production footprint, thanks to using previously

redundant gas pipelines, and unmanned mini-rigs

on the gas ﬁelds operated from the shore via

electric cables. MINI’s Investment Manager has

increasingly focused on integrating ESG factors

alongside ﬁnancial factors in the investment process

including decisions, as genuinely active investors,

to hold individual underlying investments in the

portfolio. The Investment Manager believes this

is important enabling them to deliver strong and

durable performance and to meet their broader

investment responsibility.

Share Issuance

A total of 650,000 new shares were issued during

the course of the year at an average of a 1.02%

premium to the prevailing Net Asset Value (NAV)

in May 2021, when these shares were issued. Your

Directors are keen to grow the size of the Company

and look to issue shares when the share price is at

a sufﬁcient premium to NAV. This exercise keeps

the premium in check, so as to ensure that no one

pays too high a price for the underlying assets,

whilst it also ensures adequate liquidity to those

wanting to acquire shares. Issuing shares at a

premium enhances the NAV, beneﬁtting existing

shareholders. This also dilutes MINI’s ﬁxed costs,

thus lowering the Ongoing Charges Ratio (OCR). We

will be seeking approval at the AGM in September to

renew this useful facility.

Share Redemption

Once each year, traditionally at the end of June, your

Directors choose to offer the facility for shareholders

to redeem their holdings in part or whole, at or close

to the prevailing NAV. The Directors have offered this

facility again this year and the timetable is laid out

on page 80 of this report. In fairness, as the amount

of shares tendered reached 13.3771%, the Directors

agreed to form a separate Redemption Pool and it

may take a number of weeks to liquidate this pool

appropriately.

The Board intends that the 2023 Redemption

Point will be moved from 30 June 2023 to

31 October 2023 to align with the interim report.

The Board considers this to be in the best interests

of all shareholders.

Annual General Meeting

The Annual General Meeting (AGM) of the Company

will take place at 11am on Tuesday 27 September

2022 at 1 Finsbury Circus, London, EC2M 7SH and

your Board looks forward to this annual opportunity

to meet shareholders. In addition to the formal

business of the AGM, there will be a presentation

by the fund managers on your Company’s

performance andprospects.

Annual Report 2022

Miton UK MicroCap Trust plc

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The formal notice of AGM can be found on page 85

of this report.

Outlook

The investment outlook looks pretty bleak with

inﬂation approaching double digits, rising interest

rates, (admittedly from multi-century lows), stalling

growth, fears of recession and the worst conﬂict

raging in Europe since 1945 with the possibility of

further escalation. At the time of writing one might

almost be pleasantly surprised at how resilient

markets have been. You might well be forgiven for

thinking one would be unusual to even contemplate

investing in a portfolio of microcaps. However, there

are a useful number of factors which might make

such a thought compelling.

First, ever since MIFID II was sprung on the

market at the start of 2018, there has been a

steady withdrawal of investment analysts covering

microcaps and small companies generally. Typically,

microcaps only have one analyst covering them

and that individual is usually from the sponsoring

house, whose opinions are often regarded as little

more than a marketing ploy. Your Directors remain

deeply impressed by the number of companies

which the managers of the Trust, Gervais Williams

and Martin Turner, manage to meet, physically or

remotely, over the course of a year. As dedicated

small cap managers, who have been operating in

this arena for three decades, their understanding

of what makes a successful microcap company

is almost unrivalled. There are many ‘gems in the

rough’ and your Investment Manager is well placed

to identify them.

Secondly, your Investment Manager currently deploys

a FTSE 100 put well out of the money, which will help

bring much sought after liquidity to the portfolio

if the FTSE falls to 6,200 by December 2022. This,

coupled with the long lived and dedicated facility

to borrow £5m from a leading UK bank, gives the

Investment Manager the ability to get hold of funds

when stocks are trading at distressed valuations and

thus is able to take advantage of such conditions.

Some may think that microcaps are companies

of little consequence but many of them are world

leaders in their ﬁelds and astute leadership can

enhance their already dominant positions with

sensible inﬁll acquisitions and canny investment. MTI

Wireless, an investment made soon after the Trust’s

launch, subsequently rising to become one of the

largest holdings, is a good example. It is currently

being actively engaged by many of the largest 5G

equipment manufactures because its 5G aerials

have patented commercial advantages over others.

It is a fact that well-chosen microcaps can, and often

do, rise by multiples of their original price, and this

then brings them into the sights of investment

managers who, until this point have eschewed the

smallest companies, leading to yet further share

price appreciation. Over the life of the Trust there

have been numerous stocks that have risen many

multiples from their entry cost. Within the portfolio

at present there are 63 stocks that are standing

above entry cost, of which 14 have at least doubled

since purchase, seven have tripled, and ﬁve have

quadrupled, one of which has risen even further.

‘Elephants don’t gallop’ is an old Stock Exchange

maxim, but microcaps can ﬂy!

Over recent years your Investment Manager has

highlighted why their investment strategy has

the potential to deliver excellent returns. They

have also outlined how returns can be achieved

with portfolio risks that are usefully moderated

versus others. Fortunately, to date this strategy

has delivered, with MINI’s NAV having risen nearly

90% since issue in April 2015, well ahead of most

indices, and with a Beta that has been below the

indices and many other competitor trusts. Whilst

the current economic and political news ﬂow may

have turned decisively negative, your Directors

believe that MINI’s strategy has the potential to

deliver premium returns relative to others. The

FTSE100 Index may currently be leading the way,

but UK quoted microcaps may also have some good

performance ahead and the potential to deliver

years of goodreturns.

Ashe Windham

Chairman

18 July 2022



Miton UK MicroCap Trust plc

Annual Report 2022

Who are the fund managers of the Trust?

Premier Miton Group plc is an independent, listed

fund management company, formed from the

merger of Premier Asset Management and Miton

Group in November 2019, with a well established

reputation for successfully managing UK-quoted

smaller company portfolios over the longer

term. The Trust’s board appointed Miton Group

as Investment Manager when it was ﬁrst listed

in April 2015.

The day-to-day management of the Trust’s portfolio

continues to be carried out by Gervais Williams

and Martin Turner, who came together as a team

in April 2011.

Gervais Williams

Gervais joined Miton in March 2011 and is now Head

of Equities at Premier Miton. He has been an equity

fund manager since 1985, including 17 years at

Gartmore. He was named Fund Manager of the Year

by What Investment? in 2014. Gervais is also a board

member of the Quoted Companies Alliance and a

member of the AIM Advisory Council.

Martin Turner

Martin joined Miton in May 2011. Martin and Gervais

have had a close working relationship since 2004,

with complementary expertise that led them

to back a series of successful companies. Martin

qualiﬁed as a Chartered Accountant with Arthur

Anderson and had senior roles and extensive

experience at Merrill Lynch and Collins Stewart.

Why are the index comparatives used in this report

different from those used previously?

When the Trust was ﬁrst listed in April 2015, the

Prospectus set out its prospects with reference

to the AIM investment universe, since it was

anticipated to include most of the Trust’s portfolio

holdings, and the FTSE series of indices is familiar to

most investors.

The London Stock Exchange that owns the FTSE

Index data has recently concluded that although

the Manager pays for a licence for this data, in future

this will not extend to its use by the Manager’s

clients. Premier Miton also has a licence to use

the Numis Index data, and Numis have conﬁrmed

that its terms will continue to include the use by

Premier Miton clients. Therefore, as outlined in the

Trust’s Interim Report, it need not pay the cost of a

new FTSE Index licence as it can use Numis Index

data as a performance comparator in future.

Since the Trust was ﬁrst listed in April 2015, the

returns of both sets of indices happen to be broadly

similar, although there are some divergences over

shorter time periods. If anything, the returns on the

Extended Numis 1000 Index more closely represent

the ﬂuctuations of the Trust universe of UK quoted

microcaps, because it comprises the bottom

two percent of both LSE and AIM listed stocks.

Furthermore, the Extended Numis1000 Index

returns aren’t distorted by the major ﬂuctuations of

the largest AIM listed stocks that have occurred over

the last seven years.

What were the main contributors to the Trust’s

return over the year?

After the substantial outperformance of quoted

microcaps in the year to April 2021, the share prices

of UK-quoted microcaps mostly peaked during

the year under review. In part, this was related to

a large number of corporate fund raisings ahead

of the calendar 2021 year-end that exceeded the

scale of capital available. Hence, microcap share

prices declined at a time when many larger

quoted share prices rose. Thereafter, as inﬂationary

pressures persisted and global asset prices declined

in the early months of 2022, microcap share

prices reﬂected the trend and declined further.

Over the year the NAV of the Trust declined by

13.1%. This compares with a decline of 5.8% for the

Numis1000 Index over the same period.

Investment Manager’s Report

Annual Report 2022

Miton UK MicroCap Trust plc

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Whilst quite a number of share prices of companies

in the portfolio declined, the greatest detractor to

returns this year was Accrol Group. As a supplier

of toilet rolls, demand has remained consistent.

Their problem was that their deliveries became

unreliable due to COVID-related staff absence, and

given the decline in service levels, their supermarket

customers refused to fund the additional energy

costs of their factories, at least initially. These

issues have been addressed subsequently, and it is

expected that Accrol’s proﬁtability will recover. Over

the year under review however, its share price fell by

65%, and this fall reduced portfolio returns by 1.4%.

A second example is Avacta, that had also

outperformed in the previous year. Whilst it

continues to make good progress with potential

medical treatments using afﬁmers, it had to

suspend manufacturing lateral ﬂow tests for COVID

as an antibody supplied by one of its partners was

not sensitive enough to the Omicron variant. This

detracted 1.0% from portfolio returns.

From time to time the Trust’s portfolio is invested

in FTSE100 Put options, as their valuations tend to

rise dramatically during stock market sell-offs. The

Trust held one in 2019, and it rose to a multiple of its

cost during March 2020 due to the COVID-induced

market sell-off. It was sold near the nadir in markets,

and the Manager used the cash to buy a number

of new portfolio holdings standing at abnormally

low share prices, that then went on to enhance

the upside of the Trust. The Manager invested in a

new FTSE100 Put option in August and September

2021, and since the FTSE100 Index has held up

subsequently, its ‘time value’ has declined. The

valuation of FTSE100 Put options can be likened to

insurance fees, in that the cover only extends over

a deﬁned period (to December 2022 in this case),

and as their term to expiry shortens, so does their

valuation. This position cost the Trust 1.2% over the

year to April 2022.

What are the main factors that have driven the

Trust’s return since it ﬁrst listed in April 2015?

Academic analysis of UK stock market data since 1955

identiﬁes that the best performing group of stocks

have been quoted microcaps. When the investment

universe is narrowed further, to solely include

microcaps standing on undemanding valuations

(low Price/Book), the scale of their outperformance

is even more marked. With this background in mind,

the Trust’s portfolio is principally selected for UK

quoted microcaps standing on what we consider

to be overlooked valuations at the time of purchase.

When these microcaps succeed, their share prices

can rise by much greater percentages than most

mainstreamstocks.

Since the Trust was set up in April 2015,

the combination of abundant economic growth

(the Chinese economy has been a standout

contributor) and appreciating bond valuations

(enhanced by QE) have led to substantial stock

market appreciation. This favourable trend has

been interrupted by the global pandemic and the

Russia-Ukraine war, which has led to a reduction in

the ability of the global economy to supply, whilst

demand has increased with the extra ﬁnancial

stimulus. The mismatch is now reﬂected in renewed

inﬂation, which traditionally has proved difﬁcult to

unwind. Over recent quarters, the past market trends

have started to reverse.

The implications of recent news have somewhat

overwhelmed investors, and the advantages that

UK-quoted microcap stocks have in an unsettled

global economy have remained overlooked. Hence,

to date, the differentiated potential of the Miton UK

Microcap Trust strategy hasn’t been fully evident.

Nevertheless, since inception the Trust has delivered

some attractive returns despite local headwinds such

as Brexit.



Miton UK MicroCap Trust plc

Annual Report 2022

Investment Manager’s Report continued

For us, the key point is that we remain upbeat about

the Trust’s prospects, as outlined in the paragraphs

below. Speciﬁcally, we believe the Trust’s strategy

will continue to deliver premium returns over

the coming years, and with changing market trends

we also expect there will be fewer other strategies

that can rival it.

How unusual is the UK quoted microcap

investment universe?

Prior to a sustained period of globalisation, the

returns on mainstream stock markets were often

closely related to the rate of underlying inﬂation.

When inﬂation was problematic some decades

ago, listed small and microcaps were one of very

few strategies that delivered premium returns,

and hence institutions in many countries usually

had a weighting in their locally quoted small and

microcap companies.

Over recent decades, asset returns have been

incredibly abundant, coinciding with globalisation.

Generally, institutional weightings in quoted small

and microcap stocks have lost out to other areas

that have also performed well. UK quoted small

and microcap stocks may have outperformed

UK equities over these decades, but most local

institutions have scaled back their UK weightings

in order to participate in the even stronger

internationalreturns.

The UK small and microcap stock market may

have shrunk by number of companies, but it

has remained viable, thanks to UK government

support through dedicated tax exemptions. Quoted

small companies and microcaps tend to boost local

skilled employment and increased productivity,

which ultimately contribute to additional tax take for

the Exchequer.

Economic prospects appear limited currently,

with the UK economy, in common with others,

potentially vulnerable to a recession in the next

few quarters. Whilst this will be a challenge

for all businesses, quoted microcaps have the

advantage that they are normally ﬁnanced by

share capital, and don’t usually have major debt

liabilities. Furthermore, many are relatively young

businesses operating in immature market sectors

with structural growth drivers. Effectively, many

of these are less affected by a cyclical downturn.

Finally, being quoted companies, if other businesses

become insolvent, they can acquire these

operations debt free, and often generate additional

surplus cash over the comingyears, such as Saietta

which acquired e-Traction, an electric drive train

business, complementing Saietta’s existing electric

motor business.

Following the period of globalisation when so

much of the agenda was dominated by scale, it is

reassuring to note that beyond globalisation, there

may be renewed interest in small companies. The

UK stock market is almost unique in having retained

such a vibrant, wide-ranging universe of quoted

microcap stocks.

Annual Report 2022

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What are the prospects of the Trust?

Over recent decades, when we have engaged with

investors, we have principally highlighted why we

believe our investment strategies have the potential

to deliver premium returns relative to most others in

our peer group and other UK strategies. Alongside,

we have also outlined how we consider that this

objective can be achieved with portfolio risks that

are moderated through a more diverse range of

portfolio constituents than some competitor funds.

Encouragingly, to date the returns of our funds

have generally come through as anticipated. MINI’s

strategy for example has delivered premium returns

relative to the smaller company indices over the

seven years since issue, as well as outperforming

the mainstream UK equity indices. This outcome

has been achieved despite largely avoiding stocks

that were reliant on successive capital top-ups from

investors that were popular for much of this period.

Whilst the current economic and political news

ﬂow may have turned decisively negative, we

have started to outline to our investors that

we now believe that strategies such as MINI

have the potential to deliver premium returns

relative to international comparators as well as

many/most others in our peer group. Clearly, this

is a very bold statement, and we do recognise that

our assessment of future market trends may be

erroneous, or that we at Premier Miton may not

add as much value as we have in the past through

stock selection. Even so, the reason for raising the

ante with our investors, is because we consider the

current period as being one where many of the past

stock market trends are vulnerable to ceasing, and

that we may be entering a period when new market

trends become established. If this assessment

is correct, then those early to identify the nature

of future trends, might deliver disproportionate

outperformance. Equally, alongside the absolute

downside risks associated with investments carrying

excessive risks, their performance might also be

more disappointing than they have been previously.

In short, if our analysis is correct, then we, as active

managers, now need to become hyper-alert to

stocks that might be carrying excessive risk, because

of the potential scale of absolute downside that

they might deliver. Fortunately, within the Miton

UK Microcap Trust, we have always actively sought

to moderate portfolio risk via a portfolio of holdings

well diversiﬁed by business or sector, so that any

individual disappointments are more limited in

scale. Furthermore, we have also actively sought

to select stocks with relatively strong balance

sheets that are, in our view, well placed to generate

signiﬁcant surplus cash over the coming years.

Clearly, this doesn’t automatically imply that the

Trust’s portfolio will not have some holdings that

are found in time to be carrying excessive risk, but

hopefully it does imply that these should turn out

to be a relatively small proportion of the stocks that

weown.

Source: Premier Miton

Number of quoted companies in the UK below and

above £150m market capitalisation

100

200

300

400

Number of companies

600

500

£17.5bn

combined

market

capitalisation

£2,347.7bn

combined

market

capitalisation

<£150m >£150m



Miton UK MicroCap Trust plc

Annual Report 2022

Investment Manager’s Report continued

Additionally, the characteristics of the UK stock

market generally contrast with those of most other

developed economies. Speciﬁcally, the UK has a

preference for businesses that invest in projects

generating a stream of incremental cash surpluses,

in contrast to those that invest at greater scale in

the hope that they can come to dominate the globe

in a particular industry. If the high-ambition stocks

succeed, these kinds of investments generate very

substantial cash surpluses and supernormal returns

on their equity – Microsoft, Apple and Amazon are

three good examples. But alongside, a much higher

proportion of high-ambition stocks never achieve

their objective, and with the changing stock market

trends currently, they now risk getting caught

between two stools. In anticipation of the prize, they

often build up a business with substantial costs,

but with the changing economic trends they may

never get sufﬁcient sales to fund their cost base. If

equity capital becomes short stocks such as these,

running negative cash ﬂows are likely to become

very vulnerable.

Furthermore, we fear that the prospective economic

downturn may be associated with a major squeeze

in corporate proﬁt margins, given the inﬂating

costs of inputs such as energy, supply chains,

labour, interest rates, and taxes. So high-ambition

businesses already running negative cashﬂows

prior to the downturn may ﬁnd their funding

position turns out to be even worse than expected.

The bottom line is that we believe that the risks

of investing in many UK-quoted companies are

helpfully much less than, for example, in many

US-quoted companies. In time, if this is correct then

UK portfolios such as that of the Miton UK Microcap

Trust might become a more important source of

added value, given that with the change in market

trends there may be a paucity of alternatives.

We need to underline that the analysis outlined

above is still considered controversial. At present

few investors have signiﬁcantly changed their

behaviour, and are still relying on prior market

trends persisting. Despite the drawdown on

strategies investing in high-ambition stocks, it

seems few asset allocators have yet signiﬁcantly

amended their positioning. Effectively to date,

shareholders taking proﬁts are still being matched

by those looking to invest further capital, motivated

by the lower entry price. If market trends are

changing, we anticipate that open-ended strategies

investing in high-ambition stocks will continue to

deliver disappointing returns and in time they are

in danger of becoming overwhelmed by liquidating

investors who outweigh those investing.

If there is a liquidation hiatus to come, smallcap

investment trusts have major advantages. Being

closed ended, their share price discount to NAV

takes the short-term strain if selling shareholders

disproportionately outweigh the buyers. Discounts

to NAV bring in new investors over time, so

that overhanging sellers can clear. In contrast,

when liquidating investors exceed the ability of

an open-ended fund to sell assets in the stock

market, then they are often obliged to sell their

best holdings, so the quality of the underlying

portfolio degrades. Unfortunately, such a move

often prompts asset allocators to become even

more purposeful in the selling of their disappointing

strategies, almost irrespective of their valuation

or prospects. Furthermore, since asset allocators

also hold a proportion of assets that aren’t readily

realisable, such as private equity funds, any selling

pressure tends to be concentrated in their more

conventional funds.

Annual Report 2022

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In short, whilst we are very upbeat about the

potential for the Miton UK Microcap Trust strategy

as market trends change, we anticipate that

there may be period of stock market turbulence

between now and then. One of the key risks, as we

see it, might be characterised as the potential for

a build-up of wholesale institutional liquidation

selling, as the change in market trend is recognised,

and eventually becomes the consensus.

We note that already there are signs of market

stress. Normally, a combination of a rise in the

US Dollar exchange rate and a decline in bond

valuations is associated with an improvement in

the valuations accorded to banks. The fact that this

is not happening at present may be related to an

expectation that central banks are set to withdraw

ﬁnancial liquidity further in the coming months

as they raise interest rates, and bring Quantitative

Easing to an end. The current lockdown in China

may calm commodity prices in the coming months,

but only at the expense of a further reduction in the

ability to supply, potentially accelerating corporate

ﬁnancial tensions.

However, the risk of a wholesale liquidation wave

within microcaps is fortunately quite limited. Most

institutions have progressively reduced their UK

weightings to relatively modest levels over the

last three decades, so most are already carrying

underweight holdings in the UK stock market.

And almost all of the capital they still hold in the

UK is focused on mid and large cap equities – few

have any real weighting in UK-quoted small and

microcaps. And furthermore, any UK-quoted small

and microcap exposure that they might have, is

typically focused on stocks that may need further

capital support to achieve their objectives. Hence,

any potential liquidation surge in the UK stock

market is unlikely to directly affect the Trust’s

portfolio, because institutions have so little overlap

with it.

Lastly, the scale of the ‘hiatus’ risk is positively

correlated with the trust’s holding in the FTSE100

Index Put option, and its valuation might rise

proportionate to any notional liquidation surge.

In short, the key point is that we are currently very

vigilant about market risks. And, whilst the FTSE100

Put option may have detracted from portfolio

returns recently given that the FTSE100 has been

resilient to date, we consider its ability to generate

surplus cash should market trends become very

unsettled really valuable at present given the scale

of the adverse capital market risks around

Gervais Williams and Martin Turner

18 July 2022



Miton UK MicroCap Trust plc

Annual Report 2022

Business Model

Business and status the Company

MINI was incorporated on 26 March 2015

and its Ordinary Shares were listed on the

London Stock Exchange on 30 April 2015. It is

registered in England as a public limited company

and is an investment company in accordance

with the provisions of Sections 832 and 833 of the

Companies Act 2006.

The principal activity of the Company is to carry

on business as an investment trust. The Company

intends at all times to conduct its affairs so as to

enable it to qualify as an investment trust for the

purposes of Sections 1158/1159 of the Corporation Tax

Act 2010 (“S1158/1159”). The Directors do not envisage

any change in this activity for the foreseeable future.

The Company has been granted approval from

HM Revenue & Customs (“HMRC”) as an investment

trust under S1158/1159 and will continue to be treated

as an investment trust company, subject to there

being no serious breaches of the conditions for

approval.

The principal conditions that must be met for

continuing approval by HMRC as an investment

trust are that the Company’s business should

consist of “investing in shares, land or other assets

with the aim of spreading investment risk and

giving members of the company the beneﬁt of the

results” and the Company may only retain 15% of its

investment income. The Company must also not be

a close company. The Directors are of the opinion

that the Company has conducted its affairs for the

year ended 30 April 2022 so as to be able to continue

to qualify as an investment trust.

The Company’s status as an investment trust allows

it to obtain an exemption from paying taxes on the

proﬁts made from the sale of its investments and

all other net capital gains. Investment trusts offer

a number of advantages for investors, including

access to investment opportunities that might not

be open to private investors and to professional

stock selection skills at lower cost, and the ability

to hold illiquid positions in uncertain market

conditions.

Investment Policy

The Company’s full investment policy is set out on

page 81 and contains information on the policies

which the Company follows relating to asset

allocation, risk diversiﬁcation and gearing, and

includes maximum exposures, where relevant.

The Company invests in a portfolio of UK

quoted companies with the objective of achieving

capital growth by investing in a portfolio of stocks

that are well placed to generate an attractive cash

payback from productivity improvements.

Annual Report 2022

Miton UK MicroCap Trust plc

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Report Governance

Company

Accounts

Shareholder

Information

A Summary of the Total Costs Involved in Managing the Trust

Investment trusts differ from some other forms of

collective funds in that they are set up as independent

corporations with their operations overseen by the

Board that is separate from and independent of the

fund management group that manages the capital.

In addition, they are listed, with their shares traded

on regulated exchanges – which, in our case, is the

London Stock Exchange including the Alternative

Investment Market.

The Company is a closed-ended company with no

day-to-day redemptions impacting the size of the

fund (excluding the annual redemption). Shareholders

are able to invest or exit the Company at any time

through their broker.

Running costs are deducted from the total assets

of the Company on a pro-forma basis so the NAV

published each day is expressed after costs. The

ﬁgures below are the costs paid by the Company

over the year under review and are expressed as

a percentage of the average asset value of the

Company over the year to 31 May 2022 of £104,901.000

(2021: £84,258,000).

2022

2021

Fund management fees

0.85 0.87

Administration costs, including

Company Secretarial fees 0.17 0.24

Directors/Auditor/Depositary/

Registrar/Custodian and

Stockbroker fees 0.26 0.31

All other direct costs, including

VAT on the fees above, plus

marketing, legal 0.13 0.18

Ongoing charges 1.41 1.60

In addition, the Company also pays transaction

charges

that are levied when shares are bought or

sold in the portfolio. These are dealing commissions

paid to stockbrokers and stamp duty, a Government

tax paid on transactions (which is zero when dealing

on the AIM/NEX exchanges).

2022

2021

Costs paid in

dealing commissions 0.03 0.08

Stamp duty, a Government tax

on transactions 0.01 0.02

Overall costs including

transaction charges 1.45 1.70

The overall costs of the Company for the period

were 1.45%. This compares with the Company’s

average NAV total return since issue of 89.05% (after

deduction of costs).

The basic management fee payable to the AIFM is calculated at the rate of one-twelfth of 0.9% (1% prior to 1 September 2020) of the average market

capitalisation of the Company up to £100m, 0.8% per annum on the average market capitalisation above £100m, on the last business day of each calendar

month. The basic management fee accrues daily and is payable in arrears in respect of each calendar month. For the purpose of calculating the basic fee, the

‘adjusted market capitalisation’ of the Company is deﬁned as the average daily mid-market price for an Ordinary Share and C share (when in issue), multiplied

by the number of relevant shares in issue, excluding those held by the Company in treasury, on the last business day of the relevant month.

In addition to the basic management fee, and when the Redemption Pool is in existence, the AIFM is entitled to receive from the Company a fee calculated at

the rate of 0.9% (1% prior to 1 September 2020) of the NAV of the Redemption Pool on the last business day of the relevant calendar month.

Transactions conducted by the Company also involve some loss of value due to the dealing spread in stock exchange prices. Spreads range from less than 1%

in the most actively traded large cap stocks to more than 3% in the smallest, most infrequently traded stocks. The exact loss of value is difﬁcult to determine

precisely, but is normally less than half of the dealing spread at the time of the transaction. In a large percentage of the transactions, especially in the smallest

stocks, the stock is passed through from sizeable seller to sizeable buyer on a ‘put through’ basis with potentially no loss of value through the spread. During the

year under review, this cost is believed to be very modest in comparison to the NAV.



Miton UK MicroCap Trust plc

Annual Report 2022

Portfolio Information

as at 30 April 2022

Rank Company

Sector &

main activity

Valuation

£000

% of

net assets

Dividend Yield*

1 MTI Wireless Edge Technology 2,589 2.6 3.7

2 Afritin Mining Basic Materials 2,168 2.2 0.0

3 Live Company Group Consumer Discretionary 2,137 2.1 0.0

4 Totally Health Care 2,077 2.0 1.7

5 Saietta Group Consumer Discretionary 1,924 1.9 0.0

6 Frontier IP Group Industrials 1,865 1.9 0.0

7 Corero Network Security Technology 1,811 1.8 0.0

8 Aferian Telecommunications 1,554 1.6 2.2

9 Kistos Energy 1,529 1.5 0.0

10 Atlantic Lithium Basic Materials 1,485 1.5 0.0

Top 10 investments 19,139 19.1

11 Caledonia Mining Basic Materials 1,391 1.5 4.0

12 Supreme Consumer Staples 1,375 1.5 0.0

13 CT Automotive Group Consumer Discretionary 1,361 1.5 0.0

14 Pressure Technologies Industrials 1,316 1.3 0.0

15 Capital Limited Basic Materials 1,294 1.3 2.9

16 Cyanconnode Holdings Telecommunications 1,243 1.2 0.0

17 Jubilee Metals Group Basic Materials 1,224 1.2 0.0

18 Tirupati Graphite Basic Materials 1,151 1.2 0.0

19 Van Elle Holdings Industrials 1,140 1.1 0.0

20 Centralnic Group Technology 1,140 1.1 0.0

Top 20 investments 31,774 32.0

21 IOG Energy 1,136 1.1 0.0

22 Avacta Group Health Care 1,115 1.1 0.0

23 Truﬁn Financials 1,085 1.1 0.0

24 Tharisa Basic Materials 1,068 1.1 4.7

25 Braemar Shipping Services Industrials 1,059 1.1 2.6

26 Brighton Pier Group Consumer Discretionary 1,030 1.0 0.0

27 Lamprell Energy 1,021 1.0 0.0

28 Feedback Health Care 1,010 1.0 0.0

29 Jadestone Energy Energy 1,006 1.0 1.4

30 Accrol Group Holdings Consumer Staples 1,000 1.0 2.2

Top 30 investments 42,304 42.5

Balance held in equity instruments 52,518

52.8

Total equity investments 94,822 95.3

Listed Put Option

FTSE 100 – December 2022 802 0.8

Other net current assets 3,851 3.9

Net assets 99,475 100.0

* Source: Thomson Reuters. Dividend Yield based upon historic dividends and therefore not representative of future yield.

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

The tables above set out how the portfolio’s capital

is deployed as at 30 April 2022. The data is shown

in terms of the classiﬁcations or the stock markets

on which the holdings are listed. UK smaller

quoted companies that are not listed on the Main

Market of the London Stock Exchange are normally

quoted on AIM. The AIM market is set up to meet

the requirements of smaller listed companies

providing the ability to raise funds. This also provides

liquidity in acquisition and disposal of shares. The

Company additionally holds certain shares on the

Aquis Exchange, a regulated exchange.

The cash position and the available revolving

credit facility (which may be drawn upon demand)

together provide the Company with £9m of cash

resources. This enables the Company to take

advantage of investments at opportune times.

The warrants give the right, but not the obligation,

to buy or sell a security at a certain price before

expiration. The current value of the holdings

above are valued at the exercise price where

these are ‘in the money’. The investment income

above comprises the income from the portfolio

as included in the Income Statement for the

year ended 30 April 2022 attributable to the

various sectors. The returns of the Company are

from Capital and Revenue. Investments for the

Company’s portfolio are principally selected on

their individual merits. As the portfolio evolves,

the Manager continuously reviews the portfolio’s

overall sector and index balance to ensure that it

remains in line with the underlying conviction of

the Investment Manager. The Investment Policy is

set out on page 81, and details regarding risk factors

and diversiﬁcation and other policies are set out

each year in the Annual Report.

Portfolio exposure by sector (%)

20.9

12.412.4

8.910.9

8.4 4.0

3.1

13.9

Actual annual income by sector (%)

£95.6 million

£1.0 million

2.2

1.7

Net asset by asset allocation (%)

AIM

Main Market

Cash

Warrants and Placing

FTSE 100 Option

Debtors and

Creditors

69.1 3.7

24.5

1.1

0.8

0.5

Basic Materials

Industrials

Technology

Energy

Consumer

Discretionary

Financial Services

Health Care

Financials Services

Technology

Basic Materials

Industrials

Consumer

Staples

Health Care

Consumer

Discretionary

Telecommunications

Energy

Real Estate

Consumer Staples

Telecommunications

Oil and Gas

Real Estate

Utilities

Media

20.3 14.830.6 11.4 4.5 4.4 4.3 3.5

3.1

£99.4 million

Source: Thomson Reuters.

Portfolio as at 30 April 2022



Miton UK MicroCap Trust plc

Annual Report 2022

Performance and Risks

Key Performance Indicators

The Board reviews the Company’s performance by reference to a number of key performance indicators

(“KPIs”) and considers that the most relevant KPIs are those that communicate the ﬁnancial performance and

strength of the Company as a whole. The Board and the Investment Manager monitor the following KPIs:

•

NAV performance

Whilst the Trust does not have a formal

benchmark, its returns are routinely compared

with the performance of the peer group and

the Numis 1000 Index to provide context. Over

the year, the NAV total return of the Trust was

-13.1%, which compares to -7.0% for the peer

group and -5.8% for the Numis 1000 Index.

Since the Company’s listing in April 2015,

the NAV total return was 89.1%, which compares

to 53.3% for the peer group and 63.2% for the

Numis 1000 Index. Furthermore, the total return

of the Trust has also greatly exceeded that of

the Numis All-Share Index over the year under

review, with the timing of those returns being

different from the timing of the returns of the

Numis All-Share Index. The Board believes that

a UK investment strategy that delivers returns

that are not especially closely correlated with

the mainstream UK indices offers diversiﬁcation

beneﬁts to shareholders.

•

Daily stock market trading volumes of

the Trust

Over the year, the average daily volume of the

Company's shares traded each day was 225,206

and, since IPO, an average of 258,079 shares

have been traded daily. This indicator tends to

be elevated when the Trust is outperforming,

although it may be assisted by clearing all the

overhanging sellers in the Trust each year at

the time of the redemption. Generally, new

buyers like to know there aren’t any major

sellers that are potentially overhanging, waiting

to exit.

•

The discount/premium of the share price in

relation to the NAV

At times, the number of shareholders looking

to transact in the Company’s shares exceeds

the market’s daily liquidity. Imbalances like this

are normally cleared through stock market

transactions over a few weeks, but on occasion

these imbalances can become persistent and

the Company’s share price diverges from the

daily NAV. The Company has an objective to

keep this divergence to a minimum. Over the

year under review, the Company's share price

has traded on average 5.0% below its daily NAV.

However, at the start of the year under review

the share price traded at a premium to NAV

which allowed the Company to issue a small

amount of stock to meet demand.

•

Ongoing charges

The ongoing charges on the Ordinary Shares

for the year to 30 April 2022 amounted to 1.41%

(30 April 2021: 1.6%) of total assets. Further

details are set out on page 19.

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

Principal Risks and Uncertainties

The Company is exposed to a variety of risks and uncertainties that could cause its asset price or the income

from the investment portfolio to reduce, possibly by a sizeable percentage in the most adverse circumstances.

The principal ﬁnancial risks and the Company’s policies for managing these risks and the policy and practice

with regard to the portfolio are summarised in note 18 to the ﬁnancial statements.

The Board, through delegation to the Audit and Management Engagement Committee, undertakes a robust

annual assessment and review of the principal risks facing the Company, together with a review of any new

and emerging risks which may have arisen during the year, including those that would threaten its business

model, future performance, solvency or liquidity. These risks are formalised within the Company’s risk matrix.

Information regarding the Company’s internal control and risk management procedures can be found in the

Corporate Governance Statement on pages 40 and 41.

Listed below is a summary of the principal and emerging risks identiﬁed by the Board and actions taken to

mitigate those risks.

Risk Mitigation

Investment and strategy

There can be no guarantee that the investment

objective of the Company will be achieved.

The Company will invest primarily in small

UK quoted or traded companies by market

capitalisation. Smaller companies can be expected,

in comparison to larger companies, to have less

mature businesses, a more restricted depth of

management and a higher risk proﬁle.

These companies are normally traded less

frequently on the stock exchanges and, when

aggregated with holdings in other client funds

of the Investment Manager, the combined funds

may have a signiﬁcant percentage ownership of

investee companies.

Many businesses are facing additional ﬁnancial

challenges due to demand ﬂuctuations, and/

or additional cost of supply currently, due to

the COVID-19 pandemic and the effects of the

Ukrainian war.

The Investment Manager has long experience of

managing portfolios of this nature, including dealing

in smaller capitalisation companies, and deploying an

approach that is designed to maximise the chances

of the investment objective being achieved over

longer-term time horizons. The Company is reliant

on its Investment Manager’s investment process. The

Board reviews and discusses the investment approach

at each Board meeting, and if it isn’t satisﬁed, in

extremis, it can appoint another Investment Manager.

The Board looks to mitigate the higher risk proﬁle of

individual quoted smaller companies by ensuring

the Company holds a well-diversiﬁed portfolio, both

by number of companies and areas of operation. As

a result of the COVID-19 pandemic for example, the

Company’s diversiﬁed portfolio has held some stocks

where prospects have improved that offset some

others where they have deteriorated.

The Company is structured as a closed-ended fund,

which means that it is not subject to daily inﬂows

andoutﬂows.



Miton UK MicroCap Trust plc

Annual Report 2022

Risk Mitigation

Reliance on third parties

The Company has no employees and is reliant on

the performance of third-party service providers.

Failure by the Investment Manager or any

other third-party service provider to perform in

accordance with the terms of its appointment

could have a material detrimental impact on the

operation of the Company. This could include failure

of a counterparty on whom the Company is reliant.

The Board monitors and receives reports on the

performance of its key service providers. In relation

to the risk of counterparty failure, the Board reviews

the controls report of the Depositary.

The Board may, in any event, terminate all key

contracts on normal commercial terms.

Loss of key personnel/fund managers

The Company depends on the diligence, skill,

judgement and business contacts of the Investment

Manager’s investment professionals and its future

success could depend on the continued service of

these individuals, particularly GervaisWilliams and

Martin Turner.

The Company may decide to terminate the

Management Agreement should both Gervais

Williams and Martin Turner cease to be employees

of the Management group and if they are not

replaced by a person/s who the Company considers

to be of equal or satisfactory standing within three

months of one or both of their departures.

Share price volatility and liquidity/marketability risk

The market price of the Ordinary Shares, as with

shares in all investment trusts, may ﬂuctuate

independently of their underlying NAV and may

trade at a discount or premium at different times,

depending on factors such as supply and demand

for the Ordinary Shares, market conditions and

general investor sentiment.

The Company may become too small to be

attractive to a wide audience, with lesser stock

market liquidity and a wider share price discount.

The UK’s vote to leave the EU introduced new

uncertainties and instability into the ﬁnancial

markets; likewise COVID-19 and the Russia-Ukraine

war have also had an impact, which is ongoing.

The Company has in place an annual redemption

facility whereby shareholders can voluntarily tender

their shares. The Board monitors the relationship

between the share price and the NAV. The Company

has powers to repurchase shares should there be an

imbalance in the supply and demand leading to a

persistent and excessive discount. The Investment

Manager and, on occasion, the Directors maintain

dialogue with shareholders through regular

face-to-face meetings.

Performance and Risks continued

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

Risk Mitigation

Costs of operation

As stated, the Company relies on external service

providers. Many of these are paid on a basis where

their fees are related to the size of the Company (an

“ad valorem” basis). Others are for ﬁxed monetary

amounts. Therefore, if the Company were to

shrink, through redemptions, buybacks or asset

performance, the cost per share of running the

Company would increase. This could make it harder

to achieve the investment objective.

The Board monitors the costs of all service providers.

The Board is also committed to the controlled

growth of the Company which would spread the

ﬁxed costs over a larger asset base. In the event

that the Company were to decrease in size from

its current level, the Board has capped the total

costs at no more than 2% of the aggregate market

capitalisation. The ongoing charges for the year to

30 April 2022 amounted to 1.41% (30 April 2021: 1.6%).

Regulatory risk/change in tax status

The Company is subject to laws and regulations

enacted by national and local governments. Any

change in the law and regulation affecting the

Company may have a material adverse effect on the

ability of the Company to carry on its business and

successfully pursue its investment policy.

The Board receives regular updates from its

Secretary, Broker, industry representatives and

its Investment Manager on signiﬁcant regulatory

changes that may impact the Company. The

Company’s ability to determine the shape of

regulatory or tax changes is limited and therefore

the Board aims to ensure that it is well informed and

prepared to respond to changes as they emerge.

Cyber Risk/IT Security

Errors, fraud or control failures by the Company’s

key service providers or loss of data through

increasing cyber threats or business continuity

failure could damage the Company’s reputation or

investors’ interests or result in losses.

The Board receives regular control reports

and cyber/IT policies from all material service

providers to ensure that controls are in place

including business continuity and disaster

recoveryarrangements.

The Trust may be subject to legal action by others

The investment portfolio comprises the principal

assets of the Trust, and is valued on their market

bid price along with its cash balances. One way to

realise a return for investors is to accept a takeover

offer, often at a premium to the market price. When

these transactions occur, the Trust may be in receipt

of cash proceeds, that are then reinvested in other

equities. When the acquirers are US companies,

the Trust is at risk that an acquirer subsequently

discovers that the commercial value of the business

acquired is not as anticipated, and may try to

reclaim some or all of the proceeds paid for the

acquisition from the vendors – which in our case is

the Trust.

The Trust would normally expect acquirers to

carry out their own due diligence on the assets

being acquired, and if there is subsequent

disappointment then to seek redress from

theiradvisers.



Miton UK MicroCap Trust plc

Annual Report 2022

Share Capital

Share Issues

At the Annual General Meeting held on

22 September 2021, the Directors were granted the

authority to allot up to 10,925,000 Ordinary Shares

(up to an aggregate nominal amount of £10,925)

on a non pre-emptive basis. The Company put

a new blocklisting facility into place towards the

end of the previous ﬁnancial year and, during the

year, issued 650,000 Ordinary Shares under this

blocklistingfacility.

The Directors’ current authority to allot Ordinary

Shares is due to expire at the Company’s Annual

General Meeting to be held on 27 September

2022. Proposals for the renewal of the authority are

included within the Notice of AGM on page 85.

Share Redemptions

Valid redemption requests were received under the

Company’s redemption facility for the 30 June 2021

Redemption Point in relation to 2,671,198 Ordinary

Shares, representing 2.4% of the Company’s issued

share capital. The number of valid redemption

requests received under the redemption facility for

the 30 June 2022 Redemption Point was announced

via a regulatory announcement on 30 June 2022,

namely in relation to 14,614,999 Ordinary Shares,

representing 13.3771% of the issued share capital.

Purchase of Own Shares

At the Annual General Meeting of the Company

held on 22 September 2021, the Directors were

granted the authority to buy back up to 16,377,108

Ordinary Shares. No Ordinary Shares have been

bought back under this authority during the

year under report. The authority will expire at the

forthcoming Annual General Meeting, when a

resolution for its renewal will be proposed.

Treasury Shares

Shares bought back by the Company may, at the

Board’s discretion, be held in treasury, from where

they could be re-issued at a premium to NAV quickly

and cost effectively. This provides the Company

with additional ﬂexibility in the management of its

capital base. No shares were purchased for, or held

in, treasury during the year or since the year end.

Issued Share Capital

As at the year end, there were 109,253,560 Ordinary

Shares and 50,000 Management shares (see note 4

to the ﬁnancial statements) in issue. Further details

of the Company’s share capital are set out in note 4

to the ﬁnancial statements on page 67. This includes

details of the 2022 redemption of Ordinary Shares.

The rights attached to each share class are set out

on page 81.

There are no restrictions concerning the transfer

of securities in the Company or on voting rights;

no special rights with regard to control attached

to securities; 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.

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

S.172(1) Statement

Background

Directors have a duty (under section 172 of the

Companies Act 2006) to promote the success of

a company for the beneﬁt of shareholders as a

whole. In doing so, a company must have regard

to other broader matters including the likely long

term consequences of any decision, and the need to

foster a company’s relationships with its employees,

suppliers, customers and others and to have

regard to their interests, the impact of a company

on the community and the environment, and the

desirability of maintaining a reputation for high

standards of business conduct.

Stakeholders

The Board seeks to understand the needs and

priorities of the Company’s stakeholders and these

are taken into account during all its discussions and

as part of its decision-making. In considering the

Company's stakeholders, the Board has concluded

that, as the Company is an externally managed

investment trust and does not have any employees

or customers in the traditional sense, its key

stakeholders comprise its shareholders, suppliers

(comprising mainly its Investment Manager, third

party service providers and advisers), but they also

take account of the Company’s responsibilities

to regulators and to the environment and the

wider community. The section below discusses the

actions taken by the Company to ensure that the

interests of stakeholders are taken into account.

Shareholders

The Board is committed to maintaining open

channels of communication and to engage with

shareholders in a manner which they ﬁnd most

meaningful, in order to gain an understanding of

the views of shareholders. These include:

Annual General Meeting – The Company

encourages the attendance of shareholders at

the Annual General Meeting. Shareholders have

the opportunity to meet the Directors and the

Investment Manager and to address questions to

them directly. There is typically a presentation on

the Company’s performance and on the future

outlook by the Investment Manager.

Publications – The Annual Report and Half-Year

results are made available on the Company’s

website and are circulated to those shareholders

requesting hard copies. These reports provide

shareholders with a clear understanding of the

Company’s portfolio and ﬁnancial position. This

information is supplemented by a monthly

factsheet which is available on the website.

Feedback and/or questions which the Company

receives from shareholders help the Company

evolve its reporting, aiming to render the reports

and updates transparent and understandable.

Shareholder concerns – In the event that

shareholders wish to raise issues or concerns with

the Directors, they are welcome to do so at any

time by writing to the Chairman at the registered

ofﬁce. The Senior Independent Director and

other members of the Board are also available to

shareholders if they have concerns that have not

been addressed through the normal channels.

Investor relations updates – At every Board meeting,

the Directors receive updates from the Broker, Peel

Hunt LLP, and from the Company Secretary on the

share trading activity, share price performance, the

Company’s share register and investor relations.



Miton UK MicroCap Trust plc

Annual Report 2022

Other stakeholders

Investment Manager

Maintaining a close and constructive working

relationship with the Investment Manager

(Premier Miton) is crucial to the Board. The

Investment Manager’s performance is critical for

the Company to successfully achieve consistent,

long-term returns in line with its investment

objective. The Board meets with the Investment

Manager on a regular basis, both within and outside

formal Board meetings, and receives and discusses

monthly reports and updates with the Investment

Manager when appropriate.

Further details on the relationship with the

Investment Manager can be found on page 37.

Suppliers

The Company relies on a diverse range of reputable

advisors for support in meeting its obligations.

The Board maintains regular contact with its key

external providers, namely the Administrator, the

Company Secretary, the Registrar, the Custodian

and the Broker, and receives regular reporting from

them, both through the Board and committee

meetings, as well as outside the regular meeting

cycle. Their advice, as well as their needs and views,

are regularly taken into account. The Audit and

Management Engagement Committee formally

assesses the performance of third party suppliers,

their fees and continuing appointment on an

annual basis to ensure that the key service providers

continue to function at an acceptable level and are

appropriately remunerated to deliver the expected

level of service. The Audit and Management

Engagement Committee also receives reports on

the ﬁnancial reporting control environments in

place at each service provider.

Regulators

The Company can only operate with the approval

of its regulators, who have a legitimate interest

in how the Company operates in the market and

treats its investors and shareholders. The Company

regularly considers the control environment in

place to ensure that it meets various regulatory and

statutory obligations.

Environment and Community

In light of the out-sourced nature of the Company’s

operations, the Company has very little direct

impact on the community or the environment.

However, the Investment Manager recognises

that it can inﬂuence an investee company’s

approach to Environmental, Social and Governance

(“ESG”) matters and discusses ESG matters with

investee companies on a regular basis. Further

information about the Company’s approach to

environmental, human rights, social and community

issues are set out on page 31.

The above mechanisms for engaging with

stakeholders are kept under review by the Directors

and are discussed on a regular basis at Board

meetings to ensure that they remain effective.

Should shareholders or other stakeholders of the

Company wish to contact the Chairman, they can

do so by contacting the registered ofﬁce of the

Company or by sending an email for the attention of

the Chairman at mitonukmicrocap@linkgroup.co.uk.

Decision-making

The Board considers the impact that any material

decision will have on all relevant stakeholders to

ensure that it is making a decision that promotes

the long-term success of the Company. By way of

illustration, decisions taken during the course of

the ﬁnancial year related to the recommendation

of payment of a ﬁnal dividend of 0.1p per Ordinary

Share, the renewal of the annual redemption

facility, the recruitment of an additional

Non-executive Director and the appointment

of Ashe Windham as Chairman following the

retirement of Andrew Pomfret.

S.172(1) Statement continued

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

Culture

The Company’s deﬁned purpose is relatively

simple: it is to deliver our investment objective. The

culture of the Board promotes a desire for strong

governance and long-term investment, mindful of

the interests of all stakeholders. The Board believes

that, as an investment company with no employees,

this is best achieved by working in partnership with

its appointed Investment Manager.

The Directors agree that establishing and

maintaining a healthy corporate culture among the

Board and in its interaction with the Investment

Manager, shareholders and other stakeholders

will support the delivery of its purpose, values and

strategy. The Board seeks to promote a culture of

openness, debate and integrity through on-going

dialogue and engagement with its service providers,

principally the Investment Manager.

The Board strives to ensure that its culture is in

line with the Company’s purpose, values and

strategy. The Company has a number of policies

and procedures in place to assist with maintaining

a culture of good governance including those

relating to Diversity, Directors’ conﬂicts of interest

and Directors’ dealings in the Company’s shares. The

Board assesses and monitors compliance with these

policies as well as the general culture of the Board

through Board meetings and in particular during

the annual evaluation process which is undertaken

by each Director (for more information see the

performance evaluation section on page 39).

The Board seeks to appoint the appropriate service

providers and evaluates their remit, performance

and cost effectiveness on a regular basis as

described on page 24. The Board considers the

culture of the Investment Manager and other

service providers, including their policies, practices

and behaviour, through regular reporting from

these stakeholders and in particular during the

annual review of performance and the continuing

appointment of all service providers.



Miton UK MicroCap Trust plc

Annual Report 2022

Management, Social, Environmental

and Diversity Matters

Management Arrangements

The Company’s investment manager is Premier

Portfolio Managers Limited (the “Investment

Manager”). The Investment Manager is responsible

for the management of the Company’s portfolio in

accordance with the Company’s investment policy

and the terms of the Management Agreement

dated 8 April 2015 and restated 20 October 2020.

The Board has appointed Premier Portfolio

Managers Limited as the alternative investment

fund manager (“AIFM”) of the Company.

Under the terms of the Management Agreement,

the Investment Manager is entitled to a

management fee together with reimbursement

of reasonable expenses incurred by it in the

performance of its duties. The management fee is

payable monthly in arrears and is at the rate of 0.9%

per annum where the market capitalisation is at or

below £100,000,000 and 0.8% thereafter, calculated

in respect of each calendar month, of the market

capitalisation at the relevant calculation date. In

addition to the basic management fee, and for so

long as a Redemption Pool (see page 68 for details)

is in existence, the Investment Manager is entitled

to receive from the Company a fee calculated at the

rate of 0.9% per annum of the net asset value of the

Redemption Pool on the last Business Day of the

relevant calendar month.

The Investment Manager has agreed that, for

so long as it remains the Company’s investment

manager, it will rebate such part of any

management fee payable to it so as to help the

Company maintain an ongoing charges ratio of 2%

or lower.

In accordance with the Directors’ policy on the

allocation of expenses between income and capital,

in each ﬁnancial year 75% of the management fee

payable is expected to be charged to capital and the

remaining 25% to income.

The Management Agreement is terminable by

either the Investment Manager or the Company

giving to the other not less than 12 months’ written

notice. The Management Agreement may be

terminated earlier by the Company with immediate

effect on the occurrence of certain events, including

insolvency or in the event of a material breach

by the Investment Manager of the Management

Agreement which is not remedied within thirty days

of the receipt of notice. The Company has given

certain market standard indemnities in favour of the

Investment Manager in respect of the Investment

Manager’s potential losses in carrying on its

responsibilities under the Management Agreement.

The Board appointed Bank of New York Mellon

(International) Limited (“Bank of New York

Mellon”) as its Depositary and Custodian under an

agreement dated 8 April 2015. The annual fee for

depositary services due to Bank of New York Mellon

is 0.025% per annum of gross assets, subject to a

minimum fee of £15,000.

Administrative Services are provided by Link

Alternative Fund Administrators Limited under an

agreement dated 8 April 2015. The Administration

Agreement may be terminated by either party on at

least six months’ prior written notice.

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

Continuing Appointment of the

InvestmentManager

The Board, through the Audit and Management

Engagement Committee, keeps the performance

of the Investment Manager under continual review

and the Audit and Management Engagement

Committee conducts an annual appraisal of

the Investment Manager’s performance, and

makes a recommendation to the Board about

the continuing appointment of the Investment

Manager. It is the opinion of the Board that the

continuing appointment of the Investment

Manager is in the interests of shareholders as a

whole. The Board believes that the Investment

Manager has executed the investment strategy in

line with the Prospectus. The Directors also believe

that by paying the management fee calculated

on a market capitalisation basis, rather than

a percentage of assets basis, the interests of the

Investment Manager are more closely aligned with

those of shareholders.

Environmental, Human Rights, Employee, Social

and Community Issues

The Company does not have any employees

and the Board consists entirely of non-executive

Directors. The day-to-day management of the

business is delegated to the Investment Manager.

As an investment trust, the Company has no direct

impact on the community or the environment, and

as such has no environmental, human rights, social

or community policies. In carrying out its investment

activities and in relationships with suppliers,

the Company aims to conduct itself responsibly

and ethically. The Company has a zero tolerance

policy towards bribery and corruption and as such

is committed to carrying out its business fairly,

honestly and openly. Further information about the

Company’s relationships with its stakeholders is set

out in the s.172 Statement on pages 27 to 29.

Diversity

The Board of Directors of the Company comprises

two female and two male Directors. The Company’s

Diversity Policy acknowledges the beneﬁts of all

aspects of increased diversity, including gender

and ethnic diversity, as well as diversity of thought

and perspective. The Board remains committed

to ensuring that the Company’s Directors bring a

wide range of skills, knowledge, experience and

backgrounds. The Board will always appoint the best

person for the job and will not discriminate on any

grounds including gender, race, ethnicity, religion,

sexual orientation, age or physical ability.

Approval

The Strategic Report has been approved by the

Board of Directors.

On behalf of the Board

Ashe Windham

Chairman

18 July 2022



Miton UK MicroCap Trust plc

Annual Report 2022

Directors

All the Directors are non-executive and are independent of the Investment Manager.

Ashe Windham, CVO – Chairman appointed 31 March 2015

Following 11 years’ service in the British Army, Ashe joined Barclays de Zoete Wedd

(“BZW”) in 1987 as an institutional equities salesman and was appointed a Director of

BZW’s Equities Division in 1991. He joined Credit Suisse First Boston in 1997 when they

acquired BZW’s equities business. In 2004, he joined Man Investments as Head of

Internal Communications and in 2007 became Man Group’s Global Head of Internal

Communications. In June 2009 he resigned from Man Group plc to set up a private family

ofﬁce, which he continues to run. Ashe is the chairman of the Cancer & Pisces Trust and of

The Kyle of Sutherland Fisheries Trust, whilst he is also a non-executive director of EFG Asset

Management (UK) Limited and Chair of the Remuneration Committee.

Peter Dicks – Chairman of

the Audit and Management

Engagement Committee and

Senior Independent Director

appointed 26 March 2015

Peter was a founder director of

Abingworth plc in 1973, a venture capital

investment company, mainly investing

in the USA but also in the UK, where he

worked from 1973 to 1991. Since then he

has been a non-executive director or

chairman of a number of companies. He

is on the Board of Mercia Fund 1 General

Partnership Limited and Foresight

Solar Fund Limited and currently the

chairman of SVM Emerging Fund.

Jeannette (Jan) Etherden

appointed 31 March 2015

Jan has over 35 years’ experience in

the investment industry as an analyst,

fund manager and a non-executive

director. Previously head of UK equities

for Confederation Life/Sun Life of

Canada, she joined Newton Investment

Management Limited in 1996 as a

director specialising in multi-asset

portfolios, and was also their Investment

Chief Operating Ofﬁcer from 1999 to

2001. Subsequently, she worked with

Olympus Capital Management as

development manager for specialist

hedge fund products.

Davina Walter

appointed 10 August 2021

Davina Walter is an experienced

investment professional who currently

acts as an independent charity

investment consultant. She started her

career at Cazenove & Co where she spent

more than 11 years, ending up as the

Head of US equity research. She then

spent over 16 years as an investment

manager of both large and small cap US

equities, most recently as a Managing

Director at Deutsche Asset Management.

She has been actively involved with

investment trusts since 1985 and is

Chairman of Aberdeen Diversiﬁed

Income and Growth Trust plc and a

Director of JPMorgan Elect plc.

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

Report of the Directors

The Directors present their report and the ﬁnancial statements for the year ended 30 April 2022.

Directors

The Directors in ofﬁce at the date of this Report and

the dates of their appointment are shown on page 32.

In accordance with the policy adopted by the Board,

all the Directors will retire and stand for re-election at

the Company’s forthcoming Annual General Meeting

(“AGM”). Jan Etherden has indicated her desire to retire

towards the end of 2022 and, as part of the Board’s

ongoing succession planning, the recruitment process

for her replacement is underway.

Following consideration of the results of the

performance evaluation, the Board was assured

that the performance of all Directors continues to

be effective, that they bring extensive knowledge

and commercial experience to the Board,

demonstrate a range of valuable business, ﬁnancial

and investment trust skills, that they continue to

be effective and their contribution supports the

long-term sustainable success of the company and

that they remain wholly independent. The Board

therefore recommends that shareholders vote in

favour of each Director’s proposed election.

None of the Directors or any persons connected

with them had a material interest in the transactions

and arrangements of, or the agreement with, the

Investment Manager during the year.

Substantial Shareholdings

So far as is known to the Company by virtue of

notiﬁcations made to it pursuant to the Disclosure

Guidance and Transparency Rules, the following

persons held notiﬁable interests in the Company’s

voting rights as at 30 April 2022:

Number of

Ordinary Shares

% of

voting rights

Rathbone investment

Management Limited 14,171,570 12.97

Investec Wealth &

Investment Limited 10,623,673 9.72

Almitas Capital LLC 9,235,000 6.67

Premier Miton Group plc 4,715,000 4.24

Mirabella Financial

Services LLP 1,503,137 1.35

The Company has been informed of the following

notiﬁable interests between 30 April 2022 and the

date of this report.

Number of

Ordinary Shares

% of

voting rights

Rathbone investment

Management Limited 13,905,179 14.69

Investec Wealth &

Investment Limited 10,221,244 10.80

Dividends

The Directors have recommended the payment of

a ﬁnal dividend in respect of the year of 0.15pence

per Ordinary Share, payable on 30 September

2022 to shareholders who appear on the register

on 2 September 2022. The ex-dividend date will be

1 September 2022.

Future Developments

A review of the year and the outlook for the next

year are set out in the Investment Manager’s Report

on pages 12 to 17.

Financial Risk Management

The principal ﬁnancial risks and the Company’s

policies for managing these risks are set out in note

18 to the ﬁnancial statements.

Revolving Credit Facility

The Company has a revolving credit facility (the

“facility”) £5m with The Royal Bank of Scotland

International Limited, London branch. As at the year

end, no amounts have been drawn down under

the facility.

Corporate Governance

The Corporate Governance Statement on pages

36 to 41 forms part of the Report of the Directors.

It includes details of the qualifying third party

indemnity provisions and Directors’ and Ofﬁcers’

liability insurance on page 38.

Post Balance Sheet Events

Disclosures relating to post balance sheet events

can be found in the notes on page 79.



Miton UK MicroCap Trust plc

Annual Report 2022

Going Concern

The Directors consider that it is appropriate to adopt

the going concern basis. Cashﬂow projections have

been reviewed and show that the Company has

sufﬁcient funds to meet its contracted expenditure.

On the basis of the review and, as the majority

of net assets are securities which are traded on

recognised stock exchanges, after making enquiries,

and bearing in mind the nature of the Company’s

business and assets, the Directors consider that

the Company has adequate resources to continue

in operational existence for the foreseeable future.

In arriving at this conclusion, the Directors have

carried out a robust assessment of the principal

and emerging risks set out on pages 23 to 25 of this

report, including the risks arising from COVID-19

and the Russia-Ukraine war and their impact

on the liquidity of the portfolio and resultant

cashﬂow, along with the Company’s ability to meet

obligations as they fall due, its ability to raise ﬁnance

in the short and longer term and future prospects

and results. The Company has a revolving credit

facility of £5m, which remains undrawn at the date

of signing these ﬁnancial statements (2021: £nil). In

addition, the Directors have assessed the impact

of the Company's annual redemption facility on

its cash reserves. The Directors are satisﬁed that

the impact of the 2022 redemption amounting

to 14,614,999shares, and which will be settled via

a Redemption Pool, does not constitute a risk to

the Company's going concern status. Accordingly,

the Directors have a reasonable expectation that

the Company has adequate resources to continue

in operational existence for a period of at least

12 months from the date that these ﬁnancial

statements were approved.

Viability Statement

In accordance with the AIC Code of Corporate

Governance, the Board has considered the

prospects for the Company.

The period assessed is the three years to June

2025. The Company is intended to be a long-term

investment vehicle. It was launched in 2015, and

due to the limitations and uncertainties inherent

in predicting market and political conditions, the

Directors have determined that three years is

the appropriate period over which to make this

assessment.

As part of its assessment of the viability of the

Company, the Board has considered the principal

risks and uncertainties and the impact on

the Company’s portfolio of a signiﬁcant fall in

UK markets.

To provide this assessment, the Board has

considered the Company’s ﬁnancial position and its

ability to liquidate its portfolio to meet its expenses

or other liabilities as they fall due:

•

The Company invests largely in companies

listed and traded on stock exchanges. These are

actively traded and, whilst perhaps less liquid

than larger quoted companies, the portfolio is

well diversiﬁed by both number of holdings and

industry sector;

•

The expenses of the Company are predictable

and modest in comparison with the assets in the

portfolio. There are no commitments that would

change that position;

•

The Company has no employees; and

•

the Company has an annual redemption facility

whereby shareholders may request that their

shares are redeemed at NAV. The Board has

considered the possibility that shareholders

holding a signiﬁcant percentage of the

Company’s shares request redemption. Firstly,

the Board has ﬂexibility over the method and

date of redemption so can avoid disruption

to the overall operation of the Company in

this situation. Secondly, the Company has an

arrangement with the Investment Manager

to rebate fees should total costs exceed 2%

of aggregate market capitalisation, such that

were there to be signiﬁcant redemption, or a

signiﬁcant fall in the value of the portfolio, the

expenses of operation would be manageable. In

addition, many of the expenses vary in line with

the size of the Company.

Report of the Directors continued

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

In addition to considering the principal risks on

pages 23 to 25 and the ﬁnancial position of the

Company as described above, the Board has also

considered the following further factors:

•

the continuing relevance of the Company’s

investment objective in the current

environment and the continued satisfactory

performance of the Company;

•

the level of demand for the Company’s shares

and that since launch the Company has been

able to issue further shares;

•

the gearing policy of the Company; and

•

that regulation will not increase to such an

extent that the costs of running the Company

become uneconomic.

Accordingly, the Directors have formed the

reasonable expectation that the Company will be

able to continue in operation and meet its liabilities

as they fall due over the next three years, from the

balance sheet date.

Greenhouse Gas Emissions

The Company has no greenhouse gas emissions

to report from its operations, nor does it have

responsibility for any other emissions producing

sources under the Companies Act 2006 (Strategic

Report and Directors’ Report) Regulations 2013,

including those within its underlying investment

portfolio. There is no requirement for disclosures

under The Companies (Directors’ Report) and

Limited Liability Partnerships (Energy and Carbon

Report) Regulations 2018.

Requirements of the Listing Rules

Listing Rule 9.8.4 requires the Company to include

speciﬁed information in a single identiﬁable section

of the Annual Report or a cross reference table

indicating where the information is set out. There

are no disclosures required in relation to Listing

Rule 9.8.4.

Audit Information

Each of the Directors who held ofﬁce at the date

of approval of the Report of the Directors conﬁrms

that, so far as he/she is aware, there is no relevant

audit information of which the Company’s Auditor

is unaware; and that he/she has taken all the steps

that he/she ought to have taken as a Director to

make himself/herself aware of any relevant audit

information and to establish that the Company’s

Auditor is aware of that information.

Auditor

The Company’s auditor is BDO LLP. BDO LLP

has conﬁrmed its willingness to continue to act

as the Company’s Auditor and resolutions for its

re-appointment and for the Audit and Management

Engagement Committee to determine its

remuneration will be proposed at the forthcoming

Annual General Meeting.

Annual General Meeting

The Company’s Annual General Meeting will be held

on 27 September 2022 and the formal Notice of the

AGM can be found on page 85.

Assessment and Approval

The Board is of the opinion that this Annual

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.

The Report of the Directors has been approved by

the Board.

By order of the Board.

Link Company Matters Limited

Secretary

18 July 2022



Miton UK MicroCap Trust plc

Annual Report 2022

Corporate Governance Statement

This Corporate Governance Statement forms part of the Report of the Directors.

Statement of Compliance

The Company is committed to maintaining high

standards of corporate governance. The Board of

the Company has considered the principles and

recommendations of the AIC Code of Corporate

Governance for Investment Companies (“AIC Code”)

by reference to the AIC Corporate Governance

Guide for Investment Companies (“AIC Guide”),

both as published in February 2019. The AIC Code,

as explained by the AIC Guide, addresses all the

principles set out in the UK Corporate Governance

Code (“UK Code”), as well as setting out additional

principles and recommendations on issues that

are of speciﬁc relevance to the Company as an

investment company.

The Financial Reporting Council (“FRC”), the UK’s

independent regulator for corporate reporting

and governance responsible for the UK Code, has

endorsed the AIC Code and the AIC Guide. The

terms of the FRC’s endorsement mean that AIC

members who report against the AIC Code and the

AIC Guide meet fully their obligations under the

UK Code and the related disclosure requirements

contained in the Listing Rules.

The Company complies with the recommendations

of the AIC Code and the relevant provisions of the

UK Code, except as set out below.

The UK Code includes provisions relating to: the

role of the chief executive; executive directors’

remuneration; and the need for an internal audit

function. For the reasons set out in the AIC Guide

and as explained in the UK Code, the Board

considers these provisions are not relevant to

the position of the Company, being an externally

managed investment company. The Company does

not therefore comply with these provisions and has

not reported further in respect of them.

A copy of the AIC Code and the AIC Guide can be

obtained via the AIC website, www.theaic.co.uk.

A copy of the UK Code can be obtained at

www.frc.org.uk.

The Board of Directors

The Board consists entirely of non-executive

Directors, who are independent of the Investment

Manager. The Board has no employees. No one

individual has unfettered powers of decisions made

by the Board.

The Board is accountable to shareholders for

the direction and control of all aspects of the

Company’s affairs, notwithstanding any delegation

of responsibilities to third parties. A detailed

description of the role of the Board and its

relationship with the Investment Manager are set

out further below.

The names and responsibilities of the Directors,

together with their biographies and details of their

signiﬁcant commitments, are set out on page 32.

The Directors possess a wide range of business and

ﬁnancial expertise relevant to the leadership of

the Company, including the ability and willingness

to provide robust and objective challenge to the

views and assumptions of the Investment Manager

and other Directors. All of the Directors consider

that they have sufﬁcient time to devote to the

Company’s affairs and that they carry out their

duties effectively.

No Director has a service contract with the

Company, nor are any such contracts proposed,

each Director having been appointed pursuant

to a letter of appointment entered into with the

Company. The Directors have chosen to follow

the practice of annual re-election by shareholders

at the AGM. The Directors’ appointments can be

terminated in accordance with the Articles and

without compensation. The Directors’ letters of

appointment are available for inspection at the

Company’s registered ofﬁce and will be available at

the Annual General Meeting.

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

The appointment of any new Director will be

made on the basis of assessing the candidate’s

merits, measuring his or her skills and experience

against the criteria identiﬁed by the Board as being

desirable to complement the composition and

qualiﬁcation of the Board. In accordance with the

Board’s Diversity Policy, the Board will consider all

elements of diversity when evaluating the skills,

knowledge and experience necessary to ﬁll any

Board vacancy. The Board has established the

following measurable objectives for achieving

diversity on the Board:

•

all Board appointments will be made on merit,

in the context of the skills, knowledge and

experience that are needed for the Board to

beeffective;

•

long lists of potential non-executive directors

should include diverse candidates of

appropriate merit; and

•

only executive search ﬁrms who have signed

up to voluntary Code of Conduct on gender

diversity and best practice will be engaged.

The policy is reviewed on an annual basis.

The Board, or the Investment Manager upon

request of the Board, shall offer induction training

to new Directors about the Company, its key service

providers, the Director’s duties and obligations and

other matters as may be relevant from time to time.

Board Responsibilities and Relationship with the

Investment Manager

The main roles of the Board are to create value for

shareholders, provide leadership to the Company

and approve the Company’s strategic objectives.

Speciﬁc responsibilities in relation to investments

and the Investment Manager include:

Determining the Company’s investment policy

and strategy, promoting the long-term sustainable

success of the Company, generating value for

shareholders and contributing to wider society;

determining the Company’s gearing policy;

monitoring the controls of the Investment Manager,

and reviewing the investment activity, performance

and contractual arrangements with the

Investment Manager. The Board is also responsible

for maintaining proper internal controls and

monitoring shareholders’ opinions and engaging

with them effectively. The Board has adopted a

schedule of matters reserved for decision by the

Board reﬂecting the above responsibilities and

reviews this schedule regularly.

The Company’s day-to-day functions have been

sub-contracted to a number of service providers,

each engaged under a separate legal agreement.

The management of the Company’s assets has

been delegated to the Investment Manager,

Premier Portfolio Managers Limited. The Investment

Manager has discretion to manage the Company’s

assets in accordance with the Company’s

investment policy, subject to the overall control and

supervision of the Directors.

Premier Portfolio Managers Limited is appointed

as the Company’s AIFM for the purposes of the

Alternative Investment Fund Manager Directive

(“AIFMD”).

Chairman and Senior Independent Director

The Chairman, Ashe Windham, is responsible for

leadership of the Board and ensuring its effectiveness.

The Chairman sets the Board’s agenda, ensuring

a particular focus on the overall strategy of the

Company, and allows adequate time for discussion of

all agenda items. Ashe Windham was considered to

be independent on appointment and is deemed by

his fellow Board members (all who are independent

themselves) to continue to be independent and to

have no conﬂicting relationships, in accordance with

the criteria set out in the AIC Code.

Peter Dicks, Chairman of the Audit and Management

Engagement Committee, acts as the Senior

Independent Director of the Company. He provides a

channel for any shareholder concerns regarding the

Chairman and takes the lead in the annual evaluation

of the Chairman by the independent Directors.



Miton UK MicroCap Trust plc

Annual Report 2022

The full responsibility of the Chairman and Senior

Independent Director as agreed by the Board is set

out on the Company’s website.

Board Operation

The Board holds regular Board meetings at

least four times a year, with additional meetings

arranged as necessary. The table below sets out

the attendance record of individual Directors at the

scheduled Board and Committee meetings held

during the year ended 30 April 2022.

Scheduled Board

meetings

Scheduled Audit

and Management

Engagement

Committee meetings

Number

entitled

to attend

Number

attended

Number

entitled

to attend

Number

attended

Peter Dicks 5 5 2 2

Jan Etherden 5 5 2 2

Bridget Guerin# 1 – 1 –

Andrew Pomfret* 3 3 1 1

Davina Walter≠ 3 3 1 1

Ashe Windham 5 5 2 2

# resigned 31 July 2021

* resigned 31 December 2021

≠ appointed 10 August 2021

This table provides details of scheduled meetings

held in the ﬁnancial year and the attendance at

each meeting of each Director. From time to time,

the Board is required to hold meetings outside of

its planned schedule to consider topics that require

immediate attention or to approve ad-hoc matters

and transactions. There were a number of additional

ad-hoc Board meetings held during the ﬁnancial

year, and these were related to Davina Walter’s

appointment and approval of the half year report

and accounts.

At each scheduled Board meeting, the Chairman

follows a formal agenda, circulated to the Directors

in advance by the Secretary. The Secretary and

Investment Manager regularly provide the Board

with relevant ﬁnancial information, brieﬁng notes

and papers in relation to changes in the Company’s

economic and ﬁnancial environment, statutory

and regulatory changes and corporate governance

best practice. At each Board meeting, one or more

representatives from the Investment Manager

are in attendance to present verbal and written

reports covering the Company’s activity, portfolio

and investment performance over the preceding

period. Communication between the Board and the

Investment Manager and other service providers is

maintained between formal meetings.

The Board endeavours to provide support, robust

and objective challenge and a different perspective

to the Investment Manager, to help optimise the

performance of the Company. The Board and the

Investment Manager operate in a fully co-operative

and open environment. The Board has formalised

arrangements under which the Directors, in the

furtherance of their duties, may take independent

professional advice at the Company’s expense.

As permitted by its Articles of Association and

subject to the provisions of UK legislation, the

Company has granted a third-party indemnity to

each Director in respect of liabilities which they may

sustain or incur in connection with the discharge

of their duties as a Director. The indemnity also

covers reasonable legal and other defence expenses,

although these would have to be repaid in the event

of a conviction. Deeds of indemnity in favour of each

of the Directors were executed on behalf of the

Company on their appointment and remain in force

as at the date of signing of this Report. There are no

other qualifying third party indemnity provisions in

place. In addition, Directors are covered by Directors

and Ofﬁcers’ liability insurance.

Board Committee

The Board has established an Audit and

Management Engagement Committee

(“the Committee”), the Terms of Reference of

which are available on the Company’s website at

www.mitonukmicrocaptrust.com/documents/.

Further details on the composition and role of the

Audit and Management Engagement Committee

and its activities during the ﬁnancial year can be

found on pages 42 to 44.

Corporate Governance Statement continued

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

Given the size of the Board, the Directors

do not consider it appropriate to establish a

nomination committee. The functions that would

normally be carried out by these committees are

dealt with by the full Board.

Board Evaluation

The Directors recognise the value of continually

monitoring and enhancing the performance of

the Board and view the regular evaluation of the

Board, its Committee and individual Directors as a

means of obtaining valuable feedback on areas for

development.

In the year ended 30 April 2022, the Board opted

to undertake an internal performance evaluation

by way of questionnaires, which addressed the

areas indicated by the AIC Code. In particular,

the questionnaires were designed to assess

the qualiﬁcations, independence, composition,

diversity, and performance of the Board, and

the performance of the Board’s Committee,

the Chairman and individual Directors. The

questionnaires were also intended to assess

whether the focus of Board meetings and the

information provided were appropriate and identify

any training and development needs for individual

Directors.

The evaluation process and analysis of the results

were carried out post year end and conducted

by the Chairman. Peter Dicks, as the Senior

Independent Director, led the appraisal of the

Chairman. The results of the exercise revealed no

signiﬁcant concerns amongst the Directors about

the effectiveness of the Board.

Independence of Directors

In accordance with the AIC Code, the Board

evaluation included a review of the independence of

each individual Director and the Board as a whole.

Mr Dicks holds less than 0.5% of the issued

share capital of Premier Miton Group Plc, the

parent company of the Investment Manager. The

Board considers the holding to be immaterial and of

no impact to his independence.

None of the Directors have any signiﬁcant

shareholdings in companies where the Company

has a notiﬁable stake or a holding which amounts to

more than 1% of the Company’s portfolio.

The Board is of the view that, having reviewed all

required factors, all Directors met, and continue

to meet, the independence criteria set out in the

AIC Code.

Election/Re-election of Directors

Under the Company’s Articles of Association, Directors

are required to retire at the ﬁrst Annual General

Meeting following their appointment and offer

themselves for election.

Thereafter, Directors are required to retire from

ofﬁce and stand for re-election at intervals of not

more than three years. The AIC Code and UK Code

recommend that all Directors should be subject to

annual re-election by shareholders. The Company

recognises this to be good corporate governance

and has therefore chosen to follow this practice. The

maximum length of service for any Director, excluding

the Chairman, will be nine years from ﬁrst election.

Exceptions could be made in unusual circumstances,

for example if the Company were in the middle of a

corporate action.

Conﬂicts of Interest

Under the Articles of Association of the Company,

the Board must consider and, if it sees ﬁt, may

authorise situations where a Director has an interest

that conﬂicts, or may possibly conﬂict, with the

interests of the Company.

In line with the AIC code 2019, the Board has

established a formal system to consider authorising

such conﬂicts, whereby the Directors who have no

interest in the matter decide whether to authorise

the conﬂict and any conditions to be attached to

such authorisations.



Miton UK MicroCap Trust plc

Annual Report 2022

Stewardship Responsibilities and the use of

VotingRights

As an externally-managed investment company,

the majority of the responsibilities of the Board in

relation to engagement with investee companies

are delegated to the Investment Manager.

The Board retains oversight of the investor

stewardship exercised on its behalf by reviewing

the Investment Manager’s stewardship and

voting policies, considering the regular updates

on engagement provided by the Investment

Manager and holding the Investment Manager

to account. The Investment Manager has

published a statement of compliance with the UK

Stewardship Code, which is available on its website

at www.premiermiton.com. The Board reviews this

statement of compliance annually.

Company Secretary

The Board has direct access to the advice and

services of the Secretary, Link Company Matters

Limited. The Secretary is responsible for ensuring

that Board and Committee procedures are followed

and that information and reports are delivered to

the Board on a timely basis. The Secretary is also

responsible for ensuring that applicable regulations

are complied with and the statutory obligations of

the Company are met.

Internal Controls and Risk Management Systems

The Board has overall responsibility for establishing

and maintaining the Company’s systems of internal

controls and risk management and the reliability

of the ﬁnancial reporting process and for reviewing

their effectiveness.

The Directors have reviewed and considered

the guidance supplied by the FRC on Risk

Management, Internal Control, and Related Finance

and Business Reporting and an ongoing process

has been established for identifying, evaluating

and managing the risks faced by the Company.

The Board maintains a risk matrix, which consists

of a detailed risk and internal control assessment

and provides the basis for the Committee and the

Board to regularly monitor the effective operation

of the controls and to update the risk matrix when

new risks are identiﬁed. This process, together with

key procedures established with a view to providing

effective ﬁnancial control, was in place during the

year under review and was in place at the date of

the signing of this Report. The risk management

process and Company’s systems of internal control

are designed to assist the Board in making better,

more informed decisions with a view to creating and

protecting shareholder value.

The internal control systems are designed to ensure

that proper accounting records are maintained,

that the ﬁnancial information on which business

decisions are made and which are issued for

publication is reliable and that the assets of the

Company are safeguarded. The purpose of risk

management is to manage rather than eliminate

the risk of failure in achieving the Company’s

objectives and involves Directors exercising

judgement. It should be recognised that such

systems can only provide reasonable, not absolute,

assurance against material misstatement or loss.

Internal Controls Assessment

Regular risk assessments and reviews of internal

controls will be undertaken in the context of the

Company’s overall investment objective. The

Board, through the Committee, has identiﬁed risk

management controls in four key areas: corporate

strategy; compliance with laws and regulations and

disclosure; relationships with service providers; and

investment and business activities. In arriving at

its judgment of what risks the Company faces, the

Board has considered the Company’s operations in

the light of the following factors:

•

the nature and extent of risks which it regards

as acceptable for the Company to bear within

its overall business objective;

•

the threat of such risks becoming reality;

•

the Company’s ability to reduce the incidence

and impact of risk on its performance; and

•

the cost to the Company and beneﬁts related

to the Company and third parties operating

the relevant controls.

Corporate Governance Statement continued

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

The risk matrix, established and maintained by the

Company, is structured so as to allow the Board

to assess the risks against how those risks are

managed. The risks are assessed on the basis of the

likelihood of occurrence, the impact on the business

if they were to occur and the effectiveness of the

controls in place to mitigate them. The risk register

is reviewed at meetings of the Committee and at

other times as necessary.

The Board also reviews information provided by

the Investment Manager and the Secretary on a

regularbasis.

Most functions for the day-to-day management of

the Company are sub-contracted to appropriately

qualiﬁed third parties, and the Board therefore

obtains regular assurances and information from

key third party suppliers, including the Investment

Manager, the Administrator and the Depositary,

regarding the internal systems and controls

operated in their organisations. In addition, each

of the third parties is requested to provide a copy

of its report on internal controls each year, which is

reviewed by the Committee.

The Board has carried out a review of the

effectiveness of the risk management and systems

of internal control as they have operated over the

year under review and up to the date of approval of

this Report. No signiﬁcant failings or weaknesses

were identiﬁed from that review and there were no

matters arising which required further investigation.

Shareholder Relations

The Board is committed to ensuring there is open

and effective communication with the Company’s

shareholders and in order that the Directors

understand the views of major shareholders

on matters such as governance, strategy and

performance. Accordingly, both the Board and

the Investment Manager give a high priority to

shareholder engagement and the Chairman and

other Directors are available to enter into dialogue

with shareholders. The Investment Manager and the

Company’s Stockbroker, Peel Hunt LLP, maintain a

regular dialogue with major investors and provide

the Board with regular reports on feedback from

shareholders.

All shareholders are encouraged to attend, ask

questions and vote at the Company’s AGM to be

held on 27 September 2022. A presentation by

the fund managers of the Trust will be delivered

following the formal business of the AGM and

will also be available on the Company’s website

following the meeting.

The Annual and Half-Yearly Reports of the Company

are prepared by the Board and its advisers

to present a full and readily understandable

review of the Company’s performance. Copies

are released to the London Stock Exchange,

and the Annual Report is dispatched to

shareholders by mail. They are also available

from the Secretary or on the Company’s website,

www.mitonukmicrocaptrust.com/documents/.



Miton UK MicroCap Trust plc

Annual Report 2022

I am pleased to present the Audit and Management Committee (the ‘Committee’) Report for the

ﬁnancial year ended 30 April 2022.

Composition and Operation of the Committee

Given the small size of the Board, it is deemed both

proportionate and practical for all Directors to be

on the Committee, including the Chairman of the

Company. The Board considers that the members

of the Committee have the requisite skills and

experience, relevant to the sector, as a result of

their involvement in ﬁnancial services, to fulﬁl the

responsibilities of the Committee.

Under its terms of reference, the Committee

is required to meet twice a year to discuss the

publication of the Company’s ﬁnancial statements.

Additional meetings are convened as necessary,

however no additional meetings of the Committee

were required during the year.

Role of the Committee

The primary responsibilities of the Committee are:

•

to monitor the integrity of the ﬁnancial

statements of the Company and review the

content of the Company’s half-year and annual

reports and any formal announcements

regarding its ﬁnancial reporting issues and

areas of judgement contained within them;

•

to advise the Board on whether the content

of the annual report and accounts, taken as

a whole, is fair, balanced and understandable

and provides the information necessary

for shareholders to assess the Company’s

performance, business model and strategy;

•

to monitor and keep under review

the adequacy and effectiveness of the

Company’s internal ﬁnancial controls and risk

management and internal control systems;

•

to make recommendations to the Board

in relation to the selection, appointment,

re-appointment or removal of the external

auditor, following a review of their

independence, objectivity, qualiﬁcations,

expertise and resources;

•

to approve the remuneration and terms of

engagement of the external auditor for audit

and non-audit services;

•

to review the scope, ﬁndings and effectiveness

of the external audit process;

•

to consider the terms of appointment

of the Investment Manager, to annually

review the performance of the Investment

Manager’s obligations under the Investment

Management Agreement and to consider any

variation to the terms of that agreement, and

report its ﬁndings to the Board; and

•

to review annually the performance of other

key third party service providers.

The Committee has direct access to the Company’s

external auditor, BDO LLP, and provides a forum

through which the external auditor reports to the

Board. Representatives of the external auditor

attend meetings of the Committee at least annually.

Principal Activities of the Committee during the Year

The Committee met twice during the year under

review and during those meetings it has:

•

reviewed the Company’s Annual Report for

the ﬁnancial year ended 30 April 2021 and the

related results announcements and the Half-

Yearly Report to 31 October 2021;

•

received and discussed with the Auditor their

ﬁndings from the audit of the ﬁnancial year

ended 30 April 2021 and the effectiveness of

the external audit process;

Audit and Management Engagement Committee Report

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

•

reviewed the effectiveness of the risk

management systems and internal controls

of the Company and related reports from the

Investment Manager and other third party

providers;

•

agreed the Auditor’s fees;

•

undertook an annual assessment of the

requirement for an internal audit function for

the Company and concluded that no changes

were required;

•

conducted an annual appraisal of the

Investment Manager’s performance against

the Investment Management Agreement, and

made a recommendation to the Board about

the continuing appointment of the Investment

Manager;

•

monitored compliance by providers of other

services to the Company with the terms of their

respective agreements;

•

considered the results of Falanx Cyber Defence

Limited cyber security test.

The Committee also met once post the year end to

review the Company’s Annual Report for the year

ended 30 April 2022.

Other matters reviewed by the Committees include:

•

The Committee’s terms of reference;

•

The Company’s risk matrix;

•

The Company’s policy on the supply of

non-audit services by external auditor; and

•

The whistleblowing policy of Premier Portfolio

Managers Limited.

The Committee receives a report on internal control

and compliance from the Investment Manager’s

Compliance ofﬁcer on a six-monthly basis and

discusses this with the Investment Manager. The

Investment Manager has in place a compliance

monitoring plan for testing of controls as an

alternative to establishing a separate internal

auditfunction.

The Committee monitors and reviews the

effectiveness of the external audit process for

the Annual Report, including a detailed review

of the audit plan and the audit results report,

and makes recommendations to the Board on

the re-appointment, remuneration and terms of

engagement of the Auditor. Any concerns with the

effectiveness of the external audit process would be

reported to the Board. No concerns were raised in

respect of the year ended 30 April 2022.

Audit Fees and Non-Audit Services

An audit fee of £45,000 (exclusive of VAT) has been

agreed in respect of the audit for the ﬁnancial year

ended 30 April 2022 (2021: £40,000 exclusive of VAT).

No non-audit services were provided in the ﬁnancial

year ended 30 April 2022 (2021: £nil). The Committee

has a policy on the engagement of the Auditor to

supply non-audit services. All requests for services to

be provided by the external auditor are submitted

to the Committee in order to ensure that the scope

and nature of the proposed work does not affect the

Auditor’s independence or objectivity.

Independence and Objectivity of the Auditor

Following its review of the independence and

objectivity of the Auditor, the Committee has been

reassured that no conﬂicts have arisen during the

year. The Committee will, however, continue to

monitor the position.

Re-appointment of the Auditor

BDO LLP was appointed as Auditor in April 2020.

Following consideration of the performance of BDO

LLP, the service provided during the year and a

review of their value for money, the Committee has

recommended to the Board their re-appointment

as Auditor to the Company at the Company's

forthcoming AGM.

BDO LLP has been Auditor to the Company

since April 2020 and Vanessa-Jayne Bradley has

been the audit partner since that time. Rotation of

the audit partner will take place every ﬁve years in

accordance with the FRC revised Ethical Standard

2016. Under the FRC transitional arrangements,

the Company is required to re-tender, at the latest,



Miton UK MicroCap Trust plc

Annual Report 2022

by 2030. The Company intends to re-tender within

the timeframe set by the FRC. Due to the short

period of time since the Auditor was appointed, it is

not considered appropriate to review the Auditor’s

succession at this point in time. The Committee

will regularly consider the level of fees and the

independence and objectivity of the Auditor.

Signiﬁcant Audit Issues considered by

theCommittee

Following discussion with the Investment Manager

and Auditor, the Committee determined that the

key risks in relation to the Company’s ﬁnancial

statements and how they were addressed were:

Risk Mitigation

Incomplete or inaccurate revenue recognition

The recognition of income is undertaken

in accordance with the stated accounting

policies of the Company.

The Directors review the Company’s income, revenue

forecasts and the sensitivity of the revenue account to

falls income. Particular attention is paid to any special

dividends that the Company may receive.

The valuation and ownership of the investment portfolio

The Company’s investments have been

valued in accordance with the accounting

policies, as disclosed in note 11 to the ﬁnancial

statements. The great majority of investments

are in quoted securities in active markets,

are considered to be liquid and have been

categorised as Level 1 and 2 within the IFRS13

fair value hierarchy. These are disclosed in

note 12 to the ﬁnancial statements.

The portfolio holdings and their pricing is reviewed and

veriﬁed by the Investment Manager on a regular basis and

management accounts, including a full portfolio listing,

are prepared for each Board meeting. The Company uses

the services of an independent Depositary (The Bank of

New York Mellon (International) Limited) to hold the assets

of the Company. The Depositary checks the consistency

of its records with those of the Investment Manager on a

monthly basis and reports to the Board on an annual basis.

Maintenance of investment trust status

There is a risk of failure to maintain

investment trust status in accordance with

s1158/1159 which would have a signiﬁcant

impact on the Company as a result of the

potential capital gains tax payable.

The Investment Manager and Administrator have reported

to the Committee to conﬁrm continuing compliance with

the requirements for maintaining investment trust status.

Peter Dicks

Audit and Management Engagement Committee Chairman

18 July 2022

Audit and Management Engagement Committee Report

continued

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

The Board has prepared this report in

accordance with the requirements of the Large

and Medium- Sized Companies and Groups

(Accounts and Reports) (Amendment) Regulations

2013. An ordinary resolution for the approval of

the Directors’ Remuneration Report will be put

to shareholders at the forthcoming AGM. The law

requires the Company’s Auditor to audit certain

of the disclosures provided. Where disclosures

have been audited, they are indicated as such. The

Auditor’s opinion is included in the Independent

Auditor’s Report on pages 50 to 56.

Statement from the Chairman

Given the size of the Board, it is not considered

appropriate for the Company to have a separate

remuneration committee and the functions of

this committee are carried out by the Board as a

whole. The Board consists entirely of independent

non-executive Directors and the Company has

no employees. We have not, therefore, reported

on those aspects of remuneration that relate to

executive Directors.

Directors’ fees for the year ended 30 April 2022 are

set out on page 46.

Directors’ Remuneration Policy

This Remuneration policy was last approved

by shareholders at the Company’s AGM held

in September 2019. As a binding vote on the policy

is necessary every three years, an ordinary resolution

to approve the policy will be put to shareholders

at this year’s AGM. The Board does not propose

to make any changes to the policy, which is set

outbelow.

The level of remuneration has been set in order to

attract individuals of a calibre appropriate to the

future development of the Company and to reﬂect

the speciﬁc circumstances of the Company, the

duties and responsibilities of the Directors and

the value and amount of time committed to the

Company’s affairs.

The fees for the Directors are determined within

the limits (not to exceed £500,000 per year in

aggregate) set out in the Company’s Articles

of Association, or any greater sum that may be

determined by an ordinary resolution of the

Company. The Chairman does not participate in

any discussions relating to his own fee, which is

determined by the independent Directors. Directors

are not eligible for bonuses, share options or

long-term incentive schemes or other performance

related beneﬁts as the Board does not believe that

this is appropriate for non-executive Directors.

The fees for the Directors will be increased annually,

effective from the ﬁrst day of the Company’s

ﬁnancial year, by the rate of the Consumer Price

Index prevailing at that time. Under the Company’s

Articles of Association, if any Director is called upon

to perform extra or special services of any kind,

he/she shall be entitled to receive such sum as the

Board may think ﬁt for expenses, and also such

remuneration as the Board may think ﬁt, either as a

ﬁxed sum or as a percentage of proﬁts or otherwise,

and such remuneration may, as the Board shall

determine, be either in addition to or in substitution

for any other remuneration he may be entitled

to receive.

Directors are entitled to be paid all reasonable

expenses properly incurred in attending Board,

Committee or shareholder meetings or otherwise

in or with a view to the performance of their duties.

There are no amounts set aside or accrued by the

Company to provide pension, retirement or similar

beneﬁts to the Directors.

Directors' Remuneration Report



Miton UK MicroCap Trust plc

Annual Report 2022

Component Director

Rate as at

1 May 2022

Rate as at

1 May 2021

Purpose of

Remuneration

Annual Fee Chairman £38,400 £36,740 Commitment as Chairman

Annual Fee Non-executive Directors £27,500 £26,240 Commitment as a non-executive

Director

Additional Fee Senior Independent Director and

Audit and Management Engagement

Committee Chairman

£5,500 £5,245 For additional responsibilities and

time commitment

Additional Fee All Directors N/A N/A For extra or special services performed in

their role as a Director

Expenses All Directors N/A N/A No ﬁxed rate. Reimbursement of

expenses incurred in the performance of

duties as a Director

 The Company’s policy is for the Chairman of the Board to be paid a higher fee than the other Directors to reﬂect the more onerous role

 The Company’s Articles of Association limit the total aggregate annual fees that can be paid to £500,000

 The Company’s policy is for the Senior Independent Director and Chairman of the Audit Management Engagement Committee to be paid a higher fee than

other Directors to reﬂect the more onerous role

 Additional fees would only be paid in exceptional circumstances in relation to the performance of extra or special services

 Fees were increased by the rate of the Consumer Price Index prevailing on 1 May 2021, being 1.5%

 Fees were due to be increased by the rate of the Consumer Price Index prevailing 1 May 2022, being 9%, however recognising the need to show restraint,

Directors elected to reduce the level of the CPI increase to 4.5%

Fees for any new Director appointed will be on the above basis. Fees payable in respect of subsequent

periods will be determined following an annual review. Any views expressed by shareholders on the fees

being paid to Directors would be taken into consideration by the Board.

It is the Board’s policy that Directors do not have service contracts, but Directors are provided with a letter of

appointment as a non-executive Director. The terms of their appointment provide that Directors shall retire

and be subject to election at the ﬁrst Annual General Meeting after their appointment. Compensation will

not be made upon early termination of appointment.

Directors’ Fees for the Year (audited)

The Directors who served in the year received the following emoluments:

Year ended

30 April 2022

Year ended

30 April 2021

Fixed fees

Expenses

Total

Fixed fees

Expenses

Total

Peter Dicks 31,485 – 31,485 31,025 – 31,025

Jan Etherden 26,240 – 26,240 25,855 – 25,855

Bridget Guerin 6,560 – 6,560 10,775 – 10,775

Andrew Pomfret 24,493 – 24,493 36,200 146 36,346

Davina Walter 19,108 – 19,108 – – –

Ashe Windham 29,740 – 29,740 25,855 – 25,855

137,626 – 137,626 129,710 146 129,856

Directors' Remuneration Report continued

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

Annual Percentage Change in Directors’

Remuneration

The following sets out the annual percentage

change in Directors’ fees since 30 April 2020

Percentage

change since

30 April 2021

Percentage

change since

20 April 2020

Peter Dicks* 1.5% 0.9%

Jan Etherden 1.5% 0.9%

Bridget Guerin n/a n/a

Andrew Pomfret 1.5% 0.9%

Davina Walter n/a n/a

Ashe Windham 1.5% 0.9%

* Senior Independent Director & Chair of Audit & Management

Engagement Committee

Company Performance

The Company does not have a speciﬁc benchmark

against which performance is measured. The

graph opposite compares the total return

(assuming all dividends are reinvested) to holders

of Ordinary Shares since they were ﬁrst admitted

to the Ofﬁcial List of the Financial Conduct

Authority, compared to the total shareholder

return of the Numis SC 1000 (excluding

Investment Companies) Index, which is the

closest broad index against which to measure the

Company’sperformance.

It is noteworthy that some of the best performing

stocks on the AIM exchange have been growth

stocks, often with market capitalisations much

larger than the investment universe of this

Company. This trend may continue, but in the

past it has been the smallest stocks that have

outperformed, especially those with undemanding

valuations at purchase. Further explanation of the

recent market trends is outlined in the Investment

Manager’s section of this Report on pages 12 to 17.

NAV v share price v Numis 1000 Index

Relative Importance of Spend on Pay

The table below shows the proportion of the

Company’s income spent on pay.

30 April

2022

£000

30 April

2021

£000

Dividends paid to Ordinary

Shareholders in the year 11 138

Management fees paid in

theyear 892 732

Total remuneration paid

toDirectors 138 130

The accompanying notes are an integral part of

these ﬁnancial statements.

0.0

50.0

100.0

150.0

200.0

250.0

Percent

MINI NAV

MINI Share

Price

Numis SC

1000 Ex

Invt Cos TR

Apr

2016

Apr

2015

Apr

2017

Apr

2018

Apr

2022

Apr

2021

Apr

2020

Apr

2019



Miton UK MicroCap Trust plc

Annual Report 2022

Directors’ Beneﬁcial and Family Interests (audited)

There is no requirement under the Company’s Articles

of Association or the terms of their appointment for

Directors to hold shares in the Company. The interests

of the Directors and their families in the Ordinary

Shares of the Company as at 30 April 2022 are set

outbelow:

Number of

Ordinary

shares as at

30 April 2022

Number of

Ordinary

shares as at

30 April 2021

Peter Dicks 368,150 368,150

Jan Etherden 146,300 146,300

Ashe Windham 225,000 200,000

Davina Walter 33,228 N/A

There have been no changes to the Directors’ share

interests between 30 April 2022 and the date of

thisReport.

Voting at the Annual General Meeting

The Directors’ Remuneration Report for the

year ended 30 April 2021 and the Directors’

Remuneration Policy were approved

by shareholders at the AGMs held on

22 September 2021 and 11 September 2019

respectively. The votes cast were as follows:

Directors’

Remuneration Report

(2021 AGM results)

Directors’

Remuneration Policy

(2019 AGM results)

Number

of votes

% of

votes cast

Number

of votes

% of

votes cast

For 45,022,246 99.62 49,545,884 99.93

Against 171,751 0.38 32,748 0.07

Total votes cast 45,193,997 49,578,642

Number of votes

withheld 80,360 7,000

Approval

The Director’s Remuneration Report was approved

by the Board on 18 July 2022.

On behalf of the Board

Ashe Windham

Chairman

18 July 2022

Directors' Remuneration Report continued

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

Statement of Directors’ Responsibilities

The Directors are responsible for preparing the

annual report and the ﬁnancial statements in

accordance with applicable law and regulations.

Company law and UK adopted international

accounting standards require the Directors to

prepare ﬁnancial statements for each ﬁnancial year.

Under that law the Directors have elected to prepare

the Company’s ﬁnancial statements in accordance

with UK adopted international accounting standards.

Under company law the Directors must not approve

the ﬁnancial statements unless they are satisﬁed that

they give a true and fair view of the state of affairs of

the group and company and of the proﬁt or loss for

the company for that period.

In preparing these ﬁnancial statements, the

Directors are required to:

•

Select suitable accounting policies and then

apply them consistently;

•

Make judgments and accounting estimates

that are reasonable and prudent;

•

State whether they have been prepared in

accordance with UK adopted international

accounting standards, subject to any material

departures disclosed and explained in the

ﬁnancial statements;

•

Prepare the ﬁnancial statements on the going

concern basis unless it is inappropriate to

presume that the company will continue in

business;

•

Prepare a Director’s report, as strategic

report and a Director’s remuneration report

which comply with the requirements of the

Companies Act 2006.

The Directors are responsible for keeping adequate

accounting records that are sufﬁcient to show and

explain the company’s transactions and disclose

with reasonable accuracy at any time the ﬁnancial

position of the company and enable them to ensure

that the ﬁnancial statements comply with the

Companies Act 2006.

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.

The Directors are responsible for ensuring that the

annual report and accounts, taken as a whole, are

fair, balanced, and understandable and provides the

information necessary for shareholders to assess the

group’s performance, business model and strategy.

Website publication

The Directors are responsible for ensuring the

annual report and the ﬁnancial statements are

made available on its website. Financial statements

are published on the Company’s website in

accordance with legislation in the United Kingdom

governing the preparation and dissemination

of ﬁnancial statements, which may vary from

legislation in other jurisdictions. The maintenance

and integrity of the Company’s website is the

responsibility of the Directors. The Directors’

responsibility also extends to the ongoing integrity

of the ﬁnancial statements contained therein.

The Directors conﬁrm to the best of their knowledge:

•

The ﬁnancial statements have been prepared

in accordance with UK adopted international

accounting standards in conformity with the

requirements of the Companies Act 2006 and

give a true and fair view of the assets, liabilities,

ﬁnancial position and proﬁt and loss of the

group.

•

The annual report includes a fair review of the

development and performance of the business

and the ﬁnancial position of the Company,

together with a description of the principal

risks and uncertainties that they face.

On behalf of the Board

Ashe Windham

Chairman

18 July 2022



Miton UK MicroCap Trust plc

Annual Report 2022

Independent Auditor’s Report to the members

of Miton UK Microcap Trust plc

Opinion on the ﬁnancial statements

In our opinion the ﬁnancial statements:

•

give a true and fair view of the state of the

Company’s affairs as at 30 April 2022 and of the

Company’s loss for the year then ended;

•

have been properly prepared in accordance

with UK adopted international accounting

standards; and

•

have been prepared in accordance with the

requirements of the Companies Act 2006.

We have audited the ﬁnancial statements of Miton

UK MicroCap Trust plc (the ‘Company’) for the year

ended 30 April 2022 which comprise the Income

Statement, the Statement of Changes in Equity, the

Balance Sheet, the Statement of Cash Flows and

the notes to the ﬁnancial statements, including

a summary of signiﬁcant accounting policies.

The ﬁnancial reporting framework that has been

applied in their preparation is applicable law and UK

adopted international accounting standards.

Basis for opinion

We conducted our audit in accordance with

International Standards on Auditing (UK) (ISAs (UK))

and applicable law. Our responsibilities under those

standards are further described in the Auditor’s

responsibilities for the audit of the ﬁnancial

statements section of our report. We believe that

the audit evidence we have obtained is sufﬁcient

and appropriate to provide a basis for our opinion.

Our audit opinion is consistent with the additional

report to the Audit and Management Engagement

Committee.

Independence

Following the recommendation of the Audit

and Management Engagement Committee,

we were appointed by the Board of Directors

on 22 September 2020 to audit the ﬁnancial

statements for the year ending 30 April 2020 and

subsequent ﬁnancial periods. The period of total

uninterrupted engagement including retenders

and reappointments is 3 years, covering the years

ending 30 April 2020 to 30 April 2022. We remain

independent of the Company in accordance with

the ethical requirements that are relevant to

our audit of the ﬁnancial statements in the UK,

including the FRC’s Ethical Standard as applied to

listed public interest entities, and we have fulﬁlled

our other ethical responsibilities in accordance

with these requirements. The non-audit services

prohibited by that standard were not provided to

the Company.

Conclusions relating to going concern

In auditing the ﬁnancial statements, we have

concluded that the Directors’ use of the going

concern basis of accounting in the preparation

of the ﬁnancial statements is appropriate. Our

evaluation of the Directors’ assessment of the

Company’s ability to continue to adopt the going

concern basis of accounting included:

•

Evaluating the appropriateness of the Directors’

method of assessing the going concern in

light of market volatility and the present

uncertainties by reviewing the information used

by the Directors in completing their assessment;

•

Assessing the appropriateness of the Directors’

assumptions and judgements made in

their base case and stress tested forecasts

including consideration of the available cash

resources relative to forecast expenditure

and commitments and the sufﬁciency of the

liquidity of the portfolio;

•

Checking the accuracy of historical forecasting

by agreeing to actual results; and

•

Reviewing the loan agreements to identify

the covenants and assessing the likelihood of

them being breached based on the Directors’

forecasts and our sensitivity analysis.

Based on the work we have performed, we have

not identiﬁed any material uncertainties relating to

events or conditions that, individually or collectively,

may cast signiﬁcant doubt on the Company’s

ability to continue as a going concern for a period

of at least twelve months from when the ﬁnancial

statements are authorised for issue.

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

In relation to the Company’s reporting on how it has applied the UK Corporate Governance Code, we

have nothing material to add or draw attention to in relation to the Directors’ statement in the ﬁnancial

statements about whether the Directors considered it appropriate to adopt the going concern basis

ofaccounting.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in

the relevant sections of this report.

Overview

Key audit matters

Valuation and ownership of investments

2022



2021



Materiality Financial statements as a whole

£1.00m (2021: £1.17m) based on 1% (2021: 1%) of net assets

An overview of the scope of our audit

Our audit was scoped by obtaining an understanding of the Company and its environment, including

the Company’s system of internal control, and assessing the risks of material misstatement in the

ﬁnancial statements. We also addressed the risk of management override of internal controls, including

assessing whether there was evidence of bias by the Directors that may have represented a risk of

materialmisstatement.

As part of designing our audit, we determined materiality and assessed the risks of material misstatement

in the ﬁnancial statements. In particular, we looked at where the directors made subjective judgements,

for example in respect of the valuation of investments which have a high level of estimation uncertainty

involved in determining the unquoted investment valuations.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most signiﬁcance in our

audit of the ﬁnancial statements of the current period and include the most signiﬁcant assessed risks of

material misstatement (whether or not due to fraud) that we identiﬁed, including those which had the

greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts

of the engagement team. This matter was 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 this matter.



Miton UK MicroCap Trust plc

Annual Report 2022

Key audit matter

How the scope of our audit addressed the key

auditmatter

Valuation and ownership of investments (Note 1 and

Note 11 and 12)

The investment portfolio comprises quoted

investments and a small number of unquoted

investments (warrants).

The valuation of the unquoted investments

(warrants) includes an element of subjectivity.

The Investment Manager’s fee is based on the

market capitalisation of the Company which is

inﬂuenced by the performance of the Trust. The

Investment Manager is responsible for preparing

the valuation of investments which are reviewed

and approved by the Board. Notwithstanding this

review, there is a potential risk of misstatement

in the investment valuations. Additionally, there

is a risk that the investment balance includes

investments which are no longer owned by the

Company or that the bid price used to value the

investment is incorrect.

Investments is the most signiﬁcant balance in

the ﬁnancial statements and is the key driver of

performance, therefore we determined this to be a

key audit matter.

We responded to this matter by testing the valuation

and ownership of the whole portfolio of quoted

investments. We performed the following procedures:

•

Conﬁrmed the year-end bid price was used

by agreeing to externally quoted prices and

assessed if there were contra indicators, such

as liquidity considerations, to suggest bid

price is not the most appropriate indication of

fairvalue.

•

Obtained direct conﬁrmation of the number

of shares held per equity investment from the

custodian regarding all investments held at

the balance sheet date.

For all the warrants held at the year-end, we

performed the following procedures:

•

Considered the appropriateness of the

valuation methodology against the

International Private Equity and Venture

Capital Valuation (‘IPEV’) Guidelines and

applicable accounting standards.

•

Re-performed the calculation of the

investment valuation using a valuation model

and comparing to the Investment Managers

valuation.

•

Where appropriate, performed sensitivity

analysis where reasonable alternative

assumptions could exist.

•

Obtained direct conﬁrmation of the number of

warrants held from the custodian.

Key observations

Based on our procedures performed we did not

identify any matters to suggest that the valuation and

ownership of investments was not appropriate.

Our application of materiality

We apply the concept of materiality both in planning and performing our audit, and in evaluating the

effect of misstatements. We consider materiality to be the magnitude by which misstatements, including

omissions, could inﬂuence the economic decisions of reasonable users that are taken on the basis of the

ﬁnancial statements.

Independent Auditor’s Report to the members

of Miton UK Microcap Trust plc continued

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

In order to reduce to an appropriately low level

the probability that any misstatements exceed

materiality, we use a lower materiality level,

performance materiality, to determine the extent of

testing needed. Importantly, misstatements below

these levels will not necessarily be evaluated as

immaterial as we also take account of the nature

of identiﬁed misstatements, and the particular

circumstances of their occurrence, when evaluating

their effect on the ﬁnancial statements as a whole.

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

and performance materiality as follows:

Company ﬁnancial statements

2022

£’000

2021

£’000

Materiality

1,000 1,166

Basis for determining materiality

1% of net assets (2021: 1% of net assets)

Rationale for the benchmark applied

As an investment trust, the value of net assets is

the key measure of performance for users of the

ﬁnancial statements.

Performance materiality

750 874

Basis for determining performance materiality

75% of materiality

The level of performance materiality applied was set after

having considered a number of factors including the

expected total value of known and likely misstatements

based on past experience and the level of transactions in

the year.

Lower testing threshold

We have set a lower testing threshold for those

items impacting revenue return at £129,000 which

is based on 10% of total expenditure (2021: £68,000

which is based on 5% of total expenditure).

Reporting threshold

We agreed with the Audit and Management

Engagement Committee that we would report to

them all individual audit differences in excess of

£50,000 (2021: £23,000). We also agreed to report

differences below this threshold that, in our view,

warranted reporting on qualitative grounds.

Other information

The directors are responsible for the other

information. The other information comprises the

information included in the report and accounts

other than the ﬁnancial statements and our

auditor’s report thereon. Our opinion on the

ﬁnancial statements does not cover the other

information and, except to the extent otherwise

explicitly stated in our report, we do not express

any form of assurance conclusion thereon. Our

responsibility is to read the other information

and, in doing so, consider whether the other

information is materially inconsistent with the

ﬁnancial statements or our knowledge obtained in

the course of the audit, or otherwise appears to be

materially misstated. If we identify such material

inconsistencies or apparent material misstatements,

we are required to determine whether this gives

rise to a material misstatement in the ﬁnancial

statements themselves. If, based on the work

we have performed, we conclude that there is a

material misstatement of this other information, we

are required to report that fact.

We have nothing to report in this regard.



Miton UK MicroCap Trust plc

Annual Report 2022

Corporate governance statement

The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term

viability and that part of the Corporate Governance Statement relating to the company’s compliance with

the provisions of the UK Corporate Governance Code speciﬁed for our review.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements

of the Corporate Governance Statement is materially consistent with the ﬁnancial statements or our

knowledge obtained during the audit.

Going concern and

longer-term viability

•

The Directors' statement with regards to the appropriateness of adopting the going

concern basis of accounting and any material uncertainties identiﬁed; and

•

The Directors’ explanation as to their assessment of the Company’s prospects, the

period this assessment covers and why the period is appropriate.

Other Code provisions

•

Directors' statement on fair, balanced and understandable;

•

Board’s conﬁrmation that it has carried out a robust assessment of the emerging

and principal risks;

•

The section of the annual report that describes the review of effectiveness of risk

management and internal control systems; and

•

The section describing the work of the audit and management

engagement committee.

Other Companies Act 2006 reporting

Based on the responsibilities described below and our work performed during the course of the audit,

we are required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as

described below.

Strategic report and

Directors’ report

In our opinion, based on the work undertaken in the course of the audit:

•

the information given in the Strategic report and the Directors’ report for the

ﬁnancial year for which the ﬁnancial statements are prepared is consistent with the

ﬁnancial statements; and

•

the Strategic report and the Directors’ report have been prepared in accordance

with applicable legal requirements.

In the light of the knowledge and understanding of the Company and its

environment obtained in the course of the audit, we have not identiﬁed material

misstatements in the strategic report or the Directors’ report.

Directors’ remuneration In our opinion, the part of the Directors’ remuneration report to be audited has been

properly prepared in accordance with the Companies Act 2006.

Matters on which we are

required to report by

exception

We have nothing to report in respect of the following matters in relation to which the

Companies Act 2006 requires us to report to you if, in our opinion:

•

adequate accounting records have not been kept, or returns adequate for our audit

have not been received from branches not visited by us; or

•

the ﬁnancial statements and the part of the Directors’ remuneration report to be

audited are not in agreement with the accounting records and returns; or

•

certain disclosures of Directors’ remuneration speciﬁed by law are not made; or

•

we have not received all the information and explanations we require for our audit.

Independent Auditor’s Report to the members

of Miton UK Microcap Trust plc continued

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

Responsibilities of Directors

As explained more fully in the statement of

Directors’ responsibilities, the Directors are

responsible for the preparation of the ﬁnancial

statements and for being satisﬁed that they give a

true and fair view, and for such internal control as

the Directors determine is necessary to enable the

preparation of ﬁnancial statements that are free

from material misstatement, whether due to fraud

or error.

In preparing the ﬁnancial statements, the Directors

are responsible for assessing the Company’s ability

to continue as a going concern, disclosing, as

applicable, matters related to going concern and

using the going concern basis of accounting unless

the Directors either intend to liquidate the Company

or to cease operations, or have no realistic alternative

but to do so.

Auditor’s responsibilities for the audit of the

ﬁnancial statements

Our objectives are to obtain reasonable assurance

about whether the ﬁnancial statements as a whole

are free from material misstatement, whether due

to fraud or error, and to issue an auditor’s report

that includes our opinion. Reasonable assurance is

a high level of assurance, but is not a guarantee that

an audit conducted in accordance with ISAs (UK)

will always detect a material misstatement when it

exists. Misstatements can arise from fraud or error

and are considered material if, individually or in the

aggregate, they could reasonably be expected to

inﬂuence the economic decisions of users taken on

the basis of these ﬁnancial statements.

Extent to which the audit was capable of detecting

irregularities, including fraud

Irregularities, including fraud, are instances of

non-compliance with laws and regulations. We

design procedures in line with our responsibilities,

outlined above, to detect material misstatements in

respect of irregularities, including fraud. The extent

to which our procedures are capable of detecting

irregularities, including fraud is detailed below:

We gained an understanding of the legal and

regulatory framework applicable to the Company

and the industry in which it operates, and

considered the risk of acts by the Company which

were contrary to applicable laws and regulations,

including fraud. We considered the signiﬁcant laws

and regulations to be the Companies Act 2006, the

FCA listing and DTR rules, the principles of the AIC

Code of Corporate Governance, industry practice

represented by the AIC SORP, the applicable

accounting framework, and the Company’s

qualiﬁcation as an Investment Trust under UK tax

legislation as any non-compliance of this would

lead to the Company losing various deductions and

exemptions from corporation tax.

We focused on laws and regulations that could give

rise to a material misstatement in the Company

ﬁnancial statements. Our tests included:

•

agreement of the ﬁnancial statement

disclosures to underlying supporting

documentation;

•

enquiries of management and those charged

with governance relating to the existence of

any non-compliance with laws and regulations;

•

review of minutes of board meetings

throughout the period to identify any instance

of non-compliance with laws and regulations;

•

obtaining an understanding of the control

environment in monitoring compliance with

laws and regulations; and

•

reviewing the calculation in relation to

Investment Trust compliance to check that

the Company was meeting its requirements to

retain its Investment Trust Status.

We assessed the susceptibility of the ﬁnancial

statement to material misstatement including

fraud and considered the fraud risk areas to be the

valuation of investments and management override

of controls.



Miton UK MicroCap Trust plc

Annual Report 2022

Our tests included:

•

The procedures set out in the Key Audit

Matters section above;

•

Recalculating investment management fees

intotal;

•

Obtaining independent conﬁrmation of bank

balances; and

•

Testing journals which met a deﬁned

risk criteria by agreeing to supporting

documentation and evaluating whether

there was evidence of bias by the Investment

Manager and Directors that represented a risk

of material misstatement due to fraud.

We also communicated relevant identiﬁed laws

and regulations and potential fraud risks to all

engagement team members and remained alert

to any indications of fraud or non-compliance with

laws and regulations throughout the audit.

Our audit procedures were designed to

respond to risks of material misstatement in the

ﬁnancial statements, recognising that the risk

of not detecting a material misstatement due

to fraud is higher than the risk of not detecting

one resulting from error, as fraud may involve

deliberate concealment by, for example, forgery,

misrepresentations or through collusion.

There are inherent limitations in the audit

procedures performed and the further removed

non-compliance with laws and regulations is from

the events and transactions reﬂected in the ﬁnancial

statements, the less likely we are to become aware

of it.

A further description of our responsibilities is

available on the Financial Reporting Council’s

website at: www.frc.org.uk/auditorsresponsibilities.

This description forms part of our auditor’s report.

Use of our report

This report is made solely to the Company’s

members, as a body, in accordance with Chapter

3 of Part 16 of the Companies Act 2006. Our audit

work has been undertaken so that we might state

to the Company’s members those matters we are

required to state to them in an auditor’s report and

for no other purpose. To the fullest extent permitted

by law, we do not accept or assume responsibility

to anyone other than the Company and the

Company’s members as a body, for our audit work,

for this report, or for the opinions we have formed.

Vanessa-Jayne Bradley

Senior Statutory Auditor

For and on behalf of BDO LLP, Statutory Auditor

London, UK

18 July 2022

BDO LLP is a limited liability partnership registered

in England and Wales (with registered number

OC305127).

Independent Auditor’s Report to the members

of Miton UK Microcap Trust plc continued

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

Income Statement

of the Company for the year ended 30 April 2022

Year ended

30 April 2022

Year ended

30 April 2021

Notes

Revenue

return

£000

Capital

return

£000

Total

£000

Revenue

return

£000

Capital

return

£000

Total

£000

(Losses)/gains on investments held at fair value through proﬁt

or loss 11 – (13,284) (13,284) – 61,838 61,838

Losses on derivatives held at fair value through proﬁt or loss 13 – (1,268) (1,268) – – –

Income 2 983 – 983 699 6 705

Management fee 6 (223) (669) (892) (183) (549) (732)

Other expenses 7 (587) – (587) (635) (859) (1,494)

Return on ordinary activities before ﬁnance costs and taxation 173 (15,221) (15,048) (119) 60,436 60,317

Finance costs 8 – (39) (39) – (34) (34)

Return/(loss) on ordinary activities before taxation 173 (15,260) (15,087) (119) 60,402 60,283

Taxation 9 (14) – (14) (50) – (50)

Return/(loss) on ordinary activities after taxation 159 (15,260) (15,101) (169) 60,402 60,233

Return per Ordinary Share – basic and diluted (pence) 3 0.15 (13.91) (13.76) (0.14) 49.65 49.51

The total column of this statement is the Income Statement of the Company prepared in accordance with

UK adopted international account standards in conformity with the requirements of the Companies Act

2006. The supplementary revenue return and capital return columns are presented in accordance with the

Statement of Recommended Practice issued by the Association of Investment Companies (“AIC SORP”).

All revenue and capital items in the above statement derive from continuing operations. No operations were

acquired or discontinued during the year.

There is no other comprehensive income and, therefore, the return on ordinary activities after taxation is

both the proﬁt and the total comprehensive income.

The notes on pages 61 to 79 form part of these ﬁnancial statements.



Miton UK MicroCap Trust plc

Annual Report 2022

Statement of Changes in Equity

of the Company for the year ended 30 April 2022

For the year ended 30 April 2022 Notes

capital

£000

Capital

redemption

reserve

£000

premium

account

£000

Special

reserve

£000

Capital

reserve

£000

Revenue

reserve

£000

Total

£000

As at 30 April 2021 162 61 – 64,283 52,061 84 116,651

Total comprehensive income:

Return on ordinary activities after taxation – – – – (15,260) 159 (15,101)

Transactions with shareholders recorded

directly to equity:

Redemption of Ordinary Shares – – – (2,737) – – (2,737)

Shares issued 1 – 672 – – – 673

Cancellation of shares 4 (3) 3 – – – – –

Equity dividends paid 10 – – – – – (11) (11)

As at 30 April 2022 160 64 672 61,546 36,801 232 99,475

For the year ended 30 April 2021 Notes

capital

£000

Capital

redemption

reserve

£000

premium

account

£000

Special

reserve

£000

Capital

reserve

£000

Revenue

reserve

£000

Total

£000

As at 30 April 2020 189 34 – 79,251 (8,810) 347 71,011

Total comprehensive income:

Return on ordinary activities after taxation – – – – 60,402 (169) 60,233

Transactions with shareholders recorded

directly to equity:

Redemption of Ordinary Shares – – – (14,968) 469 44 (14,455)

Cancellation of shares 4 (27) 27 – – – – –

Equity dividends paid 10 – – – – – (138) (138)

As at 30 April 2021 162 61 – 64,283 52,061 84 116,651

The notes on pages 61 to 79 form part of these ﬁnancial statements.

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

Balance Sheet

of the Company as at 30 April 2022

Notes

30 April

2022

£000

30 April

2021

£000

Non-current assets:

Investments held at fair value through proﬁt or loss 11 94,822 108,506

Current assets:

Derivative instruments 13 802 –

Trade and other receivables 14 232 2,796

Cash at bank and cash equivalents 3,794 6,272

4,828 9,068

Liabilities:

Trade and other payables 15 175 923

Net current assets 4,653 8,145

Net assets 99,475 116,651

Capital and reserves

Share capital 4 160 162

Capital redemption reserve 64 61

Share premium account 672 –

Special reserve 61,546 64,283

Capital reserve 36,801 52,061

Revenue reserve 232 84

Shareholders’ funds 99,475 116,651

pence pence

Net asset value per Ordinary Share – basic and diluted 5 91.05 104.83

These ﬁnancial statements were approved and authorised for issue by the Board of Miton UK MicroCap

Trust plc on 18 July 2022 and were signed on its behalf by:

Ashe Windham

Chairman

18 July 2022

Company No: 09511015

The notes on pages 61 to 79 form part of these ﬁnancial statements.



Miton UK MicroCap Trust plc

Annual Report 2022

Statement of Cash Flows

for the Company for the year ended 30 April 2022

30 April

2022

£000

30 April

2021

£000

Operating activities:

Net return/(loss) before taxation (15,087) 60,283

Loss/(gain) on investments and derivatives held at fair value through proﬁt or loss 14,552 (61,838)

Decrease/(increase) in trade and other receivables 12 (106)

(Decrease)/Increase in trade and other payables (18) 61

Exchange losses on capital items 1 –

Amortisation of ﬁnance costs 39 (9)

Withholding tax paid (14) (50)

Net cash outﬂow from operating activities (515) (1,659)

Investing activities:

Purchase of investments (26,813) (42,901)

Purchase of derivative investments (2,070) –

Sale of investments 29,012 61,583

Net cash inﬂow from investing activities 129 18,682

Financing activities:

Proceeds of Ordinary Share issue 688 –

Redemption/repurchase of Ordinary Shares (2,737) (14,455)

Equity dividends paid (11) (138)

Finance costs paid (32) –

Net cash outﬂow from ﬁnancing activities (2,092) (14,593)

Increase/(Decrease) in cash and cash equivalents (2,478) 2,430

Reconciliation of net cash ﬂow movement in funds:

Cash and cash equivalents at the start of the period 6,272 3,842

Net cash inﬂow/(outﬂow) from cash and cash equivalents (2,478) 2,430

Cash at the end of the period 3,794 6,272

The notes on pages 61 to 79 form part of these ﬁnancial statements.

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

Notes to the Financial Statements

1. Accounting Policies

Miton UK MicroCap Trust plc is a company

incorporated and registered in England and Wales.

The principal activity of the Company is that of an

investment trust company within the meaning of

Sections 1158/1159 of the Corporation Tax Act 2010.

The Company’s ﬁnancial statements have

been prepared in accordance with UK adopted

international accounting standards. The ﬁnancial

statements have also been prepared in accordance

with the AIC SORP for the ﬁnancial statements of

investment trust companies and venture capital

trusts.

Basis of Preparation

In order to better reﬂect the activities of an

investment trust company and in accordance

with guidance issued by the AIC, supplementary

information which analyses the Income Statement

between items of a revenue and capital nature has

been prepared alongside the Income Statement.

The ﬁnancial statements are presented in Sterling,

which is the Company’s functional currency as the

UK is the primary environment in which it operates,

rounded to the nearest £1,000, except where

otherwise indicated.

Going Concern

The ﬁnancial statements have been prepared on a

going concern basis and on the basis that approval as

an investment trust company will continue to be met.

The Directors have made an assessment of the

Company’s ability to continue as a going concern

and are satisﬁed that the Company has adequate

resources to continue in operational existence for

a period of at least 12 months from the date when

these ﬁnancial statements were approved.

In making the assessment, the Directors of the

Company have considered the likely impacts of

international and economic uncertainties on the

Company, operations and the investment portfolio.

These include, but are not limited to, the impact of

COVID-19, the war in Ukraine, supply shortages and

inﬂationary pressures.

The Directors noted that the Company, with the

current cash balance and holding a portfolio of listed

investments, is able to meet the obligations of the

Company as they fall due. The current cash balance

plus available additional borrowing, through the

revolving credit facility of which remains undrawn

(2021: undrawn), enables the Company to meet any

funding requirements and ﬁnance future additional

investments. The Company is a closed-end fund,

where assets are not required to be liquidated to

meet day to day redemptions.

The Directors have completed stress tests assessing

the impact of changes in market value and

income with associated cash ﬂows. In making

this assessment, they have considered plausible

downside scenarios. These tests were driven by the

possible effects of continuation of the COVID-19

pandemic but, as an arithmetic exercise, apply

equally to any other set of circumstances in which

asset value and income are signiﬁcantly impaired.

The conclusion was that in a plausible downside

scenario the Company could continue to meet its

liabilities. Whilst the economic future is uncertain,

and the Directors believe that it is possible the

Company could experience further reductions in

income and/or market value, the opinion of the

Directors is that this should not be to a level which

would threaten the Company’s ability to continue as

a going concern.

The Directors, the Investment Manager and other

service providers have put in place contingency plans

to minimise disruption. Furthermore, the Directors

are not aware of any material uncertainties that

may cast signiﬁcant doubt on the Company’s ability

to continue as a going concern, having taken into

account the liquidity of the Company’s investment

portfolio and the Company’s ﬁnancial position in

respect of its cash ﬂows, borrowing facilities and

investment commitments (of which there are none

of signiﬁcance). Therefore, the ﬁnancial statements

have been prepared on the going concern basis.



Miton UK MicroCap Trust plc

Annual Report 2022

Segmental Reporting

The Directors are of the opinion that the Company

is engaged in a single segment of business, being

investment business. The Company primarily invests

in companies listed in the UK.

Accounting Developments

In the year under review, the Company has applied

amendments to IFRS issued by the IASB adopted

in conformity with the Companies Act 2006. These

include annual improvements to IFRS, changes in

standards, legislative and regulatory amendments,

changes in disclosure and presentation requirements.

This incorporated:

•

Interest Rate Benchmark Reform – IBOR

‘phase 2’ (Amendments to IFRS 9, IAS 39

andIFRS 7);

•

Onerous contracts – Cost of Fulﬁlling a

Contract (Amendments to IAS 37);

•

IAS 1 Presentation of Financial Statements

and IAS 8 Accounting Policies, Changes in

Accounting Estimates and Errors (Amendment

– Disclosure initiative – Deﬁnition of Material);

and

•

Revisions to the Conceptual Framework for

Financial Reporting.

The adoption of the changes to accounting

standards has had no material impact on these or

prior years’ ﬁnancial statements.

There are amendments to IAS/IFRS that will apply

from 30 April 2022 as follows:

•

Classiﬁcation of liabilities as current or

non-current (Amendments to IAS 1);

•

Disclosure of Accounting Policies (Amendments

to IAS 1 and IFRS Practice Statement 2);

•

Deﬁnition of Accounting Estimates

(Amendments to IAS 8);

•

Deferred Tax Related to Assets and

Liabilities Arising from a Single Transaction –

Amendments to IAS 12 Income Taxes; and

•

Annual improvements to IFRS Standards.

The Directors do not anticipate the adoption of

these will have a material impact on the ﬁnancial

statements.

Critical Accounting Judgments and Key Sources of

Estimation Uncertainty

The preparation of ﬁnancial statements in

conformity with IFRS requires management to

make judgements, estimates and assumptions

that affect the application of policies and the

reported amounts in the Balance Sheet, the Income

Statement and the disclosure of contingent assets

and liabilities at the date of the ﬁnancial statements.

The estimates and associated assumptions are

based on historical experience and various other

factors that are believed to be reasonable under the

circumstances, the results of which form the basis of

making judgements about carrying values of assets

and liabilities that are not readily apparent from

other sources. Actual results may differ from these

estimates.

The areas requiring the most signiﬁcant judgement

and estimation in the preparation of the ﬁnancial

statements are: recognising and classifying unusual

or special dividends received as either revenue or

capital in nature; the valuation of warrants; and

recognition of expenses between capital and

income.

The estimates and underlying assumptions

are reviewed on an ongoing basis. Revisions to

accounting estimates are recognised in the period

in which the estimate is revised if the revision affects

only that period, or in the period of the revision and

future period if the revision affects both current and

future periods. There were no accounting estimates

or judgements that had a signiﬁcant impact on the

ﬁnancial statements in the current period.

Notes to the Financial Statements continued

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

Investments

The Company’s business is investing in ﬁnancial

assets with a view to proﬁting from their total

return in the form of income and capital growth.

This portfolio of investments is managed and

its performance evaluated on a fair value basis,

in accordance with a documented investment

strategy, and information about the portfolio is

provided internally on that basis to the Company’s

Board of Directors.

Upon initial recognition the Company designates

the investments ‘at fair value through proﬁt or

loss’. They are included initially at fair value, which

is taken to be their cost (excluding expenses

incidental to the acquisition which are written off

in the Income Statement, and allocated to ‘capital’

at the time of acquisition). When a purchase or

sale is made under a contract, the terms of which

require delivery within the time-frame of the

relevant market, the investments concerned are

recognised or derecognised on the trade date.

Subsequent to initial recognition, investments are

valued at fair value through proﬁt or loss. For listed

and quoted investments this is deemed to be bid

market prices or closing prices for Stock Exchange

Electronic Trading Service – quotes and crosses

(“SETSqx”). Changes in fair value of investments

are recognised in the income Statement as a

capital item. On disposal, realised gains and losses

are also recognised in the income Statement as

capitalitems.

Warrants give the Company the right, but not the

obligation, to buy common ordinary shares in an

investee company at a ﬁxed price for a pre-deﬁned

time period. The fair value is determined by the

Manager through use of models using available

observable inputs of the warrant: the exercise share

price of the investee company, the expiration period

plus other factors including the prevailing interest

rate and associated risks.

All investments for which fair value is measured or

disclosed in the ﬁnancial statements are categorised

within the fair value hierarchy in note 12.

Foreign Currency

Transactions denominated in foreign currencies are

converted to Sterling at the actual exchange rate as

at the date of the transaction. Monetary assets and

liabilities and assets carried at fair value denominated

in foreign currencies at the year end are reported at

the rate of exchange at the Balance Sheet date. Any

gain or loss arising from a change in exchange rate

subsequent to the date of the transaction is included

as an exchange gain or loss in the capital reserve or

the revenue account depending on whether the gain

or loss is of a capital or revenue nature.

Derivatives

Derivatives, including Index Put options, which

are listed investments, are classiﬁed as ﬁnancial

instruments at fair value through proﬁt or loss.

Derivatives are initially recorded at cost (being

premium paid to purchase the option) and

subsequently valued at fair value and included

in current assets/liabilities. Derivatives are

derecognised when the contract expires or on the

trade date when the contract is sold.

Changes in the fair value of derivative instruments

are recognised as they arise in the capital column of

the Income Statement. The fair value is calculated

by a broker using models with inputs from market

prices. On disposal or expiration, realised gains and

losses are also recognised in the income statement

as capital items.

Cash and Cash Equivalents

For the purposes of the Balance Sheet,

cash comprises cash in hand and demand

deposits. Cash equivalents are short-term, highly

liquid investments that are readily convertible to

known amounts of cash and which are subject to

insigniﬁcant risk of changes in value.

For the purpose of the Statement of Cash Flows,

cash and cash equivalents consist of cash and cash

equivalents as deﬁned above.



Miton UK MicroCap Trust plc

Annual Report 2022

Trade and Other Receivables

Trade and other receivables are measured, where

applicable, at amortised cost and as reduced by

appropriate allowance for expected irrecoverable

amounts.

Trade Payables and Short-term Borrowings

Trade payables and short-term borrowings are

measured at amortised costs.

Income

Dividends receivable on quoted equity shares are

taken to revenue on an ex-dividend basis. Dividends

receivable on equity shares where no ex-dividend

date is quoted are brought into account when the

Company’s right to receive payment is established.

Fixed returns on non-equity shares are recognised

on a time-apportioned basis.

Dividends from overseas companies are shown

gross of any non-recoverable withholding taxes,

which are presented separately in the Income

Statement.

Special dividends are taken to revenue or capital

account depending on their nature.

When the Company has elected to receive scrip

dividends in the form of additional shares rather

than in cash, the amount of the cash dividend

forgone is recognised as income. Any excess in

the value of the cash dividend is recognised in the

capital column.

All other income is allocated on a time-apportioned

accruals basis.

Expenses and Finance Costs

All expenses and ﬁnance costs are accounted

for on an accruals basis. On the basis of the

Board’s expected long-term split of total returns

the Company charges 75% (2021: 75%) of its

management fee and 100% (2021: 100%) of ﬁnance

costs to capital.

Expenses incurred directly in relation to arranging

debt ﬁnance are amortised over the term of the

ﬁnance. Finance charges incurred and amortised

are charged to capital (2021: 100%) and included in

the capital column of the Income Statement.

Expenses incurred directly in relation to issue of

shares are charged to share premium.

Expenses incurred in the maintenance of capital,

redemption and cancellation of shares are charged

to the special reserve through the Statement of

Changes in Equity.

Taxation

Deferred tax is provided using the liability method on

temporary differences between the tax bases of assets

and liabilities and their carrying amounts for ﬁnancial

reporting purposes at the reporting date based on tax

rates that are expected to apply in the period when

the liability is settled or the asset is realised. Deferred

tax assets are only recognised if it is considered more

likely than not that there will be suitable proﬁts from

which the future reversal of temporary differences can

be deducted. In line with the recommendations of the

AIC SORP, the allocation method used to calculate

the tax relief on expenses charged to capital is the

“marginal” basis. Under this basis, if taxable income is

capable of being offset entirely by expenses charged

through the revenue account, then no tax relief is

transferred to the capital account.

The charge for taxation is based on the net revenue

for the year and takes into account taxation deferred

or accelerated because of temporary differences

between the treatment of certain items for

accounting and taxation purposes. The actual charge

for taxation in the Income Statement relates to

irrecoverable withholding tax on overseas dividends

received during the year.

Notes to the Financial Statements continued

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

Dividends Payable to Shareholders

Dividends to shareholders are recognised as a

liability in the period in which they are paid or

approved in general meetings and are taken to the

Statement of Changes in Equity. Dividends declared

and approved by the Company after the Balance

Sheet date have not been recognised as a liability of

the Company at the Balance Sheet date.

Share Capital

The Company is a closed-ended investment company

with an unlimited life. As deﬁned in the Articles of

Association, redemption of Ordinary Shares is at the

sole discretion of the Directors, therefore the Ordinary

Shares have been classiﬁed as equity.

The issuance, acquisition and resale of Ordinary

Shares are accounted for as equity transactions and

no gain or loss is recognised in the Income Statement.

This is a reserve forming part of the non-distributable

reserves.

Share Premium

The share premium account represents the

accumulated premium paid for shares issued in

previous periods above their nominal value less

issue expenses. This is a reserve forming part of the

non-distributable reserves. The following items are

taken to this reserve:

•

Costs associated with the issue of shares; and

•

Premium on the issue of shares.

Special reserve

The special reserve was created by the cancellation

of the share premium account and is distributable.

This reserve may be used for:

•

Redemption of shares by way of the annual

redemption facility;

•

Costs relating to the capital structure of

the company;

•

Cancellation of shares;

•

Share buy backs

Capital Reserve

The following are taken to the capital reserve

through the capital column in the statement

of comprehensive income:

•

Gains and losses on the disposal of investments

and derivatives;

•

Increase and decrease in the valuation of

investments held at the year end;

•

Exchange differences of a capital nature; and

•

Expenses, together with the related taxation

effect, allocated to this reserve in accordance

with the above accounting policies.

Capital Redemption Reserve

The capital redemption reserve represents non

distributable reserves that arise from the purchase

and cancellation of shares.

Revenue Reserve

The revenue reserve represents the surplus of

accumulated proﬁts and is distributable by the way

of dividends.



Miton UK MicroCap Trust plc

Annual Report 2022

2. Income

Year ended

30 April

2022

£000

Year ended

30 April

2021

£000

Income from investments:

UK Dividends 604 426

Non-UK dividend income 348 247

UK REIT dividends 31 25

Bank Interest – 1

983 699

Capital dividend – 6

Total 983 705

3. Return per Ordinary Share

Returns per Ordinary Share are based on the weighted average number of shares in issue during the year.

Basic and diluted return per share are the same as there are no dilutive elements on share capital.

Year ended

30 April 2022

Year ended

30 April 2021

Net proﬁt (£000) Revenue Capital Total Revenue Capital Total

Continuation shareholders (£'000) 159 (15,260) (15,101) (125) 60,871 60,746

2021 Redemption shareholders (£') – – – (44) (469) (513)

159 (15,260) (15,101) (169) 60,402 60,233

Weighted average number of shares

in issue 109,671,976 121,654,380

Return per share (pence) 0.15 (13.91) (13.76) (0.14) 49.65 49.51

During the prior year the allocation of the return per Ordinary Share is allocated as follows:

Return per Ordinary Share Weighted average

pence pence pence

Continuation shareholders (0.11) 52.60 52.49 115,723,167

2021 Redemption shareholders (0.16) (1.74) (1.90) 27,061,157

The 50,000 Management shares do not participate in the returns of the Company.

Notes to the Financial Statements continued

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

4. Share Capital

Year ended

30 April 2022

Year ended

30 April 2021

Number £000 Number £000

Ordinary Shares of £0.001 each

Opening balance 111,274,758 112 138,335,915 139

Shares issued 650,000 1

Redemptions (2,671,198) (3) (27,061,157) (27)

109,253,560 110 111,274,758 112

Year ended

30 April 2022

Year ended

30 April 2021

Number £000 Number £000

Management shares of £1 each 50,000 50 50,000 50

The rights attaching to each share class are set out on page 81 of this report.

Shares Issued

During the year, 650,000 Ordinary Shares were issued in three tranches at an average price per share of

106.6p raising £673,000 (Gross consideration £688,000).

Redemption of Ordinary Shares

The Company has a redemption facility through which shareholders are entitled to request the redemption

of all or part of their holding of Ordinary Shares on an annual basis. As set out in the Articles of Association,

the Board may, at its absolute discretion, elect not to operate the annual redemption facility in whole or in

part. Accordingly, the Ordinary Shares have been classiﬁed as equity.

2022 Redemption

The total number of Ordinary Shares in respect of which valid redemption requests were received for

the 30 June 2022 Redemption Point was 14,614,999 Ordinary Shares (representing 13.3771% of the issued

share capital at 30 April 2022). The Directors elected to operate a redemption pool which is currently

beingrealised.

2021 Redemption

The total number of Ordinary Shares in respect of which valid redemption requests were received for the

30 June 2021 Redemption Point was 2,671,198 Ordinary Shares (representing 2.40% of the issued share

capital at 30 April 2021). All of the shares were redeemed at 102.38p and cancelled.

Management Shares

50,000 Management shares with a nominal value of £1 each were allotted to Miton Trust Managers Limited

on the date of incorporation. These shares have been fully paid up. The Management shares are non-voting

and non-redeemable and, upon a winding-up or on a return of capital of the Company, shall only receive the

ﬁxed amount of capital paid up on such shares and shall confer no right to any surplus capital or assets of

the Company.



Miton UK MicroCap Trust plc

Annual Report 2022

5. Net Asset Values

The NAVs per Ordinary Share and the net assets attributable at the year end were as follows:

30 April 2022

Ordinary Share

30 April 2021

Ordinary Share

NAV per

pence

Net assets

attributable

£’000

NAV per

pence

Net assets

attributable

£’000

Basic and diluted 91.05 99,475 104.83 116,651

NAV per Ordinary Share is based on net assets at the year end and 109,253,560 Ordinary Shares (2021:

111,274,758), being the number of Ordinary Shares in issue at the year end.

NAV of £1.00 per Management share is based on net assets at the year end of £50,000 (2021: £50,000) and

attributable to 50,000 Management shares at the year end. The shareholders have no right to any surplus

capital or assets of the Company.

6. Management Fee

The basic management fee payable to the AIFM is calculated at the rate of one-twelfth of 0.9% (2021: 0.9%) of

the average market capitalisation of the Company up to £100m, 0.8% per annum on the average market

capitalisation above £100m (2021: 0.8%), on the last business day of each calendar month. The basic

management fee accrues daily and is payable in arrears in respect of each calendar month. For the purpose

of calculating the basic fee, the ‘adjusted market capitalisation’ of the Company is deﬁned as the average daily

midmarket price for an Ordinary Share and C share (when in issue), multiplied by the number of relevant shares

in issue, excluding those held by the Company in treasury, on the last business day of the relevant month.

In addition to the basic management fee, and when the Redemption Pool is in existence, the AIFM is entitled

to receive from the Company a fee calculated at the rate of 0.9% (1% prior to 1 September 2020) of the net asset

value of the Redemption Pool on the last Business Day of the relevant calendar month.

The AIFM has agreed that, for so long as it remains the Company’s investment manager, it will not charge such

part of any management fee payable to it so that the Company can maintain an ongoing charges ratio of 2% or

lower. The ongoing charges ratio for the year is 1.6% (2020: 1.68%) for the Ordinary Shares, and as such is below

2%. In accordance with the Directors’ policy on the allocation of expenses between income and capital, in each

ﬁnancial year 75% of the management fee payable is expected to be charged to capital and the remaining 25%

to income.

Year ended

30 April 2022

Year ended

30 April 2021

Revenue

£000

Capital

£000

Total

£000

Revenue

£000

Capital

£000

Total

£000

Management fee 223 669 892 183 549 732

At 30 April 2022, an amount of £68,000 (30 April 2021: £79,000) was outstanding and due to

Premier Portfolio Managers Limited in respect of management fees.

Notes to the Financial Statements continued

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

7. Other Expenses

Year ended

30 April

2022

£000

Year ended

30 April

2021

£000

Directors' fees 138 130

Audit remuneration 45 40

Secretarial and administrator services 181 201

Registrar's fees 17 18

Custodian fees 13 20

Depository fees 27 20

Advisory and professional fees

67 108

Printing and postage 7 –

Research fee

11 10

Directors insurances and other expenses 24 24

Irrecoverable VAT 45 51

Miscellaneous 12 13

587 635

Capital expenses

– 859

Total 587 1,494

The Company reached a ﬁnal settlement with respect to the proceedings concerning Orion Healthcorp Inc. Both the settlement and the

associated legal costs are included within the ﬁgures above for the year ended 30 April 2021.

Contribution to Investment Manager's research budget

During the years ended 30 April 2022 and 30 April 2021, the Auditor’s remuneration related to audit services

only.

8. Finance Costs

Year ended

30 April 2022

Year ended

30 April 2021

Revenue

£000

Capital

£000

Total

£000

Revenue

£000

Capital

£000

Total

£000

Revolving credit facility

RBS £5m revolving loan facility arrangement fee – 6 6 – 9 9

RBS £5m revolving loan facility non-utilisation fee – 33 33 – 25 25

– 39 39 – 34 34

Revolving credit facility

The Company entered into a revolving credit facility (the “facility”) on 25 February 2021 for £5m at an interest

rate of 1.35% above SONIA on any drawn down balance and 0.65% on any undrawn balance where less than

25% of the facility is drawn down or 0.55% on any undrawn balance where more than 25% of the facility is

drawn down.

The arrangement fee of £18,000 was paid and amortised over the 3-year period of the facility.

The Company did not draw on the facility during the year (2021: nil) and no amounts have been drawn down at

the date of signing this report.



Miton UK MicroCap Trust plc

Annual Report 2022

9. Taxation

a. Analysis of tax charge in the year:

Year to 30 April 2022 Year to 30 April 2021

Revenue

£000

Capital

£000

Total

£000

Revenue

£000

Capital

£000

Total

£000

UK corporation tax – – – – – –

Overseas tax suffered 14 – 14 39 39

Foreign tax – – – 12 – 12

14 – 14 51 – 51

b. The current taxation charge for the year is lower than the standard rate of Corporation Tax in the UK of

19% (2021: 19%) The differences are explained below:

Year to 30 April 2022 Year to 30 April 2021

Revenue

£000

Capital

£000

Total

£000

Revenue

£000

Capital

£000

Total

£000

Net return before taxation 174 (15,262) (15,088) (119) 60,401 60,282

Theoretical tax at UK corporation tax rate of 19% (2021: 19%) (33) (2,900) (2,867) (23) 11,476 11,453

Effects of:

UK dividends that are not taxable (115) – (115) (81) – (81)

Overseas dividends that are not taxable (66) – (66) (32) – (32)

Capital income non-taxable – – – (8) – (8)

Non-taxable investment losses/(gains) – (2,900) (2,900) – (11,587) (11,587)

Overseas taxation not recoverable (14) – (14) (39) – 39

Double taxation relief – – – 12 – 12

Unrelieved excess expenses (148) – (148) 143 111 254

Actual current tax charge 14 – 14 50 – 50

Factors that may affect future tax charges

As at 30 April 2022, based on current estimates and including the accumulation of net allowable losses,

the Company had unrelieved losses of £9,439,302 (2021: £7,951,558) that are available to offset future taxable

revenue. A deferred tax asset of £2,359,826 (2021: £1,510,796), based on the effective tax rate of 25%, has not been

recognised because the Company is not expected to generate sufﬁcient taxable income in future periods

in excess of the available deductible expenses and accordingly, the Company is unlikely to be able to reduce

future tax liabilities through the use of existing surplus losses.

Deferred tax is not provided on capital gains and losses arising on the revaluation or disposal of investments

because the Company meets (and intends to continue for the foreseeable future to meet) the conditions for

approval as an Investment Trust Company.

Notes to the Financial Statements continued

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

10. Dividends

30 April 2022 30 April 2021

Amounts recognised as distributions to equity holders in the period. £000 pence £000 pence

In respect of the previous period:

Final dividend 11 0.01 138 0.10

11 0.01 138 0.10

The Directors have recommended a ﬁnal dividend in respect of the year ended 30 April 2022 of 0.15p

(2021: 0.01p) per Ordinary Share payable on 30 September 2022 to all shareholders on the register at close of

business on 2 September 2022. The ex-dividend date will be 1 September 2022.

11. Investments

30 April

2022

£000

30 April

2021

£000

Investment portfolio summary:

Opening book cost 80,008 78,099

Opening unrealised losses 28,498 (10,723)

Analysis of transactions made in the year

Opening fair value 108,506 67,376

Movements in the year:

Purchases at cost 26,083 43,480

Sales – proceeds (26,483) (64,188)

– gains on sales 12,268 22,617

Unrealised (losses)/gains (25,552) 39,221

Closing fair value 94,822 108,506

Closing book cost 91,876 80,008

Closing unrealised gains 2,946 28,498

Closing fair value 94,822 108,506

Costs on acquisitions 19 35

Costs on disposals 22 53

41 88

Analysis of capital gains/(losses)

Gains on sales 12,268 22,617

Movement in unrealised (losses)/gains (25,552) 39,221

(Losses)/gains on investments at fair value through proﬁt or loss (13,284) 61,838

The Company received £26,483,000 (2021: £64,188,000) from investments sold in the year. The book cost of

these investments when they were purchased was £14,215,000 (2021: £41,571,000). These investments have

been revalued over time and until they were sold any unrealised gains or losses were included in the fair

value of the investments.

A list of the largest portfolio holdings by their fair value is shown on page 20.



Miton UK MicroCap Trust plc

Annual Report 2022

12. Fair Value Hierarchy

Financial assets of the Company are carried in the Balance Sheet at their fair value or approximation of

fair value. The fair value is the amount at which the asset could be sold in an ordinary transaction between

market participants, at the measurement date, other than a forced or liquidation sale. The Company

measures fair values using the following hierarchy that reﬂects the signiﬁcance of the inputs used in making

the measurements.

Categorisation within the hierarchy has been determined on the basis of the lowest level input that is

signiﬁcant to the fair value measurement of the relevant asset as follows:

Level 1 – valued using quoted prices, unadjusted in active markets for identical assets and liabilities

Level 2 – valued by reference to valuation techniques using observable inputs for the asset or liability other

than quoted prices included in level 1

Level 3 – valued by reference to valuation techniques using inputs that are not based on observable market

data for the asset or liability

Assessing the signiﬁcance of a particular input requires judgement, considering factors speciﬁc to the asset

or liability. Financial assets are transferred at the point in which a change of circumstances occur.

The table below sets out the fair value measurement of ﬁnancial assets and liabilities in accordance with the

fair value hierarchy.

Level 1

£000

Level 2

£000

Level 3

£000

Total

£000

Financial assets at fair value through proﬁt or loss at 30 April 2022

Equity investments 93,190 1,153 479 94,822

Derivative contracts 802 – – 802

93,992 1,153 479 95,624

Level 1

£000

Level 2

£000

Level 3

£000

Total

£000

Financial assets at fair value through proﬁt or loss at 30 April 2021

Equity investments 107,286 1,156 64 108,506

107,286 1,156 64 108,506

The Level 2 investments are at values calculated using observable inputs. The fair value of warrants is

determined by the Manager through use of models using available observable inputs of the warrant:

the exercise share price of the investee company, the expiration period plus other factors including the

prevailing interest rate and associated risks.

Notes to the Financial Statements continued

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

Fair value of level 3 movements – ﬁnancial assets

As at

30 April

2022

Level 3

£000

As at

30 April

2021

Level 3

£000

Opening fair value investments 64 –

Transfer from/(to) Level 1 479 64

Movement in unrealised gains (64) –

Closing fair value of Level 3 investments 479 64

The fair value of level 3 investments are based on discounted anticipated future cash returns.

Other Financial Assets and Liabilities

For all other ﬁnancial assets and liabilities, the carrying value is an approximation of fair value, including:

trade and other receivables; cash and cash equivalents and trade and other payables.

13. Derivative Contracts

During the year the Company held a derivative contract purchased at cost of £2,070,000 (2021: £nil) with

an unrealised loss of £1,268,000 (2021: £nil), and closing fair value at the year ended 30 April 2022, £802,000

(2021: £nil).

Derivative contracts serve as components of the Company's investment strategy and are utilised primarily to

structure and hedge investments to enhance performance and reduce risk of the Company (the Company

does not designate any derivative as hedging instrument for hedge accounting purposes).

The derivative contracts that the Company may hold from time to time or issue include: index-linked notes,

contracts for differences, covered options and other equity-related instruments. The Company's investment

objective set limits on investments in derivatives. The Investment Manager closely monitors the Company's

exposure under derivative contracts and any use of derivatives for investment purposes will be made on

the basis of the same principles of risk spreading and diversiﬁcation that apply to the Company's direct

investments. The Company will not enter into uncovered short positions. During the year the Company held

no derivative contracts or transactions.

14. Trade and Other Receivables

30 April

2022

£000

30 April

2021

£000

Amount due from brokers 93 2,623

Dividends receivable 84 90

Prepayment and other debtors 53 76

Taxation recoverable 2 7

232 2,796



Miton UK MicroCap Trust plc

Annual Report 2022

15. Trade and Other Payables

30 April

2022

£000

30 April

2021

£000

Amount due to brokers – 730

Other creditors 175 193

175 923

16. Capital Management Policies

The Company’s capital management objectives are:

•

To ensure that it will be able to continue as a going concern; and

•

To maximise the income and capital return over the long term to its equity shareholders though an

appropriate balance of equity capital and debt

As stated in the investment policy, the Company has authority to borrow up to 15% of net asset value through

a mixture of bank facilities and certain derivative instruments. There were no borrowings as at 30 April 2022

or throughout the year (2021: nil). Also, as a public company, the minimum share capital is £50,000.

Notes to the Financial Statements continued

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

The Company’s capital at 30 April 2022 comprised:

30 April

2022

£000

30 April

2021

£000

Current liabilities:

Trade and other payables 175 923

Equity:

Equity share capital 160 162

Retained earnings and other reserves 99,315 116,489

Total shareholders’ funds 99,650 117,574

Debt as a % of net assets 0.00% 0.00%

The Board, with the assistance of the Investment Manager, monitors and reviews the broad structure of the

Company’s capital on an ongoing basis. This review includes:

•

the planned level of gearing, which takes into account the Investment Manager’s view of the market;

•

the buy back of shares for cancellations or treasury, which takes account of the difference between the

NAV per share and the share price (i.e the level of share price discount or premium);

•

new issues of equity shares; and

•

the extent to which revenue in excess of that which is required to be distributed should be retained.

The Company’s objectives, policies and processes for managing capital have remained unchanged since its

launch.

17. Reserves

Ordinary Shares to 30 April 2022

Capital

redemption

reserve

£000

premium

account*

£000

Special

reserve*

£000

Capital

reserve

realised*

£000

Capital

reserve

unrealised

£000

Revenue

reserve*

£000

Opening balance 61 – 64,283 23,562 28,499 84

Shares issued – 688 – – – –

Cost of share issues – (16) – – – –

Redemption of Ordinary Shares – – (2,736) – – –

Cost of redemption (1)

Cancellation of shares 3 – – – – –

Net gain on realisation of investments and derivatives – – – 12,268 – –

Unrealised gains realised in the year – – – – (26,819) –

Exchange gains/(losses) on foreign bank accounts – – – (1) – –

Management fee charged to capital – – – (669) – –

Finance costs charged to capital – – – (39) – –

Capital expenses – – – – – –

Capital dividends received – – – – – –

Equity dividends paid – – – – – (11)

Revenue return on ordinary activities after tax – – – – – 159

Closing balance 64 672 61,546 35,121 1,680 232

* At 30 April 2022, the distributable reserves of the Company comprised of £96,899,000 (2021: £87,929,000).



Miton UK MicroCap Trust plc

Annual Report 2022

Ordinary Shares to 30 April 2021

Capital

redemption

reserve

£000

premium

account*

£000

Special

reserve*

£000

Capital

reserve

realised*

£000

Capital

reserve

unrealised

£000

Revenue

reserve*

£000

Opening balance 34 – 79,251 1,912 (10,722) 347

Redemption of Ordinary Shares – – (14,968) – – –

Cancellation of shares 27 – – – – –

Net gain on realisation of investments and derivatives – – – 22,965 – –

Unrealised gains realised in the year – – – – 39,221 –

Management fee charged to capital – – – (549) – –

Finance costs charged to capital – – – 435 – –

Capital expenses – – – (1,207) – –

Capital dividends received – – – 6 – –

Equity dividends paid – – – – – (138)

Revenue return on ordinary activities after tax – – – – – (125)

Closing balance 61 – 64,283 23,562 28,499 84

18. Analysis of Financial Assets and Liabilities

Investment Objective and Policy

The Company’s investment objective and policy are detailed on pages 81 and 82.

The Company’s ﬁnancial instruments can comprise:

•

Shares and debt securities held in accordance with the Company’s investment objective and policies;

•

Derivative instruments for efﬁcient portfolio management, gearing and investment purposes; and

•

Cash, liquid resources and short-term debtors and creditors that arise from its operations.

The risks identiﬁed arising from the Company’s ﬁnancial instruments are market risk (which comprises

market price risk, interest rate risk and foreign currency exposure risk), liquidity risk and credit and

counterparty risk. The Company may enter into derivative contracts to manage risk. The Board reviews and

agrees policies for managing each of these risks, which are summarised below.

These policies have remained unchanged since the beginning of the accounting period.

Notes to the Financial Statements continued

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

Market Risk

Market risk arises mainly from uncertainty about future prices of ﬁnancial instruments used in the

Company’s business. It represents the potential loss the Company might suffer through holding market

positions by way of price movements, interest rate movements and exchange rate movements. The

Investment Manager assesses the exposure to market risk when making each investment decision and

these risks are monitored by the Investment Manager on a regular basis and the Board at quarterly

meetings with the Investment Manager.

Market price risk

Market price risk (i.e. changes in market prices other than those arising from currency risk or interest rate

risk) may affect the value of investments.

The Board manages the risks inherent in the investment portfolio by ensuring full and timely reporting of

relevant information from the Investment Manager. Investment performance and exposure are reviewed at

each Board meeting.

The Company’s exposure to changes in market prices as at 30 April 2022 on its equity and listed Put index

option investments held at fair value through proﬁt or loss was £95,624,000 (2021: £108,506,000).

The Company has experienced volatility in the fair value of investments during recent years due to COVID-19

and Brexit. The Company has used 20% to demonstrate the impact of a signiﬁcant reduction/increase in the

fair value of the investments and the impact upon the Company that might arise from future signiﬁcant

events.

A fall of 20% in fair value would reduce net assets by £19,125,000 at 30 April 2022. An equal change in the

opposite direction would have decreased the net assets and net proﬁt available to shareholders by an equal

and opposite amount. The analysis is based on closing balances only and is not representative of the year as

a whole.

Interest rate risk

Interest rate movements may affect the level of income receivable on cash deposits. The Company’s

ﬁnancial assets and liabilities, excluding short-term debtors and creditors, may include investment in

ﬁxed interest securities, such as UK corporate debt stock, whose fair value may be affected by movements

in interest rates. The majority of the Company’s ﬁnancial assets and liabilities, however, are non-interest

bearing. As a result, the Company’s ﬁnancial assets and liabilities are not subject to signiﬁcant amounts of

risk due to ﬂuctuations in the prevailing levels of market interest rates. There was no exposure to interest

bearing liabilities during the year ended 30 April 2022 (2021: nil).

The Company has a £5m revolving loan facility with The Royal Bank of Scotland plc at an interest rate of

1.35% above SONIA on any drawn down balance and 0.65% on any undrawn balance where less than 25%

of the facility is drawn down or 0.55% on any undrawn balance where more than 25% of the facility is drawn

down. During the year the facility has not been drawn down.

The possible effects on the fair value and cash ﬂows that could arise as a result of changes in interest rates

are taken into account when making investment decisions. The Board imposes borrowing limits to ensure

gearing levels are appropriate to market conditions.



Miton UK MicroCap Trust plc

Annual Report 2022

The interest rate proﬁle of the Company (excluding short-term debtors and creditors) was as follows:

30 April 2022

Floating

rate

£000

30 April 2021

Floating

rate

£000

Assets and liabilities:

Cash and cash equivalents 3,794 6,272

3,794 6,272

If the above level of cash was maintained for a year, a 1% interest rates would increase the revenue return and

net assets by £38,000 (2021: £63,000). If there was a fall by 1% in interest rates would potentially impact the

Company by a revenue reduction of £38,000 (2021: £63,000).

Foreign currency risk

Although the Company’s performance is measured in Sterling, a proportion of the Company’s assets

may be either denominated in other currencies or in investments with currency exposure. Any income

denominated in a foreign currency is converted into Sterling upon receipt. At the Balance Sheet date, all the

Company’s assets were denominated in Sterling and accordingly the only currency exposure the Company

has is through the trading activities of its investee companies.

Liquidity Risk

Liquidity risk is not signiﬁcant as the Company is a closed-ended investment trust and the majority of the

Company’s assets are investments in quoted equities and other quoted securities that are readily realisable.

The Company’s liquidity risk is managed on a daily basis by the Investment Manager in accordance with

established policies and procedures in place. The Investment Manager reviews daily forward-looking cash

reports which project cash obligations. These reports allow it to manage its obligations. A maturity analysis is

not presented as the Investment Manager does not consider this to be a material risk.

Credit and Counterparty Risk

Credit risk is the risk of ﬁnancial loss to the Company if the contractual party to a ﬁnancial instrument fails to

meet its contractual obligations.

The maximum exposure to credit risk as at 30 April 2022 was £4,828,000 (2021: £9,068,000). The calculation is

based on the Company’s credit risk exposure as at 30 April 2022 and this may not be representative for the

whole year.

The Company’s quoted investments are held on its behalf by The Bank of New York Mellon (“BNYM”), acting

as the Company’s custodian. Bankruptcy or insolvency of the custodian may cause the Company’s rights

with respect to securities held by the custodian to be delayed. The Board monitors the Company’s risk by

reviewing the custodian’s internal controls report.

Where the Investment Manager makes an investment in a bond, corporate or otherwise, the credit rating of

the issuer is taken into account so as to minimise the risk to the Company of default.

The Company’s cash balances are held on its behalf by BNYM. The Board monitor the credit worthiness of

BNYM, currently rated at Aa1 (Moody’s). The exposure of cash held at BNYM as at 30 April 2022 £3,794,000

(2021: £6,272,000). The cash balances will ﬂuctuate throughout the year and the Board will monitor

theexposure.

Notes to the Financial Statements continued

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

Investment transactions are carried out with a number of brokers whose creditworthiness is reviewed by the

Investment Manager. Transactions are ordinarily undertaken on a delivery versus payment basis whereby

the Company’s custodian bank ensures that the counterparty to any transaction entered into by the

Company has delivered on its obligations before any transfer of cash or securities away from the Company

is completed.

Cash is only held at banks that have been identiﬁed by the Board as reputable and of high credit quality.

None of the Company’s assets are past due or impaired.

19. Related Parties

The Directors who served in the year were entitled to the following emoluments in the form of fees:

Directors Fees

Directors’

fees per

annum

£000

Directors’

fees paid

for the

year

£000

Outstanding

as at

30 April

2022

£000

Directors’

fees per

annum

£000

Directors’

fees paid

for the

year

£000

Outstanding

as at

30 April

2021

£000

Peter Dicks 31 31 – 31 31 –

Jan Etherden 26 26 – 26 26 –

Bridget Guerin 26 7 – 11 11 11

Andrew Pomfret 37 25 – 36 36 –

Davina Walter 26 19 – – – –

Ashe Windham 37 30 – 26 26 –

Details of the Management fee payable to Premier Portfolio Managers Limited pursuant to the Investment

Management Agreement are set out in the Strategic Report on page 30. Amounts paid and payable are set

out in Note 6.

20. Post Balance Sheet Events

The total number of Ordinary Shares in respect of which valid redemption requests were received for the

30 June 2022 Redemption Point was 14,614,999 shares (representing 13.3771% of the issued share capital

(the “Redemption”). The Board resolved to effect the Redemption using the redemption pool method set

out in the Company’s Articles, pursuant to which the Company notionally divided its assets and liabilities

into two pools, the Redemption Pool and the Continuing Pool, with the returns attributable to the respective

Redemption and Continuing shareholders. Both shareholders have the same rights apart from the

attribution of returns determined by the Redemption Pool and Continuing Pools.

The assets attributable to the Redemption Pool consist of £11,266,000 representing 77.09p per share at the

Redemption Point. The amounts to be returned to Redemption shareholders will be determined by the

Redemption Pool.

Further announcements will be made to shareholders in due course.



Miton UK MicroCap Trust plc

Annual Report 2022

Redemption of Ordinary Shares

The Company has a voluntary redemption facility

through which shareholders are entitled to request

the redemption of all or part of their holding of

Ordinary Shares on an annual basis. For the year

ended 30 April 2022 the Redemption Point for

Ordinary Shares will be in accordance with the

timetable below.

Shareholders submitting valid requests for the

redemption of Ordinary Shares will have their shares

redeemed at the Redemption Price. The Directors

may elect, at their absolute discretion, to calculate

the Redemption Price applying on any redemption

point by reference to the Dealing Value per Ordinary

Share or by reference to a separate Redemption

Pool*.

The Board may, at its absolute discretion, elect not

to operate the annual redemption facility on any

given Redemption Point, or to decline in whole or

part any redemption request, although the Board

does not generally expect to exercise this discretion,

save in the interests of shareholders as a whole.

A redemption of Ordinary Shares may be subject

to either income tax and/or capital gains tax. In

particular, private shareholders that sell their shares

via the redemption mechanism could ﬁnd they

are subject to income tax on the gains made on

the redeemed shares rather than the more usual

capital gains tax on the sale of their shares in the

market. However, individual circumstances do

vary, so shareholders who are in any doubt about

the redemption or the action that should be taken

should consult their stockbroker, accountant, tax

adviser or other independent ﬁnancial adviser.

The relevant dates for the June 2022 Redemption

Point are:

31 May 2022 Latest date for receipt of

redemption requests and

certiﬁcates for certiﬁcated shares

3.00pm on

31 May 2022

Latest date and time for receipt

of redemption requests and

settled TFE (Transfer to Escrow)

instructions for uncertiﬁcated

shares via CREST

5.00pm on

30 June 2022

Redemption Point

By 14 July 2022 Company to notify Redemption

Price and dispatch redemption

monies; or

The redemption will be funded

by way of a Redemption Pool

and the Company will notify the

Redemption Price and dispatch

of redemption monies as soon as

practicable.

Full details of the redemption facility are set out

in the Company’s Articles of Association or are

available from the Secretary.

The Board intends that the 2023 Redemption

Point will be moved from 30 June 2023 to

29 September 2023 to avoid the summer period.

The Board considers this to be in the best interests

of all shareholders.

* the pool of cash, assets and liabilities to be created by the Directors in

respect of a particular redemption point and allocated to the Ordinary

Shares which are the subject of redemption requests for that redemption

point. The assets of the Redemption Pool will be liquidated and the

Redemption Price per Ordinary Share will equal the aggregate cash

received by the Company upon the realisation of the Redemption Pool, after

deducting the costs of the redemption, which will be borne by the relevant

pool, an adjustment for any attributable unsettled liabilities and a pro-rata

share of the costs and expenses of the Company not attributable to a

particular pool, divided by the number of Redemption Shares, as set out in

the Articles.

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

Shareholder Information

Miton UK MicroCap Trust plc was incorporated

on 26 March 2015 and its Ordinary Shares were

admitted to the premium segment of the Ofﬁcial

List and to trading on the London Stock Exchange’s

main market for listed securities on 30 April 2015.

Capital Structure

At the year end, the Company’s share capital consisted

of Ordinary Shares of £0.001 each (“Ordinary Shares”)

and non-voting management shares of £1 each

(“Management shares”). From time to time, the

Company may issue C shares of £0.01 each (“C shares”).

The Company’s shares have the following rights:

Voting: Ordinary Shares and C shares have equal

voting rights. At shareholder meetings, members

present in person or by proxy have one vote on a

show of hands and on a poll have one vote for each

share held.

Management shares are non-voting unless no other

shares are in issue at that time.

Dividends: the assets of the Ordinary Shares and

C shares are separate and each class is entitled to

dividends declared on their respective asset pool.

The management shares are entitled to receive, in

priority to the holders of any other class of shares, a

ﬁxed cumulative dividend equal to 0.01% per annum

on the nominal value.

Capital: if there are any C shares in issue, the

surplus capital and assets of the Company shall on

a winding-up or on a return of capital, be applied

amongst the existing Ordinary Shareholders and

the Management shareholders pro rata according

to the nominal capital paid up on their holdings,

having ﬁrst deducted therefrom an amount

equivalent to the assets and liabilities relating

to the C shares, which amount shall be applied

amongst the C shareholders pro rata according to

the nominal capital paid up on their holdings of C

shares.

When there are no C shares in issue, any surplus

shall be divided amongst the Ordinary Shareholders

and Management shareholders pro rata according

to the nominal capital paid up on their holdings of

Ordinary Shares and Management shares.

In each instance, the holders of the Management

shares shall only receive an amount up to the

capital paid up on such Management shares and

the Management shares shall not confer the right

to participate in any surplus remaining following

payment of such amount.

As at the date of this Report, there are 94,638,561

Ordinary Shares in issue, none of which are held in

treasury, and 50,000 Management shares.

The Company has a redemption facility through

which shareholders are entitled to request the

redemption of all or part of their holding of Ordinary

Shares on an annual basis. The Board may, at its

absolute discretion, elect not to operate the annual

redemption facility in whole or in part, although

it has indicated that it is minded to approve

allrequests.

Details of the redemption facility are set out on

page 80.

Investment Objective

The investment objective of the Company is to

provide shareholders with capital growth over the

long-term.

Investment Policy

The Company invests primarily in the

smallest companies, measured by their market

capitalisation, quoted or traded on an exchange in

the United Kingdom at the time of investment. It is

likely that the majority of the microcap companies

held in the Company’s portfolio will be quoted on

AIM and will typically have a market capitalisation

of less than £150 million at the time of investment.

The Company may also invest in debt, warrants or

convertible instruments issued by such companies

and may invest in, or underwrite, future equity

issues by such companies.



Miton UK MicroCap Trust plc

Annual Report 2022

The Company may utilise derivative instruments

including index-linked notes, contracts for

differences, covered options and other equity

related derivative instruments for efﬁcient portfolio

management, gearing and investment purposes.

Any use of derivatives for investment purposes

will be made on the basis of the same principles

of risk spreading and diversiﬁcation that apply to

the Company’s direct investments, as described

below. The Company will not enter into uncovered

shortpositions.

If companies in the portfolio achieve organic

growth or grow through corporate activity such

as acquisitions, and consequently have a market

capitalisation that would place them outside the

investable universe, the Investment Manager

will not be obliged to sell those holdings, but the

proportion of the portfolio in such companies will be

carefully monitored by the Investment Manager and

the Board so that the overall investment policy to

invest in the smallest quoted or traded companies is

not materially altered.

The Company’s portfolio is expected to be diversiﬁed

by industry and market of activity. No single holding

will represent more than 15% of Gross Assets at

the time of investment and, when fully invested,

the portfolio is expected to have over 120 holding

although there is no guarantee that will be the case

and it may contain a lesser number of holdings at

any time.

The Company will have the ﬂexibility to invest up

to 10% of its Gross Assets at the time of investment

in unquoted or untraded companies, or in any one

unquoted or untraded company.

The Company will invest no more than 10% of

Gross Assets at the time of investment in other

investment funds.

Borrowing

The Company may deploy borrowing to enhance

long-term capital growth. Gearing will be deployed

ﬂexibly up to 15% of the Net Asset Value, at the time

of borrowing. In the event this limit is breached

as a result of market movements, and the Board

considers that borrowing should be reduced, the

Investment Manager shall be permitted to realise

investments in an orderly manner so as not to

prejudice shareholders.

No material change will be made to the investment

policy without the approval of shareholders by

ordinary resolution.

Share Dealing

Shares can be traded through a stockbroker or

share trading platform.

Share Prices

The Company’s shares are listed on the London

Stock Exchange.

Share Register Enquiries

The register for the Ordinary Shares is maintained

by Link Group. In the event of queries regarding

your holding, please contact the Registrar on

0371 664 0300. Calls are charged at the standard

geographic rate and will vary by provider. Calls

outside the United Kingdom will be charged at

the applicable international rate. Email Link at

enquiries@linkgroup.co.uk. Changes of name and/or

address must be notiﬁed in writing to the Registrar:

Link Group, 10

Floor, Central Square,

29 Wellington Street, Leeds LS1 4D

Current Share Capital and Net Asset Value

Information

Ordinary £0.001 shares: 94,638,561

SEDOL Number: BWFGQ08

ISIN Number: GB00BWFGQ085

The Company releases its net asset value per share

to the London Stock Exchange daily.

Shareholder Information continued

Annual Report 2022

Miton UK MicroCap Trust plc



The

Company

Strategic

Report Governance

Company

Accounts

Shareholder

Information

Annual and Half-Yearly Reports

Copies of the Annual and Half-Yearly Reports are

available from the Secretary on telephone number

01392 477 500 and are available on the Company’s

website, www.mitonukmicrocaptrust.com

Investment Manager: Premier Portfolio

ManagersLimited

The Company’s Investment Manager is Premier

Portfolio Managers Limited, a wholly-owned

subsidiary of Premier Miton Group plc (“Premier

Miton”). Premier Miton is quoted on the AIM market

for smaller and growing companies.

As at 30 June 2022, Premier Miton had total funds

under management of approximately £11.3 billion.

Members of the fund management team

invest in their own funds and are signiﬁcant

shareholders in Premier Miton. Investor

updates in the form of monthly factsheets

are available from the Company’s website,

www.premiermiton.com/corporate/.

Association of Investment Companies

The Company is a member of the Association of

Investment Companies.

Financial Calendar

19 July 2022 Announcement of 2022

annual results

27 September 2022 Annual General Meeting

31 October 2022 Half-year end

December 2022 Announcement of 2022

half-yearly results

30 April 2023 Year end

Retail Investors advised by IFAs

The Company currently conducts its affairs so

that the shares issued by the Company can be

recommended by IFAs to ordinary retail investors in

accordance with the Financial Conduct Authority

(“FCA”) rules in relation to non-mainstream

investment products and intends to continue to

do so for the foreseeable future. The shares are

excluded from the FCA’s restrictions which apply to

non-mainstream investment products because they

are shares in an investment trust.



Miton UK MicroCap Trust plc

Annual Report 2022

Alternative Investment Fund Managers’ Directive Disclosures

Alternative Investment Fund Managers’ Directive

Disclosures

The provisions of the Alternative Investment Fund

Managers Directive (‘AIFMD’) took effect on 22 July

2014. That legislation requires the AIFM to establish

and maintain remuneration policies for its staff

which are consistent with and promote sound and

effective risk management.

Pre-Investment Disclosures

The AIFM is required to make certain disclosures

available to investors in accordance with the

AIFMD. Those disclosures that are required

to be made pre-investment can be found at

www.mitonukmicrocaptrust.com/documents.

AIFMD Leverage Limits

The maximum level of leverage which the

Investment Manager may employ on behalf of the

Company and the levels as at 30 April 2022 are set

out below. A ﬁgure of 100% means that the exposure

is equal to the net asset value and the AIF has no

leverage.

Leverage exposure

Maximum

gross leverage

Maximum

commitment

Maximum level 200% 200%

Actual level 100% 100%

Remuneration Disclosure

Premier Portfolio Managers Limited (the ‘AIFM’) is

part of a larger group of companies within which

remuneration policies are the responsibility of a

Remuneration Committee comprised entirely

of non-executive directors. That committee has

established a remuneration policy which sets out

a framework for determining the level of ﬁxed and

variable remuneration of staff, including maintaining

an appropriate balance between the two.

Arrangements for variable remuneration within the

group are calculated primarily by reference to the

performance of each individual and the proﬁtability

of the relevant business unit. The policies are

designed to reward long-term performance and long

term proﬁtability.

Within the group, all staff are employed by the

parent company with none employed directly by

the AIFM. The costs of a number of individuals are

allocated between the entities within the group

based on the expected amount of time devoted

to each.

The total remuneration of those individuals who are

fully or partly involved in the activities of the AIFM in

relation to Alternative Investment Funds, including

the Company (‘AIFs’), including those whose time is

allocated between group entities, for the ﬁnancial

year ending 30 September 2021, is analysed below:

Fixed Remuneration £3,831,752

Variable Remuneration £2,270,527

Total £6,102,279

Weighted FTE Headcount 50

The table below provides an alternative analysis of

the remuneration data.

Aggregate remuneration of:

Signiﬁcant Inﬂuence Functions £1,766,180

Senior Management Functions £83,439

Other staff £4,252,660

Total £6,102,279

The staff members included in the above analysis

support all the funds managed by the AIFM. It is

not considered feasible or useful to attempt to

apportion these ﬁgures to individual AIFs.

The AIFM’s management have reviewed the general

principles of the remuneration policy and its

application in the last year which has resulted in no

material changes to the policy.

Annual Report 2022

Miton UK MicroCap Trust plc

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Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the seventh ANNUAL GENERAL MEETING of Miton UK MicroCap Trust plc

(the “Company”) will be held on 27 September 2022 at 11.00 am at the ofﬁces of Stephenson Harwood LLP,

1 Finsbury Circus, London EC2M 7SH to consider and vote on the Resolutions below.

Resolutions 1 to 11 (inclusive) will be proposed as Ordinary Resolutions and Resolutions 12 to 14 (inclusive) will

be proposed as Special Resolutions.

Ordinary Resolutions

1. To receive and adopt the Strategic Report, Reports of the Directors and Auditor and the audited ﬁnancial

statements for the year ended 30 April 2022.

2. To receive and approve the Directors’ Remuneration Report for the year ended 30 April 2022.

3. To approve the Directors’ Remuneration Policy.

4. To re-elect Peter Dicks as a Director of the Company.

5. To re-elect Jan Etherden as a Director of the Company.

6. To re-elect Davina Walter as a Director of the Company.

7. To re-elect Ashe Windham as a Director of the Company.

8. To re-appoint BDO LLP as Auditor of the Company to hold ofﬁce from the conclusion of the meeting

until the conclusion of the next meeting at which ﬁnancial statements are laid before the Company.

9. To authorise the Audit and Management Engagement Committee to determine the remuneration of

the Auditor of the Company.

10. To declare a ﬁnal dividend of 0.15 pence per Ordinary Share for the year ended 30 April 2022.

11. THAT: The Directors be and are hereby generally and unconditionally authorised in accordance with

Section 551 of the Companies Act 2006 (“the Act”) to exercise all the powers of the Company to allot

Ordinary Shares in the capital of the Company up to an aggregate nominal value of £9,464 (being

approximately 10% of the issued Ordinary Share capital of the Company at the date of this Notice), such

authority to expire at the conclusion of the Annual General Meeting of the Company to be held in 2023

(unless previously renewed, varied or revoked by the Company in general meeting) (the “Section 551

period”), but so that the Company may, at any time prior to the expiry of the Section 551 period, make

offers or agreements which would or might require the allotment of shares in pursuance of such offers

or agreements as if the authority had not expired.



Miton UK MicroCap Trust plc

Annual Report 2022

Notice of Annual General Meeting continued

Special Resolutions

12. THAT: Subject to the passing of Resolution 11, the Directors be and they are hereby empowered, in

accordance with Sections 570 and 573 of the Act, to allot Ordinary Shares and to sell Ordinary Shares

from treasury for cash pursuant to the authority referred to in Resolution 11 as if Section 561(1) of the

Act did not apply to any such allotment or sale, such power to expire at the conclusion of the Annual

General Meeting of the Company to be held in 2023 (unless previously renewed, varied or revoked by the

Company in general meeting) save that the Company may, at any time prior to the expiry of such power,

make an offer or enter into an agreement which would or might require Ordinary Shares to be allotted

or sold from treasury equity securities in pursuance of such an offer or agreement as if such power had

not expired.

13. THAT: The Company is hereby generally and unconditionally authorised in accordance with Section

701 of the Act to make market purchases (within the meaning of Section 693(4) of the Act) of Ordinary

Shares of £0.001 each in the capital of the Company (“Ordinary Shares”) provided that:

(i) the maximum number of Ordinary Shares hereby authorised to be purchased is 14,186,320

(representing 14.99% of the Ordinary Shares in issue at the date of this Notice);

(ii) the minimum price which may be paid for each Ordinary Share is £0.001;

(iii) the maximum price which may be paid for each Ordinary Share shall not be more than the

higher of: (i) an amount equal to 105% of the average of the middle market quotations of Ordinary

Shares taken from the Daily Ofﬁcial List of the London Stock Exchange for the ﬁve business days

immediately preceding the day on which the contract of purchase is made; and (ii) the higher

of the price of the last independent trade in the Ordinary Shares and the highest then current

independent bid for the Ordinary Shares on the London Stock Exchange;

(iv) this authority will (unless previously renewed, varied or revoked by the Company in general

meeting) expire at the conclusion of the Annual General Meeting of the Company to be held in

2023;

(v) the Company may make a contract of purchase for Ordinary Shares under this authority before

this authority expires which will or may be executed wholly or partly after its expiration; and

(vi) any Ordinary Shares bought back under the authority hereby granted may, at the discretion of

the Directors, be cancelled or held in treasury and if held in treasury may be resold from treasury

or cancelled at the discretion of the Directors.

14. THAT: A general meeting other than an annual general meeting may be called on not less than 14 clear

days’ notice.

By order of the Board

Link Company Matters Limited

Registered Ofﬁce: Beaufort House, 51 New North Road, Exeter EX4 4EP

18 July 2022

Annual Report 2022

Miton UK MicroCap Trust plc

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Administrative Notes in Connection with the Annual General Meeting

1. Attending the Annual General Meeting in person

If you wish to attend the Annual General Meeting in person, you should arrive at the venue for the Annual

General Meeting in good time to allow your attendance to be registered. It is advisable to have some form of

identiﬁcation with you as you may be asked to provide evidence of your identity to the Company’s registrar,

Link Group (the “Registrar”), prior to being admitted to the Annual General Meeting.

2. Appointment of proxies

Members are entitled to appoint one or more proxies to exercise all or any of their rights to attend, speak

and vote at the Annual General Meeting. A proxy need not be a member of the Company but must attend

the Annual General Meeting to represent a member. To be validly appointed, a proxy must be appointed

using the procedures set out in these notes. If members wish their proxy to speak on their behalf at the

meeting, members will need to appoint their own choice of proxy (not the Chairman of the Annual General

Meeting) and give their instructions directly to them.

Members can only appoint more than one proxy where each proxy is appointed to exercise rights

attached to different shares. Members cannot appoint more than one proxy to exercise the rights

attached to the same share(s). If a member wishes to appoint more than one proxy, they should log on to

www.signalshares.com or contact the Registrar by telephone on 0371 664 0300. Calls are charged at the

standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the

applicable international rate. We are open between 09:00 – 17:30, Monday to Friday excluding public holidays

in England and Wales.

A member may instruct their proxy to abstain from voting on any resolution to be considered at the Annual

General Meeting by marking the ‘Vote Withheld’ option when appointing their proxy. It should be noted that

a vote withheld is not a vote in law and will not be counted in the calculation of the proportion of votes ‘For’

or ‘Against’ the resolution.

The appointment of a proxy will not prevent a member from attending the Annual General Meeting and

voting in person if they wish. A member present in person or by proxy shall have one vote on a show of

hands and on a poll every member present in person or by proxy shall have one vote for every share of which

he/she is the holder.

A person who is not a member of the Company but who has been nominated by a member to enjoy

information rights does not have a right to appoint any proxies under the procedures set out in these notes

and should read note 9 below.

3. Appointment of a proxy online

Members can appoint a proxy online at: www.signalshares.com. In order to appoint a proxy using this

website, members will need their Investor Code, which they can ﬁnd on their share certiﬁcate. If you

need help with voting online, please contact our Registrar, Link Group, on 0371 664 0391, or email Link at

enquiries@linkgroup.co.uk. Calls are charged at the standard geographic rate and will vary by provider. Calls

outside the United Kingdom will be charged at the applicable international rate. We are open between

09:00 – 17:30, Monday to Friday excluding public holidays in England and Wales. Members must appoint

a proxy using the website no later than 48 hours before the time of the Annual General Meeting or any

adjournment of that meeting.



Miton UK MicroCap Trust plc

Annual Report 2022

Notice of Annual General Meeting continued

4. Appointment of a proxy using a Form of Proxy

You may request a hard copy form of proxy directly from the Registrar by telephone on 0371 664 0300. To be

valid, a Form of Proxy or other instrument appointing a proxy, together with any power of attorney or other

authority under which it is signed or a certiﬁed copy thereof, must be received by post or (during normal

business hours only) by hand by the Registrar at Link Group, 10

Floor, Central Square, 29 Wellington Street,

Leeds, LS1 4DL no later than 48 hours before the time of the Annual General Meeting or any adjournment of

that meeting.

5. Appointment of a proxy through CREST

CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment

service may do so by using the procedures described in the CREST Manual and by logging on to the following

website: www.euroclear.com/CREST. 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 or instruction made using the CREST service 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 instruction, as

described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a

proxy or is 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 Registrar Link Group (ID RA10) no later than 48 hours before

the time of the Annual General Meeting or any adjournment of that meeting. For this purpose, the time

of receipt will be taken to be the time (as determined by the timestamp applied to the message by the

CREST Application Host) from which the Registrar 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 appointed through

CREST should be communicated to the appointee through other means.

CREST members and, where applicable, their CREST sponsors or voting service provider(s) should note

that Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular

message. 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 their 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 system providers are referred, in particular, to those

sections of the CREST Manual concerning practical limitations of the CREST system and timings.

The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)

(a) of the Uncertiﬁcated Securities Regulations 2001 (as amended).

6. Appointment of proxy by joint holders

In the case of joint holders, where more than one of the joint holders purports to appoint one or more

proxies, only the purported appointment submitted by the most senior holder will be accepted. Seniority

shall be determined by the order in which the names of the joint holders stand in the Company’s register of

members in respect of the joint holding.

Annual Report 2022

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7. Corporate representatives

Any corporation which is a member can appoint one or more corporate representatives. Members can

only appoint more than one corporate representative where each corporate representative is appointed

to exercise rights attached to different shares. Members cannot appoint more than one corporate

representative to exercise the rights attached to the same share(s).

8. Entitlement to attend and vote

To be entitled to attend and vote at the Annual General Meeting (and for the purpose of determining

the votes they may cast), members must be registered in the Company’s register of members at close of

business on 23 September 2022 (or, if the Annual General Meeting is adjourned, at close of business on

the day two days prior to the adjourned meeting). Changes to the register of members after the relevant

deadline will be disregarded in determining the rights of any person to attend and vote at the Annual

General Meeting.

9. Nominated persons

Any person to whom this notice is sent who is a person nominated under section 146 of the Companies

Act 2006 (the “Act”) to enjoy information rights (a “Nominated Person”) may, under an agreement between

them and the member by whom they were nominated, have a right to be appointed (or to have someone

else appointed) as a proxy for the Annual General Meeting. If a Nominated Person has no such proxy

appointment right or does not wish to exercise it, they may, under any such agreement, have a right to give

instructions to the member as to the exercise of voting rights.

10. Website giving information regarding the Annual General Meeting

Information regarding the Annual General Meeting, including information required by section 311A of

the Act, and a copy of this Notice of Annual General Meeting is available from the Company’s website at

www.mitonukmicrocaptrust.com/

11. Audit concerns

Members should note that it is possible that, pursuant to requests made by members of the Company

under section 527 of the Act, the Company may be required to publish on a website a statement setting

out any matter relating to: (a) the audit of the Company’s accounts (including the auditors’ report and

the conduct of the audit) that are to be laid before the Annual General Meeting; or (b) any circumstance

connected with the auditors of the Company ceasing to hold ofﬁce since the previous meeting at which

annual accounts and reports were laid in accordance with section 437 of the Act. The Company may not

require the members requesting any such website publication to pay its expenses in complying with

sections 527 or 528 of the Act. Where the Company is required to place a statement on a website under

section 527 of the Act, it must forward the statement to the Company’s auditors not later than the time

when it makes the statement available on the website. The business which may be dealt with at the Annual

General Meeting includes any statement that the Company has been required under section 527 of the Act

to publish on a website.

12. Voting rights

As at 18 July 2022 (being the latest practicable date prior to the publication of this Notice) the Company’s

issued share capital consisted of 94,638,561 Ordinary Shares, carrying one vote each, and 50,000

management shares of £1 each. The total number of voting rights in the Company is 94,638,561.



Miton UK MicroCap Trust plc

Annual Report 2022

Notice of Annual General Meeting continued

13. Notiﬁcation of shareholdings

Any person holding 3% or more of the total voting rights of the Company who appoints a person other than

the Chairman of the Annual General Meeting as their proxy will need to ensure that both they, and their

proxy, comply with their respective disclosure obligations under the Disclosure Guidance and Transparency

Rules.

14. Members’ right to require circulation of resolution

To be proposed at the Annual General Meeting Members meeting the threshold requirements set out in the

Act have the right to: (a) require the Company to give notice of any resolution which can properly be, and is

to be, moved at the Annual General Meeting pursuant to section 338 of the Act; and/or (b) include a matter

in the business to be dealt with at the Annual General Meeting, pursuant to section 338A of the Act.

15. Further questions and communication

Under section 319A of the Act, the Company must cause to be answered any question relating to the

business being dealt with at the Annual General Meeting put by a member attending the meeting

unless answering the question would interfere unduly with the preparation for the meeting or involve the

disclosure of conﬁdential information, or the answer has already been given on a website in the form of an

answer to a question, or it is undesirable in the interests of the Company or the good order of the meeting

that the question be answered.

Members may not use any electronic address or fax number provided in this Notice or in any related

documents to communicate with the Company for any purpose other than those expressly stated.

16. Documents available for inspection

Copies of the Letters of Appointment of the Non-Executive Directors of the Company will be available

for inspection at the registered ofﬁce of the Company during normal business hours on any weekday

(Saturdays, Sundays and English public holidays excepted) from the date of this Notice until the conclusion

of the Annual General Meeting and on the date of the Annual General Meeting at the location of the

meeting from 10:45am until the conclusion of the Annual General Meeting.

Annual Report 2022

Miton UK MicroCap Trust plc

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Alternative Investment Market (“AIM”)

MINI’s shares are traded on the London Stock

Exchange, although most the stocks held in

the Company’s portfolio are quoted on the AIM

exchange. AIM is owned by the London Stock

Exchange and was principally set up to meet the

funding needs of smaller, growing companies.

Alternative Performance Measure (“APM”)

An APM is a numerical measure of the Company’s

current, historical or future ﬁnancial performance,

ﬁnancial position or cash ﬂows, other than a

ﬁnancial measure deﬁned or speciﬁed in the

applicable ﬁnancial framework.

Annual General Meeting (“AGM”)

All public companies have an AGM every year,

and this is the opportunity for the shareholders

to conﬁrm their approval of the annual accounts,

the annual dividend and the appointment of the

Directors and Auditors. It is also a good time for

shareholders to meet the non-executive directors.

The Company’s AGM is on 27 September 2022. The

Notice of Meeting can be found on page 85.

Discount/Premium

If the share price of an investment trust is lower than

the NAV per share, the shares are said to be trading

at a discount. The size of the discount is calculated

by subtracting the share price from the NAV per

share and is usually expressed as a percentage

of the NAV per share. If the share price is higher

than the NAV per share, this situation is called

apremium.

Discount Calculation Page

30 April

2022

30 April

2021

Closing NAV per share (p) 6 91.05 104.83 (a)

Closing share price (p) 6 86.50 104.50 (b)

Discount (c=((a-b)/a)) 5.00% 0.31% (c)

Dividend Yield

The annual dividend expressed as a percentage of

the mid-market share price.

Financial Conduct Authority (“FCA”)

This regulator oversees the fund management

industry, including the operation of the Company.

Financial Reporting Council (“FRC”)

The FRC regulates UK auditors and provides

guidance to accountants with the aim of promoting

better transparency and integrity in the annual

reports of quoted businesses.

FTSE 100 Put Option

A FTSE 100 Put Option is a type of derivative

contract in which the underlying value is based on

the level of the FTSE 100 index.

Gearing

Gearing refers to the ratio of the Company’s debt to

its equity capital. The Company may borrow money

to invest in additional investments for its portfolio. If

the Company’s assets grow, the shareholders’ assets

grow proportionately because the debt remains the

same. If the value of the Company’s assets falls, the

situation is reversed. Gearing can therefore enhance

performance in rising markets but can adversely

impact performance in falling markets.

Growth Stock

A stock where the earnings are expected to grow

at an above-average rate, leading to a faster than

average growing share price. Growth stocks do not

usually pay a signiﬁcant dividend.

Key Performance Indicators (“KPIs”)

KPIs are a short list of corporate attributes that are

used to assess to general progress of the business

and are outlined in this Report on page 22.

Investment Association (“IA”)

The IA is the trade body that represents UK

investment managers. Premier Miton Group plc is

amember.

Glossary



Miton UK MicroCap Trust plc

Annual Report 2022

Link Company Matters Limited (“Link”)

Link is the Company Secretary for the Company.

Net Asset Value per Ordinary Share (“NAV”)

The NAV is shareholders’ funds expressed as an

amount per individual share. Shareholders’ funds

are the total value of all of the Company’s assets,

at their current market value, having deducted all

liabilities and prior charges at their par value, or at

their asset value as appropriate. The NAV per share

is calculated by dividing the shareholders’ funds by

the number of Ordinary Shares in issue excluding

treasury shares.

Ongoing Charges

As recommended by the AIC in its guidance,

ongoing charges are the Company’s annualised

revenue and capital expenses (excluding ﬁnance

costs and certain non-recurring items) expressed as

a percentage of the average monthly net assets of

the Company during the year.

Ongoing Charges

Calculation Page

30 April

2022

30 April

2021

Management fee 68 892 732

Other Administrative

expenses 69 587 635

Less non recurring fees – (23)

Total management fee

and other administrative

expenses (annualised) 1,479 1,344 (a)

Average net assets in the

year 104,901 84,258 (b)

Ongoing charges (c=a/b) 1.41% 1.60% (c)

Peer Group

The Company is part of the AIC’s UK Smaller

Companies sector whose members invest at least

80% of their assets in UK Smaller Companies.

As at 17 May 2022, the following were constituents of

this peer group:

•

Aberforth Smaller Companies Ord

•

Aberforth Split Level Income Ord

•

Aberforth Split Level Income ZDP 2024

•

abrdn Smaller Companies Inc Ord

•

abrdn UK Smaller Companies Growth Ord

•

Athelney Trust Ord

•

BlackRock Smaller Companies Ord

•

BlackRock Throgmorton Trust Ord

•

Chelverton Growth Trust Ord

•

Crystal Amber Ord

•

Downing Strategic Micro-Cap Inv. Ord

•

Henderson Smaller Companies Ord

•

Invesco Perpetual UK Smaller Ord

•

JPMorgan UK Smaller Companies Ord

•

Marwyn Value Investors 2016 Realisation

•

Marwyn Value Investors Ord

•

Miton UK Microcap Ord

•

Montanaro UK Smaller Companies Ord

•

Odyssean Investment Trust Ord

•

Oryx International Growth Ord

•

Rights & Issues Investment Trust Ord

•

River and Mercantile UK Micro Cap Ord

•

Rockwood Strategic Ord

•

Strategic Equity Capital Ord

•

SVM UK Emerging Ord

•

Worsley Investors Ord

Glossary continued

Annual Report 2022

Miton UK MicroCap Trust plc

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Redemption Pool

In the event that the Board elects to calculate the

Redemption Price through the use of a Redemption

Pool, the pool of cash, assets and liabilities to be

created by the Directors in respect of a particular

Redemption Point and allocated to the Ordinary

Shares which are the subject of Redemption

Requests for that Redemption Point.

Senior Independent Director (“SID”)

The SID is a non-executive director who can be

contacted by investors to discuss a matter of

governance when it concerns the Chairman and the

normal practice cannot be followed. The Company’s

SID is Peter Dicks.

SONIA (Interest Rate)

Sterling Overnight Index Average

Tap Issue

A tap issue is a procedure that allows the Company

to issue new shares at the current market value

when the share price is at a premium to NAV. The

Company is authorised to issue up to 10% of its

share capital without the need for an open offer.

This enables the Company to invest in attractive

investment opportunities and to issue new shares

on a ﬂexible and cost-effective basis.

Total Assets

Total assets include investments, cash, current

assets and all other assets. An asset is an economic

resource, being anything tangible or intangible that

can be owned or controlled to produce value and to

produce positive economic value. Assets represent

the value of ownership that can be converted

into cash. The total assets less all liabilities will be

equivalent to total shareholders’ funds.

Total Return – NAV and Share Price Returns

Total return statistics enable the investor to make

performance comparisons between investment

trusts with different dividend policies. The Total

Return measures the combined effect of any

dividends paid, together with the rise or fall in the

share price or NAV.

This is calculated by the movement in the share

price or NAV plus the dividends paid by the

Company assuming these are re-invested in the

Company at the prevailing NAV.

NAV Total Return Page

30 April

2022

30 April

2021

Closing NAV per share (p) 6 91.05 104.83

Add back ﬁnal dividend

for the year ended

30 April 2021 (2020) (p) 71 0.01 0.10

Adjusted closing NAV (p) 91.06 104.93 (a)

Opening NAV per share (p) 6 104.83 51.33 (b)

NAV total return

(c = ((a-b)/b)) (%) (13.1)% 104.4% (c)

Share Price Total Return Page

30 April

2022

30 April

2021

Closing share price (p) 6 86.50 104.50

Add back ﬁnal dividend

for the year ended

30 April 2021 (2020) (p) 71 0.01 0.10

Adjusted closing

share price (p) 86.51 104.60 (a)

Opening share price (p) 6 104.50 43.35 (b)

Share price total

return unadjusted

(c = (a(a-b)/b)) (%) (17.2)% 141.3% (c)

Share price total return

adjusted (%) (18.0)% 141.4%*

* Based on NAV/share price movements and dividends being reinvested at

the relevant cum dividend NAV/share price during the period. Where the

dividend is invested and the NAV/share price falls, this will further reduce the

return or, if it rises, any increase will be greater. The source is Morningstar

who have calculated the return on an industry comparative basis.

Yield Stock

Yield stocks pay above-average dividends to

shareholders. If the dividend grows, and the yield

on the share remains constant, the share price will

increase. Companies which grow their dividends

faster than average are capable of delivering faster

share price growth.



Miton UK MicroCap Trust plc

Annual Report 2022

Secretary and Registered Ofﬁce

Link Company Matters Limited

Beaufort House

51 New North Road

Exeter EX4 4EP

Telephone: 01392 477 500

Investment Manager and

Alternative Investment Fund Manager

Premier Portfolio Managers Limited

Eastgate Court

High Street

Guildford

Surrey GU1 3DE

Company website

www.mitonukmicrocaptrust.com/

Auditor

BDO LLP

55 Baker Street

London W1U 7EU

Company Administrator

Link Alternative Fund Administrators Limited

Beaufort House

51 New North Road

Exeter EX4 4EP

Depositary and Custodian

The Bank of New York Mellon (International) Limited

One Canada Square

London E14 5AL

Registrar and Transfer Ofﬁce

Link Group

Floor

Central Square

29 Wellington Street

Leeds LS1 4DL

Telephone: 0371 664 0300

( Calls are charged at the standard geographic

rate and will vary by provider. Calls outside the

United Kingdom will be charged at the applicable

international rate)

Email: enquiries@linkgroup.co.uk

Website: www.linkassetservices.com

Solicitor

Stephenson Harwood LLP

1 Finsbury Circus

London EC2M 7SH

Stockbroker

Peel Hunt LLP

100 Liverpool Street

London EC2M 2AT

Contact Details of Advisers

Shareholder warning

Many companies are aware that their shareholders have received unsolicited phone calls or

correspondence concerning investment matters. These calls typically come from fraudsters operating

in ‘boiler rooms’ offering investors shares that often turn out to be worthless or non-existent, or an

inﬂated price for shares they own. While high proﬁts are promised, those who buy or sell shares in

this way usually lose their money. These fraudsters can be very persistent and extremely persuasive.

Shareholders are therefore advised to be very wary of any unsolicited advice, offers to buy shares at a

discount or offers of free company reports.

It is very unlikely that either the Company or the Company’s Registrar would make unsolicited

telephone calls to shareholders and that any such calls would relate only to ofﬁcial documentation

already circulated to shareholders and never in respect of investment ‘advice’.

If you have been contacted by an unauthorised ﬁrm regarding your shares, you can report this using the

FCA helpline on 0800 111 6768 or by using the share fraud reporting form at www.fca.org.uk/consumers/scams.

Paternoster House

65 St Paul’s Churchyard

London EC4M 8AB

Eastgate Court

High St

Guildford GU1 3DE

Source Morningstar from 30/04/2015 to 30/04/2022.

Company performance since launch on 30 April 2015

MINI NAV

MINI Price TR

Numis SC

1000 Ex Invt

Cos TR

0.0

100.0

150.0

50.0

200.0

250.0

Percent

Apr 2015

Oct 2015

Apr 2016

Oct 2016

Apr 2017

Oct 2017

Apr 2018

Oct 2018

Apr 2019

Oct 2019

Apr 2020

Oct 2020

Apr 2021

Oct 2021

Apr 2022