Gabelli Merger Plus

Trust plc

Annual Report and Accounts

For the year ended 30 June 2022

ERGER

NVESTING

INCE

1977

“There are many advantages to investing in risk arbitrage. Let’s focus on three: risk arbitrage returns are

not closely correlated with those of the stock market; they are less volatile than returns on the S&P 500; and

longer term they are higher than those returns afforded by traditional investing. While these three factors

provide for excellent results in the world of arbitrage, the real beauty of risk arb investing is that there is

rarely a down year. Because risk arb returns are consistently positive year in and year out, they fulfill the

concept of a compound return. We proclaim this source of compounded earnings as the eighth wonder of the

world.

Compounding is the secret to wealth creation over a period of decades.”

Mario Gabelli

(Deals...Deals...and More Deals, 1999)

ENGLISH ITALIAN CHINESE JAPANESE

Deals...Deals...and More Deals - Now in four languages.

Originally published in 1999 by Gabelli University Press.

Strategic report Governance Financial statements

Gabelli Merger Plus

Trust Plc’s investment

objective:

The Company’s primary investment

objective is to seek to generate total

return consisting of capital appreciation

and current income.

Contents

Strategic report

At a glance 02

Financial Highlights 02

Chairman’s Statement 03

The Search For Value – A History of Gabelli 06

The Gabelli Investment Process 07

Investment Objective and Policy 08

Portfolio Manager’s Review 09

Portfolio Summary 13

Strategy 14

Key Performance Indicators (KPI) 14

Principal Risks 16

Viability & Going Concern Statement 19

Governance

Board of Directors 20

Directors’ Report 22

Corporate Governance Report 28

Report of the Audit & Risk Committee 32

Directors’ Remuneration Report 35

Statement of Directors’ Responsibilities in respect of the Financial Statements 38

Financial statements

Independent Auditors’ Report 39

Statement of Comprehensive Income 46

Statement of Changes in Equity 47

Statement of Financial Position 48

Statement of Cash Flows 49

Notes to the Financial Statements 50

Regulatory Disclosures 67

Glossary 68

Company Information 71

Annual General Meeting 72

Notes to the Notice of the AGM 74

Appendix – AIFMD Remuneration Disclosures 76

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

At a glance

Merger investing is a highly specialised

active investment approach designed

to profit from corporate catalyst events

such as announced mergers, acquisitions,

leveraged buyouts, demergers and other

types of reorganisations and corporate

actions (“deals”). The Portfolio Manager,

(Gabelli Funds, LLC), seeks to earn

returns through a diversified portfolio of

investments across such deals earning

the differential or “spread” between

the market price and the investment’s

ultimate value. Gabelli Merger Plus+ Trust

plc (“GMP” or “the Company”) invests

globally, although it has an emphasis on

securities traded in the United States,

across market capitalisations and sectors.

The Company was launched in July

2017 to access this unique investment

approach. The Company’s shares trade

on the Specialist Fund Segment of

the London Stock Exchange and The

International Stock Exchange under the

symbol “GMP”.

The Company seeks to generate

total returns consisting of capital

appreciation and current income through

the application of this active merger

investment program. A secondary

objective is the protection of capital,

while earning returns uncorrelated to

unmanaged equity and fixed income

markets.

The Portfolio Manager has invested in

mergers since 1977, and created its first

dedicated merger fund in 1985. The

Portfolio Manager remains vigilant in the

application of its investment methodology

and search for opportunities, maintaining

a diversified portfolio of catalyst event

merger arbitrage strategies that seek to

create an optimal risk/reward profile for

the portfolio.

The Company provides access to Gabelli’s

deep history of investing in mergers. The

approach is a natural extension of its

longstanding research-driven investment

process oriented towards undervalued

assets as articulated through its

proprietary Private Market Value with a

Catalyst

methodology (“PMV with a

Catalyst”). PMV with a Catalyst is the price

an informed buyer would pay for an entire

business in a negotiated transaction,

combined with a catalyst, to earn rates of

return independent of the broad markets’

direction.

The Company is part of the lineage

of Gabelli’s fifteen listed investment

companies beginning in 1986 with the

Gabelli Equity Trust (NYSE:GAB). The

Gabelli Funds complex currently includes

thirteen U.S.-based closed-end funds, or

investment companies, one UK-based

Investment trust, GMP, and four actively

managed ETFs. Gabelli Funds also

manages twenty four open-end funds

and a Luxembourg SICAV with three

UCITS sub-funds.

Financial Highlights

Performance

As at

30 June 2022

As at

30 June 2021

Net asset value per share (cum income) $9.35 $9.94

Net asset value per share (ex income) $9.78 $10.27

Dividends per share paid during the year

$0.48 $0.48

Share price $9.00 $7.40

Discount to Net Asset Value

2,3

(3.74)% (25.63%)

Total returns

Year ended

30 June 2022

Year ended

30 June 2021

Net asset value per share

(1.34)% 12.12%

U.S. 3-month Treasury Bill 1.69% 0.09%

Share price

29.06% 5.46%

Income

Year ended

30 June 2022

Year ended

30 June 2021

Revenue return per share ($0.09) ($0.14)

Ongoing charges

Year ended

30 June 2022

Year ended

30 June 2021

Annualised ongoing charges 1.67% 1.66%

Source: Portfolio Manager (Gabelli Funds, LLC), verified by the Administrator (State Street Bank and Trust Company).

The dividends paid during the year ended 30 June 2022 include the fourth quarter dividend for the year ended 30 June 2021.

Figures are inclusive of income and dividends paid, in line with the Association of Investment Companies (the “AIC”) guidance.

These key performance indicators are alternative performance measures. Further information regarding the use of alternative performance measures can be

found on page 14 and in the glossary on page 68.

Net Asset Value per ordinary share, total return represents the theoretical return on NAV per ordinary share, assuming that dividends paid to shareholders were

reinvested at the NAV per ordinary share at the close of business on the day shares were quoted ex dividend.

Share Price Total Return represents the theoretical return to a shareholder, on a closing market price basis, assuming that all dividends received were reinvested,

without transaction costs, into the ordinary shares of the Company at the close of business on the day the shares were quoted ex dividend.

Ongoing Charges are operating expenses incurred in the running of the Company, whether charged to revenue or capital, but excluding financing costs. These are

expressed as a percentage of the average net asset value during the period and this is calculated in accordance with guidance issued by the Association of Investment

Companies.

Strategic report Governance Financial statements

Chairman’s Statement

We share this Annual Report to

Shareholders, encompassing the period

from July 2021 through June 2022, and

note certain developments post financial

year end. This period marks the fifth year

of operations for the Gabelli Merger Plus+

Trust Plc (the “Company”), activating

the Loyalty Programme tender offer and

additional voting shares for qualifying

shareholders. Gabelli Merger Plus+

Trust Plc operates globally in the highly

specialised investment discipline of event

driven merger arbitrage. The objectives

are to compound and preserve wealth

over time, while remaining non-correlated

to the broad equity and fixed income

markets. The investment programme is

global, encompassing a broad spectrum

of special situations and event driven

opportunities, with an emphasis on

announced merger transactions. The

portfolio is a highly liquid, non-market

correlated alternative to traditional equity

and fixed income securities.

The Company’s primary objective is to

seek to generate total return, consisting

of capital appreciation and current

income. The Company will seek a

secondary objective of the protection of

capital, uncorrelated to equity and fixed

income markets. The Fund utilizes the

Gabelli Private Market Value (PMV) with

a Catalyst

investment methodology,

and has built a diversified portfolio using

catalyst event merger arbitrage strategies

to create an optimal risk/reward profile.

The investment programme is global,

encompassing a broad spectrum of special

situations and event driven opportunities,

with an emphasis on announced merger

transactions. The portfolio is a highly

liquid, non-market correlated alternative

to traditional equity and fixed income

securities. Merger returns are derived

through the narrowing of deal spreads

from time of announcement until their

expected closure. The spread is a function

of three primary elements: the risk

free rate, the risk premium associated

with the transaction fundamentals, and

the time value of money. The dynamic

interplay across these components is

evaluated within every investment by

the Manager. Position sizing will vary

according to a probabilistic assessment

of the risk. The inherent risk in all merger

investing is a broken deal rather than the

standard deviation or price variance of the

market price movements over the deal

timeline. Gabelli Funds LLC, the Portfolio

Manager, employs an active approach to

analysing the fundamentals of a merger

investment and has a long history of

implementing such a programme. At

its core, this differentiated investment

approach utilises the Gabelli analytical

methodology to manage risk amongst

other inputs and factors. The full details of

this investment programme were set out

in the offering Prospectus and are found

on the Company’s web site, www.Gabelli.

com/MergerPlus.

The Board is always receptive to feedback

and is available should you have any

questions or comments via the Portfolio

Manager’s Investor Relations group

directly. We thank you, our shareholders,

for your confidence in entrusting a portion

of your assets to our team.

The Investment Environment

Uncertainty surrounding the current

state of the global macroeconomic

environment, taxed supply chains and an

ongoing war in Eastern Europe plagued

the pace of deal making in the first half

of 2022, which showed a 21% decrease

in deals versus last year’s levels in the

second quarter alone. Deal making in

the technology sector slowed 19% year-

over-year, but remained the most active,

followed by industrials and financials.

Despite COVID-19 cases trending

significantly below peak, certain hot

spots remain, particularly in China. This

adds an element of uncertainty to capital

allocation decisions evidenced in a further

17% decline in cross border activity when

compared to last year.

Nevertheless, the number of deals

greater than $10 billion increased 11%

year-over-year, and several well-known

targets entered into merger agreements.

Microsoft began the year announcing its

$69 billion acquisition of game developer

Activision Blizzard.

In May, software company VMware Inc

agreed to be acquired by Broadcom Inc in

a cash and stock transaction valued at $61

billion. There was also Elon Musk’s well-

publicised bid to take Twitter private for

$44 billion, the outcome of which remains

uncertain.

The broad market still sits over 20% above

the level where it ended in 2019, an 8%

CAGR over a very fraught time. We as a

society may have moved past COVID,

but its aftereffects are still felt. Political,

Marc Gabelli

Chairman

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Chairman’s statement continued

corporate and individual actors still

need to sort through a variety of issues.

Economic and market conditions may

worsen before they improve, and there

may be volatility in currency markets as

Central Banks adjust interest rate policies,

but the risks are more balanced today

than they have been in some time.

Principal Developments on Investments

During the Year

Throughout periods of the first half, we

saw significant widening of deal spreads,

some of which were tied to specific

deal risks, including worries that buyers

would walk away from transactions,

leaving target companies vulnerable to

market conditions. This led to relatively

broad based selling across announced

deals, with more pain felt in technology,

given the sector’s steep selloff this year

following lofty valuations.

Spreads have since rebounded following

the successful completion of several

deals, as well as updates provided by

buyers to reassure the market that

they remain committed to closing their

transactions. While the pace of acquisition

announcements by strategic acquirers

slowed, private equity backed deals

remained plentiful. A total of $553 billion

worth of deals were announced in the half,

accounting for a quarter of all M&A activity.

While some private equity sponsors have

hit roadblocks attempting to secure

financing, strategic buyers balance sheets

remain strong with regards to cash levels

and financial buyers’ are coming off very

robust years of capital raising.

We expect transaction activity to

strengthen as companies gain more

certainty in the face of current global

concerns. As market valuations continue

to reset, the strong US Dollar is enticing

for corporate deal making, positioning

American companies well in the

competition for assets on a global basis.

The Gabelli method is well organised

to invest during such a period. Gabelli

managers are fundamental and bottom up.

Their analysts follow sectors globally, and

seek to understand everything available

relating to a business, and are agnostic

of indices and market capitalisations.

Their work emphasizes balance sheet

and cash flows. Ultimately, they seek to

identify businesses that are trading in the

market at discounts to their estimates of

the value an informed industrial acquirer

would pay for the company in its entirety,

thus establishing the Private Market Value

(“PMV”). The Gabelli team also need event

catalysts to invest, thus providing the

potential for returns independent of the

broad markets. Volatility has historically

presented excellent opportunities to

acquire a business through the fractional

interest represented in its traded shares

and we believe the PMV with a Catalyst

method will fare well in the period ahead.

Performance

The Company’s net asset value (NAV)

plus dividends paid delivered a total

return to shareholders during the year

under review of -1.11% in U.S. dollars. This

performance compared to the equivalent

13-week U.S. Treasury Bill which yielded

1.69% as of 30 June 2022, and also relative

to the IQ Merger Arbitrage ETF, S&P

Merger Arbitrage Index, and Credit Suisse

Merger Arbitrage Liquid Index, which

returned -7.44%, -1.59%, and -0.88%,

respectively. The share price total return

with dividends reinvested was 29.06%,

with the discount narrowing during the

year. The performance for shareholders

at IPO through the tender period of

22 September 2022, was 19.08% with

dividends reinvested, versus a return

of 18.97% for the Credit Suisse Merger

Arbitrage Liquid Index.

Dividend

The Company’s portfolio is largely focused

on the Catalyst events of announced

takeovers, where the terms are known

and transparent to the market. Such

investments generally have estimated

return profiles in periods of less than nine

months. The company will pursue other

Catalyst Event opportunities as they

surface, and will also invest occasionally

in other forms of relative value arbitrage,

such as such as share class arbitrage and

holdco arbitrage. Holding periods average

approximately 120 days. In arbitrage, the

culmination of a position is effectively a

return of cash as the position is closed. In

order to allow the Shareholders to realise

a predictable, but not assured, level of

cash flow and some liquidity periodically

on their investment, the Company has

adopted a “managed dividend policy”.

This policy seeks to pay Shareholders a

quarterly dividend in relation to the Net

Asset Value of the Company at the time,

which may be changed at any time by the

Board. Between inception and 30 June

2022, the Company returned $2.27 per

share to shareholders, consistent with its

dividend policy. Dividends are paid only

when declared by the Board subject to

the Board’s assessment of the Company’s

financial position and only if the Company

has sufficient income and distributable

reserves to make the dividend payment,

and the level of dividend may vary over

time. As such, the portfolio’s managed

distribution of capital through the

payment of quarterly dividends is under

review as we enter the new Fiscal Year.

Tender Offer and Close Company Status

This report also addresses the period

through October 2022 as a subsequent

event to the fiscal year ending 30 June

2022. The Company commenced the

Fifth Anniversary Tender Offer for

Qualifying Registered Shares via two

tranches beginning in September 2022

and ending February 2023. Shareholders

whose shares are registered in the Loyalty

Programme for five years are eligible

to participate in the Company’s tender

offer. As of 7 October 2022 the Company

successfully completed the tender for

3,005,957 shares at NAV less expenses.The

Tranche Two tender offer will commence

in January 2023, with an estimated

maximum of approximately 343,000

Qualifying Shares. The Tender results

present two significant developments for

shareholder consideration: first, the overall

portfolio assets under management are

now USD 68 million versus USD 97 million;

second, the post tender shareholder

composition requires the Company to

operate as a Close Company. The Board

of Directors acknowledges the broad

shareholder participation in the tender,

and notes that the largest shareholder,

Associated Capital Group, elected not to

tender and has expressed its view that the

Company should continue. Associated

Capital Group, legal and beneficial owner

of 6,216,256 shares at the time of this

writing, has confirmed via a letter of Deed,

which contains enforceable irrevocable

undertakings, that it will both vote in

favour of continuation of the company

and not participate in the Second Tranche

tender offer. As a result, the Company

will operate as a Close investment

company, and therefore will be subject to

UK corporate taxes, and thus no longer

avail itself to investment trust status. The

Board of Directors will assess shareholder

considerations and undertake the analysis

of options for the continuing Company,

including operational and structural

alternatives oriented towards expense

and tax savings, as it progresses. Finally,

in accordance with the charter, remaining

registered loyalty Programme Five-

year shareholders are eligible to receive

an additional vote per individual share

held. The Loyalty Programme has been

implemented in accordance with the

offering prospectus.

Strategic report Governance Financial statements

Final Thoughts

With heartfelt sadness we write this letter

after the passing of Her Majesty Queen

Elizabeth II, whose steadfast leadership

will be missed. Today’s post World War II

order is facing intense challenges, yet this

Company has performed consistently and

non-correlated to the broader indices since

inception. It has endured COVID-19, the

onset of inflation and higher interest rates,

and a fragile regulatory environment lead

by the geo-political wrangling between

the US and China. The list continues, as

will the Gabelli Merger Plus+ Trust Plc in

the United Kingdom.

Marc Gabelli

Chairman

25 October 2022

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

The Search For Value – A History of Gabelli

Origins of Gabelli

The Gabelli organisation, of which Gabelli

Funds, LLC is a major affiliate, began

in the U.S. in 1976 as an institutional

research firm. Gabelli’s intense, research

driven culture has driven its evolution

into a diversified global financial services

company. The basis of its success remains

unchanged – a focus on fundamental,

bottom-up research, a highly consistent

investment process, and the commitment

to superior risk adjusted returns. Today

operating from offices including the U.S.,

London, Tokyo, Hong Kong and Shanghai,

we offer portfolio management in our

core competencies across the globe.

Gabelli managers are research-driven,

fundamental investors focusing on the

principles of Graham & Dodd in 1934

and further adapted by their founder,

Mario Gabelli, with his development of

private market value (“PMV”) analysis.

Private Market Values estimate the value

of a business through the lens of what

an informed industrialist would pay for

a business in its entirety in a privately

negotiated transaction. Gabelli however

will not invest on differences to PMV

alone, and need a catalyst in place to

realize returns. Catalysts are something

happening in the company’s industry or

indigenous to the company itself that will

help realize returns.

Gabelli approaches the global stock

marketplace in a similar fashion; we focus

on free cash flow: earnings before interest,

taxes, depreciation and amortization

(EBITDA) minus the capital expenditures

necessary to grow the business. We

believe free cash flow is the best barometer

of a business’ value. Deteriorating or

rising free cash flow often foreshadows

net earnings changes. In addition, they

analyze on and off balance sheet assets

and liabilities such as property, plant

and equipment, inventories, receivables,

and legal, environmental and health care

issues. We want to know everything and

anything that will add to, or detract from,

our valuation models.

These time-tested investment principles

of fundamental security analysis are

as valid today as they were nearly one

hundred years ago.

● Our Firm’s approach is founded on the principles of Graham & Dodd

• Furthered academically by our founder Mario Gabelli

• Establish values to determine margin of safety

• Invest within circle of competence

• Invest as fractional owners of businesses

●

Intensive proprietary research culture

Our Investment Approach

Continuing a Value Investing Legacy

• Focused and rigorous independent fundamental analysis in

valuing the underlying business using publicly available

information including data from customers, competitors,

products and new technologies

• Announcement of a merger with definitive terms starts the

process

• Merger investing benefits from the Gabelli core fundamental

approach by establishing real world value before initiating

positions

Gabelli supplements the principles of Graham & Dodd through the

implementation of our proprietary

Private Market Value (PMV) with a Catalyst™ approach

Portfolio

Identify

Catalysts

Private Market

Value (PMV)

Gabelli Research

Universe

Strategic report Governance Financial statements

Methodology in Action

Merger Investing Process Begins with Announced Deal Terms

Idea Generation

• Ideas sourced from

proprietary database of

Gabelli PMV with

Catalyst

original

research coupled with

announced corporate

events and M&A

transactions worldwide

Analysis of

Merger

Opportunity

• Understand all downside

risks

• Focus on legal and

governance, Material

Adverse Change

(MAC)

clauses, financing

conditions, shareholders’

votes

• Analyze antitrust /

regulatory issues

• Dynamically assess time

to realize returns based

on the catalyst

Origination of opportunities with fundamental research,

overlap with analysis of merger investing team

Bottom Up

Analysis/

Assessment of

Deal Milestones

• Assess risk / reward

profile through probability

based analysis

• Understand the financial

wherewithal of both

acquirer and target

• Understand Board / key

shareholder /

management

/ advisers’

motivations

• Analyze antitrust /

regulatory approval

process

• Assess other key

milestones for transaction

completion

• Assess deal optionality

• Select deals with

attractive risk / reward

profile

Hedging of

Positions

• Cash deals remain un-

hedged (hedged through

the cash terms)

• Stock deals are fully

hedged using the

acquirers’ stock

• All foreign currency

exposure is hedged to the

U.S. dollar

Trading and

Dynamic

Monitoring of

Positions

• Determine optimal asset

class to invest in

• Dynamically assess size

of position according to

• Risk / reward

• Break risk

• Maximum acceptable

potential downside

• Portfolio diversification

• Assess overall portfolio

for market beta,

sector/country

concentrations and

correlation risks

• Real time monitoring of

spreads/ positions (using

our proprietary database)

which are actively traded

as the event progresses

and according to closing

• Reverse strategies are

considered if attractive

risk / reward

Gabelli “PMV with a Catalyst”

One Process Globally

Investment Process

Building A Position

Deal Timeline Closing

Remaining Hurdles:

-Board approval (friendly)

- Definitive agreement (vs. LOI)

- Antitrust approval (all

jurisdictions)

- Other regulatory approvals

-Customary closing conditions

- Stock market regulator approval

- Notes tender

- Financing approval

- Litigation resolutions

- Shareholder approval

Remaining Hurdles:

- Antitrust approval

-Other regulatory approvals

- Customary closing conditions

- Stock market regulator approval

- Notes tender

- Financing approval

- Litigation resolutions

- Shareholder approval

Remaining Hurdles:

- Antitrust approval (light)

- Shareholder approval

- Other light approvals

All approvals in place

Nearing end of deal timeline

Position sizing increasing as deal hurdles are met

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Investment Objective and Policy

Investment objective

The Company’s primary investment objective is to seek to generate total return, consisting of capital appreciation and current

income. The Company will seek a secondary objective of the protection of capital, uncorrelated to equity and fixed income markets.

Investment policy

The Company will seek to meet its investment objective by utilising the Gabelli Private Market Value (PMV) with a Catalyst

TM,

investment methodology, maintaining a diversified portfolio of event merger arbitrage strategies to seek to create an optimal risk/

reward profile for the portfolio.

“Event Driven Merger Arbitrage” is a highly specialised active investment approach designed principally to profit from the

differences between the public market price and the price achieved through corporate catalyst events. Catalysts are utilised to

earn returns independent of the broad markets’ direction. This includes corporate events such as announced mergers, acquisitions,

takeovers, tender offers, leveraged buyouts, restructurings, demergers and other types of reorganisations and corporate actions

(“deals”).

The Company will invest globally although it is expected to have an emphasis on securities traded in the United States,

predominantly equity securities issued by companies of any market capitalisation. The Company is permitted to use a variety of

investment strategies and instruments, including but not limited to: convertible and non-convertible debt securities; asset-backed

and mortgage-backed securities; fixed interest securities, preferred stock, non-convertible preferred stock, depositary receipts;

shares or units of UCIs or UCITS; rights qualifying as transferable securities; when issued, delayed delivery transferable securities;

forward contracts; swaps; recently issued transferable securities; repurchase agreements, money market instruments and warrants.

The Company may invest part of its net assets in cash and cash equivalents, money market instruments, bonds, commercial

paper or other debt obligations with banks or other counterparties having at least a single A (or equivalent) credit rating from an

internationally recognised rating agency or government and other public securities, if the Portfolio Manager believes that it would

be in the best interests of the Company and its Shareholders. This may be the case, for example, if the Portfolio Manager believes

that adverse market conditions justify a temporary defensive position. Any cash or surplus assets may also be temporarily invested

in such instruments pending investment in accordance with the Company’s investment policy.

The Company may take both long and short positions in equity and debt securities. For shorting purposes, the Company may use

indices, individual stocks, or fixed income securities.

The Company may utilise financial derivative instruments to create both long and synthetic covered short positions with the aim

of maximising positive returns. The Company may use strategies and techniques consisting of options, futures contracts, and

currency transactions and may enter into total rate of return, credit default, or other types of swaps and related derivatives for

various purposes, including to gain economic exposure to an asset or group of assets that may be difficult or impractical to acquire.

The Company may also use derivatives for efficient portfolio management purposes including, without limitation, hedging and risk

management and leverage.

The Company has broad and flexible investment authority and, accordingly, it may at any time have investments in other related

or unrelated areas. Strategies and financial instruments utilised by the Company may include: (i) purchasing or writing options

(listed or unlisted) of any and all types including options on equity securities, stock market and commodity indices, debt securities,

futures contracts, future contracts on commodities and currencies; (ii) trading in commodity futures contracts, commodity option

contracts and other commodity interests including physical commodities; (iii) borrowing money from brokerage firms and banks

on a demand basis to buy and sell short investments in excess of capital; and (iv) entering into swap agreements (of any and

all types including commodity swaps, interest rate swaps and currency swaps), forward contracts, currencies, foreign exchange

contracts, warrants, credit default swaps, synthetic derivatives (for example, CDX), collateralised debt obligations tranches, and

other structured or synthetic debt obligations, partnership interests or interests in other investment companies and any other

financial instruments of any and all types which exist now or are hereafter created.

There has been no change to the investment policy since the launch of the Company on 19 July 2017. No material change will be made

without shareholder approval.

Strategic report Governance Financial statements

Portfolio Manager’s Review

Methodology and Market Opportunity

Gabelli Funds would like to thank our

investors for allocating a portion of their

assets to the Gabelli Merger Plus+ Trust

(“GMP”). We appreciate the confidence

and trust you have placed in our

organization through your investment

in GMP. Our investment objective is to

compound and preserve wealth over time

while remaining non-correlated to the

broad markets. As a firm, we have invested

in mergers since 1977 and created the

Gabelli group’s first dedicated, announced

merger fund more than thirty years ago.

We remain vigilant in the application of

our investment philosophy and in our

search for opportunities. In this context,

let us outline our investment methodology

and the investment environment through

30 June 2022.

We remain vigilant in the application of

our investment philosophy and in our

search for opportunities. In this context,

let us outline our investment methodology

and the investment environment through

30 June 2022. Merger arbitrage is a highly

specialised investment approach designed

principally to profit from corporate events,

including the successful completion

of proposed mergers, acquisitions,

takeovers, tender offers, leveraged

buyouts, restructurings, demergers, and

other types of corporate reorganizations

and actions. As arbitrageurs, we seek to

earn the differential, or “spread,” between

the market price of our investments and

the value ultimately realized through deal

consummation.

We are especially enthusiastic about the

opportunities to grow client wealth in the

decades to come, and we highlight below

several factors that should help drive

results. These include:

• Increased market volatility, which

enhances our ability to establish

positions for the prospect of improved

returns;

• A robust market for corporate deal

making as conditions continue to

provide an accommodative market

for mergers and acquisitions.

• A rising interest rate environment,

providing attractive merger spread

opportunities;

• The Fund’s experienced investment

team, which pursues opportunities

globally through the disciplined

application of Gabelli’s investment

methodology;

Global Deal Activity

Global deal merger and acquisition

activity (“M&A”) totaled $2.2 trillion

during the first half of 2022, a year-

over-year decrease of 21%; however, the

deal flow remained notably consistent,

capped off with $1 trillion in deals in the

second quarter. This marked the eighth

consecutive quarter to pass $1 trillion.

There were twenty-six deals completed

with values greater than $10 billion,

accounting for $609 billion in aggregate,

up 11% year over year. Deals with values

between $1-$5 billion accounted for $562

billion during the year, a decrease of 35%

compared to the first half of 2021.

Cross border M&A activity totaled $687

billion for the calendar year, marking

a decrease of 17% year-over-year. The

value of private equity-backed buyouts

remained robust at $553 billion in the first

half, an all-time high. This accounted for

nearly 26% of total M&A activity.

The slowdown of deal activity, compared

to the record-breaking levels of 2021, was

driven mainly by U.S. based targets, which

saw $958 billion in deal activity, a decrease

of 28% year-over-year. European M&A

tallied $527 billion of transactions over

the same period, a decrease of only 4%.

The Technology sector was the biggest

contributor to merger activity during

the first half, totaling $531 billion. This

accounted for 25% of total announced

deal volume, a record. Financials and

Industrials sectors were also large

contributors, each accounting for 12% of

M&A activity.

Portfolio in Review

The first half of 2022 was the worst for

markets since 1970 with the S&P 500

shedding nearly 21%. Similar to 1970,

the main cause of the market turmoil

was inflation. Economists often define

inflation as too many dollars chasing

too few goods. Both those conditions

have been eminently true of late. Years

of easy monetary policy formed the

underbrush while $5 trillion in rescue

stimulus, $5 trillion in Quantitative Easing,

supply chain snafus, and pent-up demand

triggered by COVID provided the spark

for an explosion in prices. The war in

Ukraine, which has perhaps permanently

altered global food and energy flows,

accelerated the fire. Unfortunately, most

central banks, including the Fed, entered

this year behind the curve. In order to

restore credibility and avoid the fate of

Thomson Reuters M&A Review – First Half of

2022

1970s Chair Arthur Burns, Jerome Powell

has had to act aggressively with increases

of 150 basis points over the last six

months. The Fed can neither pump more

oil nor harvest more wheat, but it can act

on the demand side of the equation.

Against this backdrop of rising rates,

macroeconomic concerns, and regulatory

uncertainty, deal making slowed to $2.2

trillion in the first half of the year. While

this was down 21% compared to the same

period last year, 2021 was a record year

and a likely outlier for M&A activity. The

first two quarters of 2022 each saw deal

volume above $1 trillion, the 7th and 8th

consecutive quarters to reach that level.

We expect we will continue to see a robust

deal environment, as a reset in valuations

should provide opportunities for both

strategic and private equity buyers.

As we have noted in the past, the merger

arbitrage strategy is a beneficiary of rising

rates, as the risk free rate is one of the

components of a deal spread. As rates

rise, nominal spreads should widen, all

things being equal. Fixed income markets

are currently anticipating an additional

200 basis points of rate hikes this year,

which would bring the Fed Funds rate to

3.5%.

Currently, the spreads in the portfolio

are as wide as we have seen since the

beginning of the COVID pandemic.

Aggressive antitrust policy rhetoric has

increased volatility in deal spreads, which

provides us an opportunity. Mispriced risk

allows us to add to our highest conviction

positions at lower prices, generating

more attractive returns as deals progress

towards closing.

We continue to find attractive investment

opportunities in newly announced and

pipeline deals. We remain focused on

investing in highly strategic, well-financed

deals with an added focus on near-

term catalysts, and are upbeat about

our prospect to continue to generate

absolute returns.

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Notable contributors to performance

include:

• Arena Pharmaceuticals, Inc. (ARNA-

NASDAQ), a biotechnology company

that develops therapeutics for

autoimmune diseases, was acquired

by Pfizer in March after the companies

received U.S. antitrust approval. In

February, Pfizer withdrew and refiled

its application for antitrust approval

in the hopes of avoiding a second

request that would have extended the

timeline for approval. The companies

had already received antitrust

approvals in Germany and Austria,

and Arena shareholders voted to

approve the transaction in February.

Under the terms of the agreement,

Arena shareholders received $100.00

cash per share, or about $6 billion.

• Meggitt plc (MGGT LN-London),

an engineering firm that designs

and manufactures components for

the aerospace, defense and energy

industries, agreed to be acquired by

Parker-Hannifin for £8.00 cash per

share, or about £7 billion. Meggitt

has made considerable progress

securing various approvals needed

to consummate the transaction

and awaits only UK government

approval. The deal was completed on

13 September 2022.

• Sanderson Farms, Inc. (SAFM-

NASDAQ), a producer and processor

of fresh and frozen chicken products,

agreed to be acquired by a consortium

led by Cargill for $203 cash per share,

or about $5 billion. As the deal awaits

its final regulatory approval from the

U.S. Department of Justice, the stock

has traded favorably on Sanderson’s

fundamentals. The company’s results

have greatly benefited from poultry

pricing and the consensus is that

the stock would trade significantly

higher in the event the deal cannot be

completed.

• Swedish Match (SWMA SS-

Stockholm), a manufacturer of

smokeless tobacco products,

including the market-leading product

ZYN, agreed to be acquired by Philip

Morris International for SEK106.00

cash per share, or about $16 billion. In

June, the companies received antitrust

approval in the U.S. The spread then

tightened further upon reports that

Elliott was building a stake in Swedish

Match to oppose the sale at current

terms.

• Xilinx, Inc. (XLNX-NASDAQ), a

designer of advanced programmable

semiconductors used in automotive,

aerospace, and consumer

applications, was acquired by

Advanced Micro Devices. The

companies received approval from

Chinese antitrust regulator SAMR in

January, but were required to re-file

their application in the U.S., given it

had been more than one year since

receiving U.S. antitrust approval,

which was granted on 9 February,

2022. The deal subsequently closed

on 14 February, 2022. Under the terms

of the agreement, Xilinx shareholders

received 1.7234 shares of AMD

common stock per share of Xilinx,

which valued the company at $48

billion.

Notable detractors from performance

include:

• Avast plc (AVST LN-London),

a provider of cyber security

software, agreed to be acquired by

NortonLifeLock for $7.61 cash and

0.0302 shares of NLOK, valuing the

transaction at $8 billion. While the

deal secured all global regulatory

approvals outside of the UK, in March

the UK antitrust regulator referred the

deal to a stage two review, and the

stock sold off due to the uncertainty.

In the end, the transaction secured

approval from the Competition and

Markets Authority, with a completion

date of 12 September 2022.

• Twitter Inc. (TWTR US), a provider

of online social networking services,

Twitter agreed to be acquired by

Elon Musk for $54.20 cash, or $44

billion. In July, Elon Musk unilaterally

terminated the merger agreement

with Twitter, citing material breach

of the access to information and

financing cooperation covenants in

the context of spam accounts. Twitter

sued Musk in Delaware Chancery

court for Specific Performance,

essentially asking the court to compel

Musk to close the deal on terms.

Musk’s attempt to terminate the

transaction caused some disruption

at the company. This, coupled with a

deteriorating environment for digital-

advertising spending, negatively

impacted Twitter’s stock price. On 4

October 2022, Musk again reversed

course and stated that he would

move ahead with the acquisition at

the original price of $54.20. At the

time of writing, the outcome of this

deal is still uncertain.

Portfolio Manager’s Review continued

Strategic report Governance Financial statements

Mandiant, Inc. (MNDT-NASDAQ)

agreed to be acquired by Alphabet,

Inc. (GOOGL-NASDAQ). Mandiant

provides cyber defense solutions.

Under the terms of the agreement,

Mandiant shareholders will receive

$23.00 cash per share, valuing the

transaction at approximately $5

billion. The transaction is subject to

shareholder as well as regulatory

approvals, and is expected to close in

the second half of 2022.

Meggitt plc (MGGT LN-London) agreed

to be acquired by Parker-Hannifin

Corp. (PH-NYSE). Meggitt designs

and manufactures components and

sub-systems in the UK, rest of Europe,

the U.S., and internationally. Under

the terms of the agreement, Meggitt

shareholders will receive £8.00 cash

per share, valuing the transaction

at approximately £7 billion. The

transaction is subject to shareholder

as well as regulatory approvals, and is

expected to close in the third quarter

of 2022.

Rogers Corp. (ROG-NYSE) agreed to

be acquired by DuPont de Nemours,

Inc. (DD-NYSE). Rogers designs,

develops, manufactures, and sells

engineered materials and components

worldwide. Under the terms of the

agreement, Rogers shareholders will

receive $277.00 cash per share, valuing

the transaction at approximately $5

billion. The transaction is subject to

shareholder as well as regulatory

approvals, and is expected to close in

the second half of 2022.

Shaw Communications, Inc. (SJR/B

CN-Toronto) agreed to be acquired by

Rogers Communications, Inc. (RCI/B

CN-Toronto). Shaw Communications

operates as a connectivity company

in North America in the Wireline and

Wireless segments of the market.

Under the terms of the agreement,

Shaw shareholders will receive

C$40.50 cash per share, valuing the

transaction at approximately C$26

billion. The transaction is subject

shareholder as well as regulatory

approvals, and is expected to close in

the second half of 2022.

Swedish Match AB (SWMA SS-

Stockholm) agreed to be acquired

by Philip Morris International, Inc.

(PM-NYSE). Swedish Match develops,

manufactures, markets, and sells

snus and other smokeless tobacco

products, nicotine pouches, and other

tobacco products in Scandinavia,

the U.S., and internationally. Under

the terms of the agreement, Swedish

Match shareholders will receive SEK

106.00 cash per share, valuing the

transaction at approximately $16

billion. The transaction is subject to

the tender of at least 90% of shares

outstanding, as well as regulatory

approvals, and is expected to close in

the fourth quarter of 2022.

Tower Semiconductor Ltd. (TSEM-

NASDAQ) agreed to be acquired by

Intel Corp. (INTC-NASDAQ). Tower

Semiconductor operates foundries,

proving manufacturing of integrated

circuits (ICs) worldwide. Under

the terms of the agreement, Tower

shareholders will receive $53.00 cash

per share, valuing the transaction

at approximately $5 billion. The

transaction is subject to shareholder

as well as regulatory approvals, and is

expected to close by the first quarter

of 2023.

Vifor Pharma AG (VIFN SW-

Switzerland) agreed to be acquired

by CSL Ltd. (CSL AU- Sydney). Vifor

Pharma develops and manufactures

pharmaceutical products in

Switzerland, rest of Europe, the U.S.,

and internationally. Under the terms of

the agreement, Vifor shareholders will

receive $179.25 cash per share, valuing

the transaction at approximately $12

billion. The transaction is subject to the

tender of at least a majority of shares

outstanding, as well as regulatory

approvals, and closed in August.

Select Portfolio Holdings as

of 30 June 2022

Activision Blizzard, Inc. (ATVI-

NASDAQ) agreed to be acquired by

Microsoft Corp. (MSFT-NASDAQ).

Activision Blizzard develops and

publishes interactive entertainment

content and services. Under the

terms of the agreement, Activision

shareholders will receive $95.00 cash

per share, valuing the transaction

at approximately $74 billion. The

transaction is subject to shareholder

as well as regulatory approvals, and is

expected to close in late 2022 or 2023.

Avast plc (AVST LN-London) agreed

to be acquired by NortonLifeLock,

Inc. (NLOK-NASDAQ). Avast

provides digital security and privacy

products. Under the terms of the

agreement, Avast shareholders will

receive $7.61 cash and 0.0302 shares

of NortonLifeLock common stock

per share, valuing the transaction

at approximately £6 billion. The

transaction was subject to shareholder

as well as regulatory approvals, and

closed in mid-September 2022.

Coherent, Inc. (COHR-NASDAQ)

agreed to be acquired by II-VI, Inc.

(IIVI-NASDAQ). Coherent provides

lasers, laser-based technologies, and

laser-based system solutions. Under

the terms of the agreement, Coherent

shareholders received $220.00 cash

and 0.91 shares of II-VI common stock

per share, valuing the transaction

at approximately $7 billion. The

transaction was subject to approval

by shareholders of both companies,

as well as regulatory approvals, and

closed in July 2022.

First Horizon Corp. (FHN-NYSE)

agreed to be acquired by The Toronto-

Dominion Bank (TD CN-Toronto). First

Horizon operates as the bank holding

company for First Horizon Bank, which

provides various financial services.

Under the terms of the agreement,

First Horizon shareholders will receive

$25.00 cash per share, valuing the

transaction at approximately $13

billion. The transaction is subject to

shareholder, as well as regulatory

approvals, and is expected to close in

late 2022 or early 2023.

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Select Closed Deals as of

30June 2022

Arena Pharmaceuticals, Inc. was

acquired by Pfizer Inc. in March 2022.

Arena Pharmaceuticals focuses on

developing novel medicines in the areas

of gastroenterology, dermatology, and

cardiology. On 13 December, 2021, Pfizer

announced it would acquire Arena for

$100.00 cash per share, valuing the

transaction at approximately $6 billion.

Cerner Corp. was acquired by Oracle

Corp. in June 2022. Cerner provides

health care information technology

solutions and tech-enabled services in the

U.S. and internationally. On 20 December,

2021, Oracle announced it would acquire

Cerner for $95.00 cash per share, valuing

the transaction at approximately $30

billion.

Crown Resorts Ltd. was acquired by

Blackstone, Inc. in June 2022. Crown

Resorts operates in the entertainment

industry primarily in Australia. On

13February, 2022, Blackstone announced

it would acquire Crown for A$13.10 cash

per share, valuing the transaction at

approximately A$9 billion.

CyrusOne, Inc. was acquired by KKR & Co.,

Inc. and Global Infrastructure Partners in

March 2022. CyrusOne is a premier global

REIT specializing in design, construction,

and operation of more than 50 high-

performance data centers worldwide.

On 15 November, 2021, KKR announced

it would acquire CyrusOne for $90.50

cash per share, valuing the transaction at

approximately $15 billion.

Ferro Corp. was acquired by Prince

International, a portfolio company of

American Securities LLC, in April 2022.

Ferro produces and markets specialty

materials in the U.S., Europe, the Middle

East, Africa, the Asia Pacific, and

Latin America. On 11 May, 2021, Prince

announced it would acquire Ferro for

$22.00 cash per share, valuing the

transaction at approximately $2 billion.

IHS Markit Ltd. was acquired by S&P

Global, Inc. in February 2022. IHS Markit

provides critical information, analytics,

and solutions for various industries and

markets worldwide. On 30 November,

2020, S&P announced it would acquire

IHS for 0.2838 shares of S&P common

stock per share, valuing the transaction at

approximately $44 billion.

Intersect ENT, Inc. was acquired by

Medtronic plc in May 2022. Intersect

ENT operates as an ear, nose, and throat

medical technology company in the U.S.

On 6 August, 2021, Medtronic announced

it would acquire Intersect for $28.25

cash per share, valuing the transaction at

approximately $1 billion.

Mimecast Ltd. was acquired by Permira

in May 2022. Mimecast provides cloud

security and risk management services

for corporate information and email. On

7 December, 2021, Permira announced

it would acquire Mimecast for $80.00

cash per share, valuing the transaction at

approximately $6 billion.

Nuance Communications, Inc. was

acquired by Microsoft Corp. in March

2022. Nuance Communications provides

conversational and cognitive artificial

intelligence innovations. On 12 April, 2021,

Microsoft announced it would acquire

Nuance for $56.00 cash per share,

valuing the transaction at approximately

$17 billion.

Veoneer, Inc. was acquired by

QUALCOMM, Inc. in April 2022. Veoneer

designs, develops, and manufactures

automotive safety electronics primarily

in North America, Europe, and Asia. On

4 October, 2021, QUALCOMM announced

it would acquire Veoneer for $37.00 cash

per share, valuing the transaction at

approximately $4 billion.

Xilinx, Inc. was acquired by Advanced

Micro Devices, Inc. in February 2022. Xilinx

designs and develops programmable

devices and associated technologies

worldwide. On 27 October, 2020,

Advanced Micro Devices announced it

would acquire Xilinx for 1.7234 shares of

Advanced Micro common stock per share,

valuing the transaction at approximately

$34 billion.

Z Energy Ltd. was acquired by Ampol

Ltd. in May 2022. Z Energy sells transport

fuel in New Zealand. On 12 October,

2021, Ampol announced it would acquire

Z Energy for NZ$3.78 cash per share,

valuing the transaction at approximately

NZ$3 billion.

Portfolio Manager’s Review continued

Strategic report Governance Financial statements

Portfolio Summary

Largest Portfolio Security holdings (excluding cash and cash equivalents)

(Unaudited)

As at 30 June 2022

Security

Offsetting short position

% of total

portfolio

(gross)

Market value

$000

Offsetting market

value

$000

% of total

portfolio

(net)

Shaw Communications Inc 2.7 3,143 2.7

Activision Blizzard Inc 2.5 2,870 2.5

Coherent Inc II-VI Inc 2.3 2,693 (399) 2.0

Mandiant Inc 2.1 2,486 2.1

Vifor Pharma AG 2.1 2,442 2.1

Change Healthcare Inc 2.1 2,389 2.1

Rogers Corp 2.0 2,327 2.0

First Horizon Corp 1.9 2,245 1.9

PNM Resources Inc 1.9 2,179 1.9

Tower Semiconductor Ltd 1.8 2,112 1.8

BioHaven Pharmaceutical

Holding Company Ltd 1.8 2,076 1.8

Aerojet Rocketdyne Holdings

Inc 1.7 1,960 1.7

Citrix Systems Inc 1.7 1,924 1.7

Nielsen Holdings plc 1.5 1,750 1.5

Intertape Polymer Group Inc 1.4 1,672 1.4

Altaba Inc 1.4 1,666 1.4

SailPoint Technologies Inc 1.4 1,630 1.4

Tegna Inc 1.4 1,592 1.4

Zendesk Inc 1.4 1,567 1.4

MoneyGram International Inc 1.2 1,412 1.2

Sub-total 36.3 42,135 (399) 36.0

Other holdings

63.7 78,868 (4,901) 64.0

Total holdings 100.0 121,003 (5,300) 100.0

Long position.

The offsetting short position of II-VI taken in advance of its acquisition of Coherent Inc., which was converted into the right to

receive $220 in cash plus 0.91 share of II-VI common stock.

Represents the market value as a percentage of the total portfolio value.

Market value of the long position.

Market value of the offsetting short position.

Represents the total position value (market value plus the offsetting market value) as a percentage of the total portfolio value.

Including derivatives and equity short positions, and excluding U.S. Treasuries.

A Statement of Portfolio Changes is available from the Administrator upon request.

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Strategy

Key Performance Indicators (“KPIs”)

Our Key Performance Indicators (“KPIs”)

The Company’s strategy is to generate

returns for its shareholders by pursuing

its investment objective while mitigating

shareholder risk, by investing in a

diversified spread of equity investments.

Through a process of bottom-up stock

selection and the implementation of

disciplined portfolio construction, we

aim to create value for the Company’s

shareholders.

The largest holdings in the Company’s

portfolio are listed on page 13.

Gearing Policy

At the sole discretion of the Portfolio

Manager, the Company may use leverage

as part of its investment programme.

It is anticipated that the Company will

structurally gear and use tactical leverage

or portfolio borrowings in an amount

(calculated at the time of investment) of

around 2 times of the Net Asset Value,

subject to maximum gearing of 2.5

times the Net Asset Value. Please refer

to page 68 in the Glossary for further

discussion of gearing.

Leverage

Leverage is calculated using two methods:

i) Gross method and ii) Commitment

method. For further details please see the

Glossary on page 69.

Business Model

Please see the Methodology in Action on

page 7.

Board Diversity

Please see the “Board Diversity” item on

page 29.

The Board recognises that it is share price

performance that is most important to the

Company’s shareholders. Fundamental

to share price performance is the

performance of the Company’s net asset

value. The central priority is to generate

returns for the Company’s shareholders

through net asset value and share price

total return, and discount management.

For the year ended 30 June 2022, the

Company’s KPIs, as monitored closely

by the Board at each meeting, are listed

below:

Net Asset Value Total Return

Year ended 30 June 2022

(1.34)%

(30 June 2021: 12.12%)

Share Price Total Return

Year ended 30 June 2022

29.06%

(30 June 2021: 5.46%)

Discount to Net Asset Value

Year ended 30 June 2022

3.74%

(30 June 2021: 25.63%)

The above table sets out the key KPIs for the Company. These KPIs fall within the definition of ‘Alternative Performance Measures’

(APMs) under guidance issued by the European Securities and Markets Authority (ESMA). Information explaining how these are

calculated is set out in the Glossary. These KPIs including APMs have been carefully selected by the Board on discussion with the

Portfolio Manager, to give the most appropriate overview of performance in the financial year to shareholders and other stakeholders.

Performance measured against various

indices

The Company does not use a benchmark. However, at each meeting the Board reviews

and compares portfolio performance in the context of the performance of the ETF

MNA and Credit Suisse Merger Arb Liquid Indices.

Information on the Company’s performance is given in the Chairman’s Statement and

the Portfolio Manager’s Review.

Share Price Total Return

The Company’s primary investment objective is to seek to generate total return

consisting of capital appreciation and current income.

In order to allow the Shareholders to realise a predictable, but not assured, level of cash

flow and some liquidity periodically on their investment, the Company has adopted a

“managed dividend policy”. This policy seeks to pay Shareholders a quarterly dividend

in relation to the Net Asset Value of the Company at the time, which may be changed

at any time by the Board. Between inception and 30 June 2022, the Company returned

$2.27 per share to shareholders, consistent with its dividend policy. Dividends are paid

only when declared by the Board subject to the Board’s assessment of the Company’s

financial position and only if the Company has sufficient income and distributable

reserves to make the dividend payment, and the level of dividend may vary over

time. As such, the portfolio’s managed distribution of capital through the payment

of quarterly dividends is under review as we enter the new Fiscal Year. Additional

information can be found in the Glossary on page 70.

Strategic report Governance Financial statements

Share price discount to net asset value

(NAV) per share

The NAV per share is published on a daily basis on the London Stock Exchange and

The International Stock Exchange. The NAV is calculated in accordance with the

Association of Investment Companies (AIC) formula.

At each Board meeting, the Board monitors the level of the Company’s discount to

NAV, the changes thereto and the reason for such changes. The Directors recognise

the importance to investors that the shares should not trade at a significant discount

to NAV. Accordingly, the Board would consider implementing a share buy back

programme to ensure that the share price does not trade at a significant discount to

the NAV.

In the year under review, the Company’s shares have traded from a discount of 25.63%

as of 30 June 2021 to a discount of 3.85% as of 30 June 2022.

Performance is assessed on a total return basis for the NAV and share price.

Cumulative Performance Chart (USD) from 19 July 2017

Dividend History

Rate ($) Ex-dividend date Record date Payment date

Fourth interim 2022 Not yet declared*

Third interim 2022 0.12 18 April 2022 19 April 2022 28 April 2022

Second interim 2022 0.12 20 January 2022 21 January 2022 03 February 2022

First interim 2022 0.12 18 November 2021 19 November 2021 03 December 2021

Total 0.36

Fourth interim 2021 0.12 14 October 2021 15 October 2021 29 October 2021

Third interim 2021 0.12 15 April 2021 16 April 2021 30 April 2021

Second interim 2021 0.12 14 January 2021 15 January 2021 28 January 2021

First interim 2021 0.12 15 October 2020 16 October 2020 30 October 2020

Total 0.48

* The Board expects to announce the final interim dividend in respect of the Company’s financial year ended 30 June 2022 after the

Tranche Two Tender Offer has concluded. Qualifying Registered Shareholders who participate in either Tender Offer will not be

entitled to any such dividend in respect of any Ordinary Shares validly tendered.

-12%

-8%

-4%

12%

16%

20%

24%

Credit Suisse Merger Arb Liquid Index +18.97%

IQ Merger Arbitrage ETF +3.31%

GMP NAV +19.08%

Jul 2017

Oct 2017

Jan 2018

Apr 2018

Jul 2018

Oct 2018

Jan 2019

Apr 2019

Jul 2019

Oct 2019

Jan 2020

Apr 2020

Jul 2020

Oct 2020

Mar 2021

Jun 2021

Dec 2020

Sep 2021

Dec 2021

Mar 2022

Jun 2022

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

The Company continues to have exposure

to a variety of risks and uncertainties, and

the Audit & Risk Committee has focused

attention on identifying and mitigating

key risks likely to crystallise in the current

economic environment. The Board

continues to prioritise a robust system of

controls to minimise exposure to global

macro events in particular, which remains

highlighted as a generic risk as in recent

Annual Reports.

The Directors confirm that they have

carried out a further robust assessment

of the principal risks facing the Company

during the year, including those that would

threaten its investment objective, business

model, future performance, solvency or

liquidity. The Company maintains a risk

matrix which sets out the risks facing the

Company, the likelihood and potential

impact of each risk and the controls

established for mitigation. The risk matrix

is reviewed by the Audit & Risk Committee

on a regular basis throughout the financial

year, and was specifically refreshed in 2022

to introduce more stringent risk ratings

for each risk and to reflect the impact of

related mitigating controls.

The core principal risks set out in the

2021 Annual Report remain largely

unchanged, however there are some risks

that have emerged which are set out in the

following table with an explanation of how

they are mitigated. On review during the

year, the Board re-rated several principal

risks and considered the adequacy of

mitigating controls in place across the

Company’s operations and those of its

key third party providers. The Audit &

Risk Committee has also specifically

considered the risks associated to the

Portfolio Manager’s use of Contracts for

Difference within the investment strategy,

which on review were felt to continue to

be appropriate. The risk narrative in the

table below includes a summary of the

actions taken to position the Company to

withstand the related effects for markets

and investments:

Principal Risks

Risk Mitigation

Investment Portfolio Risks

Decline in the U.S. equity markets. By investing in a diversified portfolio and by adhering to a carefully monitored

series of investment restrictions, enabled by automated pre-trade compliance

features and daily review of trade tickets. These strictures mandate that no

single security purchase can, at the time of investment, account for more

than 15% of the gross assets of the Company. The Board meets the portfolio

management team quarterly at the Board meetings to review the risk factors

and their effects on the portfolio, and a thorough analysis of the investment

strategy is undertaken.

Merger and event driven risks address the

possibility that deals do not go through, are

delayed beyond the original closing dates, or that

the terms of the proposed transactions change

adversely.

Portfolio management team’s careful selection and active monitoring of mergers

and acquisitions deals, and maintaining a thorough knowledge of the selected

securities in the portfolio.

Global Macro Events Risks

Unforeseen global emergencies such as the

pandemic could lead to dramatically increased

market instability and Company share price

volatility.

Global economic, geopolitical, and financial conditions are constantly monitored.

Diversification of Company assets is incorporated into the investment strategy

and, if disruptive events occur, the Manager is prepared to adopt a temporary

defensive position and invest some or all of the Company’s portfolio in cash or

cash equivalents, money market instruments, bonds, commercial paper, or other

debt obligations with banks or other counterparties, with appropriate ratings as

determined by an internationally recognised rating agency and approved by the

Board. Another option is the investment in “government and public securities”

as defined for the purposes of the Financial Conduct Authority Handbook.

The effects of the COVID-19 pandemic appear to be easing, but the aftermath

of the pandemic continues to create uncertainty for economic forecasts and

markets as Governments globally seek to transition communities, businesses

and individuals back to normality. The Manager has therefore carefully managed

the Company’s investments to protect shareholders’ interests and to position

the Company to benefit from future performance of markets in line with its key

investment principles. The pandemic also impacted the day-to-day operational

management of both the Board and the Company’s third party service providers.

The Board and all its third party service providers continue to successfully

work and meet remotely, and regular third party briefings have kept the Board

informed of how related risks are minimised through the pandemic and ongoing

global recovery.

Strategic report Governance Financial statements

Risk Mitigation

The military aggression undertaken by Russia

against Ukraine has upset the world economic

order. The geopolitical repercussions are extensive,

creating global problems including higher energy

and food prices and possibly altering global food

and energy flows permanently.

The Board continues to monitor the events unfolding in Ukraine. The portfolio

management team of the Trust monitors the holdings for their exposure to

the war.

The Audit & Risk Committee have noted that it is possible that a future event

may temporarily compromise the availability of an individual board member or a

key representative or integral team member of a third party service provider, in

turn impacting the Company’s performance and have plans in place to prepare

for such eventualities such as remote working etc to ensure continuity.

Fraud and cybersecurity vulnerability could

increase for key service providers resulting from

the war in Ukraine. Such events are external to

the management and beyond the controls of the

Company.

The Board relies on assurances from the Company’s key third-party providers

that they have appropriate and adequate cybersecurity policies in place to

mitigate the risk of a cyberattack. The Board keep these policies under review

by receiving regular presentations from the Heads of cybersecurity of its service

providers, who describe in detail the efforts they take to secure the company’s

data and to mitigate the risks of loss or potential damages that could result from

such attacks.

Operational Risks

Outsourcing

The operational functions of the Company are

outsourced to third parties. Systems disruptions,

control failures and/or operational lockdowns

caused by the COVID-19 pandemic at these

companies could impact the Company.

All third party service providers report to the Board on a regular basis and their

reports and representations are reviewed by the Board, the AIF Manager and

the Portfolio Manager.

A state-backed cyberattack could also result

in widespread disruption across the financial

industry.

Whilst the Board takes all reasonable endeavours to safeguard the Company

from a cyberattack on this scale, complete mitigation of this external risk

cannot be guaranteed, however the Board, together with its’ service providers

remain vigilant to the likelihood of such an event in the current climate and

have improved the company’s readiness to reduce disruptions to the company’s

activities, in the event of such threat.

Market and Share Price Risks

Market risk arising from volatility in the prices of

the Company’s investments. The share price of

the Company may fall below the NAV.

To address a discount, the Board may consider using share buybacks, through

which shares would be repurchased when trading at a discount from NAV, up to

a maximum percentage of 14.99% of the issued share capital. The Company has

continued its shareholder engagement programmes to increase its visibility and

interaction with existing and potential investors.

Financial Risks

Comprise: (i) share price risk (comprising interest

rate risk, currency risk and other price related

risks); (ii) liquidity risk; and (iii) credit risk.

Further details of these risks are disclosed in Note 12 to the financial statements

together with a summary of the policies for managing these risks.

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Risk Mitigation

Corporate Governance and Regulatory Compliance Risks

Damage to its reputation through poor corporate

governance.

The Board complies with good governance practices in accordance with the

Association of Investments Trusts’ (“AIC”) Code of Corporate Governance

guidelines which endorse the UK Corporate Governance Code. The Board and

its Committees actively perform self-assessments of compliance through the

annual effectiveness evaluation and receive are advised regularly advice from

by the Company Secretary in relation to any regulatory changes within the

corporate governance landscape that may impact the company.

Shareholder discontent due to a lack of

appropriate communications and/or inadequate

financial reporting.

The Board is in contact with its major shareholders on a regular basis, and it

monitors shareholder sentiment.

Failure to comply with legal and regulatory

requirements

The Company receives and responds to guidance from both its external and

internal advisors on compliance with the Listing Rules, the Financial Conduct

Authority’s Disclosure and Transparency Rules, UK Companies Act 2006, as well

as other applicable regulations.

In order to qualify as an investment trust, the

Company must comply with Section 1158-59

of the Corporation Tax Act 2010 (“CTA 2010”).

A breach of these sections could result in the

Company losing investment trust status and,

as a consequence, capital gains realised within

the Company’s portfolio would be subject to

Corporation Tax.

The Board receives confirmations periodically that the Company remains

compliant with s1158 CTA 2010 in maintaining its Investment Trust Status. The

criteria are monitored by the Administrator, AIF Manager, and the Portfolio

Manager who reports to the Board on compliance at each quarterly meeting.

In addition, the Audit & Risk Committee are also kept informed of any potential

breaches by the Company’s External Auditors who review compliance as part of

the audit process and provide guidance accordingly.

Emerging Risks Mitigation

Environmental, Social and Climate Change Risks

Environmental, Social and Climate issues pose

some of the most significant challenges to the

long-term prosperity of the global economy, the

well-being of people and communities, and the

natural environmental ability to support life.

The Board and Investment Manager are committed to supporting business

activities that are environmentally and socially responsible in line with its

sustainability commitments and its support of the goals of the Paris Accord.

Geopolitical Risks

Geopolitical risks have risen with Russia’s

invasion of Ukraine. The impact of sanctions

and the rise in commodity prices are likely to be

the main transmission mechanism to markets.

Rising commodity prices and further disruption

to supply chains shall exacerbate inflationary

pressure and may also create a negative impact

on global growth, with Europe at particular risk.

The Board is keeping these evolving risks and market pressures under constant

review and will continue to monitor the volatility around investee company

valuations and implications for the Company’s likely future dividend income

stream.

Principal Risks continued

Strategic report Governance Financial statements

Viability & Going Concern Statement

In accordance with the provisions of the

UK Corporate Governance Code, the

Directors have assessed the prospects of

the Company over a longer period than

the 12 months referred to in the ‘Going

Concern’ guidelines.

The Board conducted this review

focusing on a period of five years. This

period was selected as it is aligned with

the Company’s investment objective of

generating total return, consisting of

capital appreciation and current income.

In making this assessment the Board also

considered the Company’s principal risks.

Investment Companies in the UK operate

in a well established and robust regulatory

environment and the Directors have

assumed that:

• Investors will continue to want to

invest in closed-end investment

companies because the fixed

capitalisation structure is suited to

pursuing the Portfolio Manager’s

proprietary long-term PMV with a

Catalyst

investment strategy;

• The Company’s remit of investing

globally with an emphasis on securities

traded in the U.S., and predominantly

equity securities issued by companies

of any market capitalisation will

continue to be attractive to investors.

• The UK’s well established investment

and robust regulatory environment

will continue as such and will remain

an attractive global domicile for the

Company’s remit.

• The recent period of UK political

instability as reflected in the Sterling

exchange rate relative to the US

Dollar, the interplay of parliamentary

politics with the Bank of England, and

the regulatory unravelling of Brexit

relative to the European Union, will

pass in the medium term and return to

a period of marketplace stability and

instill domicile confidence for global

investors.

As with all investment vehicles, there is

a risk that the performance of individual

investments will vary and that capital may

be lost, but this is not regarded as a threat

to the viability of the Company.

Operationally, the Company retains title

to all assets, and cash and securities are

held with a custodian bank approved by

the Portfolio Manager and the Board.

The nature of the Company’s investments

means that solvency and liquidity risks

are low because:

• The Company’s portfolio is invested in

readily realisable, listed securities;

• The closed-end nature of the

Company means that, unlike an

open-ended fund, it does not need to

liquidate positions when shareholders

wish to sell their shares; and

• The expenses of the Company

are predictable and modest in

comparison with the assets and there

are no capital commitments currently

foreseen which would alter that

position.

• The taxation of the Company should

it operate as a close investment

company are predictable and modest

in comparison with the return profile

of the investment programme, and as

a result of regular consultation with

shareholders, an effort to undertake

the mitigation of such close status

taxation, such as a re-domiciliation,

is not expected in the period after 12

months from the tranche two tender

offer.

The Board have closely monitored

the impact of the ongoing COVID-19

pandemic, Brexit uncertainty, and the

war in Ukraine. Those impacts and related

continuing uncertainty have short- and

potentially medium-term implications

for the Company’s investment strategy.

Additionally, the Board is monitoring the

period ahead on the basis of the Company

no longer having investment trust status

and its implications on the Company’s

investment return profile over the longer

term. In context, the Board continuously

monitors the Company’s investment

portfolio, liquidity and gearing, along with

levels of market activity, to appropriately

minimise and mitigate consequential

risks to capital and future income such

as geopolitical risks, financial risks etc.

The risks are discussed in more detail in

the Chairman’s statement and on pages

3 to 5.

Taking these factors into account,

the Directors confirm that they have

a reasonable expectation that the

Company will continue to operate and

meet its expenses. The Directors have

also considered the fact that there will

be a continuation vote at the Company’s

2022 Annual General Meeting, and

having consulted and maintained close

contact with the Company’s major

shareholders, have received a letter

in Deed, which contains enforceable

irrevocable undertakings, from the largest

shareholder, Associated Capital Group,

legal and beneficial owner of 6,216,256

shares at the time of this writing, that they

will both vote in favour of continuation of

the company and not participate in the

2nd tender offer. Thereby the Directors

confirm with certainty that the company’s

largest shareholder will vote in favour of

the company to continue to operate.

The Company’s portfolio consists primarily

of U.S. investments. Accordingly, the

Company believes that the post “Brexit”

arrangements introduced by the U.K.

government and market U.K. government

and market regulators will not materially

affect the prospects for the Company,

but the Board and Portfolio Manager will

continue to keep developments under

review.

This Viability & Going Concern Statement,

the Strategic Report for the year ended

30 June 2022 (on pages 2 to 18 of this

document) and the s172 statement (on

pages 29 and 30) have been approved by

the Board and signed on its behalf by:

Marc Gabelli

Chairman

25 October 2022

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Board of Directors

Marc Gabelli

Non-executive Director and Chairman

Chairman of the Nomination Committee

Marc is a director and President of the

Portfolio Manager’s parent company,

GGCP, a director of Associated Capital

Group “ACG” and is a Senior Portfolio

Manager at Gabelli. As a fund manager, his

focus is global value equity investments.

He has managed several Morningstar five

star mutual funds, and a Lipper #1 ranked

global equity mutual fund. Marc is active

in a variety of charitable educational

efforts in the United States and United

Kingdom. He has lived and worked in the

U.K. at various times, beginning in 1990.

He is a graduate of the Massachusetts

Institute of Technology (M.I.T.) Sloan

School of Management.

Appointed on 28 April 2017.

Marco Bianconi

Independent non-executive Director

Chairman of the Audit & Risk Committee,

member of the Conflicts and Remuneration

Committees

Marco is Corporate Development, M&A

and Investor Relations Director at Cementir

Holding N.V. an international Building

Materials manufacturer quoted on the

Italian Stock exchange. He has previously

served for five years as CFO of its parent

company Caltagirone SpA. Prior to this

he worked for over eight years at Fidelity

Investments in London as Portfolio

Manager and Pan-European Equity Analyst.

Marco holds a number of non-executive

roles within the Cementir group and is non-

executive director at Henderson European

Focus Trust Plc. Marco holds an MBA at

NYU Stern School of Business, class 1996

and he is a Chartered Accountant since

1990.

Appointed on 5 June 2017.

John Birch

Non-executive Director

Chairman of the Management

Engagement and Conflicts Committees,

member of the Remuneration and

Nomination Committees

John is the Managing Partner of The

Cardinal Partners Global S.a.r.l. Previously

he was Chief Operating Officer of

Sentinel Asset Management, Inc. and

Sentinel Administrative Services, Inc.,

both members of National Life Group. He

has also held senior roles in State Street,

American Skandia Investment Services,

Inc., Gabelli Funds, Inc. and Gabelli

International. He has an MA in Tax and over

30 years experience in asset management.

Appointed on 5 June 2017.

The Directors of the Company who were in office during the year and up to the date of the signing of the financial statements were

as follows:

Strategic report Governance Financial statements

John Newlands

Independent non-executive Director

Member of the Audit & Risk Committee

John has served more than twenty years

in the City of London, most recently

with Brewin Dolphin Limited as Head of

Investment Companies Research from

2007 to 2017. He was a member of the

Association of Investment Companies

Statistics’ Committee from 2000 to

2017. He has an MBA from Edinburgh

University Business School and is a

Chartered Electrical Engineer. He has

written four books about financial history,

the most recent charting the history

of Dunedin Income Growth Investment

Trust. He is a non executive director of

CQS New City High Yield Fund and Chair

of Develop North PLC and Deputy Chair

of the Investment Committee of Durham

Cathedral.

Appointed on 8 February 2018.

Yuji Sugimoto

Independent non-executive Director

Member of the Nomination, Conflicts and

Management Engagement Committees

Yuji has over 37 years experience in

financial markets. He is a former Executive

Director of Sumitomo Mitsui Banking

Corporation in the US. Prior to this

Yuji co-managed Japanese/Pan-Asian

institutional research sales as a Managing

Director at Lehman Brothers / Barclays.

From 2003 to 2007 he managed a New

York based Japanese equity hedge fund

Sugimoto Capital Management LLC,

which he founded. He started his career

at Salomon Brothers working for 24 years

in New York, London, Hong Kong and

Tokyo in a number of institutional sales

management positions as a Managing

Director. He has a MBA from the University

of Southern California and a B.A. in

Economics from Columbia University.

Appointed on 5 June 2017.

James Wedderburn

Independent non-executive Director

Chairman of the Remuneration

Committee and member of the Audit &

Risk Committee

James has over 40 years experience in

the investment industry. From 1999 to

2017 he was Director of the family office

of Sir Peter Lampl, founder of the Sutton

Trust social mobility charity, where he

was responsible for all financial and

investment matters and closely involved

with the charity’s finances. He worked

previously at financial group Hamilton

Lunn monitoring the global investments

of ultra high net worth clients and, prior

to that, was a fund manager at Invesco

MIM and Samuel Montagu responsible

for UK pension fund and charity clients.

James spent his early career as a UK

equity research analyst at Cazenove and

Laing & Cruickshank after graduating

from Oxford University.

Appointed on 15 November 2017.

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Directors’ Report

The Directors present the annual report and accounts of the

Company for the year ended 30 June 2022. The financial

statements have been prepared in accordance with International

Financial Reporting Standards (IFRS) as adopted by the UK

international accounting standards and have been prepared in

accordance with the requirements of the Companies Act 2006.

The Company

The Company was incorporated in England and Wales on 28

April 2017 with registered number 10747219. The Company is

registered as an investment company as defined by Section 833

of the Companies Act 2006 (the “Companies Act”) and operates

as such.

The Company was admitted to the Specialist Fund Segment of

the Main Market of the London Stock Exchange and trading on

the Official List of the International Stock Exchange on 19 July

2017.

The Company’s Listing Sponsor on the International Stock

Exchange is Ocorian Administration (Guernsey) Limited. The

Company also operates an additional market quote for its ordinary

shares on the London Stock Exchange, denominated in sterling.

In the opinion of the Directors, the Company has conducted

its affairs during the year under review so as to qualify as an

investment trust for the purposes of section 1158 of the Corporation

Tax Act 2010 (as amended). See below in the Directors’ Report for

additional information on the Company’s tax status.

Continuation of the Company

An ordinary resolution for the continuation of the Company as a

closed-end investment company will be proposed at the Annual

General Meeting (“AGM”) scheduled to be held on 30 November

2022, which is the AGM immediately following the fifth anniversary

of the Company’s listing.

Associated Capital Group, legal and beneficial owner of 6,216,256

shares at the time of this writing, has confirmed via a letter of

Deed, which contains enforceable irrevocable undertakings, that

it will both vote in favour of continuation of the company and

not participate in the 2nd tender offer. As such the Company will

continue its business as presently constituted.

The Directors believe, having taken into account the views of

the Company’s investment manager, that the continuation of the

Company’s operations is in the best interests of its Shareholders.

Going concern

The Directors, having taken account of the continuing market

regulatory changes affecting investee companies, investment

valuations, implications of the COVID-19 pandemic, and the war

in Ukraine, and, have determined that the Company’s strategy,

longer-term asset allocation, short-term liquidity and robust

governance structure provide a sufficient basis for the Board to

adopt the going concern basis for the Company as at 30 June

2022.

In forming this position, the Directors consulted with shareholders

utilizing the tender offer process, considered the Company’s

investment objectives, risk management policies, capital

management policies and procedures, the nature of the portfolio

and expenditure projections in detail.

The Company is able to meet all of its liabilities from its assets

and the ongoing charges are approximately 1.60% of assets. This

Going Concern statement should be read in conjunction with the

Company’s Viability & Going Concern Statement which can be

found on page 19.

Furthermore, the Company has the full support of the largest

shareholder, Associated Capital Group, legal and beneficial owner

of 6,216,256 shares at the time of this writing, that has confirmed

via a letter of Deed that it will both vote in favour of continuation

of the company and not participate in the 2nd tender offer.

Directors

The Directors of the Company in office at the date of this report

and their biographies are set out on pages 20 and 21. Details of

Directors’ interests in the shares of the Company are set out in the

Directors’ Remuneration Report.

Directors’ retirements are subject to the Company’s Articles of

Association (the “Articles”). The Articles provide that the directors

may appoint a person who is willing to act as a director and any

director so appointed is required to retire at the next AGM after his

or her appointment and is eligible for reappointment. All directors

who held office at the time of the two preceding AGMs and who

did not retire by rotation at either of them are also required to

retire by rotation and are eligible for reappointment. In addition,

each Director considered to be non-independent will retire and

being eligible offer themselves for re-election on an annual basis.

The Board has agreed to follow the recommendations of the

latest Corporate Governance Codes and ask all Directors of the

Company to offer themselves for re-election annually. Therefore,

all the Directors will retire at the forthcoming AGM and, being

eligible will offer themselves for re-election.

Having considered the Directors’ performance as part of the

annual Board evaluation process the Board believes that it

continues to be effective and that the Directors each bring an

appropriate level of knowledge, experience, business, financial

and asset management skills. The Board therefore recommends

that shareholders vote in favour of each Director’s proposed

election at the AGM.

Mr. Gabelli, as a Director and President of the Gabelli Group

(“GGCP, Inc.”), the parent company of both Gabelli Funds, LLC

(the “Portfolio Manager”) and Associated Capital Group, the

Company’s largest shareholder, is deemed to be interested in the

Company’s Portfolio Management Agreement, as is Mr. Birch, who

serves on the Boards of other funds in the Gabelli/GAMCO group

of companies.

There were no other contracts subsisting during the year under

review, or up to the date of this report, in which a Director of the

Company is, or was, materially interested and which is, or was,

significant in relation to the Company’s business.

None of the Directors have a service contract with the Company.

The terms of their appointment was provided to them in writing.

No Director is entitled to compensation for loss of office on the

takeover of the Company. The powers of the Directors are set out

in the Corporate Governance Statement.

Directors’ conflicts of interest

Directors have a duty to avoid situations in which they have, or

could have, a direct or indirect interest that conflicts, or may

potentially conflict, with the Company’s interests. This is in

addition to the continuing duty that Directors owe the Company

to disclose to the Board any transaction or arrangement under

consideration by the Company in which they are interested.

Strategic report Governance Financial statements

Directors are required to disclose any conflicts and potential

conflicts of interest upon appointment. A schedule of these is

maintained by the Company Secretary and provided at each

quarterly Board meeting. Directors are responsible for keeping

these disclosures up to date and in particular to notify any new

potential conflicts of interest, or changes to existing situations, to

the Company Secretary.

In accordance with the Companies Act 2006 and the Company’s

Articles, the Directors can authorise such conflicts or potential

conflicts of interest. In deciding whether to authorise any conflict,

the Directors must consider their general duties under the

Companies Act 2006, and their overriding obligation to act in a

way they consider, in good faith, will be most likely to promote the

Company’s success.

In addition, the Directors are able to impose limits or conditions

when giving authorisation to a conflict, or potential conflict of

interest, if they think this is appropriate. The authorisation of

any conflict matter, and the terms of any authorisation, may be

reviewed by the Board at any time.

The Board believes that the procedures established to deal with

conflicts of interest operated effectively during the year under

review.

Directors’ Indemnities

In accordance with the provisions of the Companies Act, the

Company’s Articles allow for Directors and officers of the

Company to be indemnified out of the assets of the Company

against all costs, losses, and liabilities incurred for negligence,

default, breach of duty or trust in relation to the Company’s

affairs and activities. The Articles also provide that, subject to the

provisions of the Companies Act 2006, the Board may purchase

and maintain insurance for the benefit of Directors and officers

of the Company against any liability which may incur in relation

to anything done or omitted to be done, or alleged to be done

or omitted to be done, as a Director or officer. The Company has

taken out Directors’ and Officers’ Liability insurance, which covers

the Directors and officers of the Company.

Share Capital

Full details of the Company’s issued share capital are given in

Note 11 to the Financial Statements on page 57. Details of the

voting rights in the Company’s shares as at the date of this report

are also given in Note 14 to the Notice of Annual General Meeting

on page 62.

The ordinary shares carry the right to receive dividends and have

one voting right per share. Voting rights may increase to certain

Loyalty Programme qualifying shareholders in the subsequent

period commencing calendar year end 2022 (see “Loyalty

Programme”). There are no restrictions on the voting rights of

the ordinary shares or any shares which carry specific rights with

regard to the control of the Company.

No shares were issued during the year under review, or up to close

of business on 30 June 2022.

At the year end and at the date of this report there were

accordingly 95,960 ordinary shares held in treasury (0.93% of the

issued share capital).

Share Repurchase

The Company has authority to buy back shares in the market and

may cancel or hold ordinary shares acquired by way of market

purchase in treasury.

The Directors will consider repurchasing shares in the market

under an extension of the programme if they believe it to be in

shareholders’ interests. It is the Board’s intention that any shares

bought back by the Company will be held in treasury and will

only be sold at prices at or above the prevailing NAV per share

ensuring a positive overall effect for shareholders when shares are

bought back at a discount and then sold at a price at or above the

NAV per share.

The current authorities to buy back and sell shares from treasury

and to issue shares will expire at the conclusion of the 2022

Annual General Meeting. The Directors are proposing that these

authorities be renewed at the forthcoming Annual General

Meeting.

Tender Offer

In line with the fifth anniversary tender offer, and via two separate

tranches, the company is implementing the offer to purchase

shares from all qualifying registered shareholders entered into

the loyalty register and who continuously remain on the loyalty

offer. As a subsequent event, the tender offer completed its first

tranche on 30 September and purchased and settled 3,055,957

million shares. A second tranche fifth anniversary tender offer is

expected to commence in January of 2023.

While the tender offer is available to all shareholders, Associated

Capital Group, legal and beneficial owner of 6,216,256 shares at

the time of this writing, has confirmed via a letter of Deed that

it will both vote in favour of continuation of the company and

not participate in the 2nd tender offer and thereby remain as the

company’s largest shareholder.

Close Company

As a result of the Fifth Anniversary tender offer tranche one, the

Company will operate as an Investment Company with Close

Company status. The Board does not expect any impact on the

investment policy as detailed in the Charter, as a result of close

status. The Board is examining alternatives to reduce costs on an

ongoing basis and will seek to undertake a comprehensive review

during the fiscal year following the completion of the tranche two

of the Fifth Anniversary tender offer, beginning in the 2023-2024

period.

Loyalty Programme

The Company has implemented a loyalty programme to incentivise

long-term share ownership. The loyalty programme is open to all

shareholders, who are entered in the Loyalty Register, a separate

increase its voting power after holding shares for a continuous

period of at least five years. Each shareholder so registered will

be entitled to subscribe for one special voting loyalty share in

respect of each ordinary share held.

A shareholder may only exercise this right during the prescribed

subscription period each calendar year, being between 1 and

14 December, by completing the appropriate subscription

documentation and paying up the nominal value of the special

voting loyalty shares. Subject to the receipt of valid subscriptions

during the period and the satisfaction of certain requirements by

the Company under the Companies Act and the Articles special

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

voting loyalty shares would be issued on 31 December, or the

preceding business day, should 31 December not be a business

day.

Each ordinary shareholder and holder of special voting loyalty

shares has the right to receive notice of, to attend, to speak at,

and vote at general meetings of the Company. Each ordinary

shareholder and holder of special voting loyalty shares who is

present in person or by proxy at general meetings has one vote,

whether on a show of hands or on a poll, in respect of each

ordinary and special voting loyalty share held. At any general

meeting ordinary shares and any special voting loyalty shares in

the capital of the Company in issue would vote effectively one

class.

The ordinary shares carry the right to receive dividends. The

special voting loyalty shares are not entitled to participate in any

dividend or distribution made or declared by the Company except

for a fixed annual dividend equal to 0.00001% of their nominal

value. On a winding up of the Company holders of special voting

loyalty shares would be entitled to be repaid the capital paid up

thereon pari passu with the repayment of the nominal amount

of the ordinary shares. The special voting loyalty shares are not

transferrable without the prior written consent of the Company.

There are no restrictions on the transfer of ordinary shares or on

the exercise of voting rights attached to them, which are governed

by the Company’s Articles and relevant legislation.

There are no shares which carry specific rights with regard to the

control of the Company.

Activities and Business Review

A review of the business and details of research activities can be

found within the Strategy section of this Annual Report.

Alternative Investment Fund Managers

As an investment company that is managed and marketed in the

United Kingdom, the Company is an Alternative Investment Fund

(“AIF”) falling within the scope of, and subject to the requirements

of, the Alternative Investment Fund Managers Directive (“AIFMD”).

The Company has appointed Carne Global Fund Managers

(Ireland) Limited (“Carne”) as its Alternative Investment Fund

Manager (“AIFM”) pursuant to the AIFMD, however as a result of

the United Kingdom’s departure from the European Union, the

Company will assign Gabelli Funds LLC, a US SEC registered

investment advisor as the investment manager in accordance

with such exemptions.

Carne is responsible for the portfolio management and risk

management functions of the Company until which point Gabelli

Funds’ LLC is assigned portfolio manager. At such point Carne will

continue to provide the Company AIFM administrative services

and monitor risks. The Carne Agreement may be terminated by

either party giving not less than 90 days’ written notice.

Carne is entitled to receive from the Company such annual fees,

accrued and payable at such times, as may be agreed in writing

between itself and the Company from time to time. The fees are

to be payable monthly and subject to a minimum monthly fee of

€2,500. During the year under review the AIFM fees paid to Carne

were $48,062 (2021: $53,475). Regulatory disclosures including

the Key Investor Information Document are provided on the

website. Disclosures on Remuneration as required under AIFMD

can also be found on page 36 and 65.

Portfolio management and administration

Gabelli Funds, LLC (“Gabelli”) was appointed as Portfolio Manager

with effect from 15 June 2017 under a Portfolio Management

Agreement (the “Agreement”) with Carne and the Company

under which portfolio management functions were delegated

to Gabelli. Gabelli receives a management fee, payable monthly

within 10 business days calculated at the rate of 0.85% of NAV

accrued daily and calculated on each business day.

Gabelli is entitled to earn a performance fee under the Agreement

in respect of each performance period, ending 30 June each year.

For the year under review Gabelli was entitled to a performance

fee of 20% of any outperformance of the net asset value total

return, capped at 3% of the average NAV. For the year ended 30

June 2022 no performance fee was paid (2021: $2,795,658).

Appointment of the Manager

The arrangements for the provision of portfolio management and

other services to the Company is considered by the Board on an

ongoing basis and a formal review is conducted annually.

During the year, the Board considered the performance of Gabelli

as Portfolio Manager by reference to the investment process,

portfolio performance and how it had fulfilled its obligations

under the terms of the Portfolio Management Agreement.

It is the opinion of the Board that the continuing appointment

of Gabelli as Portfolio Manager, on the terms disclosed is in

shareholders’ interests as a whole. Among the reasons for this

view is the depth, experience and investment process of Gabelli.

Facilitating Retail Investments

The Company conducts its affairs so that its shares can be

recommended by independent financial advisers to ordinary retail

investors in accordance with the FCA’s rules in relation to non-

mainstream pooled investments 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 pooled investments because they are shares

in an investment trust.

Other third party service providers Depositary and Custodian

The Company appointed State Street Trustees Limited as its

Depositary under a Depositary Agreement dated 30 June 2017

between Carne, Gabelli and the Company. The main role of the

Depositary under the AIFMD is to act as a central custodian with

additional duties to monitor the operations of the Company,

including cash flows and to ensure that the Company’s assets are

valued appropriately. The Depositary receives a fee payable at

0.025% per annum of the gross assets of the Company.

Under the Depositary Agreement, custody services in respect of

the Company’s assets have been delegated to State Street Bank

and Trust Company. The Custodian receives a custody fee payable

by the Company at rates depending on the number of trades and

the location of securities held subject to a minimum annual fee

payable of not less than $31,250. Custody fees of $41,736 were

paid during the year under review (2021: $38,326).

The depositary agreement is subject to 90 days’ written notice of

termination by any party.

Directors’ Report continued

Strategic report Governance Financial statements

Registrar

Computershare Investor Services Plc (the “Registrar”) has been

appointed as the Company’s registrar pursuant to the Registrar

Services Agreement. The Registrar is responsible for maintaining

the Company’s register of shareholders and also provides services

in respect of the payment of dividends, provision of shareholder

documentation and compliance with the Common Reporting

Standard. Fees of $13,000 was paid to the Registrar during the

year under review (2021: $15,525). Fees in respect of corporate

actions will be agreed at the time of the corporate action.

Other Service Providers

Kin Company Secretarial Limited was formally appointed in

October 2021 to take over as the Company Secretary from

Maitland Administration Services Limited (“Maitland”). State

Street Bank and Trust Company (“the Administrator”) is

responsible for the day-to-day administration of the Company

including the maintenance of the Company’s financial records

and the calculation of the daily NAV. Kin Company Secretarial

has worked with the Administrator to perform the functions of

Company Secretary for the 2021/2022 financial year.

The Kin Company Secretarial agreement has no minimum

term and is terminable by Kin or the Company on not less than

one month’s notice. Fees of $84,466 were paid for Company

Secretarial services during the year under review (2021: $62,299).

Related Party Transactions

Carne Global Fund Managers (Ireland) Limited is a related party to

the Company as it is considered to have significant influence over

the Company in its role as AIFM. AIFM fees of $48,062 were paid

to Carne during the year ended 30 June 2022 (2021: $53,475).

Further details of related party transactions are provided in note

16 to the financial statements.

Substantial shareholders

As at 30 June 2022, the Company had been advised by the

following shareholders of their interests of 3% or more in the

Company’s ordinary issued share capital:

Shareholder

% of

Voting Rights

Associated Capital Group Inc 60.42%

Banca Generali SpA

5.26%

Fondazione Cassa di Risparmio di Perugia 4.83%

Victor Paullier & Cía 4.59%

Pictet & Cie (Europe) SA Luxembourg 4.03%

Banco di Desio e Della Brianza 3.87%

LQH SA 3.42%

Subsequent to 30 June 2022 and as result of the fifth anniversary

tender offer tranche one, the Company has been notified of several

significant changes. The Company was notified that Associated

Capital Group had not tendered any shares in tranche one of the

tender and does not plan to tender any shares in the tranche two

tender, resulting in Associated Capital Group owning an estimated

87% of the voting rights. As of the time of this report’s publishing,

the list of substantial shareholders is being gathered, however it is

expected to change significantly.

Future developments

The Chairman’s Statement and Portfolio Manager’s report within

this Annual Report contain details of likely future developments.

Financial instruments

The financial risk management and internal control processes

and policies, and exposure to the risks associated with financial

instruments can be found in Note 12 to the financial statements.

Results

The Company generated a revenue loss for the year ended 30

June 2022 of $943,000 (2021: $1,459,000).

Disclosure of Information under Listing Rule 9.8.4

The disclosures required by Listing Rule 9.8.4, where relevant to

the Company, are discussed in more detail on page 67.

Dividends and dividend policy

In order to allow the Shareholders to realise a predictable, but

not assured, level of cash flow and some liquidity periodically on

their investment, the Company has adopted a “managed dividend

policy”. This policy seeks to pay Shareholders a quarterly dividend

in relation to the Net Asset Value of the Company at the time,

which may be changed at any time by the Board. Between

inception and 30 June 2022, the Company returned $2.27

per share to shareholders, consistent with its dividend policy.

Dividends are paid only when declared by the Board subject

to the Board’s assessment of the Company’s financial position

and only if the Company has sufficient income and distributable

reserves to make the dividend payment, and the level of dividend

may vary over time. As such, the portfolio’s managed distribution

of capital through the payment of quarterly dividends is under

review as we enter the new Fiscal Year. The Company declared

and paid three quarterly interim dividends of US$0.12 per ordinary

share each on 03 December, 03 February 2022, and 28 April 2022

for the financial year ending 30 June 2022. The Board expects to

announce the fourth interim dividend in respect of the Company’s

financial year ended 30 June 2022 after the Tranche Two Tender

Offer has concluded. Qualifying Registered Shareholders who

participate in either Tender Offer will not be entitled to any such

dividend in respect of any Ordinary Shares validly tendered.

Exercise of Voting Rights in Investee Companies

The exercise of voting rights attached to the Company’s portfolio

has been delegated to the Portfolio Manager.

Articles of Association

The Company’s Articles can only be amended by special resolution

at a general meeting of the shareholders. No amendments are

proposed at the 2022 AGM.

Change of Control

There are no agreements the Company is party to that might

be affected by a change in Control of the Company. There

are no agreements between the Company and its Directors

for compensation for loss of office that occurs as a result of a

takeover bid.

Gabelli approach to voting at shareholder meetings

During the year, the Manager voted on approximately 859

proposals at approximately 165 shareholder meetings on behalf of

the Company. At these meetings, the Manager voted in favour of

the majority of resolutions, but voted against the recommendations

of management on approximately 29 resolutions.

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Most of the votes against were in respect of resolutions relating

to super-dilutive stock option plans, which were deemed by the

Investment Manager not to be in the best interests of shareholders.

Streamlined Energy and Carbon Reporting

The Company is categorised as a lower energy user under the

HMRC Environmental Reporting Guidelines March 2019 and

is therefore not required to make the detailed disclosures of

energy and carbon information set out within the guidelines.

The Company’s energy and carbon information is therefore not

disclosed in this report.

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.

Modern Slavery Act 2015 (the “MSA”)

The Company is an investment company and has no employees

and does not provide goods and services in the normal course of

business. Accordingly, the Directors consider that the Company is

not required to make a slavery and human trafficking statement

under the MSA.

Employees, Social, Human Rights and Environmental Matters

The Company is an investment company and has no employees and

accordingly it has no direct social, human rights or environmental

impact from its operations. In carrying on its investment activities

and relationship with suppliers the Company aims to conduct

itself responsibly, ethically and fairly.

Political donations

No political contributions or donations were made during the

financial period ended 30 June 2022.

Annual General Meeting

The following information to be discussed at the forthcoming

Annual General Meeting is important and requires your immediate

attention. If you are in any doubt about the action you should take,

you should seek advice from your stockbroker, bank manager,

solicitor, accountant or other financial adviser authorised under

the Financial Services and Markets Act 2000 (as amended).

If you have sold or transferred all of your ordinary shares in the

Company, you should pass this document, together with any

other accompanying documents, including the form of proxy, at

once to the purchaser or transferee, or to the stockbroker, bank or

other agent through whom the sale or transfer was effected, for

onward transmission to the purchaser or transferee.

The Directors currently anticipate that this year’s Annual General

Meeting will be open to shareholders, but reserve the right to

change arrangements for the meeting at short notice. Therefore

shareholders are strongly encouraged to vote by proxy and to

appoint the Chairman as their proxy. The following resolutions

will be proposed to the AGM. Resolutions 12-14 are proposed to

the meeting as special business of the meeting as an ordinary

resolution. Resolutions 15-17 are proposed as special resolutions.

Ordinary resolutions require a simple majority vote (above 50%)

to be passed, whereas Special resolutions require at least a 75%

majority vote to be passed.

Resolution 12

The Company’s articles of association include a requirement for the

Board to propose an ordinary resolution at the first annual general

meeting following the fifth anniversary of the initial public offering

of the Company for the Company to continue its business as a

closed-ended investment company. Resolution 12 in the Notice of

AGM is an ordinary resolution for shareholders to approve that the

Company continues in existence (the “Continuation Resolution”).

Resolution 13 Authority to Allot shares

The Directors may only allot shares for cash if authorised to do so

by shareholders in general meeting. Resolution 13 seeks authority

for the Directors to allot shares for cash up to an aggregate

nominal amount of US$10,238 which represents 10% of the current

issued share capital. The authority will expire at the conclusion of

the 2022 Annual General Meeting unless renewed prior to that

date.

Resolution 14 Loyalty Shares

The articles of association authorise the issuance of Special Voting

Loyalty Shares. Resolution 14 seeks authority for the Directors to

allot Special Voting Loyalty Shares, and to accept subscriptions

for such Special Voting Loyalty Shares outside the subscription

period specified in the articles of association, provided all other

conditions set forth therein are satisfied.

Resolution 15 Authority to disapply pre-emption rights

Directors require specific authority from shareholders before

allotting new shares or selling shares from treasury for cash

without first offering them to shareholders in proportion to their

existing holdings. Resolution 15 seeks to empower the Directors to

allot new shares for cash or to sell shares held in treasury free from

statutory pre-emption rights up to an aggregate nominal amount

of US$10,238, being 10% of the current issued share capital and

equivalent to 1,023,820 ordinary shares of US$0.01 each. The

authority will expire at the conclusion of the 2022 Annual General

Meeting unless renewed prior to that date.

Resolution 16 Authority to buy back shares

Resolution 16 seeks to renew the authority previously granted

to Directors to enable the Company to purchase up to 1,535,628

ordinary shares being 14.99% of the issued share capital.

The Directors will only consider repurchasing shares in the market

if they believe it to be in shareholders’ interests and as a means

of correcting any imbalance between supply and demand for

the Company’s shares. Under the Listing Rules of the Financial

Conduct Authority (“FCA”), the maximum price which can be

paid is the higher of (i) 5% above the average market value of the

ordinary shares for the five business days immediately preceding

the date on which the purchase is made and (ii) the higher of

the price quoted for (a) the last independent trade of, and (b)

the highest current independent bid for, any number of ordinary

shares on the trading venue where the purchase is carried out.

In making purchases, the Company will deal only with member

firms of the London Stock Exchange. The authority will expire

at the conclusion of the 2022 Annual General Meeting unless

renewed prior to that date.

Resolution 17 General Meetings on 14 clear days’ notice

Resolution 17 seeks shareholder authority to call general meetings

other than an AGM on 14 clear days’ notice. The approval will be

Directors’ Report continued

Strategic report Governance Financial statements

effective until the Company’s next AGM, when it is intended that

a similar resolution will be proposed. The Board will utilise this

authority to provide flexibility when merited and would not use it

as a matter of routine.

Recommendation

Your Board recommends all resolutions to shareholders as being

in the best interests of the Company and its shareholders as a

whole. The Directors therefore unanimously recommend that

shareholders vote in favour of each resolution, as they intend to

do in respect of their own beneficial holdings.

Directors’ statement as to the disclosure of information to the

auditors

In accordance with the requirement and definitions under section

418 of the Companies Act 2006, the Directors at the date of

approval of this report confirm that:

• so far as they are aware, there is no relevant audit information

of which the Company’s auditors are unaware; and

• each Director has taken all the steps that they ought to have

taken as a Director to make themselves aware of any relevant

audit information and to establish that the Company’s auditors

are aware of that information.

Appointment of independent auditors

PricewaterhouseCoopers LLP, the independent external auditors

of the Company, were appointed in 2017. Resolutions to reappoint

PricewaterhouseCoopers LLP as the Company’s auditors, and

to authorise the Audit & Risk Committee to determine their

remuneration will be proposed at the forthcoming AGM.

The Directors’ Report was approved by the Board on 25 October

2022.

Marc Gabelli

Chairman

25 October 2022

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Corporate Governance Report

This Report sets out the role and activities of the Board and

explains how the Company is governed.

Governance

Applicable Corporate Governance Code and compliance

in year

As a company admitted to trading on the Specialist Fund

Segment, the Board has considered the principles and provisions

of the Association of Investment Companies’ Code of Corporate

Governance (the ‘AIC Code’). The AIC Code addresses the

Principles and Provisions set out in the 2018 version of the

Financial Reporting Council’s UK Corporate Governance Code

(the ‘UK Code’), as well as setting out additional provisions

on issues that are of specific relevance to the Company as an

investment company listed on the London Stock Exchange.

The Board considers that reporting against the principles and

provisions of the AIC Code, which has been endorsed by the

Financial Reporting Council, provides more relevant information

to shareholders. The following analysis explains how the

company has complied with the principles and provisions of the

AIC Code during the financial year.

The Board of Directors also recognise the critical importance of

effective corporate governance to investors, potential investors

and the Company’s stakeholders, and the directors therefore

give priority to high standards of corporate governance.

The Board confirms that it complies with the recommendations

of the AIC Code and the relevant provisions of the UK Code

except as follows:

Summary of AIC Code Provision Compliance Performance in year

Director and Board independence

and independence from the Manager

x A formal policy and procedure ensure Board independence

and the independence of the investment Manager.

The Chair should be independent on

appointment

x Although the Chairman is not deemed independent for

the purposes of the AIC Code, given his qualifications and

investment experience, and the significant commitment being

made by the Gabelli Group to the Company, the Board believes

that his appointment as Chairman is in the best interests of the

Company and the shareholders as a whole.

Appoint a Senior Independent Director

(‘SID’)

x The Board does not deem it necessary to appoint a SID given

the nature of its activities as a listed investment trust.

The key responsibilities of the SID under the UK Code are

completed by the Non-executive Directors. The performance

of the Chairman is appraised annually by the Non-executive

Directors.

Monitor risk management and internal

control systems

x The Company has delegated its operational management to

third party service providers, the Board therefore receives

reports from those parties to satisfy itself that an appropriate

controls environment is maintained. These reports extend to

any relevant instances of whistleblowing at each of the service

providers.

Identification of remuneration consultant

in the Annual Report

x The Remuneration Committee does not deem it necessary to

appoint a remuneration consultant.

The AIC Code is available on the AIC website (www.theaic.co.uk).

It includes an explanation of how the AIC Code adapts the

Principles and Provisions set out in the UK Code to make them

relevant for investment companies. The UK Code is available

from the Financial Reporting Council’s website at frc.org.uk.

The Board

Overview of the Board

The Board consists of six non-executive Directors. All Directors

have a wide range of other interests and are not dependent

on the Company itself. Their biographical details, which are

set out in detail on pages 20 and 21, demonstrate a breadth of

investment, commercial and professional experience with an

international perspective.

The Board has a formal schedule of matters specifically reserved

for its decision, which are categorised under various headings,

including strategy and management, internal controls and risk

management, strategy and policy considerations, transactions,

and finance.

The provision of the UK Code which relates to the combination

of the roles of the chairman and chief executive does not apply

as the Company has no executive directors.

The Board meets quarterly to review investment performance,

financial reports, discuss strategy and has the overriding

responsibility for assessing and reviewing the company’s risk

appetite. Board or Committee meetings are also held on an ad

hoc basis and as required to consider any other material issues

as they arise.

Representatives of the Portfolio Manager and Company

Secretary attend each meeting. The Board, the AIFM, the

Portfolio Manager, the Company Secretary and other key

Strategic report Governance Financial statements

services providers operate in a cooperative and constructive

relationship.

Chairman

The Board is satisfied that other than his relationship with the

Portfolio Manager, the Chairman, Marc Gabelli, does not have

any appointments or interests which may create a conflict of

interest with the Company’s activities or interests.

The Nomination Committee reviewed the performance of the

Chairman during the year and is comfortable that he continues

to have sufficient time to commit to his duties, and that he

performs effectively in the role. The Board therefore recommends

shareholders vote to re-elect the Chairman at the 2022 Annual

General Meeting.

Board Diversity

When recruiting a new Director, the Board’s policy is to appoint

individuals on merit. The Board believes diversity is important in

bringing an appropriate range of skills, knowledge and experience

to the Board and gives that consideration when recruiting new

Directors.

As at 30 June 2022 there were 6 male Directors, of multiple

nationalities and ethnicities, and no female Directors on the Board.

Whilst all future board appointments will be made on merit, the

Directors have committed to keep the Board’s gender diversity

under review with a view to improving the ratio over time.

Role of the Board

The Board is collectively responsible for the long-term success

of the Company and is accountable to shareholders and

the Company’s wider stakeholders for the performance and

governance of the Company. It is also ultimately responsible for

setting and executing the Company’s strategic aims, its purpose,

culture and values. The authority of the Board in these areas is

subject to the Articles and to such approval of the shareholders

in a general meeting as may be required from time to time.

The Board also ensures that the necessary resources are in place

to enable the Company’s objectives to be met in accordance

with the Company’s investment objective, and that shareholder

value is maximised within a framework of proper controls.

The Directors exercise the powers conferred by the Company’s

Articles of Association and UK Company Law to manage

the Company’s interest for the benefit of shareholders and

stakeholders.

As an investment company the Company’s day to day

responsibilities are delegated to third party service providers. The

Company has no employees and the Directors are non-executive

with the Portfolio Manager represented by the Chairman.

Stakeholder Interests (s.172 statement)

The Companies (Miscellaneous Reporting) Regulations 2018

require directors to explain more fully how they have discharged

their duties under Section 172(1) of the Companies Act 2006

in promoting the success of their companies for the benefit

of members as a whole. This enhanced disclosure covers how

the Board has engaged with and understands the views of

stakeholders and how stakeholders’ needs have been taken into

account, the outcome of this engagement and the impact that it

has had on the Board’s decisions.

As the Company is an externally managed investment company

and does not have any employees or customers, the Board

considers the main stakeholders in the Company to be the

shareholders and other key service providers. The reasons for

this determination, and the Board’s overarching approach to

engagement with these stakeholders, are set out in the table

below.

Stakeholder

Activity or mitigation in the year

Shareholders • The Company operates a Loyalty Programme to reward shareholders who retain their

shares for at least five years. Further information regarding the Programme can be

found on page 23;

• As a listed investment trust, the Board operates policies designed to safeguard the value

of shareholders’ investment, in particular the Board may initiate a buyback programme

whenever the Company’s share price represents a discount of 7.5% or more;

• Shareholders’ rights are also protected under the Company’s Articles of Association

which require any proposal that may materially change those rights to be subject to

prior approval by a majority of shareholders in general meeting; and

• Shareholders are given opportunities to attend meetings with the Board and to also

attend, ask questions and vote at the Annual General Meeting of the Company.

Service Providers

The Board regularly evaluates the performance of its key panel of third-party professional

service providers. The appraisals involve an opportunity for those third parties to provide

360° feedback. During the period under review, the Board traveled to New York to visit

the GAMCO head office and meet with members of staff at all levels by way of employee

engagement. As part of the off-site visit, the Board also met with the company’s major

shareholders.

Social & Environment Whilst the Company’s key investment objective targets outperformance through exposure

to corporate transactions in the United States, the Investment Manager, Gabelli Funds,

LLC operates a suite of investment policies designed to take account of Environmental,

Social and Governance (‘ESG’) themes across its investment strategies. These policies

ensure that exposure to ESG risks is minimised for the Company’s stakeholders.

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Stakeholder

Activity or mitigation in the year

Other Stakeholders • The Board seeks to maintain the highest levels of corporate governance through

compliance with the principles and provisions of both the AIC Code and, to the

maximum extent practicable, the UK Code; and

• The Board is committed to responding promptly and transparently to any reputational

or regulatory matter that might arise affecting the Company, its future prospects or its

investment activities.

Purpose, Values and Culture

The Board takes its responsibilities under the AIC Code seriously

and has accordingly sought to identify and promote each of: a

corporate purpose, distinct values and a culture for the Company.

However, as a listed investment trust, which has appointed third

party service providers to operate its day to day business, the

chosen purpose, values and culture are necessarily focused on

the approach and activities of the Board of Directors.

Nevertheless, the Board prioritises the Company’s primary

investment objective, together with its proprietary Private Market

Value with a Catalyst methodology, in defining its PMV with a

Catalyst purpose. The Company’s values and culture primarily

reflect those of its experienced, independent and diverse

individual board members, combined with the approach and

professionalism of its appointed third party service providers.

The Board regularly monitors both the performance of the

Company against its investment objective and proprietary

methodology; and its individual directors and service providers

to ensure continuing strong performance and integration with

the Board’s values and culture.

Employees, Social, Human Rights and Environmental Matters

As an investment vehicle the Company has no employees and

accordingly it has no direct social or community impact and

limited environmental impact from its operations. However, the

Company believes that it is in shareholders’ interests to consider

human rights issues, together with environmental, social and

governance factors when selecting and retaining investments.

Directors’ Appointment, Retirement and Succession

The rules concerning the appointment, retirement and rotation

of Directors are set out in the Directors’ Report. The Board

believes that it has a reasonable balance of skills and experience.

It recognises the value of the progressive refreshing of, and

succession planning for, company boards, including for the

Chairman. The Board’s tenure and succession policy seeks to

ensure that it maintains the balance of skills and experience

required.

Directors must be able to demonstrate their commitment, in

terms of time, to the Company. The Board is of the view that

length of service does not itself impair a Director’s ability to

act independently or exercise good judgement, rather, a long

serving Director can continue to offer valuable perspectives and

experience.

When Directors are appointed they go through an induction

programme organised by the Portfolio Manager to familiarise

them with the specifics of the portfolio. Directors are also

provided with key information on the Company’s policies,

regulatory and statutory requirements and internal controls on

a regular basis.

Committees of the Board

The Board has established an Audit & Risk Committee, Nomination

Committee, Remuneration Committee, Management Engagement

Committee and a Conflicts Committee. Each Committee has

defined terms of reference and duties. A record of the meetings

held during the year is set out in the table on page 31.

Audit & Risk Committee

The Audit & Risk Committee is chaired by Marco Bianconi.

Further details are provided in the report of the Audit & Risk

Committee on pages 32 to 34.

Nomination Committee

The Nomination Committee is chaired by the Chairman of

the Board (who would not chair the Committee when the

Chairman’s successor was being considered) and consists of

Marc Gabelli, John Birch and Yuji Sugimoto. The Nomination

Committee is responsible for reviewing Board succession, the

policy on directors’ tenure, the performance of the Board and

its Committees and the appointment of new Directors. When

voting on candidates for the appointment of new directors, only

independent directors will vote.

Remuneration Committee

The Remuneration Committee is chaired by James Wedderburn

and consists of John Birch and Marco Bianconi. The Remuneration

Committee is responsible for setting the Directors’ remuneration

in conjunction with the Chairman and will take into consideration

the Company’s peer group and the potential to appoint external

remuneration consultants when making decisions.

Management Engagement Committee

The Management Engagement Committee is chaired by

John Birch and consists of John Birch and Yuji Sugimoto. The

Management Engagement Committee is responsible for ensuring

that the provisions of the Portfolio Management Agreement

remain competitive and in the best interest of shareholders and

to review the performance of the Manager, Portfolio Manager

and other third party service providers to the Company. Details

of the management arrangements are set out on page 24.

Conflicts Committee

The Conflicts Committee is chaired by John Birch and consists

of Marco Bianconi and Yuji Sugimoto. The Conflicts Committee

is responsible for considering the potential conflicts of interest

that may arise in relation to the operation of the Company with

regard to the Directors, the AIF Manager, the Portfolio Manager

and other service providers of the Company.

Attendance at scheduled meetings

The table below sets out the number of Board and Committee

meetings held during the year under review to 30 June 2022 and

the number of meetings attended by each Director.

Corporate Governance Report continued

Strategic report Governance Financial statements

The Audit & Risk Committee will meet at least twice a year and

all other Committees at least once a year and additionally as

required.

Director Board

Audit

& Risk

Co.

Rem

Co.

M.E

Co..

Nom

Co.

Conficts

Co.

Marc Gabelli 4/4 n/a n/a n/a 1/1 n/a

Marco Bianconi 4/4 6/6 1/1 n/a n/a 1/1

John Birch 4/4 n/a 1/1 1/1 1/1 1/1

John Newlands 4/4 6/6 n/a n/a n/a n/a

James Wedderburn 4/4 6/6 1/1 n/a n/a n/a

Yuji Sugimoto 4/4 n/a n/a 1/1 1/1 1/1

The meetings held total includes dividend and other specific purpose

approval Board Sub-Committee meetings held by video conference that not

all directors were expected to attend.

Includes a Cyber-Security Deep-Dive Session .

Board Evaluation

The Board undertook an annual self-evaluation of its performance,

that of its committees and individual Directors, including the

Chairman. The reviews were led by the Chairman, in the case of

the Board, and the Chairman of each committee otherwise.

Each Chairman, assisted by the Company Secretary, determined

the scope and format for the review, which generally confirmed

the directors’ view that the Board and its governance continued

to function well with few issues.

There were no significant actions arising from the evaluation

process and it was agreed that the composition of the Board, at

that time, reflected a suitable mix of skills and experience, and that

the Board as a whole, the individual Directors and its committees

were performing in accordance with the provisions of the AIC

Code other than where explained in this Report.

Risk Management

Directors’ liability insurance

During the year the Company has renewed and maintained

appropriate Directors & Officers’ insurance on behalf of the Board.

Internal controls

The Board has overall responsibility for the Company’s systems

of internal controls and for reviewing their effectiveness. In

common with the majority of investment trusts, the Board has

determined that the most efficient and effective management

of the Company is achieved by the Directors determining the

investment strategy, and the Portfolio Manager being responsible

for the day-to-day investment management decisions on behalf

of the Company.

Accounting, company secretarial and custodial services have

also been delegated to third party service providers who

specialise in these areas and can provide, because of their size

and specialisation, economies of scale, segregation of duties,

and all that is required to provide proper systems of internal

control within a regulated environment.

As the Company has no employees and its operational functions

are undertaken by third parties, the Audit & Risk Committee

does not consider it necessary for the Company to establish its

own internal audit function. Instead, the Audit & Risk Committee

examines internal control reports received from its principal

service providers to satisfy itself as to the controls in place.

The internal controls aim to ensure that assets of the Company

are safeguarded, proper accounting records are maintained,

and the financial information used within the business and for

publication is reliable. The need for an internal audit function is

reviewed annually by the Committee.

The system therefore manages rather than eliminates risk

of failure to achieve the Company’s business objectives and

provides reasonable, but not absolute assurance against material

misstatement or loss.

Shareholder relations and Annual General Meeting

The primary medium by which the Company communicates with

its shareholders is through the Annual and Half Yearly Reports

which aim to provide shareholders with a clear understanding

of the Company’s activities and results in the relevant financial

period. This information is supplemented by the daily calculation

and publication of the NAV per share to a regulatory information

service.

The Annual and other General Meetings provide an opportunity

for shareholders to engage with the Board of Directors, and

the individual directors and the Investment Manager regularly

communicate with significant shareholders to discuss company

updates and other key events.

All shareholders are ordinarily encouraged to attend and vote at

the Company’s Annual General Meeting. However, it is explained

in the Notice of Annual General Meeting that whilst the Directors

anticipate the meeting in 2022 being open to shareholders,

the Directors reserve the right to change arrangements at

short notice. Shareholders are strongly encouraged to vote by

proxy and to appoint the Chairman as their proxy. The Board

and representatives of the Portfolio Manager are similarly

usually available at the Annual General Meeting to discuss

issues affecting the Company. They will be happy to answer any

questions provided in writing prior to the meeting this year.

The Notice of Annual General Meeting is set out on pages 72

and 73 and details the business of the meeting. Any item not of

an entirely routine nature is explained in the Directors’ Report

on pages 22 to 27. The Notice of Annual General Meeting and

any related papers are sent to shareholders at least 21 clear days

before the meeting.

Substantial Shareholdings

A summary of the significant shareholders that have been

notified to the Board as at the date of this report can be found

on page 25.

Anti-Bribery Policy

The Company has zero tolerance towards bribery and is

committed to carrying out business fairly, honestly and openly.

The Board takes its responsibility to prevent bribery seriously

and its service providers are contacted to regularly confirm their

anti-bribery policies and controls.

Criminal Finances Act 2017

The Board has a zero tolerance approach to the facilitation of

tax evasion.

By order of the Board

Marc Gabelli

Chairman

25 October 2022

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Report of the Audit & Risk Committee

Chairman of the

Audit & Risk Committee

Marco Bianconi

Members

Marco Bianconi

John Newlands

James Wedderburn

As Chairman of the Audit & Risk Committee, I am pleased to

present the Report of the Audit & Risk Committee for the year

ended 30 June 2022.

Role of the Committee

The Company has established a separately chaired Audit &

Risk Committee (the “Committee”) to ensure that the interests

of shareholders are properly protected in relation to financial

reporting, internal controls and risk mitigation.

The Committee meets at least twice a year in preparation for

the publication of both the annual and half yearly results, and

otherwise as necessary.

This year, following review of the Audit & Risk Committee Terms

of Reference, we collectively decided to expand the remit of the

Committee to incorporate elements of risk oversight beyond the

scope of financial risk, with particular attention to Cybersecurity

Risk. As a result, the Committee is now more appropriately

renamed ‘the Audit & Risk Committee’ and the Committee’s terms

of reference have been updated to reflect this expanded remit.

The updated terms of reference are available from the Company’s

website at https://www.gabelli.co.uk/investment-products/gabelli-

merger plus/.

Composition of the Committee

The Committee consisted of three Directors during the year

under review whose biographies are on pages 20 and 21 and the

Committee composition was therefore unchanged.

The Committee as a whole has competence relevant to the

investment trust sector and is able to discharge its responsibilities

effectively, with each Director having appropriate financial

experience and as such contribute strongly to the Committee’s

operation.

The Company’s Auditors are invited to attend meetings of the

Committee on a regular basis. Representatives of the Portfolio

Manager and other external advisors, including the Administrator,

may also be invited to attend if deemed necessary by the Audit &

Risk Committee.

Committee Responsibilities

The key responsibilities of the Audit & Risk Committee are to

ensure the integrity, clarity and completeness of the Company’s

financial statements, evaluate the robustness of the systems of

internal controls, monitor the quality, effectiveness and objectivity

of the external audit process and monitor the key risks facing the

Company.

During the year the principal activities of the Committee included:

• A comprehensive review of the half yearly report and annual

report and accounts, having considered the disclosures made

therein in relation to internal controls, risk management,

viability, going concern, related parties, whether the report

is fair, balanced and understandable and whether it provides

the information necessary for shareholders to assess the

Company’s position and performance, business model and

strategy;

• A review of the effectiveness of the external audit process,

including the scope, execution, level of materiality, together

with the independence, objectivity and efficiency of the

external auditors and the quality of the audit engagement

team;

• A review and approval of the external audit plan together with

the annual audit fee;

• Setting a policy for the approval of non-audit services;

• A review of the appropriateness of the Company’s accounting

policies;

• Ensuring the adequacy of the internal control systems and

evaluating the need for an internal audit function, further

details of which are provided below; and

• Meeting with representatives of the Company’s third-party

service providers to review and benchmark the adequacy

and effectiveness of their internal controls processes and risk

management systems. This initiative included a review of the

key technology risks facing the company and its main service

providers, including, but not limited to policies, practices and

safeguards, cybersecurity and fraud, identification, assessment,

monitoring, mitigation and the overall management of those

risks,

• A comprehensive deep-dive analysis of the cybersecurity

risks facing the Company, including meetings with the Chief

Technology Officers and Heads of cybersecurity of key third-

party service providers to ensure adequate and appropriate

safeguards were in place to protect the integrity of the

company’s data, including a cyberattack incident response

and recovery plan.

• A thorough review of the adequacy and security of the

company’s arrangements with its contractors and external

parties to raise concerns, in confidence, about possible

wrongdoing in financial reporting or other matters. The

Committee considered that the arrangements remained

appropriate and proportionate.

• Meeting with key senior staff of GAMCO at their New York

headquarters and undertook a comprehensive due diligence

review of their operations, including a detailed review of

the NAV calculation process. The Committee resolved to

undertake a due diligence of third-party service providers’

internal controls and risk management systems at regular

intervals and on a rotational basis.

Chairman

Marco Bianconi

Strategic report Governance Financial statements

Significant Issues and Audit Risk

During the year, the Audit & Risk Committee also considered a

number of significant issues and areas of key audit risk in respect

of the Annual Report and Accounts. The Committee reviewed

the external audit plan at an early stage and concluded that the

appropriate areas of audit risk relevant to the Company had been

put in place to obtain a reasonable assurance that the financial

statements as a whole would be free of material misstatement.

The following table sets out the key areas of risk identified and

explains how these were addressed.

Significant issue How the issue was addressed

COVID-19 and geopolitical risks

The Board reviews the risks arising from the COVID-19

pandemic and from the war in Ukraine, which both impacted

market valuations during the financial year and continue to

create uncertainty regarding the Company’s future dividend

income streams. The Audit & Risk Committee has regularly

reviewed the Company’s exposure to systemic and company

specific risks arising from the COVID-19 pandemic and from the

increasing geopolitical tensions.

Valuation and existence of investments

The AIFM performs the valuation of the Company’s assets in

accordance with its responsibilities under the AIFMD rules.

Ownership of listed investments is verified by reconciliation

to the Custodian’s records. Ownership of CFDs is verified by

reconciliation to the counterparty’s records. The Directors

receive reports, and an annual confirmation from the Depository

who has responsibility for overseeing the operations of the

Company including verification of the existence and valuation

of investments.

Recognition of income

Income received is accounted for in line with the Company’s

accounting policies, as set out on pages 50 and 51.

Compliance with Section 1158 of the Corporation Tax Act 2010

The Committee regularly considers the controls in place to

ensure the regulations for ensuring investment trust status are

observed at all times receiving supporting documentation from

GabelIi Funds LLC and State Street Bank and Trust Company.

Maintaining internal controls

The Committee receives regular reports on internal controls

from State Street Bank and Trust Company and Gabelli

Funds and has access to the relevant personnel of both State

Street and Gabelli Funds who have a responsibility for risk

management and internal audit.

Performance fee

The performance fee calculation is prepared by the

Administrator and reviewed by the Manager and the Committee

before recommendation to the Board, all with reference to the

portfolio management agreement.

Resource Risk

The Company has no employees and its day to day activities

are delegated to third party suppliers. The Board monitors the

performance of third-party suppliers on an ongoing basis.

Governance

The Company has developed a risk register which identifies the

risks facing the Company, their likelihood, potential impact and

the controls established for mitigation. The risk register and the

operation of key controls by the Portfolio Manager and third-

party service providers is reviewed on a regular basis by the

Committee.

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

External audit

The Committee conducted a review of PricewaterhouseCoopers

LLP’s independence and audit process effectiveness as part of

its review of the financial reporting for the year ended 30 June

2022 and separately completed a market benchmarking exercise

in respect of the external audit. In considering the effectiveness,

the Committee reviewed the audit plan, the level of materiality, key

financial reporting risks, and the auditors’ findings.

The Committee also considered the execution of the audit against

the plan, as well as the auditors reporting to the Committee in

respect of the financial statements for the year. Based on this,

the Committee was satisfied with the quality of the external audit

process.with appropriate focus and challenge on the key audit risks.

The Committee advises the Board on the appointment of the

external auditors and on their remuneration. It keeps under review

the cost effectiveness and the independence and objectivity of

the external auditors, mindful of controls in place to ensure the

latter. To this end, the Committee has implemented a policy on the

engagement of the external auditors to supply non-audit services.

The Committee was satisfied that the objectivity and

independence of the auditors was not impaired as no non audit

services were undertaken during the year. Accordingly, the

Committee recommended to the Board that shareholder approval

be sought at the forthcoming AGM for the appointment of

PricewaterhouseCoopers LLP as the Company’s auditors for the

ensuing financial year, and for the Committee to determine the

auditors’ remuneration.

Audit Tendering

PricewaterhouseCoopers LLP was appointed as auditors with

effect from the Company’s launch in July 2017. The Company is

required to put the external audit out to tender at least every ten

years, and at least every twenty years to change the auditors. The

Company will be required to put the audit out to tender, at the

latest following the 2027 year end.

The Audit & Risk Committee will consider annually the need to

tender as a consequence of audit quality or independence. There

are no contractual obligations that restrict the Company’s choice

of auditors.

During the year ended 30 June 2022 £0 was paid to the auditors

for non-audit services (2021: £0). The auditors are required to

rotate the Company’s Lead Engagement Partner every five years.

Kevin Rollo was appointed as the Audit Engagement Partner in

2021 and has successfully overseen the engagement with the

support of a strengthened audit team for the financial year under

review.

Internal Audit function

As the Company has no employees and its operational functions

are undertaken by third parties, the Committee does not consider

it necessary for the Company to establish its own internal audit

function. Instead, the Committee examines internal control reports

received from its principal service providers to satisfy itself as to

the controls in place.

The internal controls aim to ensure that assets of the Company are

safeguarded, proper accounting records are maintained, and the

financial information used within the business and for publication

is reliable. The need for an internal audit function is reviewed

annually by the Committee.

Whistleblowing, anti-bribery and corruption

The Company has no employees; therefore no policies relating

to whistleblowing, anti-bribery, or corruption are considered

necessary. Notwithstanding this, the Company seeks at all times

to conduct its business with the highest standards of integrity

and honesty. Gabelli Funds, LLC is committed to complying with all

applicable legal and regulatory requirements relating to accounting

and auditing controls and procedures. Staff members of Gabelli

Funds, LLC are encouraged to report complaints and concerns

regarding accounting or auditing matters through available

channels described in the Portfolio Manager’s Whistleblower

Policy.

Marco Bianconi

Chairman of the Audit & Risk Committee

25 October 2022

Report of the Audit & Risk Committee continued

Strategic report Governance Financial statements

Directors’ Remuneration Report

The Board presents the Directors’ Remuneration Report which

has been prepared in accordance with the requirements of

Sections 420-422 of the Companies Act 2006 and Schedule 8 to

the Large and Medium-sized Companies and Groups (Accounts

and Reports) (Amendment) Regulations 2013. The law requires

the Company’s auditors to audit certain of the disclosures

provided. Where disclosures have been audited this is indicated.

Statement from the Chairman

This Report describes how the Board has applied the

principles relating to Directors’ remuneration. The Company’s

Remuneration Policy was originally approved by shareholders

at the AGM in 2018 and shareholders approved a version of the

Remuneration Policy with minor further updates at the AGMs

in 2019 and in 2020, in accordance with section 439A of the

Companies Act 2006. Such policy would therefore ordinarily

remain in place until further approved by shareholders in 2023.

All future amendments to the Remuneration Policy are required

to be made by way of an ordinary resolution put to shareholders

at a General Meeting.

Following the recommendation of the Remuneration Committee

the Remuneration Policy was amended in 2019 to reflect that a

portion of the annual Directors’ fees would be payable in Ordinary

Shares of the Company, such amount to be determined by the

Board at its discretion. But, owing to complexities surrounding

the share issuance scheme approved at the 2019 Annual

General Meeting, and following legal advice, the incremental

compensation will be paid in cash, in the amount of $10,000

per annum, per Director. In 2020, the Remuneration Policy was

updated to increase the overall aggregate limit on fees payable

to Directors from $150,000 to $180,000.

Remuneration Committee

The Company has established a Remuneration Committee which

meets at least once a year. Further details of the membership are

provided in the Corporate Governance Report on page 30.

Policy Table

Fixed fee element

Remuneration consists of a fixed fee each year and the Directors of the Company are

entitled to such rates of annual fees as the Board at its discretion determines.

Discretionary element

In accordance with the Company’s Articles of Association, if a Director is requested

to perform extra or special services, they will be entitled to receive such additional

remuneration as the Board considers appropriate.

Expenses

In accordance with the Company’s Articles of Association the Directors are also entitled

to be reimbursed for out-of-pocket expenses and any other reasonable expenses incurred

in the proper performance of their duties.

Purpose and link to strategy

Directors’ fees are set to:

• be sufficient to attract and retain individuals of a high calibre with suitable knowledge

and experience to promote the long term success of the Company;

• reflect the time spent by the Directors working on the Company’s behalf and

representing the Company;

• reflect the responsibilities borne by the Directors;

• recognise the greater time commitment and responsibility required for the positions

of Chairman of the Board and the Chairman of the Audit & Risk Committee through

appropriate fee supplements for each role.

Operation

Fees payable to the Directors will be reviewed annually. A number of factors will be

considered to ensure that the fees are set at an appropriate level. These will include

the average rate of inflation during the period since the last fee increase, the level of

Directors’ remuneration for other investment trusts of a similar size and complexity of

the Directors’ responsibilities.

Maximum

The total remuneration paid to the non-executive Directors is subject to an annual

aggregate limit of $180,000 in accordance with the Company’s Articles of Association,

following approval by shareholders at the AGM in 2020. Any further changes to this limit

will require Shareholder approval by ordinary resolution.

The Company has no employees to consult in drawing up

the policy. There are no performance related elements to the

Directors’ fees.

To ensure fees are set at an appropriate level, the Company

Secretary provides a comparison of the Directors’ remuneration

with other investment trusts of a similar size and/or mandate,

as well as taking into account any data published by the

Association of Investment Companies. This comparison,

together with consideration of any alteration in non-executive

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Directors’ responsibilities, is used to review whether any change

in remuneration is necessary. The review of fees is performed on

an annual basis.

The fees paid to Directors on an annual basis during the year to

30 June 2022 are set out on the next page.

Remuneration

Fees per annum US$

Director of the Board 30,000

Additional fee for the Chairman of the Board 1,000

Additional fee for the Chairman of the Audit

& Risk Committee 5,000

Additional fee for the members of the Audit

& Risk Committee 1,000

Following a review in September 2021, the Committee agreed

that the Directors’ fee would not increase for the year ending

30 June 2022.

Any remuneration arrangements for new directors will

be determined by the Committee in accordance with the

Remuneration Policy, and would also be expected to mirror the

above fee structure.

The additional fees shown in the table above paid to the

Chairman of the Board (albeit Mr Gabelli waived his fee) and the

Chairman and members of the Audit & Risk Committee during

the year ended 30 June 2022 also remain unchanged for the

year ending 30 June 2023.

Consideration of Shareholders’ Views

Shareholders’ approval for the remuneration report will be

sought at the 2022 AGM. Shareholders will have the opportunity

to express their views and raise any queries on the policy either

at or in advance of this meeting. The AGM is currently anticipated

to be open to shareholders, however, if the AGM is closed to

shareholders wishing to attend in person for any reason, there

will be an opportunity for questions to be lodged for a response

from the Board in parallel to the meeting being held.

At the AGM held on 1 December 2021, of the votes cast, 100% were

in favour of (or granted discretion to the Chairman who voted

in favour of) each of the resolutions to approve the Directors’

Remuneration Report and the recommended amendments to

the Directors’ Remuneration Policy.

Details of voting on the Remuneration Report at the 2022 AGM

will be provided in the annual report for the year ending 30 June

2023.

Director’s Remuneration Implementation Report (audited)

Single Total Figure of Remuneration

The single total remuneration figure for each Director who

served during the year to 30 June 2022 is set out below with

prior year comparison. As the Company has no employees

the table below sets out the total remuneration costs paid by

the Company. Mr Gabelli waived the entitlement to his fees as

Chairman. Mr Gabelli devotes a portion of his time employed by

Gabelli to serve as Chairman of the Company. An apportionment

of his remuneration on a time served basis from employment

by an affiliate of the Portfolio Manager would materially equate

to the fees received by the other Directors of the Company for

similar qualifying services.

Directors’ notice periods and payment for loss of office

Directors’ appointments may be terminated without notice. In

this event, the Director will only be entitled to fees accrued at

the date of termination, together with reimbursement of any

expenses properly incurred to that date.

None of the Directors are entitled to post-employment benefits

or termination benefits.

No discretionary payments were made during the year to

30 June 2022.

Year to 30 June 2022 Year to 30 June 2021 Year to 30 June 2020

Fees Total % change Fees

Total % change Fees

Total

Marc Gabelli – – – – – – – – – –

Marco Bianconi 35,000 35,000 (3)% 25,000 11,167 36,167 24% 24,167 5,000 29,167

John Birch 30,000 30,000 (4)% 20,000 11,167 31,167 29% 19,167 5,000 24,167

John Newlands 31,000 31,000 (4)% 21,000 11,167 32,167 21% 21,558 5,000 26,558

Yuji Sugimoto 30,000 30,000 (4)% 20,000 11,167 31,167 29% 19,167 5,000 24,167

James Wedderburn 31,000 31,000 (4)% 21,000 11,167 32,167 28% 20,167 5,000 25,167

Total 157,000 157,000 107,000 55,835 162,835 104,226 25,000 129,226

Represents the fee supplement originally to be paid in shares, on a pro rata basis for the period 1 January to 30 June 2020 following shareholder approval in

2019. Owing to complexities surrounding the share issuance scheme approved at the 2019 Annual General Meeting, and following legal advice, the incremental

compensation was paid in cash, in the amount of $10,000 per annum, per Director. The amount presented for the year ended 30 June 2021 includes cash

payments equivalent to and in lieu of dividends that would have been paid between 1 January 2020 and 30 June 2021, in the amount of $1,167 per Director. See

page 35 for further details.

Directors’ Remuneration Report continued

Strategic report Governance Financial statements

Directors’ Interests

The interests of the Directors (including their connected persons),

who are not required to purchase shares, in the Company’s share

capital are as follows:

Ordinary shares of $0.01

Directors

As at

30 June 2022

As at

30 June 2021

Marc Gabelli 20,100 20,000

Marco Bianconi 1,200 1,200

John Birch 1,000 1,000

John Newlands – –

Yuji Sugimoto – –

James Wedderburn 1,500 1,500

Total 23,800 23,700

None of the Directors has been granted, or exercised, any options

or rights to subscribe for the Ordinary Shares of the Company.

Company Performance

A graph showing the Company’s NAV performance measured

by total shareholder return compared with the Credit Suisse

Merger Arb Liquid Index, the S&P Merger Arb Index, the 13 week

US Treasury Bills, and the IQ Merger Arbitrage ETF (MNA), since

launch, can be found on page 15.

Relative Importance of Spend on Pay

The table below shows the Directors’ remuneration (2022:

$157,000 and 2021: $162,835) in comparison with Portfolio

management fees paid, dividends paid to shareholders and the

Company’s annual revenues.

2022 2021

Directors’ remuneration as a % of $000 % $000 %

Dividends to Shareholders 4,914 3.2 4,936 3.3

Portfolio management fees 842 18.6 852 19.1

Revenues 1,076 14.6 327 49.8

Statement by the Chairman of the Board

The Directors confirm that the Directors’ Remuneration Report

set out above provides a fair and reasonable summary for the

financial year ended 30 June 2022 of:

a) the major decisions on Directors’ remuneration;

b) any substantial changes relating to Directors’ remuneration

made during the period; and

c) the context in which those changes occurred and the

decisions which have been taken.

The Directors’ Remuneration Report was approved by the Board

on 25 October 2022 and is signed on its behalf by:

Marc Gabelli

Chairman of the Board

25 October 2022

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Statement of Directors’ Responsibilities in respect

of the Financial Statements

The Directors are responsible for preparing the Annual Report

and the financial statements in accordance with applicable law

and regulation.

Company Law requires the Directors to prepare financial

statements for each financial year. Under that law the Directors

have prepared the financial statements in accordance with UK-

adopted international accounting standards in conformity with

the requirements of the Companies Act 2006. Under company

law the Directors must not approve the financial statements

unless they are satisfied that they give a true and fair view of the

state of affairs of the Company and of the profit or loss of the

Company for that period.

In preparing the financial statements, the Directors are required

to:

• select suitable accounting policies and then apply them

consistently;

• state whether applicable UK-adopted international

accounting standards in conformity with the requirements of

the Companies Act 2006 have been followed, subject to any

material departures disclosed and explained in the financial

statements;

• make judgements and accounting estimates that are

reasonable and prudent; and

• prepare the financial statements on the going concern basis

unless it is inappropriate to presume that the Company will

continue in business.

The Directors 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 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 and the Directors’ Remuneration

Report comply with the Companies Act 2006.

The Directors are responsible for the maintenance and integrity

of the Company’s website.

Legislation in the United Kingdom governing the preparation and

dissemination of financial statements may differ from legislation

in other jurisdictions.

Directors’ confirmations

The Directors consider that 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 position and performance, business model and

strategy.

In the case of each Director in office at the date the Director’s

Report is approved:

• so far as the Director is aware, there is no relevant audit

information of which the Company’s auditors are unaware;

and

• they have taken all the steps that they ought to have taken as

a Director in order to make themselves aware of any relevant

audit information and to establish that the Company’s

auditors are aware of that information.

By order of the Board

Marc Gabelli

Chairman of the Board

25 October 2022

Strategic report Governance Financial statements

Report on the audit of the financial statements

Opinion

In our opinion, Gabelli Merger Plus+ Trust plc’s financial statements:

• give a true and fair view of the state of the company’s affairs as at 30 June 2022 and of its result and cash flows 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, included within the Annual Report and Accounts (the “Annual Report”), which comprise:

the Statement of Financial Position as at 30 June 2022; the Statement of Comprehensive Income, the Statement of Changes in Equity,

and the Statement of Cash Flows for the year then ended; and the notes to the financial statements, which include a description of

the significant accounting policies.

Our opinion is consistent with our reporting to the Audit & Risk Committee.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our

responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section

of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial

statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled

our other ethical responsibilities in accordance with these requirements.

To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not

provided.

We have provided no non-audit services to the company in the period under audit.

Our audit approach

Overview

Audit scope

• The company is a standalone Investment trust company and engages Gabelli Funds, LLC (the “Manager”) to manage its assets.

• We conducted our audit of the Financial Statements using information from State Street Global Services (the “Administrator”) to

whom the Manager has, with the consent of the Directors, delegated the provision of certain administrative functions.

• We tailored the scope of our audit taking into account the types of investments within the company, the involvement of the third

parties referred to above, the accounting processes and controls, and the industry in which the company operates.

• We obtained an understanding of the control environment in place at both the Manager and the Administrator, and adopted a

fully substantive testing approach using reports obtained from the administrator.

Key audit matters

• Valuation and existence of investments

• Income from investments

• Assessment of the appropriateness of the going concern basis of preparation of the financial statements

Materiality

• Overall materiality: US$958,410 (2021: US$1,017,250) based on 1% of net assets.

• Performance materiality: US$718,808 (2021: US$762,938).

The scope of our audit

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

Independent auditors’ report to the members of

Gabelli Merger Plus

Trust Plc

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2019

Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the

financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not

due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of

resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results

of our procedures thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our

opinion thereon, and we do not provide a separate opinion on these matters.

This is not a complete list of all risks identified by our audit.

Assessment of the appropriateness of the going concern basis of preparation of the financial statements is a new key audit matter

this year. Consideration of the impact of COVID-19, which was a key audit matter last year, is no longer included because of the

reduced uncertainty of the impact of COVID-19 in the current year as markets and economies continue to recover. Otherwise, the key

audit matters below are consistent with last year.

Key audit matter How our audit addressed the key audit matter

Valuation and existence of investments

Refer to page 50 (Accounting Policies, Note 2(g)) and

page 52 (Notes to the Financial Statements, Note 3).

The company’s investments have increased to US$95m.

The investment portfolio at year-end consisted of

listed equity investments and derivatives (contracts for

difference). We focused on the valuation and existence

of investments because investments represent the

principal element of the net asset value as disclosed

in the Statement of Financial Position in the financial

statements. We also focused on the accounting policy

for the valuation of investments as set out in the

accounting standards as incorrect application could

indicate a misstatement in the valuation of investments.

• We assessed the accounting policy for the valuation of investments

for compliance with accounting standards and the AIC SORP and

performed testing to check that investments are accounted for in

accordance with this stated accounting policy.

• We tested the valuation of the listed equity investments by agreeing

the prices used in the valuation to independent third party sources.

• We tested the existence of the investment portfolio by agreeing

listed equity investment holdings to an independent custodian

confirmation.

• For derivatives, we tested a sample of the valuation of these

investments using valuation techniques.

• We tested existence of derivatives by obtaining a direct confirmation

from the respective counterparty.

• No material issues were identified.

Income from investments

Income from investments refers to dividend income and

net capital gains from investments. Refer to pages 50

and 51 (Accounting Policies, Note2(e) and 2(g)). The

company’s dividend income for the year is US$1.1m.

Realised gains on investments for the year is US$5.8m

and unrealised losses on investments is US$6.3m. We

focused on the accuracy, occurrence and completeness

of dividend income, and existence of net capital gains

as incomplete or inaccurate income could have a

material impact on the company’s net asset value and

dividend cover. We also focused on the accounting

policy for income recognition and its presentation in

the Statement of Comprehensive Income as set out

in the requirements of The Association of Investment

Companies Statement of Recommended Practice (the

“AIC SORP”) as incorrect application could indicate a

misstatement in income recognition.

• We assessed the accounting policies implemented were in

accordance with accounting standards and the AIC SORP, and

that income has been accounted for in accordance with the stated

accounting policy.

• We tested the accuracy of dividend receipts by agreeing the

dividend rates from investments to independent market data. To test

for occurrence, we confirmed that a sample of dividends recorded

had occurred in the market. To test for completeness, we tested that

the appropriate dividends had been received in the year by reference

to independent data of dividends declared for all listed investments

during the year.

• We also tested the allocation and presentation of dividend income

between the revenue and capital return columns of the Income

Statement in line with the requirements set out in the AIC SORP by

confirming reasons behind dividend distributions.

• The gains/losses on investments held at fair value comprise realised

and unrealised gains/losses. For unrealised gains and losses, we

tested the valuation of the portfolio at the year-end (on a sample

basis for derivatives), together with testing the reconciliation of

opening and closing investments. For realised gains/losses, we tested

a sample of disposals by agreeing the proceeds to bank statements

and we re-performed the calculation of a sample of realised gains/

losses.

• No material issues were identified.

Independent auditors’ report to the members of

Gabelli Merger Plus

Trust Plc continued

Strategic report Governance Financial statements

Key audit matter How our audit addressed the key audit matter

Assessment of the appropriateness of the going

concern basis of preparation of the financial statements

The Company is subject to a continuation vote in

November 2022, whereby should shareholders not

vote in favour of continuation the Directors would have

to put forward plans to restructure or liquidate the

Company (Directors’ Report, sections “Continuation of

the Company”, page 22). As this follows a recent Tender

offer which has resulted in the loss of Investment Trust

status, we considered whether this led to an increased

likelihood that the continuation vote would go against

continuation. Secondly, we considered whether the

loss of Investment Trust Company (“ITC”) status would

mean that the Directors of the Trust would voluntarily

choose to restructure or liquidate the Company as

it no longer benefited from tax efficient status of an

ITC. Thirdly, with a second Tender Offer to be made to

shareholders in January 2023 we considered the risk

of whether a significant proportion of the remaining

shareholders tendering their shares would result in the

Company either not being able to meet its obligations or

requiring again the Directors to restructure or liquidate

the Company (see Directors’ Report, “Going Concern”

section, page 22 and Note 2c), page 50).

Refer to the “conclusions on going concern” section below outlining

the evaluation of the directors’ assessment of the company’s ability to

continue to adopt the going concern basis and the conclusions reached.

The assessment of going concern is intrinsically linked to the directors’

statement regarding the longer-term viability. Additional procedures

associated with the directors’ statement regarding the longer-term

viability included:

• Challenging management as to the likelihood of continued

shareholder support for a UK listing and evaluating the extent of

the binding legal nature of the commitments from the majority

shareholders.

• Forming an independent view as to the potential or otherwise to

utilise brought forward tax losses in the new structure and evaluating

management’s assessment of viability to ensure that it was not

dependent on a specific outcome.

Refer to the “Corporate Governance” section for the conclusions

reached.

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements

as a whole, taking into account the structure of the company, the accounting processes and controls, and the industry in which it

operates.

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 significant accounting estimates

that involved making assumptions and considering future events that are inherently uncertain.

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These,

together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our

audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both

individually and in aggregate on the financial statements as a whole.

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

Overall company materiality

US$958,410 (2021: US$1,017,250).

How we determined it

1% of net assets

Rationale for benchmark applied

We believe that net assets is the primary measure used by shareholders in assessing

the performance of the company and is a generally accepted auditing benchmark for

investment trust audits.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and

undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of

our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in

determining sample sizes. Our performance materiality was 75% (2021: 75%) of overall materiality, amounting to US$718,808 (2021:

US$762,938) for the company financial statements.

In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment

and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was

appropriate.

We agreed with the Audit & Risk Committee that we would report to them misstatements identified during our audit above $47,921

(2021: $50,863) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Conclusions relating to going concern

Our evaluation of the directors’ assessment of the company’s ability to continue to adopt the going concern basis of accounting

included:

• Evaluating the Directors’ assessment of potential operational impacts of the results of the recent Tender offer and the upcoming

Continuation vote, considering their consistency with other available information and our understanding of the business and

assessed the potential impact on the financial statements;

• Reviewing the Directors’ assessment of the Company’s financial position in the context of its ability to meet future expected

operating expenses, their assessment of liquidity as well as their review of the operational resilience of the Company and oversight

of key third-party service providers;

• Assessing the implications of potential significant reductions in Net Asset Value as a result of market performance on the ongoing

ability of the Company to operate;

• Evaluating the legally binding confirmation from the majority shareholder regarding their intention and ability to continue to

support the Company and commitment to not participate in the January Tender Offer; and

• Assessing the impact of loss of Investment Trust Company status and the continued operations of the company.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,

individually or collectively, may cast significant doubt on the company’s ability to continue as a going concern for a period of at least

twelve months from when the financial statements are authorised for issue.

In 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.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the company’s ability

to continue as a going concern.

In relation to the directors’ reporting on how they have 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.

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’

report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the

other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this

report, any form of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider

whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or

otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are

required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material

misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement

of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.

With respect to the Strategic report and Director’s Report, we also considered whether the disclosures required by the UK Companies

Act 2006 have been included.

Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and

matters as described below.

Strategic report and Director’s Report

In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Director’s

Report for the year ended 30 June 2022 is consistent with the financial statements and has been prepared in accordance with

applicable legal requirements.

In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we did not

identify any material misstatements in the Strategic report and Director’s Report.

Independent auditors’ report to the members of

Gabelli Merger Plus

Trust Plc continued

Strategic report Governance Financial statements

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.

Corporate governance statement

The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the

corporate governance statement relating to the company’s compliance with the provisions of the UK Corporate Governance Code

specified for our review. Our additional responsibilities with respect to the corporate governance statement as other information are

described in the Reporting on other information section of this report.

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

governance statement is materially consistent with the financial statements and our knowledge obtained during the audit, and we

have nothing material to add or draw attention to in relation to:

• The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;

• The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks

and an explanation of how these are being managed or mitigated;

• The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern

basis of accounting in preparing them, and their identification of any material uncertainties to the company’s ability to continue

to do so over a period of at least twelve months from the date of approval of the financial statements;

• The directors’ explanation as to their assessment of the company’s prospects, the period this assessment covers and why the

period is appropriate; and

• The directors’ statement as to whether they have a reasonable expectation that the company will be able to continue in operation

and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to

any necessary qualifications or assumptions.

Our review of the directors’ statement regarding the longer-term viability of the group was substantially less in scope than an

audit and only consisted of making inquiries and considering the directors’ process supporting their statement; checking that the

statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the statement

is consistent with the financial statements and our knowledge and understanding of the company and its environment obtained in

the course of the audit.

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

corporate governance statement is materially consistent with the financial statements and our knowledge obtained during the audit:

• The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides

the information necessary for the members to assess the company’s position, performance, business model and strategy;

• The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and

• The section of the Annual Report describing the work of the Audit & Risk Committee.

We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the company’s

compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing

Rules for review by the auditors.

Responsibilities for the financial statements and the audit

Responsibilities of the directors for the financial statements

As explained more fully in the Statement of Directors’ Responsibilities, the directors are responsible for the preparation of the financial

statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are

also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are

free from material misstatement, whether due to fraud or error.

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.

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Auditors’ 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 auditors’ 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.

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.

Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and

regulations related to breaches of section 1158 of the Corporation Tax Act 2010 (see page 33 of the Annual Report), and we considered

the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and

regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management’s

incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls),

and determined that the principal risks were related to posting of inappropriate journal entries to increase income or to overstate

the value of investments and increase the net asset value of the company. Audit procedures performed by the engagement team

included:

• Discussions with the Directors, the Manager and the Administrator, including consideration of known or suspected instances of

non-compliance with laws and regulation and fraud;

• Evaluation of the controls implemented by the Manager and the Administrator designed to prevent and detect irregularities;

• Assessment of the company’s compliance with the requirements of Section 1158 of the Corporation Tax Act 2010, including

recalculation of numerical aspects of the eligibility conditions; and

• Identifying and testing journal entries, in particular a sample of journals posted as part of the financial year end close process.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-

compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements.

Also, 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 or intentional misrepresentations, or through collusion.

Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing

techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations.

We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit

sampling to enable us to draw a conclusion about the population from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.

uk/auditorsresponsibilities. This description forms part of our auditors’ report.

Use of this report

This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with

Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume

responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save

where expressly agreed by our prior consent in writing.

Other required reporting

Companies Act 2006 exception reporting

Under the Companies Act 2006 we are required to report to you if, in our opinion:

• we have not obtained all the information and explanations we require for our audit; or

• adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from

branches not visited by us; or

• certain disclosures of directors’ remuneration specified by law are not made; 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.

We have no exceptions to report arising from this responsibility.

Independent auditors’ report to the members of

Gabelli Merger Plus

Trust Plc continued

Strategic report Governance Financial statements

Appointment

Following the recommendation of the Audit & Risk Committee, we were appointed by the members on 1 July 2017 to audit the

financial statements for the year ended 30 June 2018 and subsequent financial periods. The period of total uninterrupted engagement

is 5years, covering the years ended 30 June 2018 to 30 June 2022.

Kevin Rollo (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

London

25 October 2022

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Statement of Comprehensive Income

for the year ended 30 June 2022

Year ended 30 June 2022 Year ended 30 June 2021

Income Notes

Revenue

$000

Capital

$000

Total

$000

Revenue

$000

Capital

$000

Total

$000

Investment income 5 1,076 – 1,076 327 – 327

Total investment income 1,076 – 1,076 327 – 327

Gains/(Losses) on investments

Net realised and unrealised (losses)/gains on

investments 3, 14 – (460) (460) – 15,435 15,435

Net realised and unrealised currency gains/(losses) on

investments – 490 490 – (142) (142)

Net gains/(losses) on investments – 30 30 – 15,293 15,293

Total income and gains on investments 1,076 30 1,106 327 15,293 15,620

Expenses

Portfolio management fee 6 (842) – (842) (852) – (852)

Performance fee 6, 13 – – – – (2,796) (2,796)

Other expenses 6 (1,127) (124) (1,251) (901) (174) (1,075)

Total expenses (1,969) (124) (2,093) (1,753) (2,970) (4,723)

Net return on ordinary activities before finance costs

and taxation (893) (94) (987) (1,426) 12,323 10,897

Interest expense and similar charges (1) – (1) – – –

Profit/(loss) before taxation (894) (94) (988) (1,426) 12,323 10,897

Taxation on ordinary activities 8 (49) – (49) (33) – (33)

Profit/(loss) for the year (943) (94) (1,037) (1,459) 12,323 10,864

Earnings/(Loss) per share (basic and diluted) 9 ($0.09) ($0.01) ($0.10) ($0.14) $1.20 $1.06

The total column of this statement represents the Statement of Comprehensive Income prepared in accordance with International

Financial Reporting Standards (“IFRS”). The supplementary revenue return and capital return columns are both prepared under

guidance issued by the Association of Investment Companies. All items in the above statement derive from continuing operations.

No operations were acquired or discontinued during the year ended 30 June 2022.

The Company does not have any income or expense that is not included in net profit for the year. Accordingly, the net profit for the

period is also the total comprehensive income for the year, as defined in IAS1 (revised).

The notes on pages 50 to 66 form part of these financial statements.

Strategic report Governance Financial statements

Statement of Changes in Equity

for the year ended 30 June 2022

Year ended 30 June 2022

Year ended 30 June 2022 Note

Called up

Capital

$000

Special

Distributable

Reserve*

$000

Capital

Reserve

$000

Revenue

Reserve*

$000

Total

$000

Balance as at 1 July 2021 103 83,976 21,059 (3,413) 101,725

Loss for the period after tax on ordinary activities – – (94) (943) (1,037)

Dividends paid 7 – (4,914) – – (4,914)

Balance as at 30 June 2022 103 79,062 20,965 (4,356) 95,774

Year ended 30 June 2021

Year ended 30 June 2021 Note

Called up

Capital

$000

Special

Distributable

Reserve*

$000

Capital

Reserve

$000

Revenue

Reserve*

$000

Total

$000

Balance as at 1 July 2020 103 88,912 9,279 (1,954) 96,340

Ordinary shares bought back into treasury – – (543) – (543)

Profit/(loss) for the period after tax on ordinary activities – – 12,323 (1,459) 10,864

Dividends paid 7 – (4,936) – – (4,936)

Balance as at 30 June 2021 103 83,976 21,059 (3,413) 101,725

* The Revenue Reserve and Special Distributable Reserve are treated as distributable reserves. As at 30 June 2022, the net amount of reserves that are distributable

are $74,706,000 (2021: $80,563,000).

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Statement of Financial Position

as at 30 June 2022

As at 30 June 2022 As at 30 June 2021

Note $000 $000 $000 $000

Non-current assets

Investments held at fair value through profit or loss 3 92,381 98,369

Current assets

Cash and cash equivalents 10 5,911 12,405

Receivable for investment sold 423 2,622

Other receivables 15 66 147

6,400 15,174

Current liabilities

Portfolio management fee payable (61) (82)

Performance fee payable – (2,796)

Payable for investment purchased (1,875) (1,822)

Other payables 15 (212) (314)

Bank overdrafts (391) –

Net current assets 3,861 10,160

Non-current liabilities

Investments at fair value through profit or loss 3 (416) (6,752)

Offering fees payable (52) (52)

Net assets 95,774 101,725

Share capital and reserves

Called-up share capital 11 103 103

Special distributable reserve* 79,062 83,976

Capital reserve 20,965 21,059

Revenue reserve* (4,356) (3,413)

Total shareholders' funds 95,774 101,725

Net asset value per ordinary share $9.35 $9.94

* The Revenue Reserve and Special Distributable Reserve are treated as distributable reserves. As at 30 June 2022, the net amount of reserves that are distributable

are $74,706,000 (2021: $80,563,000).

Signed by:

Strategic report Governance Financial statements

Statement of Cash Flows

for the year ended 30 June 2022

Year ended

30 June 2022

Year ended

30 June 2021

$000 $000 $000 $000

Cash flows from operating activities

(Loss)/profit before tax (988) 10,897

Adjustments for:

Gains on investments (30) (15,293)

Cash flows from operating activities

Purchases of investments

1,2

(202,678) (277,371)

Sales of investments

1,2

204,122 252,191

Increase in receivables

(995) (409)

(Decrease)/increase in payables

(2,918) 2,640

Interest paid (1) –

Dividend income 1,076 330

Foreign withholding taxes on dividends (49) (33)

Net cash flows from operating activities

(2,461) (27,048)

Cash flows from financing activities

Shares bought back for cash – (543)

Dividends paid (4,914) (4,936)

Net cash flows from financing activities (4,914) (5,479)

Net decrease in cash and cash equivalents

(7,375) (32,527)

Cash and cash equivalents at the start of the period 12,405 45,074

Effect of foreign exchange rates

490 (142)

Cash and cash equivalents at the end of the period

5,520 12,405

Receipts from the sale of, and payments to acquire, investment securities, have been classified as components of cash flows from operating activities because

they form part of the Company’s dealing operations.

Comparative figures have been updated to reflect a reclassification of moving the non-cash elements of the purchases/sales from the “increase/decrease in

receivables/payables” to the “purchases/sales of investments” section.

Comparative figures have been updated to reflect a reclassification of effect of foreign exchange rates from “cash flows from operating activities” to “net

decrease in cash and cash equivalents” section.

As at 30 June 2022, $5,843,979 (2021: $11,697,439) was held as collateral at UBS securities LLC and was restricted.

Gabelli Merger Plus

Trust Plc is registered in England and Wales under Company number 10747219.

The financial statements on pages 46 to 49 were approved by the Board of Directors on 25 October 2022 and signed on its behalf by

Marc Gabelli

Chairman

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Notes to the Financial Statements

1 General Information

Gabelli Merger Plus+ Trust Plc (the “Company”) is a closed-ended public limited company incorporated in the United Kingdom

on 28 April 2017 with registered number 10747219. The Company commenced operation on 19 July 2017 and intends to conduct

its affairs so as to qualify, at all times, as an investment trust for the purposes of section 1158 of the Corporation Tax Act 2010

(as amended).

2 Accounting policies

(a) Basis of preparation – The financial statements of Gabelli Merger Plus+ Trust Plc have been prepared in accordance with the UK

adopted International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

The financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial

assets and financial liabilities (including derivative financial instruments) at fair value through profit or loss.

The principal accounting policies adopted by the Company are set out below. Where presentational guidance set out in the

Statement of Recommended Practice (‘SORP’) for investment trusts issued by the Association of Investment Companies (‘AIC’)

in October 2019 is consistent with the requirements of IFRS, the Directors have sought to prepare the financial statements on a

basis compliant with the recommendations of the SORP.

(b) Presentation of Statement of Comprehensive Income – To better reflect the activities of an investment trust company and

in accordance with guidance issued by the AIC, supplementary information which analyses the Statement of Comprehensive

Income between items of a revenue and capital nature has been presented alongside the Statement of Comprehensive Income.

(c) Going concern – The Directors, having taken account of the continuing market regulatory changes affecting investee companies,

investment valuations, implications of the COVID-19 pandemic, and the war in Ukraine, and have determined that the Company’s

strategy, longer-term asset allocation, short-term liquidity and robust governance structure provide a sufficient basis for the

Board to adopt the going concern basis for the Company as at 30 June 2022.

In forming this position, the Directors consulted with shareholders utilizing the tender offer process, considered the Company’s

investment objectives, risk management policies, capital management policies and procedures, the nature of the portfolio and

expenditure projections in detail. These items are discussed in more detail in the Directors’ Report on pages 22 to 27 and the

Chairman’s Statement on pages 3 to 5.

The Directors have also considered the fact that there will be a continuation vote at the Company’s 2022 Annual General

Meeting, and having consulted and maintained close contact with the Company’s major shareholders, have received a letter in

Deed, which contains enforceable irrevocable undertakings, from the largest shareholder, Associated Capital Group, legal and

beneficial owner of 6,216,256 shares at the time of this writing, that they will both vote in favour of continuation of the company

and not participate in the 2nd tender offer. Thereby the Directors confirm with certainty that the company’s largest shareholder

will vote in favour of the company to continue to operate. The Viability & Going Concern Statement on page 19 contains

additional information.

(d) Statement of estimation uncertainty – In the application of the Company’s accounting policies, the Investment Manager is

required to make judgements, estimates, and assumptions about carrying values of assets and liabilities that are not always

readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other

factors that are considered to be relevant. Actual results may vary from these estimates. There have been no significant

judgements, estimates, or assumptions for the period.

(e) Income recognition – Revenue from investments (other than special dividends), including taxes deducted at source, is included

in revenue by reference to the date on which the investment is quoted ex-dividend, or where no ex-dividend date is quoted,

when the Company’s right to receive payment is established. Franked investment income is stated net of the relevant tax credit.

Other income includes any taxes deducted at source.

Special dividends are credited to capital or revenue, according to the circumstances. Scrip dividends are treated as unfranked

investment income; any excess in value of the shares received over the amount of the cash dividend is recognised as a capital

item in the Statement of Comprehensive Income.

Interest income is accounted for on an accrual basis by reference to the principal outstanding and at the effective interest rate

applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset

to that asset’s net carrying amount.

(f) Expenses – The management fees are allocated to revenue in the Statement of Comprehensive Income. Interest receivable and

payable and management expenses are treated on an accruals basis. All other expenses are charged to revenue except where

they directly relate to the acquisition or disposal of an investment, in which case, they are added to the cost of the investment

or deducted from the sale proceeds.

The formation and initial expenses of the Company are allocated to capital.

Strategic report Governance Financial statements

(g) Investments – Investments have been designated upon initial recognition at fair value through profit or loss. Investments are

recognised and de-recognised at trade date where a purchase or sale is under a contract whose terms require delivery within

the time frame established by the market concerned, and are initially measured at fair value. Subsequent to initial recognition,

investments are valued at fair value. Movements in the fair value of investments and gains/losses on the sale of investments are

taken to the Statement of Comprehensive Income as capital items.

The Company’s investments are classified as held at fair value through profit or loss in accordance with applicable International

Financial Standards.

Financial assets and financial liabilities are recognised in the Statement of Financial Position when the Company becomes a

party to the contractual provisions of the instrument. The Company shall offset financial assets and financial liabilities if it has

a legally enforceable right to set off the recognised amounts and interests and intends to settle on a net basis. Financial assets

and liabilities are derecognised when the Company settles its obligations relating to the instrument.

Contracts for Difference (CFDs)

CFDs are recognised in the Statement of Financial Position at the accumulated unrealised gain or loss as an asset or liability,

respectively. This represents the difference between the nominal book cost and market value of each position held. Movements

in the unrealised gains/losses are taken to the Statement of Comprehensive Income as capital items.

(h) Cash and cash equivalents – The Company may invest part of its net assets in cash and cash equivalents, money market

instruments, bonds, commercial papers or other debt obligations with banks or other counterparties, having at least a single-A

(or equivalent) credit rating from an internationally recognised rating agency or government and other public securities, if the

Portfolio Manager believes that it would be in the best interests of the Company and its shareholders. This may be the case, for

example, where the Portfolio Manager believes that adverse market conditions justify a temporary defensive position. Any cash

or surplus assets may also be temporarily invested in such instruments pending investment in accordance with the Company’s

investment policy. Cash balances are marked to market based on the prevailing exchange rate as of the valuation date. US

Treasuries are valued at their amortised cost.

(i) Transaction costs – Transaction costs incurred on the purchase and disposal of investments are recognised as a capital item in

the Statement of Comprehensive Income.

(j) Foreign currency – Foreign currencies are translated at the rates of exchange ruling on the period end date. Revenue received/

receivable and expenses paid/payable in foreign currencies are translated at the rates of exchange ruling at the transaction date.

(k) Fair value – All financial assets and liabilities are recognised in the financial statements at fair value.

(l) Dividends payable – Interim and final dividends are recognised in the period in which they are declared.

(m) Capital reserve – Capital distributions received, realised gains or losses on investments that are readily convertible to cash, and

capital expenses are transferred to the capital reserve. Share buybacks are funded through the capital reserve, with details of

buybacks disclosed on page 23 and in note 11.

(n) Taxation – The tax effect of different items of income/gains and expenditure/losses is allocated between revenue and capital

on the same basis as the particular item to which it relates, under the marginal method, using the Company’s effective rate of

tax. Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the period end

date where transactions of events that result in an obligation to pay more or a right to pay less tax in future have occurred at

the period end date measured on an undiscounted basis and based on enacted tax rates. This is subject to deferred tax assets

only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of

the underlying timing differences can be deducted. Timing differences are differences arising between the Company’s taxable

profits and its results as stated in the accounts which are capable of reversal in one or more subsequent periods.

(o) Functional and presentation currency – The functional and presentation currency of the Company is the U.S. dollar.

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

3 Investments at fair value through profit or loss

The financial assets measured at fair value through profit or loss in the financial statements are grouped into the fair value

hierarchy as follows:

As at 30 June 2022

Level 1

$000

Level 2

$000

Level 3

$000

Total

$000

Financial assets at fair value through profit or loss

Quoted equities 89,577 1,782 – 91,359

Contingent value rights – 132 5 137

Derivatives – 885 – 885

Gross fair value 92,381

Derivatives – (416) – (416)

Net fair value 89,577 2,383 5 91,965

As at 30 June 2021

Level 1

$000

Level 2

$000

Level 3

$000

Total

$000

Financial assets at fair value through profit or loss

Quoted equities 92,205 5,498 – 97,703

Contingent value rights – 278 – 278

Derivatives – 388 – 388

Gross fair value 98,369

Derivatives – (1,892) – (1,892)

Quoted equities - shorts (4,860) – – (4,860)

Net fair value 87,345 4,272 – 91,617

* Dova Pharmaceuticals Inc has been transferred from Level 1 to Level 2 and Zagg Inc has been transfered from Level 2 to Level 3 during the year.

Analysis of changes in market value and book cost of portfolio investments in year

Year ended

30 June 2022

$000

Year ended

30 June 2021

$000

Opening book cost 93,078 59,509

Opening investment holding losses (1,461) (9,377)

Opening market value 91,617 50,132

Additions at cost 202,731 276,928

Disposals proceeds received (201,923) (250,878)

Gains/(losses) on investments (460) 15,435

Market value of investments 91,965 91,617

Closing book cost 99,687 93,078

Closing investment holding losses (7,722) (1,461)

Closing market value 91,965 91,617

The company received $201,923,000 (2021: $250,878,000) from investments sold in the year. The book cost of these investments

when they were purchased was $196,122,000 (2021: $243,359,000). Further explanation of the disposal proceeds received in the

year can be found in the Net realised and unrealised gains/(losses) on investments section on page 53.

Notes to the Financial Statements continued

Strategic report Governance Financial statements

Fair value hierarchy

IFRS 13 requires the Company to classify its financial instruments held at fair value using a hierarchy that reflects the significance

of the inputs used in the valuation methodologies. These are as follows:

• Level 1 – quoted prices in active markets for identical investments;

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayments,

credit risk, etc.); and

• Level 3 – Significant unobservable inputs.

Valuation process and techniques for Level 3 valuations

The investments in contingent value rights are reviewed regularly to ensure that the initial classification remains correct given

each asset’s characteristics and the Company’s investment policies. The contingent value rights are initially recognised using

the transaction price as the best evidence of fair value at acquisition, and are subsequently measured at fair value. At 30 June

2022, the quantitative inputs used to value the level 3 contingent value rights included the last sale price, broker quotes, or the

merger price.

Level 2 financial assets at fair value through profit or loss

The investments in contracts for difference are marked at the price of the underlying equity. Contingent value rights in Level 2 are

marked using broker quotes.

Level 3 financial assets at fair value through profit or loss

Year ended

30 June 2022

$000

Year ended

30 June 2021

$000

Opening valuation – 42

Assets acquired during the year – 2

Assets disposed during the year – –

Total profit or loss included in net profits/(losses) on investments in

the Statement of Comprehensive Income 5 (44)

Closing valuation 5 –

Net realised and unrealised gains/(losses) on investments

Year ended

30 June 2022

$000

Year ended

30 June 2021

$000

Realised gains on investments 5,801 7,519

Movement in unrealised gains/(losses) on investments (6,261) 7,916

Net realised and unrealised gains/(losses) on investments (460) 15,435

4 Transactions costs

During the year commissions and other expenses were incurred in acquiring within gains/(losses) in the Statement of

Comprehensive Income. The total costs were as follows:

Year ended

30 June 2022

$000

Year ended

30 June 2021

$000

Purchases 68 79

Sales 33 75

Total 101 154

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

5 Income/(loss) from investments

Year ended

30 June 2022

$000

Year ended

30 June 2021

$000

Income/(loss) from investments

Overseas equities 530 286

Income on short-term investments

3 (7)

Other income 543 48

Total income/(losses) 1,076 327

Income on short-term investments represents the return on cash and cash equivalents, primarily U.S. Treasury Bills. Further information can be found in Note

10 on page 57.

6 Expenses

Year ended

30 June 2022

$000

Year ended

30 June 2021

$000

Revenue expenses

Portfolio Management Fee (842) (852)

Contracts for Difference (429) (277)

Directors’ Remuneration (157) (163)

Legal Fees (110) (45)

Company Secretary Fees (94) (62)

Audit Fees – PwC (70) (68)

AIFM – Carne (60) (53)

Administration Fees – State Street (44) (42)

Custodian/Depositary Fees – State Street (42) (38)

Printing (17) (13)

Other (33) (36)

Directors’ Expenses (15) -

Ongoing LSE and UKLA Fees (14) (10)

Registrar – Computershare

(13) (16)

Regulatory Filing Fees – AIFMD (13) (58)

LSE RNS fees (8) (14)

Marketing expenses (4) (3)

Dividend Expense on Securities Sold Short (4) (7)

Broker Retainer Fee

- 4

Total revenue expenses (1,969) (1,753)

Capital expenses

Transaction costs on derivatives (73) (103)

Transaction Charges – State Street (51) (71)

Performance Fee

– (2,796)

Total capital expenses (124) (2,970)

The regulatory filing fees for the year ended 30 June 2021 include filing fees from prior fiscal years.

The broker retainer fees for the year ended 30 June 2022 reflects a Cantor Fitzgerald Europe Retainer reimbursement.

Further information regarding the Performance Fee can be found in Note 13 on page 62.

Notes to the Financial Statements continued

Strategic report Governance Financial statements

Portfolio Management Fee

Under the terms of the Portfolio Management Agreement, the Portfolio Manager will be entitled to a management fee

(“Management Fee”), together with reimbursement of reasonable expenses incurred by it in the performance of its duties under

the Portfolio Management Agreement, other than the salaries of its employees and general overhead expenses attributable to the

provision of the services under the Portfolio Management Agreement. The Management Fee shall be accrued daily and calculated

on each Business Day at a rate equivalent to 0.85% of NAV per annum.

AIFM fees

The Company has appointed Carne Global Fund Managers (Ireland) Limited (“Carne”) as its Alternative Investment Fund Manager

pursuant to the AIFMD. Carne is entitled to receive from the Company such annual fees, accrued and payable at such times, as

may be agreed in writing between itself and the Company from time to time. The fees are payable monthly and subject to a

minimum monthly fee of ¤2,500.

7 Equity dividends

Year ended

30 June 2022

$000

Year ended

30 June 2021

$000

Dividends paid 4,914 4,936

During the year ended 30 June 2022 dividends paid per share totalled $0.48 (30 June 2021: $0.48 per share). More detailed

information can also be found in the Dividend History table on page 14.

8 Taxation on ordinary activities

Year ended 30 June 2022

Analysis of the tax charge in the year

Revenue

$000

Capital

$000

Total

$000

Irrecoverable overseas tax (49) – (49)

Total (49) – (49)

Year ended 30 June 2021

Analysis of the tax charge in the year

Revenue

$000

Capital

$000

Total

$000

Irrecoverable overseas tax (33) – (33)

Total (33) – (33)

Year ended 30 June 2022

Factors affecting the tax charge for the year

Revenue

$000

Capital

$000

Total

$000

Loss before taxation (894) (94) (988)

UK Corporation tax at effective rate of 19% 170 18 188

Effects of:

Non taxable overseas dividends 98 – 98

Gains on investments held at fair value through profit or loss – (87) (87)

Irrecoverable overseas tax (49) – (49)

Expenses not deductible for tax purposes (1) (10) (11)

Losses on foreign currencies – 93 93

Movement in excess management expenses (352) (18) (370)

Movement in deferred tax rate on excess management expenses 85 4 89

Total (219) (18) (237)

Total tax charge for the year (49) – (49)

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

8 Taxation on ordinary activities (continued)

Year ended 30 June 2021

Factors affecting the tax charge for the year

Revenue

$000

Capital

$000

Total

$000

(Loss)/profit before taxation (1,426) 12,323 10,897

UK Corporation tax at effective rate of 19% 271 (2,341) (2,070)

Effects of:

Non taxable overseas dividends 54 – 54

Losses on investments held at fair value through profit or loss – 2,933 2,933

Irrecoverable overseas tax (33) – (33)

Expenses not deductible for tax purposes (1) (12) (13)

Gains on foreign currencies – (27) (27)

Movement in excess management expenses (324) (553) (877)

Total (304) 2,341 2,037

Total tax charge for the year (33) – (33)

At the year end after offset against income taxable on receipt, there is a potential deferred tax asset of $2,354,232 (2021:

$1,498,961) in relation to surplus tax reliefs. As the Company has not generated sufficient taxable profits to utilise these amounts,

no deferred tax asset has not been recognised.

Due to the Company’s status as an investment trust and the intention to continue to meet the conditions required to obtain

approval in the foreseeable future, the Company has not provided deferred tax on capital gains and losses arising on the

revaluation or disposal of investments.

9 Earnings per share

Earnings per ordinary share is calculated with reference to the following amounts:

Year ended

30 June 2022

Year ended

30 June 2021

Revenue return

Revenue loss attributable to ordinary shareholders ($000) (943) (1,459)

Weighted average number of shares in issue during year 10,238,206 10,247,238

Total revenue return (loss) per ordinary share ($0.09) ($0.14)

Capital return

Capital return attributable to ordinary shareholders ($000) (94) 12,323

Weighted average number of shares in issue during year 10,238,206 10,247,238

Total capital return per ordinary share ($0.01) $1.20

Total return per ordinary share ($0.10) $1.06

Net asset value per share

As at

30 June 2022

As at

30 June 2021

Net assets attributable to shareholders ($000) 95,774 101,725

Number of shares in issue at year end 10,238,206 10,238,206

Net asset value per share $9.35 $9.94

Notes to the Financial Statements continued

Strategic report Governance Financial statements

10 Cash and cash equivalents

As at

30 June 2022

$000

As at

30 June 2021

$000

Cash 5,911 12,405

Total 5,911 12,405

The Board and Investment Manager oversee investments held in cash and cash equivalents in accordance with the Investment

Policy.

11 Called up share capital

As at

30 June 2022

$000

As at

30 June 2021

$000

Allotted, called up and fully paid:

10,238,206 (2021: 10,238,206) Ordinary shares of $0.01 each – equity 102 102

Treasury shares:

95,960 (2021: 95,960) Ordinary shares of $0.01 each – equity 1 1

Total shares 103 103

12 Financial risk management

The Company’s financial instruments comprise securities and other investments, cash balances, receivables, and payables that

arise directly from its operations; for example, in respect of sales and purchases awaiting settlement, and receivables for accrued

income. The Company also has the ability to enter into derivative transactions in the form of forward foreign currency contracts,

futures, and options, for the purpose of managing currency and market risks arising from the Company’s activities.

The main risks the Company faces from its financial instruments are (i) share price risk (comprising interest rate risk, currency risk,

and other price risk), (ii) liquidity risk, and (iii) credit risk.

The Board regularly reviews, and agrees upon, policies for managing each of these risks. The Portfolio Manager’s policies for

managing these risks are summarised below and have been applied throughout the year. The numerical disclosures exclude short

term receivables and payables, other than for currency disclosures.

(i) Share price risk

The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market

prices. This market risk comprises three elements – interest rate risk, currency risk, and other price risk.

Interest rate risk

Interest rate movements may affect the level of income receivable and payable on cash deposits.

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

when making investment decisions.

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

12 Financial risk management (continued)

Interest risk profile

The interest rate risk profile of the portfolio of financial assets/(liabilities) at the year end date was as follows:

As at 30 June 2022

Interest

rate

Local

currency

000

Foreign

exchange

rate

US Dollar

equivalent

$000

Assets:

US dollar 0.24 5,585 1.00 5,585

Australian dollar 0.12 (48) 1.45 (33)

Canadian dollar 0.15 15 1.29 12

Euro currency (0.75) (8) 0.96 (8)

GBP Sterling 0.12 (24) 0.82 (29)

Hong Kong dollar 0.00 1 7.85 *

New Zealand dollar 0.10 5 1.61 3

Norwegian krone 0.00 (5) 9.88 (1)

South African rand 0.00 (13) 16.38 (1)

Swedish krona (0.75) (80) 10.25 (8)

Total 5,520

* Less than $500.

As at 30 June 2021

Interest

rate

Local

currency

000

Foreign

exchange

rate

US Dollar

equivalent

$000

Assets:

US dollar 0.00 12,462 1.00 12,462

Australian dollar 0.00 1 1.33 1

Canadian dollar 0.00 6 1.24 5

Euro currency (0.75) (12) 0.84 (14)

GBP sterling 0.00 (39) 0.72 (54)

Hong Kong dollar 0.00 1 7.77 *

Japanese yen (0.35) 265 110.99 2

Polish zloty 0.00 1 3.81 *

Singapore dollar 0.00 4 1.34 3

Swedish krona (1.25) 1 8.55 *

Total 12,405

* Less than $500.

Interest rate sensitivity

The sensitivity analysis below has been determined based on the exposure to interest rates for both derivative and non-derivative

instruments at the year end date and the stipulated change taking place at the beginning of the financial year and held constant

throughout the reporting period in the case of instruments that have floating rates.

If interest rates had been 10 (2021: 10) basis points higher or lower and all other variables were held constant, the Company’s profit

or loss for the reporting year to 30 June 2022 would increase/decrease by $6,000 (2021: $12,000). This is mainly attributable to

the Company’s exposure to interest rates on its floating rate cash balances.

Notes to the Financial Statements continued

Strategic report Governance Financial statements

Currency risk

The Company’s investment portfolio is invested predominantly in foreign securities and the year end can be significantly affected

by movements in foreign exchange rates. It is not the Company’s policy to hedge this risk on a continuing basis but the Company

may, from time to time, match specific overseas investments with foreign currency borrowings.

The revenue account is subject to currency fluctuation arising from overseas income.

Currency risk exposure by currency of denomination:

As at 30 June 2022

Net

Investments

$000

Net monetary

assets

$000

Total currency

exposure

$000

Australian dollar – (55) (55)

Canadian dollar 5,295 (5,222) 73

Euro currency 98 (55) 43

GBP Sterling 937 (805) 132

Hong Kong dollar – 2 2

New Zealand dollar – 3 3

South African rand – (7) (7)

Swedish krona – 108 108

Swiss franc – – –

Total non US Investments 8,772 (6,031) 2,741

US dollar 82,724 10,309 93,033

Total 91,496 4,278 95,774

As at 30 June 2021

Net

Investments

$000

Net monetary

assets

$000

Total currency

exposure

$000

Australian dollar – (7) (7)

Canadian dollar 4,845 (4,851) (6)

Euro currency 1,327 (604) 723

GBP sterling – (44) (44)

Hong Kong dollar – (12) (12)

Japanese yen – 5 5

Norwegian krone – 4 4

Singapore dollar – 2 2

South African rand – (2) (2)

Total non US Investments 6,172 (5,509) 663

US dollar 91,806 9,256 101,062

Total 97,978 3,747 101,725

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

12 Financial risk management (continued)

Currency sensitivity

The following table details the Company’s sensitivity to a 10% increase and decrease in US dollars against the relevant foreign

currencies and the resultant impact that any such increase or decrease would have on net return before tax and equity

shareholders’ funds. The sensitivity analysis includes only outstanding foreign currency denominated items and adjusts their

translation at the year end for a 10% change in foreign currency rates.

As at

30 June 2022

$000

As at

30 June 2021

$000

Australian dollar (6) (1)

Canadian dollar 8 (1)

Euro currency 5 72

GBP Sterling 13 (4)

Japanese yen – 1

South African rand (1) –

Swedish krona 11 –

Swiss franc – –

The relevant US dollar exchange rates as at 30 June 2022 were: Australian Dollar (1: 1.4542); Canadian Dollar (1: 1.2900); Euro currency (1: 0.9565); GBP Sterling

(1: 0.8234), South African rand (1: 16.3825), Swedish krona (1: 10.2474) and Swiss franc (1: 0.9574).

Other price risk

Other price risks, i.e., changes in market prices other than those arising from interest rate or currency risk, may affect the value

of the quoted investments.

The Investment Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in

order to review investment strategy. The investments held by the Company are listed on a recognised stock exchange.

Other price risk sensitivity

If market prices at the year end date had been 15% higher or lower while all other variables remained constant, the return

attributable to ordinary shareholders for the year ended 30 June 2022 would have increased/decreased by $13,795,000. The

calculations are based on the portfolio valuations as at the year end date, and are not representative of the year as a whole.

(ii) Liquidity risk

This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. All creditors

are payable within 3 months.

Liquidity risk is not considered to be significant as the Company’s assets comprise mainly readily realisable securities, which can

be sold to meet funding commitments if necessary.

(iii) Credit risk

This is the risk of failure of the counterparty to a transaction to discharge its obligations under that transaction that could result

in the Company suffering a loss.

The table below shows the counterparty risk as at the Balance Sheet date:

Derivative

exposure: CFDs

$000

Collateral posted

$000

Net exposure

$000

Counterparty

UBS Securities, LLC (469) (5,844) (6,313)

Total (469) (5,844) (6,313)

Net exposure represents the mark-to-market value of derivative contracts less any cash collateral held. Negative exposure

represents the Fund’s exposure to that counterparty. Positive amounts are not an exposure to the Fund.

The risk is managed as follows:

• Investment transactions are carried out mainly with brokers whose credit ratings are reviewed periodically by the Portfolio

Manager.

• Most transactions are made delivery versus payment on recognised exchanges.

Notes to the Financial Statements continued

Strategic report Governance Financial statements

• Cash is held at State Street Bank and Trust which has a credit rating by Standard and Poor’s on short term deposits of A-1+

and long term deposits AA-.

The maximum credit risk exposure as at 30 June 2022 was $6,400,000 (2021: $15,174,000). This was due to cash and receivables

as per note (10) ‘Cash & cash equivalents’, note (15) ‘Total other receivables’ and Statement of Financial Position Receivable for

investment sold.

Capital management policies and procedures

The Company’s capital management objectives are:

• to ensure that the Company will be able to continue as a going concern; and

• to maximise the revenue and capital return to its equity shareholders through an appropriate balance of equity capital and

debt.

The Board monitors and reviews the broad structure of the Company’s capital on an ongoing basis. The Board considers

the Company’s capital requirements in the context of both the Special Distributable and Revenue reserves being treated as

distributable, as permitted by current accounting standards for listed investment trusts. The distributable reserves can be used

to fund dividends and share repurchase programmes. This review includes the nature and planned level of gearing, which takes

account of the Portfolio Manager’s views on the market and the extent to which revenue in excess of that which is required to be

distributed under the investment trust rules should be retained.

The analysis of shareholders’ funds is as follows:

As at

30 June 2022

$000

As at

30 June 2021

$000

Called-up share capital 103 103

Special distributable reserve* 79,062 83,976

Capital reserve 20,965 21,059

Revenue reserve* (4,356) (3,413)

Total shareholders' funds 95,774 101,725

* The Revenue Reserve and Special Distributable Reserve are treated as distributable reserves. As at 30 June 2022, the net amount of reserves that are

distributable are $74,706,000 (2021: $80,563,000).

Alternative Investment Fund Managers’ (‘AIFM’) Directive

In accordance with the Alternative Investment Fund Managers’ Directive (“AIFMD”), the Company has appointed Carne Global

Fund Managers (Ireland) Limited as its Alternative Investment Fund Manager (the “AIFM”) to provide portfolio management and

risk management services to the Company in accordance with the investment management agreement.

Leverage

Leverage is calculated using two methods: i) Gross method and ii) Commitment method. For further details please see the

Glossary on page 69.

The Company’s maximum leverage levels at 30 June 2022 are shown below:

Leverage Exposure

Gross

method

Commitment

method

Maximum permitted limit 500% 250%

Actual 131% 137%

The leverage limits are set by the AIFM and approved by the Board and are in line with the maximum leverage levels permitted

in the Company’s Articles of Association. The AIFM is also required to comply with the gearing parameters set by the Board in

relation to borrowings.

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

13 Performance fee

Subject to the satisfaction of the Performance Conditions, the Portfolio Manager shall be entitled under the Portfolio Management

Agreement, in respect of each Performance Period, to receive 20% of the Total Return relating to such Performance Period,

provided that such amount shall not exceed 3% of the Average NAV.

Performance Conditions

The Portfolio Manager’s entitlement to a Performance fee in respect of any Performance Period shall be conditional on the

Closing NAV per Share in respect of the Performance Period (adjusted for any changes to the NAV per Share through dividend

payments, Share repurchases (howsoever effected) and Share issuances since Admission) being in excess of the Performance

Hurdle and High Water Mark. For the year ended 30 June 2022, no Performance fee was paid. As at 30 June 2022, no amount

was outstanding to the Portfolio Manager in respect of the performance fee, reflecting the performance period matching the

Company’s financial year (2021: $2,795,658).

14 Derivatives risk

The Company’s investment policy may involve the use of derivatives (including, without limitation, forward foreign exchange

contracts, equity contracts for difference swap agreements (“CFDs”), securities sold short and/or structured financial instruments).

The Company may use both exchange-traded and over-the-counter derivatives as part of its investment activity. The cost of

investing utilizing derivatives may be higher than investing in securities (whether directly or through nominees) as the Company

will have to bear the additional costs of purchasing and holding such derivatives, which could have a material adverse effect

on the Company’s returns. The low initial margin deposits normally required to establish a position in such instruments permit a

high degree of leverage. As a result, depending on the type of instrument, a relatively small movement in the price of a contract

may result in a profit or a loss which is high in proportion to the amount of funds actually placed as initial margin and may result

in unquantifiable further losses exceeding any margin deposited. In addition, daily limits on price fluctuations and speculative

position limits on exchanges may prevent prompt liquidation of positions resulting in potentially greater losses.

The use of derivatives may expose the Company to a higher degree of risk. These risks may include credit risk with regard

to counterparties with whom the Company trades, the risk of settlement default, lack of liquidity of the derivative, imperfect

tracking between the change in value of the derivative and the change in value of the underlying asset that the Company is

seeking to track and greater transaction costs than investing in the underlying assets directly. Additional risks associated with

investing in derivatives may include a counterparty breaching its obligations to provide collateral, or, due to operational issues

(such as time gaps between the calculation of risk exposure to a counterparty’s provision of additional collateral or substitutions

of collateral or the sale of collateral in the event of a default by a counterparty), there may be instances where credit exposure

to its counterparty under a derivative contract is not fully collateralised. The use of derivatives may also expose the Company to

legal risk, which is the risk of loss due to the unexpected application of a law or regulation, or because a court declares a contract

not legally enforceable.

The use of CFDs is a highly specialised activity that involves investment techniques and risks different from those associated with

ordinary portfolio security transactions. In a CFD, a set of future cash flows is exchanged between two counterparties. One of

these cash flow streams will typically be based on a reference interest rate combined with the performance of a notional value of

shares of a stock. The other will be based on the performance of the shares of a stock. Depending on the general state of short

term interest rates and the returns on the Company’s portfolio securities at the time a CFD transaction reaches its scheduled

termination date, there is a risk that the Company will not be able to obtain a replacement transaction or that terms of the

replacement will not be as favourable as on the expiring transaction. At 30 June 2022 the Company held CFDs, as shown in the

following table.

Notes to the Financial Statements continued

Strategic report Governance Financial statements

Security name

Trade

currency

(000)

As at

30 June 2022

Unrealised

gain/(loss)

$000

Aareal Bank AG EUR 7 (3)

ADTRAN Inc USD (15) 7

ADVA Optical Networking SE USD 27 (7)

Ardent Leisure Group Ltd AUD 190 6

Atlantia SpA EUR 73 (2)

Atotech Ltd USD 27 (5)

Avast plc USD 383 160

Befimmo EUR 7 **

Black Knight Inc USD 3 3

Brewin Dolphin Holdings plc GBP 109 4

Broadcom Inc USD (1) 14

Caretech Holdings plc GBP 9 **

Cazoo Group Ltd USD 27 (8)

CMC Materials Inc USD 11 10

ContourGlobal plc GBP 60 (1)

Deutsche Euroshop AG EUR 56 11

Disruptive Capital GP GBP 86 **

Distell Group Ltd ZAR 44 (6)

Drilling Co USD 15 (130)

EcoOnline Holding AS NOK 103 **

EDF SA EUR 14 (7)

Emis Group plc GBP 2 **

Entain plc GBP 22 (26)

Entegris Inc USD (5) 29

Euronav NV USD 1 **

Flagstar Bancorp Inc USD 11 8

Frontline Ltd USD (1) **

Fulton Financial USD (9) **

Genkyotex SA EUR 7 **

Grief Inc USD (4) (7)

Grifols SA USD (12) (4)

Healthcare Realty Trust Inc USD (37) (64)

Healthcare Trust of America USD 37 15

HomeServe plc GBP 67 8

Hunter Douglas EUR * **

Ideagen Inc GBP 88 2

II-VI Inc USD (8) 45

Intercontinental Exchange Inc USD * 1

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Security name

Trade

currency

(000)

As at

30 June 2022

Unrealised

gain/(loss)

$000

Intertrust NV EUR 29 1

IVECO Group NV EUR 6 **

Lennar Corp USD (5) (3)

Leovegas AB SEK 46 **

Link Admin AUD 94 (28)

MaxLinear Inc USD (2) 3

Mediaset Espana Comunicacion, S.A. EUR 32 (2)

Meggitt plc GBP 395 97

MKS Instruments Inc USD (1) 5

New York Community Bancorp USD (44) (4)

Newcrest Mining AUD (3) 5

Noble Corp USD (25) 156

NortonLifeLock USD (10) 3

Orange Belgium SA EUR 5 (4)

Praemium Ltd AUD 121 (5)

Prudential USD 11 4

Randall & Quilter Investment Holdings Ltd GBP 32 5

Rentokil Initial plc USD (77) (2)

Sanne Group plc GBP 11 1

SciPlay Corp USD 20 10

Siemens Gamesa Renewable Energy S.A. EUR 12 1

Silicon Motion Technology Corp ADR USD 4 (21)

Siltronic AG EUR 5 (41)

SOHO China Ltd HKD 437 2

Spear Investment Group EUR 39 (2)

Spire Healthcare plc GBP 62 6

Swedish Match AB SEK 391 115

Telecom Italia EUR 285 1

Ultra Electronics Holdings plc GBP 30 73

Vivo Energy plc USD 412 11

VMware Inc USD 5 (34)

Vonage Holdings Corp USD 45 63

Total unrealised gain on derivatives 469

* Less than 500 shares.

** Less than $500.

Notes to the Financial Statements continued

14 Derivatives risk (continued)

Strategic report Governance Financial statements

15 Other Assets and Liabilities

The categories of other receivables and other payables include:

As at 30 June

2022

$000

As at 30 June

2021

$000

Other receivables

FX currency sold 12 57

All other receivables 54 90

Total other receivables 66 147

Other payables

FX currency purchased – 20

Custodian fees 7 8

Accounting fees 17 13

Audit fees 70 70

All other payables 118 203

Total other payables 212 314

16 Related party disclosure: Directors

Each of the Directors is entitled to receive a fee from the Company at such rate as may be determined in accordance with the

Articles of Incorporation. The Directors’ remuneration is $30,000 per annum for each Director, other than:

• the Chairman, who will receive an additional $1,000 per annum *;

• the Chairman of the Audit & Risk Committee, who will receive an additional $5,000 per annum; and

• the Members of the Audit & Risk Committee, who will receive an additional $1,000 per annum.

Each of the Directors is also entitled to be paid all reasonable expenses properly incurred by them in connection with the

performance of their duties. These expenses will include those associated with attending general meetings, Board or committee

meetings and legal fees. The Board may determine that additional remuneration may be paid, from time to time, to any one or

more Directors in the event such Director or Directors are requested by the Board to perform extra or special services on behalf

of the Company.

Carne Global Fund Managers (Ireland) Limited, as AIFM is considered a related party to the Company as it is considered to have

significant influence over the Company in its role as AIFM. During the financial year ended 30 June 2022, the AIFM received fees

of US$46,403, of which US$3,135 was payable at year end. Carne Global Financial Services Limited, the parent Company of the

AIFM, received fees amounting to US$14,645 during the financial year ended 30 June 2022 in respect of other fund governance

services to the Company, of which US$3,223 was payable at year end. The related party transactions with the Directors are set

out in the Directors’ Remuneration Report on pages 35 to 37.

Related parties disclosure: other

The Portfolio Management fee and Performance fee for the year ended 30 June 2022 paid by the Company to the Portfolio

Manager are presented in the Statement of Comprehensive Income. Details of Portfolio management fee paid during the year are

disclosed in Note 6. Details of Performance fee paid during the year are disclosed in Note 13.

As at 30 June 2022, Associated Capital Group Inc., an affiliate of the Portfolio Manager, held 6,195,825 Ordinary Shares in the

Company.

Further details of related parties and transactions, including with the Company’s AIFM Carne Global Fund Managers (Ireland)

Limited, are disclosed in the Directors’ Report on pages 22 and 27.

Connected party transactions

All connected party transactions are carried out at arm’s length. There were no such transactions during the year ended 30 June

2022.

* Mr Gabelli has waived his fees since appointment as Chairman.

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

17 Contingent Liabilities and Commitments

As at 30 June 2022, the Company had no contingent liabilities or commitments (30 June 2021: nil).

18 Historical Share and NAV information

30 June 2022 30 June 2021 30 June 2020

Total Shares 10,238,206 10,238,206 10,328,206

Total NAV ($000) 95,774 101,725 96,430

NAV per share $9.35 $9.94 $9.33

19 Significant events

The outbreak of Coronavirus (COVID-19), declared by the World Health Organisation as a global pandemic in 2020, has impacted

many aspects of daily life and the global economy. Travel movements and operational restrictions were implemented by many

countries throughout 2019-2021. However in 2022, most economies globally have fully reopened and the pace of recovery has

varied from country to country. Countries and their workforce have successfully adapted to living and working in this pandemic

environment. As we move into the latter half of 2022, there continues to be potential unforeseen economic consequences

from this virus and market reaction to such consequences could be rapid, unpredictable and vary significantly from country to

country.

The Directors together with the Manager will continue to monitor business continuity and resilience processes with the objective

of mitigating any potential for ongoing impact of COVID-19.

Conflict in Ukraine

Events arising in Ukraine, as a result of military action being undertaken by Russia, may impact on securities directly or indirectly

related to companies domiciled in Russia and/or listed on exchanges located in Russia (“Russian Securities”). As at 30 June

2022, the Company did not have direct exposure to Russian securities. The Directors are monitoring developments related to

this military action, including economic sanctions and actions of foreign governments.

20 Post balance sheet events

The Gabelli Merger Plus+ Trust conducted and completed the Tranche One Tender Offer, as set out in the circular published by

the Company on 19 August 2022. The results of the tender were as follows: A total of 3,055,957 Qualifying Shares were validly

tendered under the Tranche One Tender Offer at the Tender Price of 938.15 U.S. cents per share, which, upon being purchased

by the Company, are to be held in treasury. Proceeds of the tender were payable by 13 October 2022.

The post tender remaining Shareholder base may result in the Company being deemed a Close Company for the purposes of

taxation and is separately under advice. The Company is committed to delivering its investment programme for the long term

and is examining alternatives to minimise taxes, costs and expenses for its Shareholders.

Notes to the Financial Statements continued

Strategic report Governance Financial statements

Regulatory Disclosures

Information to be disclosed in accordance with Listing Rule 9.8.4

The disclosures below are made in compliance with the requirements of Listing Rule 9.8.4.

9.8.4 (1) The Company has not capitalised any interest in the year under review.

9.8.4 (2) The Company has not published any unaudited financial information in a class 1 circular or prospectus or any profit forecast

or profit estimate.

9.8.4 (4) The Company does not have any long term incentive schemes in operation.

9.8.4 (5) and (6) The Chairman Mr Gabelli has waived or agreed to waive any current or future emoluments from the Company.

9.8.4 (7) During the year to 30 June 2021 , the Company has not issued shares.

9.8.4 (8) and 9.8.4 (9) are not applicable.

9.8.4 (10) As President of the Portfolio Manager’s parent company, GGCP, and an employee of the Portfolio Manager, Mr Gabelli is/

was deemed to be interested in the Company’s portfolio management agreement. There were no other contracts of significance

subsisting during the year under review to which the Company is a party and in which a Director of the Company is or was materially

interested; or between the Company and a controlling shareholder.

9.8.4 (11) This provision is not applicable to the Company.

9.8.4 (12) and (13) There were no arrangements under which a shareholder has waived or agreed to waive any dividends or future

dividends.

9.8.4 (14) This provision is not applicable to the Company.

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Glossary

Alternative Investment Fund Managers Directive (“AIFMD”)

Agreed by the European Parliament and the Council of the European Union and adopted into UK legislation, the AIFMD classifies

certain investment vehicles, including investment companies, as Alternative Investment Funds (“AIFS”) and requires them to appoint

an Alternative Investment Fund Manager (“AIFM”) and Depositary to manage and oversee the operations of the investment vehicle.

The Board of the Company retains responsibility for strategy, operations and compliance and the Directors retain a fiduciary duty to

shareholders.

Alternative Performance Measures

Net Asset Value total return, which is calculated based on the net asset value per share at 30 June 2022, compared to the Net Asset

Value per share as at 30 June 2021, adjusted for dividends paid, and assumes that dividends are reinvested.

Share price total return, which is calculated based on the share price as at 30 June 2022, compared to the share price as at 30 June

2021, adjusted for dividends paid, and assumes that all dividends are reinvested.

Discount to net asset value, which is calculated by dividing the difference between the share price and net asset value per share, by

the net asset value per share.

Association of Investment Companies (“AIC”)

The Company is a member of the AIC which is the trade body for investment companies and represents the industry in relation to

various matters which impact the regulation of such entities.

Capital Return per Share

The capital return per share is the capital profit for the year (see Statement of Comprehensive Income) divided by the weighted

average number of ordinary shares in issue during the year.

Close company

Subject to certain exceptions, a close company is broadly a company which is under the control of five or fewer participators or any

number of participators if those participators are directors, or more than half the assets of which would be distributed to five or fewer

participators, or to participators who are directors, in the event of the winding up of the company.

Contract for Difference (“CFD”)

A financial instrument in which a set of future cash flows is exchanged between two counterparties. One of these cash flow streams

will typically be based on a reference interest rate combined with the performance of a notional value of shares of a stock. The other

will be based on the performance of the shares of a stock. CFDs are open-ended with no fixed termination date, in contrast to swaps,

which utilitize fixed termination dates.

Custodian

The Custodian is responsible for ensuring the safe custody of the Company’s assets and that all transactions in the underlying

holdings are transacted in an accurate and timely manner.

Depositary

From July 2014 all AIFs were required to appoint a Depositary who has responsibility for overseeing the operations of the Company

including safekeeping, cash monitoring and verification of ownership and valuation of the underlying holdings and is responsible for

the appointment of a custodian. The Depositary is strictly liable for the loss of any investments or other assets in its custody unless

it has notified that it has discharged its liability in certain markets.

The Depositary has confirmed that it has not discharged liability in relation to any of the Company’s assets.

Dividend Dates

When declared or recommended, each dividend will have three key dates applied to it. The payment date is the date on which

shareholders will receive their dividend, either by BACS transfer or by receipt of a dividend cheque. The record date applied to the

dividend is used as a cut-off for the Company’s registrars to know which shareholders should be paid a dividend. Only shareholders

on the register of members at the close of business on the record date will receive the dividend. The ex-dividend date is the business

day before the record date and is the date upon which the Company’s net asset value will be disclosed ex-dividend.

Dividend Yield

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

Gearing (including Actual and Nominal Gearing)

The net gearing percentage reflects the amount of borrowings (i.e. bank loans or overdrafts) the Company has used to invest in

the market less cash and investments in cash funds, divided by net assets. Nominal gearing is the total notional amount of assets

plus total notional amount of liabilities, divided by equity. Actual gearing is calculated under two methodologies: the gross method,

Strategic report Governance Financial statements

which includes the market value of positions and the gross exposure of derivatives, and excludes cash and cash equivalents; and the

commitment method, which includes the value of cash and cash equivalents. Nominal CFD gearing is the gross nominal value of CFD

positions, as a percentage of shareholders’ equity.

High Water Mark

The closing Net Asset Value (NAV) per share in respect of the last performance period in respect of which a performance fee was

payable to the Portfolio Manager (adjusted for any changes to the NAV per share through dividend payments, share repurchases,

and share issuances from admission to the end of such performance period).

Investment Trusts

Investment trusts are public limited companies, listed on the London Stock Exchange, which provide shareholders with a professionally

managed portfolio of investments. Investments trusts are exempt from tax on the capital gains arising on their investments subject

to meeting certain criteria. Income, net of expenses and tax, is substantially distributed to shareholders. Investment trusts are also

known as investment companies, although the tax legislation retains the reference to investment trusts.

Liquidity

In the context of the liquidity of shares in the stock market, this refers to the availability of buyers in the market for the share in

question. Where the market in a particular share is described as liquid, that share will be in demand and holders wishing to sell their

shares should find ready buyers. Conversely, where the market in a share is illiquid the difficulty of finding a buyer will tend to depress

the price that might be negotiated for a sale.

Leverage

Leverage is the ratio between a fund’s Total Exposure and its Net Asset Value, expressed as a percentage. For the purposes of the

AIFM Directive, leverage can be calculated using two methods: (i) the gross method; and (ii) the commitment method. Under the gross

method, Total Exposure is the algebraic sum of all investment positions (long and short), excluding cash and cash equivalents and

converting derivative instruments into the equivalent position in the underlying asset. Under the commitment method, Total Exposure

is the algebraic sum of all investment positions (long and short), plus cash and cash equivalents, minus hedging arrangements and

offsetting instruments between eligible assets.

Net Asset Value (“NAV”) per ordinary share

The value of the Company’s assets (i.e. investments, cash held and debtors) less any liabilities (i.e. bank borrowings, debt securities

and creditors) for which the Company is responsible, divided by the number of shares in issue. The aggregate NAV is also referred to

as total shareholders’ funds on the Statement of Financial Position. The NAV is published daily.

Net Asset Value per ordinary share, total return represents the theoretical return on NAV per ordinary share, assuming that dividends

paid to shareholders were reinvested at the NAV per ordinary share at the close of business on the day shares were quoted ex-

dividend.

2022 2021

NAV at start of year 9.93 9.33

NAV at end of year 9.35 9.93

Effect of dividends* 0.46 0.51

NAV at end of year including effect of dividends 9.81 10.44

NAV total return (1.34)% 11.89%

* Assumed reinvested at the time of shares going ex-dividend.

Ongoing Charges are operating expenses incurred in the running of the Company, whether charged to revenue or capital, but

excluding financing costs. These are expressed as a percentage of the average net asset value during the year and this is calculated

in accordance with guidance issued by the Association of Investment Companies.

2022

$000

2021

$000

Regular recurring expenses a 1,592 1,736

Average Shareholders’ funds b 99,579 131,080

Ongoing Charge Calculation a/b 1.60% 1.32%

Gabelli Merger Plus

Trust Plc Annual Report and Accounts 2022

Performance Fee

A detailed explanation of the calculation methodology for the Performance Fee payable to the Investment Manager can be found

in Note 13.

Performance Hurdle

In relation to each performance period, the hurdle is represented by “A” multiplied by “B”, where: “A” is equal to the starting NAV per

share increased by two times the rate of return on 13 week Treasury Bills published by the US Department of the Treasury over the

performance period, less the starting NAV per share; and “B” is the weighted average of the number of shares in issue (excluding any

shares held in treasury) at the end of each day during the performance period. The Remuneration Committee has determined that

this is the most appropriate means of benchmarking the Manager’s performance.

Premium/(Discount)

The amount by which the market price per share of an investment trust is either higher premium or lower (discount) than the NAV

per share, expressed as a percentage of the NAV per share.

Revenue Return per ordinary share

The revenue return per ordinary share is the revenue return profit for the year divided by the weighted average number of ordinary

shares in issue during the year.

Share Price Total Return represents the theoretical return to a shareholder, on a closing market price basis, assuming that all dividends

received were reinvested, without transaction costs, into the ordinary shares of the Company at the close of business on the day the

shares were quoted ex dividend.

2022 2021

Share price at start of year 7.40 7.50

Share price at end of year 9.00 7.40

Effect of dividends* 0.55 0.51

Share price at end of year including effect of dividends 9.55 7.91

Share price total return 29.06% 5.46%

* Assumed reinvested at the time of the shares going ex-dividend.

Total Return Performance

This is the return on the share price or NAV taking into account both the rise and fall of share prices and the dividends and interest

paid to shareholders. Any dividends received by a shareholder are assumed to have been reinvested in either additional shares (for

share price total return) or the Company’s assets (for NAV total return).

Glossary continued

Strategic report Governance Financial statements