Report and Accounts
For the Year Ended
30 September 2024
CT UK Capital and
Income Investment
Trust PLC
Forward looking statements
This document may contain forward looking statements with respect to the financial condition, results of operations and business of CT UK Capital
and Income Investment Trust PLC. Such statements involve risk and uncertainty because they relate to future events and circumstances that could
cause actual results to differ materially from those expressed or implied by forward looking statements. The forward looking statements are based
on the Directors’ current view and on information known to them at the date of this document. Nothing should be construed as a profit forecast.
Report and Accounts 2024 | 1
Overview
Company Overview 2
Financial Highlights for the year ended 30 September 2024 3
Chair’s Statement 4
Strategic Report
More Than Three Decades of Dividend Growth 8
Fund Manager’s Review 9
The Fund Manager’s Investment Philosophy and Process 13
Purpose, Strategy and Business Model 15
Key Performance Indicators 17
Twenty Largest Holdings 18
Investment Portfolio by Sector 20
List of Investments 23
Our Approach to Responsible Investment 24
Principal Risks and Future Prospects 28
Promoting the Success of the Company
– Section 172 statement 31
Policy Summary 33
Governance Report
Directors 36
Directors’ Report 37
Corporate Governance Statement 42
Report of the Nomination and Remuneration Committee 45
Directors’ Remuneration Report 47
Report of the Audit and Risk Committee 50
Report of the Management Engagement Committee 53
Statement of Directors’ Responsibilities 54
Management and Advisers 55
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the action you should take,
you are recommended to seek your own independent financial advice from your stockbroker, bank manager, solicitor, accountant or other
independent financial adviser authorised under the Financial Services and Markets Act 2000 if you are in the United Kingdom or, if not,
from another appropriately authorised financial adviser. If you have sold or otherwise transferred all your ordinary shares in CT UK Capital
and Income Investment Trust PLC please forward this document, together with the accompanying documents, immediately to the purchaser
or transferee or to the stockbroker, bank or agent through whom the sale or transfer was effected for transmission to the purchaser or
transferee. If you have sold or otherwise transferred only part of your holding of shares, you should retain these documents.
Contents
Independent Auditors’ Report 56
Financial Report
Income Statement 61
Statement of Changes in Equity 62
Balance Sheet 63
Statement of Cash Flows 64
Notes to the Accounts 65
Ten Year Record (Unaudited) 82
Analysis of Ordinary Shareholders (Unaudited) 83
Notice of Annual General Meeting 84
Other Information
Information for Shareholders 88
How to Invest 89
Alternative Performance Measures 91
Glossary of Terms 93
Financial calendar
Fourth interim dividend for 2024 20 December 2024
Annual General Meeting 6 March 2025
First interim dividend for 2025
March 2025
Interim results for 2025 announced May 2025
Second interim dividend for 2025 June 2025
Third interim dividend for 2025 September 2025
Final results for 2025 announced November 2025
Fourth interim dividend for 2025 December 2025
2 | CT UK Capital and Income Investment Trust PLC
Company Overview
Consistently growing income from investing in some of the UK’s best businesses
With an objective to secure long term capital and income growth from a portfolio consisting
mainly of FTSE All-Share companies, we offer Shareholders a reliable income while at the same
time seeking to grow the size of your investment.
We have been searching out the very best of the UK’s large and medium sized businesses
since 1992 to give our Shareholders access to a range of quality UK stocks in one place.
We carefully identify companies that are growing and profitable today and have the sustainable
foundations to be able to continue that profitable growth into the future.
We choose to invest in companies we strongly believe in. Most of them generate much of their
revenues outside the UK which means you benefit from international growth and diversification.
Our fund manager, Julian Cane, has managed the Company’s investments for over 27 years,
outperforming its Benchmark over that period. The Manager’s results have driven the increase
in dividend every year since the launch of the Company, through the market’s ups and downs.
We are an “AIC Dividend Hero” in recognition of 31 consecutive years of increased annual
dividends.
Our Ongoing Charges figure of 0.67% represents very good value for Shareholders.
Whether you are looking for regular income now, or to reinvest your dividends for
long term growth, we believe that CT UK Capital and Income Investment Trust
can play an important part in your investments.
Visit our website at ctcapitalandincome.co.uk
DIVIDEND
HERO
Potential investors are reminded that the value of investments and the income from them may go down as well as up and investors may not receive back the full amount
invested. Tax benefits may vary as a result of statutory changes and their value will depend on individual circumstances.
CT UK Capital and Income Investment Trust is suitable for retail investors in the UK, professionally advised private clients and institutional investors who seek growth over
the longer term in capital and income, and who understand and are willing to accept the risks and rewards of exposure to equities.
Registered in England and Wales with company registration number 02732011. Legal Entity Identifier: 21380052ETTRKV2A6Y19
Report and Accounts 2024 | 3
Overview
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
Financial Highlights
for the year ended 30 September 2024
Ordinary dividends – 31st consecutive annual increase
Dividends for the year represent a 2.9% (2023: 3.0%) increase on the
prior year (2023: 12.15p), our thirty-first consecutive annual rise.
12.50p
Dividend Yield
The annual dividend yield for the Company is 3.7% (2023: 4.1%) based
on the paid and proposed dividends for the 2024 financial year and the
share price as at 30 September of 334.0p (2023: 298.0p).
3.7%
Share price total return*
The share price total return for the year was 16.6% (2023: 10.9%). The
share price as at 30 September 2024 was 334.0p (2023: 298.0p).
16.6%
Net Asset Value per share total return*
The Net Asset Value per share total return for the year was 18.4%
(2023: 13.1%). This is in comparison to the Benchmark FTSE All-Share
Index which returned 13.4% (2023: 13.8%).
18.4%
Shares ended the year at a discount* of 2.9% (2023: 1.2%)
The shares traded at an average discount to NAV of 3.8% (2023: 3.1%)
over the year.
(2.9)%
* See Alternative Performance Measures on pages 91 and 92 for explanation
4 | CT UK Capital and Income Investment Trust PLC
Chair’s Statement
Dear Shareholder,
I am pleased to write to you with my report for the year to 30 September
2024.
Over the year, the total return gain in our Net Asset Value (“NAV”) per
share was 18.4%, comfortably outperforming the total return over the
same period of 13.4% for the Company’s Benchmark, the FTSE All-Share
Index (“the Index”). The Fund Manager’s Review, which follows, gives
more detail on market movements and our performance.
Although it has been a challenging year, stock markets have generally
been positive. The global geo-political situation was troubled before
the year began as Russia’s invasion of Ukraine continues, but into
this, the escalating conflict in the Middle East has added yet greater
uncertainty and misery. Economic growth in the UK has shown some
Performance over 3 years:
NAV total return +16.4%, FTSE All-Share +23.9%
Source: Refinitiv Eikon
Performance over 1 year:
NAV total return +18.4%, FTSE All-Share +13.4%
Source: Refinitiv Eikon
improvement after the mild recession of the second half of 2023, but
growth rates are pretty lacklustre by historic standards.
More positively, inflation, which had escalated rapidly with the recovery
from COVID-19, continued to decrease and having started our financial
year at 6.7%, the UK Consumer Price Index (“CPI”) fell to 2.2% at our
year end, having been at the Bank of England’s target level of 2.0%
in the summer. This reduction in inflationary pressure was supportive
for equity markets as it was expected to be the prelude to meaningful
interest rate cuts.
Total Return – The Company offers a reliable income while at
the same time seeking to grow the size of your investment
Looking at our performance over the last three years. Our performance
somewhat lagged that of the Index in 2022 in an environment of
Rebased to 100 at 30 September 2021Rebased to 100 at 30 September 2023
*See Alternative Performance Measures on pages 91 and 92 for explanation.
“During the past year the Company has delivered an 18.4% Net Asset Value Total
Return, a 5.0% outperformance of the FTSE All-Share benchmark. As an active
managed investment, it is impossible to guarantee consistent performance in excess
of the Index, but our performance when markets have been stable or rising has more
than outweighed the periods of more challenging performance.”
Jane Lewis, Chair
CT UK Capital and Income - NAV total return*
FTSE All-Share – total return
CT UK Capital and Income - share price total return*
CT UK Capital and Income - NAV total return*
FTSE All-Share – total return
CT UK Capital and Income - share price total return*
Sep 24Jul 24May 24Mar 24Jan 24Nov 23Sep 23
90
95
100
110
115
125
105
120
Sep 23Sep 22Sep 21
90
105
110
115
125
130
120
Sep 24
95
100
85
Report and Accounts 2024 | 5
Chair’s Statement
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
The reasons behind this are explained in detail in the Fund Manager’s
Review, but in summary there were three major factors at play. First, our
previous year’s figures had been boosted by special dividends which
were not repeated this year. Secondly, one of our major investments
has decided to redirect its cash return to shareholders into a share buy
back programme and this is arguably leading to greater capital growth
in that investment, albeit at the expense of dividend income. And thirdly,
corporate activity has led to the take-overs of a number of our higher
yielding investments, again boosting capital returns, but reducing our
dividend income.
With these results, the Board is declaring a dividend for our fourth
quarter of 3.95 pence per share to give a total for the year of 12.50
pence. This is a rate of increase over one year of 2.9%, which compares
to CPI of 1.7%. The Board recognises the importance to Shareholders
of reliable and growing dividends. Our steady, incremental approach to
increasing the dividend has led to considerable outperformance of CPI
and the implied dividend from our main benchmark, the FTSE All-Share
Index over the longer term. For example, over 25 years, growth in these
three comparators has been 160% in our dividend, 85% for CPI and
138% for the dividend from the FTSE All-Share Index.
Translating these figures to compound annual rates of growth, over
25 years we have grown your Company’s dividend by a rate of 3.2%,
compared to 2.5% for CPI and 2.9% for the FTSE All-Share Index.
In addition to the growth in the dividend, the starting yield is also of
significance to Shareholders, and as at 30 September 2024, the yield on
the shares was 3.7% compared to 3.6% from the FTSE All-Share Index.
rising interest rates and particularly around the period of the infamous
mini-budget that caused so much turmoil in investment markets. With
conditions more stable over the last year, we have produced stronger
results and a large part of the deficit has been clawed back.
Over the longer term, looking at the 10 and 25 year periods shown
below, our performance has been well ahead of the Index. As an
active managed investment, it is impossible to guarantee consistent
performance in excess of the Index, but our performance when
markets have been stable or rising has more than outweighed the
periods of more challenging performance, which have generally
coincided with times when the equity market has suffered more
turmoil. Our investment process and its attention to long-term
fundamentals has generated positive absolute investment returns
and outperformance of the Index over the long-term, and our attractive
dividend yield and annual dividend growth are an integral part of this.
Income Growth – The Company has increased its dividend
every year since it was launched, through the market’s ups
and downs
Our earnings fell last year as the dividends paid to us by our investee
companies declined. At face value, this is surprising given the strength
of the UK stock market and our own NAV growth. The decline in our
income should not be taken as a negative indicator for performance
either historically or prospectively, but partly as a change in the
balance between capital and income returns that we happened to
receive last year.
Rebased to 100 at 30 September 2014
Performance over 10 years:
NAV total return +98.7%, FTSE All-Share +83.6%
Source: Refinitiv Eikon
CT UK Capital and Income - NAV total return*
FTSE All-Share – total return
CT UK Capital and Income - share price total return*
Rebased to 100 at 30 September 1999
Performance over 25 years:
NAV total return +342.5%, FTSE All-Share +275.5%
Source: Refinitiv Eikon
*See Alternative Performance Measures on pages 91 and 92 for explanation.
CT UK Capital and Income - NAV total return*
FTSE All-Share – total return
CT UK Capital and Income - share price total return*
Sep 14
Sep 16 Sep 18 Sep 20 Sep 24
150
120
90
180
210
Sep 22
200
190
170
160
140
130
110
100
460
100
Sep 99
Sep 04 Sep 09 Sep 14
Sep 19
Sep 24
340
300
260
220
180
140
60
380
420
500
6 | CT UK Capital and Income Investment Trust PLC
At the forthcoming Annual General Meeting, the Board will again ask
Shareholders to renew its authorities to issue shares at a premium
and buyback at a discount. This will assist the Board in continuing to
protect the discount to NAV at which the Company’s shares may trade.
Gearing
We have borrowed additional funds to invest in our portfolio throughout
the year. These borrowings are on a flexible, short-term basis with the
cost being linked to short-term interest rates. Borrowing for additional
investment adds value for Shareholders if the cost of the borrowing
is less than the additional returns achieved by extra investments and
that was clearly the case last year.
Costs
Costs are an inevitable drag on performance and it is one of our
objectives to run your Company as efficiently as possible. The
largest expense is the contract for the investment management of
our portfolio. This is directly related to the value of the investment
assets and so increased over the last year. Other expenses also rose
across the board as a result of inflation-linked price increases. Press
and publication expenses increased 20% as the Company marketed
its proposition to Shareholders. Overall, the cost ratio at 0.67% still
remains at a competitive level.
ESG
Your investment manager integrates the consideration of financially
material Environmental, Social and Governance (“ESG”) factors
into its research and investment process. Pages 24 to 27 explain
Columbia Threadneedle Investment’s ESG policies and how these
are implemented with respect to management of the investment
portfolio. There are also examples of its engagement with our investee
companies.
We are proud that your Company is an AIC Dividend Hero and has
increased its dividend every year since launch in 1992. It is firmly
our intention to continue this record of dividend growth and we are
supported in that ambition by the strength of our revenue reserve,
currently at £11.1 million. As in other years when our earnings were
not quite sufficient to match our dividend, we have drawn from this
reserve this year in order to grow the dividend, and we are confident
that in years to come, where earnings exceed the dividend, this
reserve will be added to.
Share Price discount to NAV
Over the year, the Company’s shares traded at an average discount to
the underlying NAV of 3.8% and within a range of -1.4% and -5.8%.
The focus in my statement up to this point has been on NAV per
share, as that is what your investment manager is most directly able
to influence. However, the Board is very aware that the investment
experience of Shareholders is directly linked to the Company’s share
price. The Board has long believed it is in Shareholders’ interests that
the Company’s shares should not trade at prices that are too detached
from the underlying NAV per share. To try to create the right conditions
for this, the Company has the ability to buyback its own shares if the
share price stands at a discount compared to the underlying NAV per
share and to issue its own shares if the share price is at a sufficient
premium.
Last year, your Company bought back 4.3 million of its own shares at
an average discount of 4.2% and increasing the NAV of the Company
by 0.2%. This is more than in any other year and is in large part a
consequence of selling by the beneficiaries of maturing Child Trust
Funds, set up in the early 2000’s, many of which bought shares in your
Company.
Cost of running the Company as a % of average net assets*
Source: Columbia Threadneedle Investments
*See Alternative Performance Measures on pages 91 and 92 for explanation.
Share price discount to NAV over one year (%)*
Source: Columbia Threadneedle Investments
*See Alternative Performance Measures on pages 91 and 92 for explanation.
0
-1
-2
-3
-4
-5
-6
May 24 Sep 24Mar 24Jan 24Nov 23Sep 23 Jul 24
0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
0.64
0.66
0.64
0.59
0.58
0.58
0.58
0.59
0.59
0.66
0.67
Chair’s Statement
Report and Accounts 2024 | 7
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
Directorate Change
I was appointed to the Board in November 2015 and became
Chair with effect from 1 July 2023. As part of the Board’s ongoing
succession planning and in accordance with corporate governance
best practice, I will retire from the Board at the conclusion of the
Company’s 2025 Annual General Meeting.
Upon my retirement, it is intended that Nicky McCabe, the Company’s
Senior Independent Director, who was appointed to the Board
in January 2021 will become Chair. Nicky has extensive sector
experience as she was formerly Head of Product and Investment
Trusts at Fidelity International as well as a director and Chief Operating
Officer of a number of Fidelity companies. Nicky is currently a non-
executive director of abrdn Asian Income Fund Ltd, Artemis Investment
Management Limited and EFG Asset Management (UK) Limited. I am
delighted that the Company and Shareholders will benefit from her
extensive experience, knowledge and leadership.
As she becomes Chair, Nicky will hand over her other roles within
the Company to Board colleagues. Thus at the conclusion of the
2025 AGM, it is intended that Patrick Firth will be appointed Senior
Independent Director and Christopher Metcalfe will become Chair of
the Management Engagement Committee.
As a further part of the Board’s succession planning a search
company was commissioned to find a new Director for the Board. It is
anticipated that a new Director will be appointed to the Board shortly.
Cancellation of Share Premium Account
The Board agreed during the year to propose the cancellation of
the Company’s share premium account at the forthcoming Annual
General Meeting (“AGM”). The Company has a sizeable share
premium account which is non-distributable and the Board believes
that converting the share premium account to a distributable reserve
will provide a significant pool of reserves which can be used in future,
if required, to fund dividends, share buybacks and other returns of
capital in accordance with applicable law.
AGM
The AGM will be held at 12.30pm on 6 March 2025 at the offices of
Columbia Threadneedle Investments, Cannon Place, 78 Cannon Street,
London, EC4N 6AG. This will be followed by a presentation by our
manager, Julian Cane, on the Company and its investment portfolio.
For Shareholders who are unable to attend, any questions they
may have regarding the resolutions proposed at the AGM or the
performance of the Company can be directed to a dedicated email
account, ctukagm@columbiathreadneedle.com, by Thursday
27 February 2025. We will endeavour, in so far as reasonably
practicable, to address all such questions at the meeting. In addition,
the meeting will be recorded and will be available to view on the
Company’s website, www.ctcapitalandincome.co.uk shortly thereafter.
To ensure that your votes will count, I would encourage all Shareholders
especially those that cannot attend in person to complete and submit
their Form of Proxy or Form of Direction in advance of the AGM.
Outlook
While there may be many uncertainties to be faced in the coming year
and beyond, there should be recognition that the UK and the world have
been largely able to navigate the hugely difficult environment of recent
years. This resilience should help to give some confidence about the
future.
The challenges, including COVID-19, geo-political issues, war in Europe,
inflationary bursts and interest rates rising rapidly from all-time low
levels, have definitely played a part in setting future direction. 2024 has
been the year of democracy with around 2 billion people eligible to vote
across the world in key elections. That these outcomes are now largely
known and settled should allow a course of greater clarity next year and
into the following electoral cycle. In turn, this should help companies to
plan better and therefore to invest and execute their strategies more
efficiently.
The inflationary surge experienced across most of the world brought on
largely by the impact on supply chains from responses to COVID-19 and
the monetary and fiscal support to keep economies operating, seems
to be easing in most places. This is clearly a positive development
and should allow short-term interest rates to be reduced in most key
economies, but the battle against inflation may yet prove to be more
protracted and hence the reduction in rates may consequentially be
somewhat delayed. As and when rates are lowered, this should be
advantageous for economic growth and stock markets. As ever, skilled
stock selection will be key.
It has been a great honour to serve on the Company’s Board first as
a non-executive director and latterly as its Chair. I would like to thank
Julian Cane, our Fund Manager, for his continuing quiet professionalism
throughout my tenure regardless of what the markets and the geo-
political landscape deliver, ensuring always that Shareholders benefit
from his investment skills honed through a long career. Further thanks
are due to Scott McEllen, our Company Secretary for his diligence
and good natured keeping of order at Board meetings and to Marrack
Tonkin, Columbia Threadneedle’s head of investment trusts, who treads
a difficult line between representing the management house and
supporting an independent Board.
Finally, on behalf of the Board, I would like to thank Shareholders for
their continued support.
Jane Lewis
Chair
28 November 2024
8 | CT UK Capital and Income Investment Trust PLC
Cumulative income received by Shareholders from a £1,000
investment at launch in September 1992
£2,000
2024
£1,500
£1,000
£500
£0
£2,500
1992 1997 2002 2007 2012 2017
Source: Columbia Threadneedle Investments and Refinitiv Eikon
CT UK Capital & Income Investment TrustFTSE All-Share Index
A key feature of the structure of an investment trust is that it allows
companies such as ours to accumulate a Revenue Reserve from
undistributed income in good years and then to draw down from it when
circumstances are more challenging. The Board knows that Shareholders
appreciate a steadily rising dividend and, for example, during COVID-19,
chose to pay dividends to Shareholders in two years that were not fully
covered by annual earnings.
Over that time, an initial investment of
£1,000 in CT UK CAPITAL AND INCOME
INVESTMENT TRUST
has yielded £2,501
in gross income, assuming dividends had
not been reinvested.
This compares to just
£1,112 paid out on
the FTSE ALL-SHARE INDEX
based on the
annual dividend yield, and
£1,185 earned from a SAVINGS ACCOUNT
paying the Bank of England base rate over
the same period.
Dividend Progression since launch in September 1992
12.00
1993 1998 2003 2008 2018 2024
11.00
10.00
13.00
2013
8.00
7.00
6.00
9.00
4.00
3.00
2.00
5.00
1.00
0.00
pence per share
Source: Columbia Threadneedle Investments
Annual Dividends Special Dividends
AIC Dividend Hero
Companies which have consistently grown their annual dividend for over
twenty years are classed by the AIC as Dividend Heroes. Our Company
is one of a small group of investment trusts which have achieved this
standard. The Board is proud that the Company is an AIC Dividend Hero
and it is our intention to continue to extend this record of continuous
growth in annual dividend.
Savings Account
DIVIDEND
HERO
The Company has increased its annual dividend paid to Shareholders
every year since 1993. This is despite facing diverse challenges
including the UK recession of the early 1990s, the Asian Financial
Crisis, the September 11 attack on the New York World Trade Centre,
the Global Financial Crisis, COVID-19 and more recently the ongoing war
in Ukraine.
More Than Three Decades of Dividend Growth
by investing in top UK businesses
Report and Accounts 2024 | 9
Strategic Report
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
Review of the UK Stockmarket
The UK stock market made good progress in the year under review to
30 September 2024 with a total return gain in the FTSE All-Share Index
of 13.4%. The general background appeared not to be overly conducive
to strong investment returns as economic growth in the UK was slow
by historic standards, the geopolitical situation was deteriorating
and there was considerable political uncertainty, both in the UK and
internationally. Yet the UK equity market recorded a stronger than
average return.
There are a number of strands of explanation to this apparent
contradiction. Arguably the most important elements were that
expectations were already low – both for economic growth and
improving geopolitics – and that valuations were correspondingly
undemanding. As we moved through the year, the UK economy left
behind its very mild recession and subsequent growth, although not
at a rapid pace, has been ahead of many peers. Political uncertainty
was reduced in the UK through an earlier than expected General
Election and landslide victory by the Labour Party. The size of the
Labour majority has largely been taken as an indicator that the new
Government will follow a moderate path without having to pander to the
more extreme elements of the party. The UK equity market reached its
high point for the year shortly after the election.
Also of great significance during the year was the fall in inflation. It was
already firmly on a declining trend having peaked at more than 11% in
2022, but CPI was still at 6.7% at the start of our financial year. The
continued reduction, even touching the Bank of England’s target rate
of 2.0% during the summer, allowed the Bank of England’s Monetary
Policy Committee sufficient leeway to make monetary policy less
restrictive and as a consequence the Official Bank Rate was cut from
5.25% to 5.0% in August 2024 and subsequently reduced to 4.75%.
These cuts were taken symbolically as the start of a series of rate
reductions.
“Whether looking at the price/earnings ratio or dividend yield, UK equities appear
to be more cheaply valued than the historic average.”
Fund Manager’s Review
Julian Cane, Fund Manager
Individual Stock Performance
Table A on page 10 shows the list of the strongest and weakest
share prices in the portfolio over the last year. Of this year’s strongest
performers, three, Intermediate Capital, CRH and Vistry, were in the
same list for the previous year, thus compounding one year’s strong
performance with another; two, IG and OSB, had been amongst the
weakest performers in the previous year, thus rebounding and justifying
the decision to continue to back these companies after weaker share
price performance. Three of the strongest risers, CRH, Vistry and
Ibstock, are in the building or building product industries and therefore
were beneficiaries of better than expected economic growth and the
expectation that interest rates will be reducing. The strength of the
share price in DS Smith was a result of the take-over approaches the
company had from both Mondi and International Paper, with a take-over
by International Paper eventually being agreed.
The list of the weakest share prices shows the impact of difficult
trading and profit warnings for a number of companies. Burberry
has struggled with a sharp slow-down in demand for luxury products
from China and from its own repositioning in the sector, while Close
Brothers has been particularly heavily hit by the FCA’s motor finance
review. We are confident that both of these companies will recover in
time. XP Power has found its end markets disrupted, but in a show
of confidence in the business, it was bid for by an industry peer at a
level considerably above the current share price. The share price of BP
was impacted both by an unscheduled change of senior management
and a weak oil price (despite the growing war in the Middle East).
Rentokil was a new addition to the portfolio during the year. We knew
it was finding trading in the US difficult after having made a substantial
acquisition, but we are confident that this will be resolved in time.
10 | CT UK Capital and Income Investment Trust PLC
Table B, below, shows the ten stocks that made the greatest
contribution (both positive and negative) to our performance relative
to that of the Index. This analysis builds on Table A as it also takes
into account the impact of the size of the investment position in the
portfolio as well as the size and performance of every stock included in
the Benchmark Index.
Many of the strongest absolute performers also were amongst the
strongest contributors to relative performance as their strong share
price performances were combined with good weightings within the
portfolio relative to the Index; Intermediate Capital and Vistry were in
the top three for the second successive year. The benefit of not having
invested in Reckitt and Glencore, both large component parts of the
Index and weak performers is also clear, as is the positive contribution
from not having a full Index weighting in Shell and BP, both of whose
share prices were weak.
The list of the negative contributors shows the effect of not owning
a number of large companies whose share prices performed well,
Rolls-Royce, 3i, Barclays, Lloyds Banking, NatWest and Tesco. We
have chosen not to invest in the main UK banks, but in OSB instead,
believing that its smaller, more niche operations should be capable of
greater growth and better returns, while the company is also valued at
a discount to its larger peers.
Table A: Absolute performance of stocks held during the year
10 Strongest share prices
Portfolio Average
Weight (%)
Total Return to
the Company (%) 10 Weakest share prices
Portfolio Average
Weight (%)
Total Return to
the Company (%)
Bridgepoint Group 0.4 84.5 Heineken Holding 1.0 -6.7
DS Smith 1.3 68.4 St. James's Place 0.6 -9.4
Intermediate Capital Group 5.5 67.6 Diageo 3.2 -11.6
CRH 2.8 57.3 Burford Capital 3.6 -11.7
IG Group 1.6 51.0 Rentokil Initial 0.3 -20.4
Experian 1.5 48.0 BP 2.1 -22.5
Vistry Group 5.0 43.2 FDM Group (Holdings) 0.3 -22.6
Beazley 3.5 40.3 XP Power 1.2 -44.2
Ibstock 1.5 34.7 Close Brothers Group 0.6 -50.8
OSB Group 5.2 29.4 Burberry Group 0.6 -61.1
Source: Columbia Threadneedle Investments
Table B: Relative to the Benchmark Index
Top 10
Contributors
Portfolio
Average
Weight
(%)
Average
Weight
Relative to
the Index (%)
Total
Return
to the
Company
(%)
Contribution
To Relative
Performance
(%)
Bottom 10
Contributors
Portfolio
Average
Weight
(%)
Average
Weight
Relative to
the Index (%)
Total
Return
to the
Company
(%)
Contribution
To Relative
Performance
(%)
Intermediate Capital
Group
5.5 5.2 67.6 1.9 Tesco – -0.9 – -0.2
Vistry Group 5.0 4.8 43.2 1.2 NatWest Group – -0.7 – -0.2
CRH 2.8 2.8 57.3 0.9
Lloyds Banking
Group
– -1.4 – -0.3
Beazley 3.5 3.4 40.3 0.7 Barclays – -1.2 – -0.3
OSB Group 5.2 5.1 29.4 0.6 3i Group – -1.1 – -0.4
Shell 3.2 -4.3 -3.2 0.6 Burberry Group 0.6 0.4 -61.1 -0.5
Reckitt – -1.5 – 0.5
Close Brothers
Group
0.6 0.6 -50.8 -0.5
BP 2.1 -1.3 -22.5 0.5 XP Power 1.2 1.1 -44.2 -0.7
Glencore – -2.3 – 0.5 Burford Capital 3.6 3.6 -11.7 -0.9
DS Smith 1.3 1.1 68.4 0.4 Rolls-Royce Holdings – -1.3 – -0.9
Source: Columbia Threadneedle Investments
Report and Accounts 2024 | 11
Strategic Report
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
Portfolio Turnover
All of our investments are made with a long-term perspective in
mind. We do not set a particular time frame in which to realise our
investments as our aim is to invest in high quality companies that are
able to compound returns over many years and drive considerable
long-term value. We are not looking for short-term trading opportunities,
or where there are only relatively small gaps between a share price
and our estimation of a company’s fair value. At the outset, it is
often difficult to assess when greater value will be realised in an
investment, but we are willing to be patient and it is our intention to be
stable, supportive shareholders and for our returns to be driven by a
combination of share price appreciation, dividends and dividend growth.
Total sales from the portfolio in the year under review were £43.0m and
total new investments (excluding share buybacks) were £32.1m. The
total number of investee companies in the portfolio remained at 47, as
one complete sale, one take-over and a merger of two of our holdings
were replaced by three new additions. Compared to average fair value
of investments of £354m, the rate of turnover was 11%.
Revenue and Earnings Per Share
Historically, our income receipts have shown reasonably steady
progression, but in more recent years that has not been the case.
The disruption caused to the economy and companies by COVID-19
is the most obvious cause of part of this. Traditionally, companies
were reluctant to reduce or forego their dividends as it was taken as a
negative sign for the companies’ prospects, but that habit was broken
by the pandemic. Arguably, ever since, even though the stressed
conditions brought on by the pandemic have long since passed, the
strict discipline around progressive dividend payments has weakened
for operating companies, even though we know how important this is
for many shareholders.
This observation is not meant as a value judgement as it may be better
for companies to redirect their cash in different ways, most obviously,
companies may assess that they can add more value by investing more
in their own business, by acquiring other businesses or by buying back
their own shares. This evolution in dividend paying culture does bring
about some greater volatility into our dividend receipts from companies,
but arguably should add to our own total returns.
The percentage of companies in our portfolio actively buying back their
own shares is 46%. There are a couple of reasons behind the growing
focus on share buybacks in preference to dividends. First, buybacks
can be more opportunistic and flexible: paying a dividend sets up an
expectation the same or more will be paid next year; that is not true for
share buybacks. Secondly, a company may calculate that its share price
does not reflect the proper value of the business and that a purchase
of those shares will create more value for shareholders than other
investments. Historically, some companies may have paid surplus cash
to shareholders in the form of special dividends (irregular payments as
opposed to regular dividends) but a combination of taxation and low share
prices may have made share buybacks more attractive to companies and
shareholders.
For example, looking at the four companies in the portfolio that contributed
the greatest proportion of our income in our prior year, dividend payments
from OSB to us have decreased as the previous year the company paid a
special dividend which was not repeated this year, but the company has
been active with a share buyback programme. OSB’s ordinary dividend
has increased on an annual basis. Our second largest dividend payer
was Legal & General; its ordinary dividend has also increased, but more
surplus cash is being directed towards a share buyback. Thirdly, Vistry
is in the process of refocusing its business activities and is foregoing
dividend payments entirely and returning cash to shareholders via
share buybacks instead. It is notable that this is a much more common
practice amongst US companies. Fourthly, Rio Tinto, the mining
company, has explicitly linked its dividend payment to its profitability
and although our total dividends for the year from Rio Tinto were higher
than the previous year, the latest dividend was lower than its prior
year equivalent, showing the inherent volatility that comes from linking
dividends to profits that come from commodity-related companies.
Beyond these factors, last year we also received dividends from Hipgnosis
Songs Fund and Round Hill Music Royalty Fund. Both of these companies
have been taken over and while we benefited from the rise in the share
prices as they were acquired, it also meant that there would be no more
income to be received from them.
Valuation
There are very many ways of assessing the valuation of equities and equity
markets with a range of attractions and shortcomings. Amongst the most
straightforward are the price/earnings (p/e) multiple and the dividend yield.
These have the benefit of being easy to calculate and understand, as well
as there being a great deal of historic information for comparison. The
p/e multiple relates the price of an index (or share) to the earnings that
are generated by the index (or share) in a year. In essence, it shows how
many years of earnings that the price represents, so all other things being
equal a lower p/e is a sign of a cheaper investment. The dividend yield by
contrast records the cash dividend received in a year from an investment
relative to the price, so a higher dividend yield will be more attractive than
a lower yield.
The charts on page 12 show how these two ratios have changed over the
last 30 years and in very crude terms it is possible, for example, to see
how investment markets were expensive in the run up to 2000 with the
Technology, Media and Telecom boom (higher than average p/e and lower
than average dividend yield) and how markets became cheap during and
after the COVID-19 pandemic with a low p/e and high yield. The ratios
are far from perfect measures of value and are backward looking, but the
12 | CT UK Capital and Income Investment Trust PLC
length of the data series does allow comparison across a number
of economic cycles. Whether looking at the p/e ratio or dividend
yield, UK equities appear to be more cheaply valued than the historic
average, despite the strength of the market over the last two years.
This is obviously not sufficient on its own to guarantee further strong
investment returns, but it does help to provide some context on the
valuation background.
It is also worthwhile comparing the cash return from shares (the
dividend yield) with the yields available from some other assets. The
bottom chart shows the dividend yield on equities is once again lower
than the yields on the 10-year UK government bond and the UK bank
base rate. While this may seem less attractive than the last decade, it
is entirely consistent with all of the years prior to 2008 when the gap
was much greater and equity markets still performed well for many
years. It should also be remembered the chart only shows income
returns and that over time equity markets have tended to increase in
capital value, whereas a bank account will only ever repay the capital
sum deposited and a bond will only return its face value at maturity.
Outlook
At its most straightforward, the return to investors from equities can
be broken into two parts: the dividend yield and capital change, which
itself is made up of changes in both earnings (or some other relevant
metric such as asset value) and the valuation multiple (such as price/
earnings or price/book value) applied to that metric.
With a dividend yield for the UK equity market of 3.6% and an
expectation for a similar rate of earnings growth over the next year,
even without a change in rating, returns from the UK stock market
could be around 7%. As is described earlier, the valuation multiple for
the UK market is not particularly demanding in an historic context, and
so there is the possibility that this could improve, which would add
further to equity returns. Certainly, a fall in interest rates and bond
yields would be supportive of an increase in the rating and would
probably also help earnings growth.
All this is, of course, theoretical and hypothetical, but none the less
can be a useful way to think of equity returns and hopefully helps to
illustrate why an investment in UK equities could be attractive.
Julian Cane
Fund Manager
28 November 2024
FTSE All-Share - Average Price Earnings Ratio
FTSE All-Share - Price Earnings Ratio
FTSE All-Share Index – Price/Earnings Ratio (%)
5.0
10.0
15.0
20.0
25.0
30.0
35.0
Sep 98Sep 93 Sep 03 Sep 24Sep 08 Sep 13 Sep 18
Source: Refinitiv Eikon
Source: Refinitiv Eikon
FTSE All-Share Index – Dividend Yield (%)
2.0
2.5
3.0
3.5
4.0
4.5
5.5
5.0
6.0
Sep 98Sep 93 Sep 03 Sep 24Sep 08 Sep 13 Sep 18
FTSE All-Share – Average Dividend Yield
FTSE All-Share – Dividend Yield
Yields from investment assets (%)
0.0
2.0
4.0
6.0
8.0
10.0
Sep 98Sep 93 Sep 03 Sep 24Sep 08 Sep 13 Sep 18
Source: Refinitiv Eikon
UK Government 10 Year Bond Yield
FTSE All-Share – Dividend Yield UK Clearing Banks Base Rate
Report and Accounts 2024 | 13
Strategic Report
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
The Fund Manager’s Investment
Philosophy and Process
Q&A with Julian Cane
The Investment Process Focuses on Three Aspects for Each Company
Q Could you outline the Company’s investment
objective?
A
The Company’s objective is to secure long-term capital and income
growth from a portfolio consisting mainly of FTSE All-Share companies.
The Company aims to offer Shareholders a reliable and growing
income while at the same time seeking to grow the size of their
investment.
Q What is your investment philosophy?
A
I have managed the Company for over 27 years. Throughout that
period, my colleagues and I have been searching out the very best of
the UK’s large and medium sized businesses to give Shareholders
access to a range of quality UK stocks in one place. We believe share
prices often don’t fully reflect the future prospects and returns of
companies. We believe it is possible to identify significant differences
between market prices and our assessment of a business’s value.
By investing in such companies at attractive prices, superior
investment performance can be generated. In particular, we believe
that companies with the potential to compound returns at sustainably
high rates over many years are frequently underestimated by the
market initially and are therefore undervalued. The valuations of
companies can also become attractive because of adverse market
reaction to short term difficulties or simply because a sector has
become unfashionable. If companies are able to generate attractive
returns over long periods, there is evidence the market eventually
rewards this success with higher valuations.
• Understandable
• Durable competitive
advantages
• Attractive business model
• Strong sustainability
characteristics
Q
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• Present value of future
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• Sustainable superior
returns
• ESG score embedded
in proprietary valuation
method
• Proven operators
• Responsible capital
allocators
• Aligned interests
• Appropriate incentives
• Strong governance
Julian Cane, Fund Manager
14 | CT UK Capital and Income Investment Trust PLC
C
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Implementation of the Investment Process
Q What are the outcomes of this philosophy?
A
We believe that this philosophy leads naturally to long term
investment thinking and the generation and preservation of value over
the longer term. We are not looking to trade shares, nor are we making
short term bets on market movements, but instead are looking to the
longer term. Over time, we expect high corporate returns to drive an
increase in the value of a business and that in turn the share price will
benefit as the market recognises the level and sustainability of those
returns.
As shareholders, we are part owners of businesses, and take our
responsibilities seriously, engaging with the company’s management
and non-executives if necessary, and voting on all resolutions at
company meetings.
Q What is your approach to risk?
A
Risk is often seen as the flipside of return. The standard economic
and business academic approach to risk measures it in terms of
volatility. Sharp upward moves in share prices are seen as just as
“risky” as an equivalent downward move, but we recognise this
asymmetry doesn’t make practical sense as the result of losing
money on falling share prices is much more consequential than if a
share price rises. By investing in companies with attractive returns
and relatively little debt, we should be able to reduce the risk of a
permanent loss of capital.
Q What research is undertaken prior to an
investment purchase
A
We carry out detailed analysis of all the companies in which
we invest, looking in particular at three aspects: the Quality of the
company including the sustainability of its competitive position; its
Management including its alignment with Shareholders; and the
Valuation of the shares. Integral to our assessment of these factors
is an analysis of the ESG issues that face the company and its
responses to them. More detail on this is given on pages 24 to 27.
Our valuation approach is pragmatic enough to apply the most relevant
valuation method on a company by company and sector by sector
basis, while recognising that in the long-term, cash flows are most
often the strongest driver of value. Before buying, we assess whether
the share price is low relative to the intrinsic value of the business as
we are looking to achieve a margin of safety on the investment.
Our research is conducted in-house and is peer reviewed by the wider
investment team prior to any purchase decision. This ensures the
benefit of shared knowledge and experience is brought to bear on each
investment.
Q How is an investment monitored after
purchase?
A
Subsequent to a purchase of the shares, the progress of the
company and its share price will then be monitored regularly with
in-depth reviews and retesting of the original investment thesis
particularly if the company or its share price do not perform as initially
expected.
Like all investors, we are having to make assessments about the
future and take decisions in the face of uncertainty. There is a real
possibility of being wrong. We believe that we can mitigate this risk by
following this long-term philosophy, emphasising a number of factors:
thorough analysis; peer review; the need for a margin of safety on
purchase; continuous monitoring; and diversification of the investment
portfolio.
Reasons to sell can be driven by positive or negative factors: positive,
if the value of the company has risen to our assessment of its value,
or negative, if the assessment of the company’s long-term value
deteriorates significantly. An investment may also be sold if, for
example, a similar, but cheaper alternative can be found or if the size
of the investment position has become larger than is preferred for risk
purposes.
Julian Cane
Fund Manager
28 November 2024
Report and Accounts 2024 | 15
Strategic Report
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
Purpose and strategy
The purpose of CT UK Capital and Income Investment Trust (the
“Company”) is to provide investors with long term capital and income
growth.
The strategy is to invest in companies, mainly in the FTSE All-Share
Index, that have good long term prospects with attractive returns on
invested capital.
The investment philosophy and processes underpinning this strategy
are set out on pages 13 and 14.
The aim is to position the Company as a compelling investment choice,
particularly for retail investors.
Business model
CT UK Capital and Income Investment Trust PLC is a listed, closed-end
investment company, known as an investment trust.
The Company’s Board of non-executive Directors looks after the
interests of Shareholders. It has the responsibility for decisions on
strategy, corporate governance, risk and control assessment, setting
policies as detailed on pages 33 to 35, setting limits on gearing and
asset allocation, monitoring investment performance and setting and
monitoring marketing budgets.
Within these policies the management of the Company’s assets,
including asset allocation, gearing, stock selection and portfolio
risk has been contractually delegated to Columbia Threadneedle
Investment Business Limited (the “Manager”).
As an investment trust, the Company does not need to sell investments
to meet redemptions. This allows the Company to take a longer term
view and to remain invested whatever the market conditions.
Having the ability to borrow to invest is also a significant advantage
over a number of other investment fund structures. Borrowing allows
the Company to have more resources to invest on behalf of its
Shareholders.
Alignment of values and culture
In addition to strong investment performance from the Manager, the
Board expects it to adhere to the very highest standards of responsible
investing and that its values, culture, expectations and aspirations align
with its own. As an original signatory to the United Nations Principles
for Responsible Investment (“UNPRI”), the Manager has achieved
the maximum rating of A+ for key areas of its responsible investment
approach and active ownership in listed equities.
The Board considers the Manager’s culture and values as part of the
annual assessment of its performance and in determining whether its
reappointment is in the interests of Shareholders. As part of Columbia
Threadneedle Investments, the Manager can be expected to continue
its long established culture of diversity, collaboration and inclusion, all
of which are anchored by shared values, in keeping with the Board’s
own expectations and beliefs.
Responsible investment impact
The Company’s ESG approach is set out on page 24 and helps deliver
sustainable investment performance over the longer term.
The direct carbon impact of the Company’s activities is minimal as it
has no employees, premises, physical assets or operations either as a
producer or a provider of goods or services, while its Shareholders are
effectively its customers. In consequence, it does not directly generate
any greenhouse gas or other emissions or pollution. The Company’s
indirect impact occurs through the investments that it makes and this
is mitigated by the Manager’s responsible investment approach as
explained on pages 24 to 27.
Manager evaluation
Investment performance and responsible ownership are fundamental
to delivering sustainable long term growth in capital and income for
Shareholders and the Board therefore exercises a robust annual
evaluation of the Manager’s performance.
The process for the evaluation for the year under review and the basis
on which the decision to reappoint the Manager for another year are
set out on page 53.
Purpose, Strategy and Business Model
16 | CT UK Capital and Income Investment Trust PLC
Fund Manager and management of the assets
As Fund Manager on behalf of the Manager, Julian Cane is responsible
for developing and implementing the Company’s investment strategy
with the Board and for the day-to-day management of the portfolio. He
is supported in carrying out research and in the selection of stocks by
a team of investment professionals.
Managing risks and opportunities
Like all businesses, investment opportunities do not come without
risks and uncertainties and so the performance of the Manager is
monitored at each Board meeting on a number of levels. In addition
to managing the Company’s assets, the ancillary functions of
administration, secretarial, accounting and marketing services are
all carried out by the Manager. The Board receives reports on the
investment portfolio; the wider portfolio structure; risks; compliance
with borrowing covenants; income, dividend and expense forecasts; any
errors; internal control procedures; marketing; Shareholder and other
stakeholder issues, including the Company’s share price premium or
discount to NAV; and accounting and regulatory updates.
Shareholders can assess the financial performance from the Key
Performance Indicators that are set out on page 17 and, on page 28,
can see what the Directors consider to be the Principal Risks that
the Company faces. In addition to regularly monitoring the Manager’s
performance, its commitment and available resources and its systems
and controls, the Directors also review the services provided by
other principal suppliers. These include JP Morgan Chase Bank, (the
“Custodian”) and JP Morgan Europe Limited (the “Depositary”) in their
duties towards the safeguarding of the assets.
The principal policies that support the strategy are set out from page
33, whilst the Fund Manager’s Review of activity in the year begins
on page 9. In light of the strategy, investment processes and control
environment (relating to both the oversight of the Company’s service
providers and the effectiveness of the risk mitigation activities), the
Board has set out on page 38 its reasonable expectation that the
Company will continue in operation and meet its liabilities over the
coming five years.
Marketing
With approximately 91% of the shares held by retail investors and with
share saving schemes and platforms representing an increasingly
significant and growing element of the Shareholder base, the Board
remains focused with the Manager on promoting the Company’s
success to this audience.
Both current and potential investors have access to an increasing
number of digital marketing channels. In recent years, therefore, the
Company has responded by increasing its presence across a wider
range of digital channels with a focus on engaging and informative
content.
In addition, the Company continues to participate in webinars and
investment events.
Communication with Shareholders
Communication with Shareholders includes reporting the Company’s
activities and performance through the publication of its financial
statements. The vast majority of Shareholders and CT Savings Plan
investors prefer not to receive such detailed information. To avoid losing
this essential line of communication, we instead make available a short
notification summary of the main highlights of our half yearly and annual
results. Shareholders and CT Savings Plan investors are able to locate
the full information on our website, ctcapitalandincome.co.uk.
The Annual General Meeting (“AGM”) of the Company provides a forum,
both formal and informal, for Shareholders to meet and discuss issues
with the Directors and the Fund Manager. Through the Manager, the
Company ensures that the CT Savings Plan investors are encouraged
to attend and vote at AGMs alongside those who hold their shares as
members on the main Shareholder register. Details of the proxy voting
results on each resolution are published on the Company’s website
where there is also a link to the daily publication of our NAV and our
monthly factsheet.
The Company holds a five yearly continuation vote. At the AGM held on
9 March 2023, Shareholders voted 99.5% in favour of the continuation
of the Company. In advance of the vote, during 2022, the Board
surveyed investors who held the Company’s shares within the CT
Savings Plans. Common themes amongst responses included
the importance of performance, dividend growth, low fees and the
reputation of the Manager. The next continuation vote is scheduled to
be held in 2028.
The Company’s next AGM will be held at 12.30pm on 6 March 2025 at
Cannon Place, 78 Cannon Street, London, EC4N 6AG.
The Manager also has in place a programme of visits designed to
foster good relations with wealth managers and underlying investors
in promoting the Company’s investment proposition. These visits are
reported regularly to the Board. The Chair and Senior Independent
Director are available to meet with major investors on request.
Report and Accounts 2024 | 17
Strategic Report
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
(1) See Alternative Performance Measures on pages 91 and 92 for explanation.
Ongoing charges as at 30 September
2024
%
2023
%
2022
%
Ongoing charges
(1)
0.67 0.66 0.59
This shows whether the Company is being run efficiently. It measures the
running costs as a percentage of the average net assets.
Source: Columbia Threadneedle Investment Business Limited
Share price (discount)/premium to NAV per share as at 30 September
2024
%
2023
%
2022
%
(Discount)/premium
(1)
(2.9) (1.2) 0.8
This is the difference between the share price and the NAV per share. It is
an indicator of excess supply over demand in the case of a discount and
the excess demand over supply in the case of a premium.
Average discount to NAV during the
year
(1)
(3.8) (3.1) (1.8)
Source: Columbia Threadneedle Investment Business Limited
Compound annual dividend growth
1 Year
%
3 Years
%
5 Years
%
10 Years
%
Company dividend 2.9 2.5 1.9 2.4
This shows the Company’s dividend growth which is compared to the
changes in the UK Consumer Price Index (“CPI”) and the average dividend
paid by the broad UK stock market, as represented by the FTSE All-Share
Index.
Inflation (CPI) 1.7 6.1 4.3 3.0
FTSE All-Share Index - implied dividend 3.3 8.4 -1.0 3.2
Source: Columbia Threadneedle Investment Business Limited, Refinitiv Eikon and Office of National Statistics
Total return performance
1 Year
%
3 Years
%
5 Years
%
10 Years
%
NAV per share
(1)
18.4 16.4 26.6 98.7
This is used to measure the performance of the Manager in terms of
Capital and Income growth by comparison to the return of the benchmark
index.
Benchmark index: FTSE All-Share 13.4 23.9 32.2 83.6
Share Price
(1)
16.6 15.8 24.9 88.8
This is used to measure the return to Shareholders in terms of capital
growth and the dividends they have received in comparison to the return of
the benchmark index.
Source: Columbia Threadneedle Investment Business Limited and Refinitiv Eikon
The Board assesses its performance in meeting the Company’s objective against the following key
measures. Commentary can be found in the Chair’s Statement and Fund Manager’s Review.
Key Performance Indicators
18 | CT UK Capital and Income Investment Trust PLC
Twenty Largest Holdings
2024 2023
2024
% of total
investments
2024
Value
£’000s
2023
Value
£’000s
1 5 Intermediate Capital (Financials)
A specialist lender to private companies both on its own behalf and increasingly
for third-party investors. It has been generating good returns despite the difficult
conditions and has great long-term potential to grow the business further.
6.1 22,705 14,107
2 1 AstraZeneca (Health Care)
A major international pharmaceutical company. Its pipeline of new drugs across
a range of different therapeutic areas is proving successful and producing strong
growth now with more potential further out.
5.5 20,507 19,647
3 6 Unilever (Consumer Staples)
A leading manufacturer of branded fast-moving consumer goods with more than
half of its sales in emerging markets which have greater growth potential. New
management is trying to reinvigorate the group and rebalance the mix of goods it
produces.
5.1 18,868 13,809
4 2 Vistry Group (Consumer Discretionary)
The company will be refocusing itself on its partnership operations, where it
builds new homes in conjunction with others, such as local authorities, housing
associations and Homes England. This should make the business less exposed
to the economic cycle than traditional housebuilders.
4.8 17,990 16,872
5 21 LondonMetric Property (Real Estate)
This Real Estate Investment Trust owns a desirable and differentiated portfolio of
properties. It has a particular focus on delivering reliable and growing income-led
total returns.
4.8 17,833 5,883
6 4 OSB Group (Financials)
This specialist challenger bank generates good returns and has grown well at
carefully controlled risk levels. The company has found progress more problematic
in a rising interest rate environment, but we believe the impact on longer-term
results should be very limited.
4.7 17,496 14,733
7 3 RELX (Consumer Discretionary)
RELX is a global provider of information-based analytics and decision tools for
professional and business customers across a range of industries. It also has
a leading global events business. It generates high returns which we expect will
improve further.
4.6 17,194 14,985
8 12 Beazley (Financials)
A specialist insurer with a diverse underwriting portfolio that has historically
generated good returns and growth. It has become increasingly recognised
for the strength of its cyber insurance operations, which complement its other
underwriting activities.
4.1 15,220 11,060
9 9 Rio Tinto (Basic Materials)
One of the world’s foremost mining companies. It has a diversified asset base,
but its most significant interests are in low-cost, high-quality iron ore. It is our only
current exposure to the mining sector.
3.6 13,245 12,935
10 10 Legal and General (Financials)
A focus on generating a strong and growing cash flow allows this UK life assurer
to pay an attractive dividend and have a regular share buyback, which together
make the total returns generated by the company attractive.
3.3 12,215 12,015
Strategic Report
Report and Accounts 2024 | 19
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
2024 2023
2024
% of total
investments
2024
Value
£’000s
2023
Value
£’000s
11 22 National Grid (Utilities)
An internationally diversified utility company, fairly evenly balanced between
the different regulatory regimes of the UK and US with most of its operations
owning and operating electricity transmission facilities and distribution networks.
Increasing electrification, both in terms of use and generation of power, should
increase its growth rate.
3.3 12,073 5,782
12 8 Burford Capital (Financials)*
Burford is the leading international provider of litigation funding, using both its
own financial resources and investing third-party capital. It is a fast evolving and
growing market with attractive returns for those able to navigate its complexities
well.
3.1 11,531 13,180
13 16 CRH (Industrials)
CRH manufactures and supplies a wide range of building materials, used across
the range from public infrastructure projects to residential homes. It operates in
more than 30 countries, with the US accounting for over half of sales.
3.0 11,250 8,176
14 11 Shell (Energy)
A leading international oil exploration, production and marketing group. A new
management team is looking to reinvigorate the group and total returns to
shareholders, combining the dividend and share buyback, should be attractive,
but inevitably are sensitive to the commoditised oil price.
2.8 10,306 11,076
15 7 Diageo (Consumer Staples)
The largest producer of premium branded spirits in the world and also a major
brewer. The strength of the brands and substantial exposure to markets with
greater growth potential should lead to attractive returns.
2.6 9,761 13,198
16 17 GSK (Health Care)
After many years of lacklustre performance, current management is under
significant pressure to reinvigorate the business. The demerger of the health care
business (Haleon) focuses more attention on the pharmaceutical and vaccine
businesses.
2.2 8,265 8,130
17 18 Phoenix (Financials)
A UK domestic life assurer growing both by taking on new customers and through
taking part in consolidation of the sector. Increased scale drives operational and
capital efficiencies as well as diversification benefits that underpin an attractive
dividend.
2.2 8,048 6,941
18 19 Howden Joinery (Consumer Discretionary)
This business designs, manufactures and sells fitted kitchens, mostly in the UK.
Its integrated value chain and efficiency make it a high returning business with
the potential to grow and improve returns further.
2.0 7,347 6,775
19 13 Compass (Consumer Discretionary)
Compass is the global leader in outsourced catering. A structural shift towards
more outsourcing was disrupted by the pandemic, but good rates of growth have
returned. It has unrivalled scale helping it to offer its clients great value.
1.9
7,183
9,400
20 27 IG (Financials)
IG is a global leader in online trading and investments and is a beneficiary of
market volatility, which typically drives an increase in active clients and revenue.
The business has become more diversified following its acquisition of tastytrade
in the US.
1.8
6,808
4,758
The value of the twenty largest holdings represents 71.5% (30 September 2023: 68.5%) of the Company’s total investments.
*Quoted on the Alternative Investment Market in the UK.
20 | CT UK Capital and Income Investment Trust PLC
Performance
of this
sector in the
portfolio
%
Performance
of this sector
in the FTSE
All-Share
Index
%
Average
Portfolio
weighting
%
Average FTSE
All-Share
weighting
%
Impact on
relative
performance
%
Energy
At over 11%, this is a significant component of the FTSE All-
Share Index, with BP (-22.5%) and Shell (-3.2%) representing
nearly all of this industry segment. Against a background of a
modestly weaker oil price (during the year the price of a barrel
of Brent Crude Oil fell from around $82 to under $72), the
share prices of these companies fell. This is in contrast to
the previous year, when the oil price, and the share prices,
rose. This underscores why our investment weight in the
sector and these companies is less than that of the Index, as
it is clear that the oil price itself, and therefore ultimately the
returns that are earned by the industry, are fairly
unpredictable. Added to this, governments have repeatedly
shown a willingness to interfere in the industry and it is not
clear how the companies will transition more of their existing
operations to a zero-carbon future. Nonetheless, there are
attractions to the industry as it has strong cashflow and being
very mature it has limited opportunities to invest and hence
returns to shareholders are relatively high via dividends and
share buybacks.
-11.6 -9.9 5.3 11.1 +1.2
Basic Materials
Rio Tinto (+9.6%) is our only investment in this industry. It has
some of the highest quality mining assets amongst its peer
group and we believe that over the long-term and across
commodity price cycles these should provide attractive
returns and superior performance.
+9.6 +4.5 3.7 7.0 +0.5
Industrials
There were a number of our investments in this industry which
performed strongly, either through a combination of good
operational performance and change in rating (such as CRH,
the building material supplier (+57.3%) and Ibstock, the brick
manufacturer (+34.7%)), or take-over (DS Smith (+68.4%) is
being acquired by International Paper). This led to our
performance in this sector to be good, but as a result of not
owning Rolls Royce (+138.7%), it was not as strong as that of
the sector as a whole.
+23.8 +28.5 13.5 11.8 -0.2
Consumer Staples
The share price of Unilever (+23.4%) was strong as the
company appears to be starting to reverse the sluggish
operational performance of the recent past, and Coca-Cola
HBC (+22.0%) also picked up performance as its sales in
emerging markets were robust. Diageo (-11.6%) was again
disappointing as its operational issues have continued.
+9.2 +11.0 10.5 13.9 -0.1
Investment Portfolio by Sector
Strategic Report
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Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
Performance
of this
sector in the
portfolio
%
Performance
of this sector
in the FTSE
All-Share
Index
%
Average
Portfolio
weighting
%
Average FTSE
All-Share
weighting
%
Impact on
relative
performance
%
Health Care
The pharmaceutical companies AstraZeneca (+6.7%) and GSK
(+5.5%) which are long-standing investments in the portfolio,
both had relatively lacklustre performance over the year. Our
newer investment in Smith & Nephew, which struggled the
previous year, showed some better signs of recovery and rose
by 16.7%.
+7.9 +7.2 9.5 11.7 +0.2
Consumer Discretionary
A diverse range of businesses, including retail, travel, media
and housebuilding, are grouped together in this one industry
heading. The backdrop of an economy improving and growing
faster than initially forecast and inflation falling, leading to the
expectation of falling interest rates, was supportive for many
of the companies in this sector. Amongst them was Vistry, the
housebuilder (+43.2%) and Howden Joinery (+26.4%), both of
which had also performed well the previous year. Relx
(+28.7%), the media business, has proven itself to be a
strong performer almost regardless of the background, and
made further gains. The biggest detractor from performance
in this group was Burberry (-61.1%). Much of the company’s
problems stem from a more difficult environment in which to
sell luxury goods, but recent management change will look to
reinvigorate more internal factors.
+24.2 +18.9 17.2 12.0 +1.1
Telecommunications
Returns in this industry have been disappointing for most
companies for a long time as there has historically been little
pricing power or differentiation of product/service, while
required investment has been substantial. All of this has led
us to be sceptical of investments in the telecommunications
industry, but we do recognise that demand for mobile, fixed
and internet services is likely to remain strong.
– +16.9 0.0 1.2 -0.0
Utilities
The growing electrification of the UK requires considerably
more investment in infrastructure for generating assets and
for transmission. In response, National Grid (+21.5%)
launched a rights issue during the year, which we fully
supported, also sub-underwriting the deal. The background
was also supportive for SSE (+20.9%), while Pennon (+8.2%),
the water company, recovered somewhat helped by OFWAT’s
draft determination on allowable returns.
+19.6 +17.0 4.6 3.6 +0.2
22 | CT UK Capital and Income Investment Trust PLC
Performance
of this
sector in the
portfolio
%
Performance
of this sector
in the FTSE
All-Share
Index
%
Average
Portfolio
weighting
%
Average FTSE
All-Share
weighting
%
Impact on
relative
performance
%
Financials
There were a number of strong performers among our
investments in this industry grouping. The most significant
individual contributor to portfolio performance was
Intermediate Capital (+67.6%) following strong growth in its
asset management operations. Beazley (+40.3%) benefited
from growth and good returns in its insurance business while
OSB (+29.4%) recovered from its profit warning the previous
year, which had been brought on by rising interest rates. The
portfolio does not have any investments in the High Street
banks, which performed well last year, but it did benefit from
the take-over of Hipgnosis Songs Group (+27.2%).
+24.4 +21.3 28.7 23.8 +1.2
Technology
Sage Group is our only investment in this industry. Its share
price performance (+5.5%) was disappointing, but a
consequence of derating rather than weaker operating
performance.
+5.5 +19.0 1.0 1.3 -0.1
Real Estate
Expectations of falling interest rates and improving economic
activity were positive for this industry. We started the year
with three investments, but two merged, leaving us with two
at our year end. Performance of all three was strong with LXi
(+14.8% until merger), LondonMetric (+25.9%) and Sirius Real
Estate (+19.8%).
+26.5 +22.8 6.0 2.6 +0.4
The figures shown in the first two columns compare the total return of the group of investments held within the portfolio in each
Industry sector against the total return of all Industry sector constituents of the FTSE All-Share Index over the year to
30 September 2024. All figures shown are before operating costs and the effect of gearing.
Strategic Report
Report and Accounts 2024 | 23
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
30 September 2024
Quoted investments Holding
Value
£’000s
% of total
investments
UNITED KINGDOM – EQUITIES
AstraZeneca 177,000 20,507 5.5
Babcock International 500,000 2,363 0.6
Beazley 2,000,000 15,220 4.1
BP 1,600,000 6,266 1.7
Bridgepoint 500,000 1,719 0.5
British American Tobacco 180,000 4,903 1.3
Burberry 185,000 1,297 0.3
Burford Capital* 1,165,362 11,531 3.1
Close Brothers Group 351,474 1,446 0.4
Coca-Cola HBC 120,000 3,194 0.9
Compass 300,022 7,183 1.9
Diageo 375,000 9,761 2.6
DS Smith 1,272,727 5,878 1.6
Experian 156,000 6,132 1.7
FDM 226,881 872 0.2
Ferguson Enterprises 35,000 5,145 1.4
Forterra 2,550,000 4,437 1.2
GSK 545,000 8,265 2.2
Howden Joinery 810,000 7,347 2.0
Ibstock 3,400,000 6,317 1.7
IG 740,000 6,808 1.8
Intermediate Capital 1,020,000 22,705 6.1
Intertek 100,000 5,155 1.4
Legal and General 5,400,000 12,215 3.3
LondonMetric Property 8,715,874 17,833 4.8
M&G 1,100,000 2,280 0.6
National Grid 1,172,083 12,073 3.3
OSB Group 4,500,000 17,496 4.7
Pearson 500,000 5,065 1.4
Pennon Group 735,000 4,348 1.2
Phoenix 1,439,776 8,048 2.2
RELX 490,000 17,194 4.6
Rentokil
1,100,000 4,008 1.1
Rio Tinto 250,000 13,245 3.6
Sage 332,716 3,407 0.9
Shell 425,000 10,306 2.8
Sirius Real Estate 5,087,015 4,960 1.3
Smith & Nephew 500,000 5,788 1.6
SSE 210,000 3,954 1.1
SSP
1,815,689 2,891 0.8
St James's Place 350,000 2,567 0.7
Unilever 390,000 18,868 5.1
Vistry Group 1,377,475 17,990 4.8
WPP
480,000 3,663 1.0
XP Power 331,781 4,366 1.2
UNITED KINGDOM TOTAL
EQUITIES
357,016 96.3
30 September 2024
Quoted investments Holding
Value
£’000s
% of total
investments
OVERSEAS – EQUITIES
CRH 165,000 11,250 3.0
Heineken 48,000 2,702 0.7
OVERSEAS TOTAL EQUITY 13,952 3.7
TOTAL INVESTMENTS 370,968 100.0
The number of investments in the portfolio is 47 (2023: 47).
*Quoted on the Alternative Investment Market in the UK.
Investments shown in italics are new additions to the portfolio during the year.
List of Investments
24 | CT UK Capital and Income Investment Trust PLC
Responsible investment
The Company is not an investment trust with explicit ESG or
sustainable characteristics. However, we, the Board, believe investing
responsibly is fundamental to long-term wealth creation. As part
of its overall risk management process, the Manager integrates
the consideration of financially material environmental, social and
governance factors into its research and investment process and
encourages stronger ESG practices to be adopted by issuers through
its engagement and voting activities.
Our approach
We also believe that good financial outcomes are more likely to be
achieved if the Manager fully understands the risks and opportunities
that relate to the markets in which the Company invests.
The Manager shares this belief and considers that the review of
financially material ESG factors can provide an important perspective
to its investment research. Consideration of these factors could affect
an investment’s valuation by helping assess future investment risk and
also unlock potential new investment opportunities.
There are two strands to the Board’s approach to responsible
investment:
• the Company’s own responsibilities on matters such as
governance; and
• ESG integration, engagement and proxy voting made on the
Company’s behalf by its Manager.
The Company’s compliance with the AIC Code of Corporate Governance
is detailed in the Corporate Governance Statement on pages 42 to 44.
In addition, the Policy Summary statement on pages 33 to 35 includes
the Company’s policies towards Board diversity and inclusion, integrity
and business ethics and the Modern Slavery Act 2015.
We recognise that the most material way in which the Company can
have an impact is through active ownership of its investments. The
Manager engages in dialogue, including around ESG factors, with the
management of investee companies on behalf of the Company as
an integral part of its approach to research and investment, and as
stewards of client capital.
The Manager is a signatory to the United Nations Principles
for Responsible Investment (“UNPRI”) under which signatories
contribute to the development of a more sustainable global financial
system. As a signatory, the Manager aims to incorporate the
consideration of financially material ESG factors into its investment
processes.
Active ownership
The Manager engages with the management of investee companies
on ESG factors that could have a material impact on their
businesses and, where necessary, encourages improvement in
management practices that it believes could help drive financial
returns. The Manager’s active ownership activities are supported by
its policies on corporate governance, proxy voting and engagement.
These policies support and inform the Manager’s engagement and
voting activities on behalf of its clients and are available on its
website.
As stewards of £344 million of assets, we support investing responsibly. The Company benefits from
the Manager’s approach in this field and its £501 billion of assets under management.
Our Approach to Responsible Investment
Strategic Report
Report and Accounts 2024 | 25
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Other Information
Chair’s StatementOverview Auditors’ Report
In the year under review, the Manager engaged with 16 investee
companies held by the Company on the range of ESG topics above.
Corporate governance was a key engagement topic, including
discussions around board ESG oversight, remuneration and
effectiveness. Engagement on climate change typically focused on
companies’ net zero strategies, as well as energy transition and
emissions’ management.
The Manager records Milestones where companies make tangible
improvement in their policies and practices in alignment with the
Manager’s engagement objectives. Milestones are recorded using a
three-star rating system: one star is awarded for a smaller change
to ESG practices; two stars are awarded for meaningful updates and
changes to ESG practices; and three stars are awarded for material
changes of significant ESG importance. Three Milestones were
recorded for investee companies held by the Company during the
reporting period. These are disclosed on the following page.
ESG and the investment process
During 2023, as part of the integration of the Manager’s business
with Columbia Threadneedle Investments, the Manager undertook
an extensive project to join all investment teams together on a
single Order Management System (“OMS”). This was completed in
October 2023 and, through the combined OMS, helped to expand the
availability of the Manager’s ESG integration tools.
These tools use data from many sources to enhance and inform the
integration of ESG considerations into investment research, portfolio
construction and risk monitoring, by giving a clear picture of the ESG
considerations that are financially relevant to different investment
opportunities.
Key tools include:
• ESG materiality ratings;
• Sustainable Development Goals mapping tool;
• Net Zero Framework;
• Good governance model;
• Exclusions framework; and
• Controversy rating.
These tools are a starting point for the Manager’s ESG assessment.
The Fund Manager will co-ordinate with a responsible investment
analyst to ensure that those reviewing opportunities for the
Company are well informed in relation to the ESG aspects of the
potential investment. Specialism within the team of responsible
investment analysts allows the Fund Manager to liaise with those who
understand the key ESG issues relating to a particular sector.
Engagement
Source: Columbia Threadneedle Investments
Corporate Governance 17
Climate change 14
Environmental stewardship 7
Labour Standards 4
Human Rights 2
Public Health 2
Issues raised with companies on engagement
26 | CT UK Capital and Income Investment Trust PLC
Examples in the reporting period
GSK
Since 2011, GSK’s albendazole donation programme, carried out in partnership with the World Health Organisation, has been targeted at
controlling soil-transmitted helminthiasis (infestation with one or more intestinal parasitic roundworms) in at-risk populations.
According to the World Health Organization, soil-transmitted helminth infections are among the most common infections worldwide and
affect the poorest and most deprived communities.
The Manager engaged the company, together with other investors on the recommendations laid out in the 2021 Access to Medicine
Index. The company has now extended the donation program to include pre-school aged children as an additional at-risk group and
expanded its public commitment to donating until 2025.
National Grid
National Grid has disclosed a detailed and robust review of its trade associations, including an overview of its lobbying efforts on climate.
As a company with highly regulated business activities, regulation is a key lever to delivering on their climate strategy. As such, its
lobbying efforts are an important part of its climate strategy. The Manager had engaged with the company through Climate Action 100+,
seeking this disclosure.
Unilever
Following significant opposition to the remuneration report at the company’s AGM, Unilever paused salary increases for the new CEO for
the next two years to bring the level back to market expectations. The Manager abstained on the remuneration report as the new CEO
was receiving a salary level significantly higher than his predecessor. This will ensure that remuneration levels are not excessive given he
has only recently taken on the role.
Key: As discussed on page 25, stars represent positive outcomes from engagement with three stars being the highest based on the Manager’s assessment of the change.
Voting on portfolio investments
The Manager’s Corporate Governance Guidelines set out
expectations of the management of investee companies in terms of
good corporate governance. The Board expects to be informed by
the Manager of any sensitive voting issues involving the Company’s
investments. In the absence of explicit instructions from the Board,
the Manager has been empowered to exercise discretion in the use
of the Company’s voting rights and reports at each meeting to the
Board on its voting record. The Manager will vote on all investee
company resolutions.
The Manager is a signatory to the UK Stewardship Code 2020 and,
as required by the Financial Reporting Council, has reported on how
it has applied the Code in its Stewardship Report 2023. This report
is available at www.columbiathreadneedle.com.
We expect the Company’s shares to be voted on all holdings where
possible. During the year, the Manager voted at 58 meetings
of investee companies held by the Company. The Manager did
not support management’s recommendations on at least one
resolution at approximately 28% of all meetings. With respect to all
items voted, the Manager supported over 98% of all management
resolutions. Director elections were the most common reason for a
vote against management, followed by compensation.
Examples of votes against management
• The Manager voted against certain director election proposals
at Hipgnosis Songs Fund, a music IP investment and song
management company, owing to concerns around governance
and oversight.
• The Manager voted against a director election proposal at
Coca-Cola HBC on the basis that the company should appoint a
woman to at least one senior board position, in line with the FCA
diversity guidelines for listed companies.
• The Manager voted against the proposal to approve Diageo’s
remuneration report due to concerns with link between pay and
performance.
Strategic Report
Report and Accounts 2024 | 27
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Other Information
Chair’s StatementOverview Auditors’ Report
The Manager recognises the importance of managing climate-related
risks and opportunities effectively to protect long-term investment
returns.
In June 2024, the Manager published its updated Climate Report,
detailing how it manages climate-related risks and opportunities, in
line with the recommendations of the Taskforce on Climate-Related
Financial Disclosures (“TCFD”).
In the following table is the Company’s carbon footprint (Scope 1 and
2) of its investments. This reflects the total carbon emissions for the
Company’s portfolio as at 30 September 2024 expressed in terms
of tonnes of CO2 emitted per $million invested. This is compared
with the Benchmark’s carbon footprint. The data highlights that the
portfolio’s carbon footprint is very similar to that of the Benchmark.
Building materials company, CRH, was the largest contributor to
the Company’s carbon footprint. The Manager’s engagement with
CRH in June 2024 indicated that although CRH recognised carbon
emissions as a key ESG issue, it lagged its peers in committing
to clear carbon capture and storage (“CCS”) timelines. This was
despite a recognition by its management that this was a crucial
element for cement decarbonisation.
As investor dialogue focuses upon CRH’s 2030+ decarbonisation
roadmap, the Manager notes that more ambitious targets and
2024
CT UK Capital and Income Investment Trust PLC
FTSE All-Share
Tonnes CO₂e / $m invested
0
10
20
30
40
50
60
Source: MSCI ESG
0
50
Climate change
transparency on areas like CCS costs, low-carbon product specifics,
and Scope 3 emissions would be welcomed. On carbon accounting,
CRH state there is significant headroom for all the cash-generating
units they have impairment tested on a carbon scenario, but the
Manager considers that they do not disclose sufficient detail on the
assumptions included in this analysis, which leaves the Manager
unable to fully understand the forward-looking carbon transition risk.
Overall, the Manager has engaged with seven of the portfolio’s top
ten carbon footprint contributors on climate change.
28 | CT UK Capital and Income Investment Trust PLC
Principal Risks Mitigation Actions taken on Principal Risks in the year
Market and Political Risks
Macroeconomic and geopolitical risk including rising international tensions arising
from the war in Ukraine, dispute in the South China Sea, events in the Middle East
and the emerging policies of the newly elected UK Government.
The Company has a clearly defined and approved strategy which is reviewed and
approved on an annual basis. The Board can hold additional board meetings at
short notice to discuss the impact of significant changes in the macroeconomic
and geopolitical environment. The Company maintains a portfolio of diversified
stocks.
Forward looking stress tests ranging from moderate to extreme scenarios are
provided by the Manager to the Board to support the Five Year Horizon Statement.
At each meeting of the Board, the Directors consider and discuss the investment
performance of the Company with Julian Cane, the Company’s Fund Manager. The Board
held its annual strategy meeting in July 2024 which included a presentation for the
Manager on the macroeconomic outlook.
At the November 2024 Audit and Risk Committee meeting, the Directors reviewed updated
forward looking stress tests prepared by the Manager providing support for the Five Year
Horizon Statement disclosed on page 30.
Investment Performance Risks
Unfavourable markets or asset allocation, sector and stock selection and
management and use of cash and gearing are inappropriate giving rise to
investment underperformance as well as impacting capacity to pay dividends.
The portfolio of quoted securities is diversified and the Company’s structure
enables it to take a long term view notwithstanding the current market volatility.
Investment policy, performance, revenue and gearing are reviewed at each Board
meeting. The Manager’s Investment Risk team provides independent oversight on
investment risk management. The Board regularly considers operating costs along
with underlying dividend income and the implications for the dividend payment
capacity of the Company taking into account revenue reserves.
At each meeting of the Board, the Directors consider and discuss the investment
performance of the Company with Julian Cane, the Company’s Fund Manager.
Legal and Regulatory Risks
To maintain its investment trust status, the Company is required to comply with
Section 1158 of the UK Corporation Taxes Act. The Company is also required to
comply with UK company law, is subject to the requirements of the AIFMD and
the relevant regulations of the London Stock Exchange and the Financial Conduct
Authority.
The Board receives regular control reports from the Manager covering risk and
compliance. The Board has access to the Manager’s Risk Manager and requires any
significant issues directly relevant to the Company to be reported immediately. The
Depositary is specifically liable for loss of any of the Company’s securities and cash
held in custody.
The Manager continues to strengthen and develop its Risk, Compliance and Internal
Control functions. The Depositary oversees custody of investments and cash and reports
to the Company in accordance with the Alternative Investment Fund Managers Directive
(“AIFMD”).
Product Strategy Risks
Inappropriate business or marketing strategy particularly in relation to investor
needs or sentiment giving rise to a share price discount to NAV per share.
To gauge investor sentiment, the Board holds an investor satisfaction survey which
is conducted every five years ahead of a vote on whether the Company should
continue. The Board holds a separate annual meeting to consider the Company’s
strategy. The appointment of the Manager is also reviewed annually. Share
buybacks can be employed to help moderate discount volatility, while share issues
can be made when the shares are trading at a premium. At each Board meeting
the Directors receive an update on the marketing activities undertaken by the
Manager. The Company’s Broker provides periodic updates to the Board relating to
the Company’s trading in the wider market.
In May 2024, the Board agreed to the continuing appointment of the Manager, which has
continued to deliver on the Company’s objective. At each Board meeting the marketing
activities of the Manager are reported. During the year 4,290,000 shares were bought
back at a small discount to NAV. Since the year end to 26 November 2024, the Company
has bought back 632,500 shares to be held in treasury. No shares have been issued.
These actions moderated share price volatility and enhanced NAV per share for continuing
Shareholders.
Cyber Risks
Theft of Company and customer assets or data.
The Manager has an Information Security team with the objective to protect its
clients from malicious external attacks.
Supervision of the Manager’s third-party service providers, including State Street
and SS&C, is maintained by Columbia Threadneedle Investments and includes
assurances regarding IT security and cyber-attack prevention.
The Manager’s Information Security team has developed and implemented a programme
for 2024 focused upon minimising software vulnerabilities, brand monitoring and
continued oversight of vendor risk.
Third Party Service Provider Risks
Errors, fraud or control failures at service providers or business continuity failure
could damage reputation or investors’ interests or result in losses.
The Board receives regular control reports from the Manager covering risk and
compliance including oversight of third-party service providers. The Board has
access to the Manager’s Risk Manager and requires any significant issues directly
relevant to the Company to be reported immediately. The Depositary is specifically
liable for loss of any of the Company’s securities and cash held in custody.
The Manager continues to strengthen and develop its Risk, Compliance and Internal
Control functions. Supervision of third-party service providers has been maintained by the
Manager. The Depositary oversees custody of investments and cash and reports to the
Company in accordance with the Alternative Investment Fund Managers Directive.
During the year the Audit and Risk Committee met with members of the Manager’s internal
audit function to discuss the outcome of their recent reviews and planned activities.
Principal Risks and Future Prospects
No change in overall risk during the year.
No change in overall risk during the year.
No change in overall risk during the year.
No change in overall risk during the year.
No change in overall risk during the year.
The Board has carried out a robust assessment of the
Company’s principal and emerging risks and the disclosures
in the Annual Report that describe the principal risks, the
procedures in place to identify emerging risks and explain how
they are being managed or mitigated.
The principal risks together with their mitigations are set out in the
following table. The Board’s processes for monitoring them and
identifying emerging risks are set out on page 51 and in note 21 to
the accounts. The global economy continues to suffer considerable
disruption due to the effects of the war in Ukraine, events in the
Middle East and the after-effects of a high inflation environment.
The Directors continue to review the key risk register for the Company
which identifies the risks that the Company is exposed to, the controls
in place and the actions being taken to mitigate them.
The principal risks identified as most relevant to the assessment
of the Company’s future prospects and viability are detailed in the
following table.
Emerging risks represent new information which could significantly
change how an existing risk is perceived, but where the impact or
likelihood remains uncertain.
Future Prospects
Through a series of connected stress tests ranging from moderate to
extreme scenarios and based on historical information, but forward
looking over the five years commencing 1 October 2024, the Board
assessed the risks of :
• potential illiquidity of the Company’s portfolio;
• the effects of any substantial future falls in investment values
and income receipts on the ability to repay and renegotiate
borrowings;
• potential breaches of loan covenants, the maintenance of
dividend payments and retention of investors; and
• the potential need for extensive share buybacks in the event of
share price volatility and a move to a wide discount.
The Board also took into consideration the perceived viability of its
principal service providers, potential effects of anticipated regulatory
changes and the potential threat from competition. The Board’s
conclusions are set out under the Five Year Horizon Statement on
page 30. A five year period is considered to be a reasonable time
frame for measuring and assessing medium to long term investment
performance. A five year period has also been selected as the shares
may not be suitable for investors intending to hold them for less than
that period.
No change in overall risk during the year.
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Chair’s StatementOverview Auditors’ Report
Principal Risks Mitigation Actions taken on Principal Risks in the year
Market and Political Risks
Macroeconomic and geopolitical risk including rising international tensions arising
from the war in Ukraine, dispute in the South China Sea, events in the Middle East
and the emerging policies of the newly elected UK Government.
The Company has a clearly defined and approved strategy which is reviewed and
approved on an annual basis. The Board can hold additional board meetings at
short notice to discuss the impact of significant changes in the macroeconomic
and geopolitical environment. The Company maintains a portfolio of diversified
stocks.
Forward looking stress tests ranging from moderate to extreme scenarios are
provided by the Manager to the Board to support the Five Year Horizon Statement.
At each meeting of the Board, the Directors consider and discuss the investment
performance of the Company with Julian Cane, the Company’s Fund Manager. The Board
held its annual strategy meeting in July 2024 which included a presentation for the
Manager on the macroeconomic outlook.
At the November 2024 Audit and Risk Committee meeting, the Directors reviewed updated
forward looking stress tests prepared by the Manager providing support for the Five Year
Horizon Statement disclosed on page 30.
Investment Performance Risks
Unfavourable markets or asset allocation, sector and stock selection and
management and use of cash and gearing are inappropriate giving rise to
investment underperformance as well as impacting capacity to pay dividends.
The portfolio of quoted securities is diversified and the Company’s structure
enables it to take a long term view notwithstanding the current market volatility.
Investment policy, performance, revenue and gearing are reviewed at each Board
meeting. The Manager’s Investment Risk team provides independent oversight on
investment risk management. The Board regularly considers operating costs along
with underlying dividend income and the implications for the dividend payment
capacity of the Company taking into account revenue reserves.
At each meeting of the Board, the Directors consider and discuss the investment
performance of the Company with Julian Cane, the Company’s Fund Manager.
Legal and Regulatory Risks
To maintain its investment trust status, the Company is required to comply with
Section 1158 of the UK Corporation Taxes Act. The Company is also required to
comply with UK company law, is subject to the requirements of the AIFMD and
the relevant regulations of the London Stock Exchange and the Financial Conduct
Authority.
The Board receives regular control reports from the Manager covering risk and
compliance. The Board has access to the Manager’s Risk Manager and requires any
significant issues directly relevant to the Company to be reported immediately. The
Depositary is specifically liable for loss of any of the Company’s securities and cash
held in custody.
The Manager continues to strengthen and develop its Risk, Compliance and Internal
Control functions. The Depositary oversees custody of investments and cash and reports
to the Company in accordance with the Alternative Investment Fund Managers Directive
(“AIFMD”).
Product Strategy Risks
Inappropriate business or marketing strategy particularly in relation to investor
needs or sentiment giving rise to a share price discount to NAV per share.
To gauge investor sentiment, the Board holds an investor satisfaction survey which
is conducted every five years ahead of a vote on whether the Company should
continue. The Board holds a separate annual meeting to consider the Company’s
strategy. The appointment of the Manager is also reviewed annually. Share
buybacks can be employed to help moderate discount volatility, while share issues
can be made when the shares are trading at a premium. At each Board meeting
the Directors receive an update on the marketing activities undertaken by the
Manager. The Company’s Broker provides periodic updates to the Board relating to
the Company’s trading in the wider market.
In May 2024, the Board agreed to the continuing appointment of the Manager, which has
continued to deliver on the Company’s objective. At each Board meeting the marketing
activities of the Manager are reported. During the year 4,290,000 shares were bought
back at a small discount to NAV. Since the year end to 26 November 2024, the Company
has bought back 632,500 shares to be held in treasury. No shares have been issued.
These actions moderated share price volatility and enhanced NAV per share for continuing
Shareholders.
Cyber Risks
Theft of Company and customer assets or data.
The Manager has an Information Security team with the objective to protect its
clients from malicious external attacks.
Supervision of the Manager’s third-party service providers, including State Street
and SS&C, is maintained by Columbia Threadneedle Investments and includes
assurances regarding IT security and cyber-attack prevention.
The Manager’s Information Security team has developed and implemented a programme
for 2024 focused upon minimising software vulnerabilities, brand monitoring and
continued oversight of vendor risk.
Third Party Service Provider Risks
Errors, fraud or control failures at service providers or business continuity failure
could damage reputation or investors’ interests or result in losses.
The Board receives regular control reports from the Manager covering risk and
compliance including oversight of third-party service providers. The Board has
access to the Manager’s Risk Manager and requires any significant issues directly
relevant to the Company to be reported immediately. The Depositary is specifically
liable for loss of any of the Company’s securities and cash held in custody.
The Manager continues to strengthen and develop its Risk, Compliance and Internal
Control functions. Supervision of third-party service providers has been maintained by the
Manager. The Depositary oversees custody of investments and cash and reports to the
Company in accordance with the Alternative Investment Fund Managers Directive.
During the year the Audit and Risk Committee met with members of the Manager’s internal
audit function to discuss the outcome of their recent reviews and planned activities.
30 | CT UK Capital and Income Investment Trust PLC
Viability Statement – Five Year Horizon
In accordance with the UK Corporate Governance Code, the Directors
have assessed the future prospects of the Company over the coming
five years. Factors that the Board considered were:
• The Company has a long term investment strategy under which
it invests mainly in readily realisable, UK publicly listed securities
and which restricts the level of borrowings.
• At the Annual General Meeting of the Company held on 9 March
2023, Shareholders voted 99.5% in favour of the continuation
of the Company. The next continuation vote for the Company is
scheduled to be held in 2028.
• The Company is inherently structured to generate long term
returns, with a five year period viewed as a reasonable time frame
for measuring and assessing medium to longer term investment
performance.
• The Company is able to take advantage of its closed-end
investment trust structure, including the ability to use short term
borrowings by way of loans and overdrafts and the capacity to
secure additional finance well in excess of five years.
• There is robust monitoring of the headroom under the Company’s
bank borrowing covenants.
• A regular and robust review of revenue and expenditure forecasts
is undertaken throughout the year.
• The Company retains title to all of its assets which are
safeguarded as described under “Safe custody of assets” and
“Depositary” on page 40.
The Board gave careful consideration to the impact of the war in
Ukraine, events in the Middle East and the after effects of a high
inflation environment and the resulting volatility in stockmarkets and
economic disruption when making this assessment.
As discussed in note 20 to the Financial Report on page 75, the
Company has a number of banking covenants and at present the
Company’s financial position does not suggest that any of these
are close to being breached. The primary risk is that there is a very
substantial decrease in the NAV of the Company in the short to
medium term. The Directors have considered the remedial measures
that are open to the Company if such a covenant breach appears
possible. As at 26 November 2024, the last practicable date before
publication of this report, borrowings amounted to £28 million. This
is in comparison to a net asset value of £332 million. In accordance
with its investment policy the Company is invested mainly in readily
realisable, FTSE All-Share listed securities. These can be realised, if
necessary, to repay the loan facility and fund the cash requirements
for future dividend payments.
The Company operates within a robust regulatory environment. The
Company retains title to all assets held by the Custodian. Cash is
held with banks approved and regularly reviewed by the Manager.
Based on this assessment, and in the context of the Company’s
business model, strategy and operational arrangements set out
above, the Board has a reasonable expectation that the Company will
be able to continue in operation and meet its liabilities as they fall
due over the five year period ending November 2029.
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Chair’s StatementOverview Auditors’ Report
Under Section 172 of the Companies Act 2006, the Directors have a
duty to act in the way they consider, in good faith, would be most likely
to promote the success of the Company for the benefit of its members
as a whole, and in doing so, have regard, amongst other matters, to:
• the likely consequences of any decision in the long term;
• the interests of the Company’s Shareholders;
• the need to foster the Company’s business relationships with
suppliers, customers and others;
• the impact of the Company’s operations on the community and
environment;
• the desirability of the Company maintaining a reputation for
high standards of business conduct; and
• the need to act fairly as between members of the Company.
As explained on page 15, the Company is an externally managed
investment company and has no employees, customers or premises.
The key stakeholders are the Shareholders, the Manager, suppliers,
regulators and service providers.
The Board believes that the optimum basis for meeting its duty to
promote the success of the Company is by appointing and managing
third parties with the requisite performance records, resources,
infrastructure, experience and control environments to deliver the
services required to achieve the investment objective and successfully
operate the Company. By developing strong and constructive working
relationships with these parties, the Board seeks to ensure high
standards of business conduct are adhered to at all times and service
levels are enhanced whenever possible. This combined with the careful
management of costs is for the benefit of all Shareholders who are
also key stakeholders.
The Company’s primary working relationship is with the Manager. The
portfolio activities undertaken by the Fund Manager and the impact of
decisions taken are set out in the Fund Manager’s Review on pages 9
to 12. On pages 24 to 27 information is provided on the Company’s
approach towards responsible investment. The Directors are supportive
of the Manager’s approach, which focuses on engagement with the
investee companies on ESG issues and how this links with the United
Nations Sustainable Development Goals (“SDGs”). Further information
on the annual evaluation of the Manager, to ensure its continued
appointment remains in the best interests of Shareholders, is set out
on page 53.
Service providers such as, JP Morgan Chase Bank (the “Bank” and
“Custodian”), JP Morgan Europe Limited (the “Depositary”), Cavendish
(the “Broker”) and Computershare Investor Services PLC (the
“Registrar”) are also considered key stakeholders. The Board receives
regular reports from them and evaluates them to ensure expectations
on service delivery are met.
The Directors value engagement with Shareholders. The Company’s
website www.ctcapitalandincome.co.uk is available to all Shareholders
and key decisions are announced to the London Stock Exchange
through a Regulatory News Service. The Company holds an Annual
General Meeting. Shareholders are invited to attend, and this provides
an open forum for them to discuss issues and matters of concern
with the Board and representatives of the Manager and the Company’s
advisors.
At the Annual General Meeting held on 9 March 2023, Shareholders
voted 99.5% in favour of continuation of the Company. In advance
of the continuation vote, the Board surveyed Shareholders. The next
continuation vote is scheduled to be held in 2028.
Shareholders are invited to communicate with the Board through the
Chair or Company Secretary. Alternatively, issues can be discussed with
the Company’s Senior Independent Director, who can be contacted at
the Company’s registered office address detailed on page 55.
The Company’s Shareholders are always considered when the Board
makes decisions and examples include:
Dividends
The Board is aware that dividend income is important to Shareholders
and dividend growth is therefore a Key Performance Indicator of the
Company. Prudent stewardship in prior years combined with careful
stock selection has given the Company distributable reserves providing
some resilience to pay dividends in years when there is a shortfall in
investment income. Therefore, despite the COVID-19 pandemic, the
war in Ukraine, events in the Middle East and the after-effects of a high
Promoting the Success of the Company
– Section 172 Statement
32 | CT UK Capital and Income Investment Trust PLC
inflation environment, the Company has increased its annual dividends
paid to Shareholders, and maintained its “AIC Dividend Hero” status.
As part of the decision making process, the Manager has provided the
Board with estimates of dividend income for the forthcoming year and
the estimated impact upon the distributable reserves of the Company.
During the year, the Board agreed to propose the cancellation of the
Company’s sizable share premium account at the forthcoming AGM.
Converting the share premium account to a distributable reserve will
provide a significant pool of reserves which, if required, can be used
to fund dividends, share buybacks and other returns of capital in
accordance with applicable law.
Share issuance and buy-backs
Ensuring that liquidity is maintained for the Company’s shares is
important to Shareholders. During the year, the Company bought
back for treasury 4,290,000 shares at a small discount. This action
moderated share price volatility.
The proposed cancellation of the share premium account, discussed
above, will provide additional distributable reserves for the buyback of
the Company’s shares.
Board succession planning
The Board is committed to ensuring that its composition is compliant
with best corporate governance practice under the revised AIC Code
including guidance on tenure. On 7 March 2024, Tim Scholefield retired
from the Board having served nine years. Upon his retirement, Nicky
McCabe was appointed Senior Independent Director.
As part of the Board’s succession planning, Fletcher Jones, a search
company without connection to the Company or any individual Director,
was commissioned to find a new Director for the Board. Following this
selection process, Christopher Metcalfe, was appointed to the Board
and its committees with effect from 8 March 2024.
On 6 March 2025, at the conclusion of the AGM, Jane Lewis, the
Chair of the Company will retire having served nine years. Upon this
retirement, it is intended that Nicky McCabe, the Company’s Senior
Independent Director, who was appointed to the Board in January 2021
will become Chair. Nicky has extensive sector experience as she was
formerly Head of Product and Investment Trusts at Fidelity International
as well as a director and Chief Operating Officer of a number of Fidelity
companies. Nicky is currently a non-executive director of abrdn Asian
Income Fund Ltd, Artemis Investment Management Limited and EFG
Asset Management (UK) Limited.
In addition, at the conclusion of the 2025 AGM, it is intended
that Patrick Firth will be appointed Senior Independent Director
and Christopher Metcalfe Chair of the Management Engagement
Committee.
As a further part of the Board’s succession planning, Nurole, a search
company without connection to the Company or any individual director,
was commissioned to find a new Director for the Board. It is anticipated
that a new Director will be appointed to the Board shortly.
Retail investors
The Company’s Shareholders are predominantly retail investors who
invest through savings or execution only platforms. A significant
proportion invest through the CT Savings Plans and the Board remains
focused with the Manager on the optimal delivery of the Company’s
investment proposition for the benefit of all Shareholders. The Manager
remains committed to its savings plans and its relationship with its
customers and is investing significantly to improve digital capabilities,
access and information for Shareholders through the savings plans.
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Chair’s StatementOverview Auditors’ Report
Investment
The Company is required to have a publicly stated investment
objective and policy from which Shareholders, prospective investors
and other stakeholders can understand the scope of its investment
remit and constraints imposed under it. Any material changes to
this objective and policy can only be made with the approval of
Shareholders and the Financial Conduct Authority.
The Company’s investment objective is to secure long term capital
and income growth from a portfolio consisting mainly of UK listed
companies.
The Company seeks to achieve this objective by identifying
investments in companies which have good long term prospects but
whose share prices do not reflect their intrinsic value, either because
of relative short term underperformance giving rise to adverse
investor sentiment or simply because they are unfashionable. Many
of the stocks purchased have a higher than average dividend yield.
Investment risk is reduced by investing mainly in FTSE All-Share
companies. The majority of holdings are in large and mid-
capitalisation companies, although the Company also holds
investments in smaller companies. At the year end the Company
was invested in 47 holdings. During the year the Company had no
exposure to derivatives.
There are no maximum limits across sectors. The Company can
invest in securities listed on the Alternative Investment Market
(“AIM”) up to a limit of 10% of gross assets at the time of
investment.
No single investment in the portfolio may exceed 10% of the
Company’s gross assets at the time of purchase and no unquoted
securities may be purchased without the prior approval of the Board.
No holding in an unquoted security should exceed 5% of the value
of gross assets at the time of investment and no more than five
unquoted securities may be held in the portfolio at any one time.
The total value of its investments held in listings outside the UK
must not exceed 10% of the Company’s gross assets at the time of
investment but no individual country limits are imposed. The proportion
of the portfolio held in UK listings of companies as at 30 September
2024 was 96%, of which the proportion of the portfolio held in FTSE
All-Share and AIM listed companies was 92% and 3% respectively. 4%
of the total portfolio was held in listings outside the UK.
No more than 10% of its gross assets can be invested in other listed
investment companies (including investment trusts) unless they
themselves have stated they will invest no more than 15% of their
gross assets in other listed investment companies. Provided they
have, the Company’s limit becomes 15%.
The Company may use derivatives principally for the purpose of
income enhancement and efficient portfolio management. Options
may only be written on quoted stocks and the total notional exposure
is limited to a maximum of 5% of gross assets at the time of
investment for both put and call options. The exposure arising from
any futures contracts entered by the Company is included within the
calculation of the 20% limit on cash and gearing.
The Board carries out due diligence with regard to the investment
policy and underlying policies at each of its Board meetings receiving
regular reports from the Fund Manager. Confirmation of adherence
to the investment restrictions and limitations set by the Board are
required at each meeting. The Fund Manager’s Review on pages 9 to
12 provides an overview of the outcome from the application of the
investment policy and the underlying policies during the course of
the year.
Using its closed-end investment company structure, the Company
can borrow over short, medium or long term periods within a range of
0 to 20% of gross assets to enhance Shareholder returns. As at
30 September 2024 the Company had borrowings of £28 million.
The Board monitors borrowing levels and covenant headroom at
each Board meeting.
Policy Summary
34 | CT UK Capital and Income Investment Trust PLC
Dividend
The Company’s revenue account is managed with the objective of
continuing the Company’s record of delivering a stable and growing
dividend to Shareholders over time. Prudent use of long established
revenue reserves is made whenever necessary to help meet any
revenue shortfall. Dividends can also be paid from capital reserves.
The Board determines payments by taking account of timely income
forecasts, brought forward distributable reserves, prevailing inflation
rates, the dividend payment record and Corporation Tax rules
governing investment trust status.
The consistent application of this policy has enabled the Company to
pay an increased dividend every year since launch in 1992.
Cancellation of the Share Premium Account
The Company has built up a sizeable share premium account,
which is non-distributable. Under the Companies Act 2006 and the
Companies (Reduction of Share Capital) Order 2008, a company
may, with the sanction of a special resolution of its shareholders and
the confirmation of the High Court (the “Court”), cancel the amounts
standing to the credit of its share premium account and apply
the sums resulting from such cancellation to create distributable
reserves. The Board believes that cancelling the Company’s share
premium account and applying the sums cancelled in this manner
will provide a significant pool of reserves which can be used in
future, if required, to fund dividends, share buybacks and other
returns of capital in accordance with applicable law.
The Board is therefore seeking approval from Shareholders at the
forthcoming AGM to cancel the entire amount standing to the credit
of the current share premium account, following which it will make an
application to the Court to obtain its confirmation of the cancellation.
Subject to confirmation by the Court and the cancellation of the
share premium account taking effect, the amounts so cancelled will
be credited to the Company’s distributable reserves. The estimated
cost of the process is £28,000.
Premium/Discount
The Company issues shares in order to meet Shareholder demand
which cannot be satisfied through the market and to moderate any
premium at which the shares have traded in relation to the NAV per
share. When the shares revert to trading at a price lower than the
NAV per share, the Board has the flexibility to buyback shares in
accordance with the authority given by Shareholders. Shares bought
back can either be cancelled or held in treasury for potential resale
at a premium. This policy has the benefit of enhancing NAV per share
for continuing Shareholders. The Board reviews the discount and
premium levels at each meeting. The shares traded at an average
discount of 3.8% throughout the year. The shares ended the year
at a 2.9% discount. During the year ended 30 September 2024,
the Company bought back 4,290,000 shares at a small discount
to be held in treasury. From 30 September 2024 to 26 November
2024, the Company has bought back 632,500 shares to be held in
treasury. No shares have been issued.
Taxation
The taxation policy is one of full commitment to complying with
applicable legislation and statutory guidelines. It is essential that the
Company always retains its investment trust tax status by complying
with Section 1158 of the Corporation Tax Act 2010 (“Section 1158”)
such that it does not suffer UK Corporation Tax on capital gains. In
applying due diligence towards the retention of Section 1158 status
and adhering to its tax policies, the Board receives regular reports
from the Manager. The Company has received approval from HMRC
as an investment trust under Section 1158 and has since continued
to comply with the eligibility conditions. The Manager also ensures
that the Company submits correct taxation returns annually to
HMRC; settles promptly any taxation due; and claims back, where
possible, all taxes suffered in excess of taxation treaty rates on non
UK dividend receipts.
Board diversity
The policy towards the appointment of non-executive Directors is
based on the Board’s belief in the benefits of having a diverse range
of experience, skills, length of service and backgrounds, including
gender.
The policy is always to appoint the best person for the job and, by
way of this policy statement, it is confirmed that there will be no
discrimination on the grounds of gender, ethnicity, socioeconomic
background, religion, sexual orientation, age or physical ability.
The overriding aim of the policy is to ensure that the Board is
composed of the best combination of people to deliver the objective.
The policy is applied for the purpose of appointing individuals that,
together as a Board, will continue to achieve that aim as well as
ensuring optimal promotion of the Company’s investment proposition
in the marketplace.
The Board is conscious of the diversity targets set out in the UK
Listing Rules.
In accordance with UK Listing Rule 6.6.6R (9), (10) and (11) the
Board has provided the following information in relation to its
diversity. The information has been voluntarily disclosed by each
Director and is correct as at 30 September 2024.
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Chair’s StatementOverview Auditors’ Report
jurisdictions in which it operates. The policy is based on a risk
assessment undertaken by the Board and professional advice is
sought as and when deemed necessary.
Modern Slavery Act 2015
As an investment company with no employees or customers and
which does not provide goods or services in the normal course of
business, the Company considers that it does not fall within the
scope of the Modern Slavery Act 2015 and it is not, therefore,
obliged to make a human trafficking statement. The Company’s
own supply chain which consists predominantly of professional
advisers and service providers in the financial services industry,
which is highly regulated, is considered to be low risk in relation to
this matter. A statement by the Manager under the Act has been
published on its website columbiathreadneedle.co.uk.
UK Financial Sanctions and Prevention of the Facilitation
of Tax Evasion
The Board is fully committed to complying with all legislation,
regulation and relevant guidelines including those relating to the UK
financial sanctions regime in the context of the Company’s business
and also the UK’s Criminal Finances Act 2017, designed to prevent
tax evasion and the facilitation of tax evasion in the jurisdictions in
which the Company operates. Professional advice is sought as and
when deemed necessary.
Jane Lewis
Chair
28 November 2024
Board Gender as at 30 September 2024
(1)
Number of
Board Members
Percentage of
the Board
Number of
senior positions
on the Board
(2)
Men 2 40% –
Women 3 60%
(3)
2
(4)
(1) The Company has opted not to disclose against the number of Directors in executive
management as this is not applicable for an investment trust.
(2) Composed of the Chair and the Senior Independent Director.
(3) This meets the UK Listing Rules target of 40%.
(4) This meets the UK Listing Rules target of 1. Following the retirement of Jane Lewis
at the Company’s AGM to be held on 6 March 2025, Nicky McCabe will be appointed as
Chair and Patrick Firth will be appointed as Senior Independent Director. The Company
will therefore continue to meet the UK Listing Rules target that at least one of the senior
positions on the Board be held by a woman.
Board Ethnic Background as at 30 September 2024
(1)
Number of
Board Members
Percentage of
the Board
Number of
senior positions
on the Board
(2)
White British
or other white
(including
minority-white
groups)
4 80% 2
Black/African/
Caribbean/
Black British
1
(3)
20% –
(1) The Company has opted not to disclose against the number of Directors in executive
management as this is not applicable for an investment trust.
(2) Composed of the Chair and the Senior Independent Director.
(3) This meets the UK Listing Rules target of 1.
As evidenced above, the Company has met all the diversity targets
set out in UK Listing Rule 6.6.6R (9). The Board will continue to
take all matters of diversity into account as part of its succession
planning.
The information included in the above tables has been obtained
following confirmation from the individual Directors. The Board will
continue to take diversity into account as part of its succession
planning and recruitment process.
Integrity and business ethics
The Company applies a strict anti-bribery and anti-corruption policy
insofar as it applies to any Directors or employee of the Manager
or of any other organisation with which the Company conducts
business. The Board also ensures that adequate procedures
are in place and followed in respect of third party appointments,
acceptance of gifts and hospitality and similar matters.
Prevention of the facilitation of tax evasion
The Company is committed to compliance with the UK’s Criminal
Finances Act 2017, designed to prevent tax evasion in the
36 | CT UK Capital and Income Investment Trust PLC
Directors
Jane Lewis, Chair of the Company
Jane was appointed to the Board on
24 November 2015 and became Chair on
1 July 2023. She was last re-elected by
Shareholders on 7 March 2024. She is a
non-executive director of BlackRock World
Mining Trust PLC, Majedie Investments PLC
and the Senior Independent Director and
Chair of the Nominations Committee of
JPMorgan Global Growth and Income PLC.
She was Chairman of Invesco Perpetual UK
Smaller Companies Investment Trust PLC
and until August 2013 was a Director of
Corporate Finance and Broking at Winterflood
Investment Trusts. Prior to this she worked
at Henderson Global Investors and Gartmore
Investment Management Limited in
investment trust business development and
at WestLB Panmure as an investment trust
broker. Jane will retire from the Board at the
conclusion of the Company’s AGM to be held
on 6 March 2025.
Dunke Afe, Chair of the Nomination and
Remuneration Committee
Dunke was appointed to the Board on 1 June
2023 and became Chair of the Nomination
and Remuneration Committee on 20 July
2023. She was elected by Shareholders on
7 March 2024. Dunke is an accomplished
business professional with extensive Brand
Development, Marketing, Innovation and
Strategy experience. She was formerly
Executive Director of Global Marketing at
Estee Lauder Companies and prior to that,
held Senior leadership roles in other blue
chip multinationals including Unilever and
Kimberly Clark. She is also a non-executive
Director of Blackrock Smaller Companies
Trust PLC.
Patrick Firth, Chair of the Audit and Risk
Committee
Patrick was appointed to the Board on 21
July 2022 and became Chair of the Audit
and Risk Committee on 1 January 2023.
He was last re-elected by Shareholders on 7
March 2024. Patrick is a qualified Chartered
Accountant and a member of the Chartered
Institute for Securities and Investment. He
worked in the fund industry in Guernsey from
1992 and was Managing Director of third-party
fund administration businesses and a non-
executive director of a number of management
companies, general partners and investment
companies. Currently he is Chair of the Audit
and Risk Committee of India Capital Growth
Fund Limited. He is also a non-executive director
of Sierra GP Limited. It is intended that Patrick
will be appointed Senior Independent Director at
the conclusion of the Company’s Annual General
Meeting to be held on 6 March 2025.
Nicky McCabe, Senior Independent Director
and Chair of the Management Engagement
Committee
Nicky was appointed to the Board on 1 January
2021 and became Chair of the Management
Engagement Committee on 16 September
2021. She was appointed Senior Independent
Director on 7 March 2024. Nicky was last
re-elected by Shareholders on 7 March
2024. Nicky has extensive sector experience
as she was formerly Head of Product and
Investment Trusts at Fidelity International as
well as a director and Chief Operating Officer
of a number of Fidelity companies. Nicky is
currently a non-executive director of abrdn
Asian Income Fund Ltd, Artemis Investment
Management Limited and EFG Asset
Management (UK) Limited. It is intended that
Nicky will be appointed Chair of the Board upon
the retirement of Jane Lewis at the conclusion
of the Company’s AGM to be held on 6 March
2025.
Christopher Metcalfe, Non-executive Director
Christopher was appointed to the Board on
8 March 2024. He is Chairman of Martin
Currie Global Portfolio Trust plc and the Senior
Independent non-executive Director of JP
Morgan US Smaller Companies Investment
Trust plc. He is also a non–executive Director
of Herald Investment Trust plc. He has
extensive equity fund management and
investment trust experience having previously
worked in senior positions at Newton
Investment Management, Schroder Investment
Management and Henderson Administration
Group. It is intended that Christopher will
be appointed Chair of the Management
Engagement Committee at the conclusion of
the Company’s Annual General Meeting to be
held on 6 March 2025.
No Director holds a directorship elsewhere in common with other members of the Board.
All Directors are members of the Management Engagement Committee and the Nomination and Remuneration Committee.
All Directors with the exception of Jane Lewis are members of the Audit and Risk Committee.
Report and Accounts 2024 | 37
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Other Information
Chair’s StatementOverview Auditors’ Report
Governance Report
Directors’ Report
The Directors submit the Report and Accounts of the Company for the year ended 30 September
2024. The Directors’ biographies; Corporate Governance Statement; the Report of the Nomination
and Remuneration Committee; the Directors’ Remuneration Report; the Report of the Audit and Risk
Committee Report and the Report of the Management Engagement Committee form part of this
Directors’ Report.
Statement regarding Report and Accounts
The Directors consider that following advice from the Audit and
Risk Committee, the Report and Accounts, taken as a whole, is
fair, balanced and understandable and provides the information
necessary for Shareholders to assess the Company’s position and
performance, business model and strategy. The Audit and Risk
Committee has reviewed the Report and Accounts for the purposes
of this assessment. The market outlook for the Company can be
found on page 12. Principal risks can be found on page 28 with
further information on page 76.
Shareholders will be asked to approve the adoption of the Report
and Accounts for the financial year ended 30 September 2024 at
the AGM (Resolution 1).
Results and dividends
The results for the year are set out in the attached accounts. The
Company’s dividend payments are set out below.
Dividends paid in the year ended 30 September 2024
£’000s
Fourth of four interims for the year ended 30 September 2023
of 3.90p per share
4,046
First of four interims for the year ended 30 September 2024
of 2.85p per share
2,918
Second of four interims for the year ended 30 September 2024
of 2.85p per share
2,882
Third of four interims for the year ended 30 September 2024
of 2.85p per share
2,864
12,710
Further details are provided in note 9 to the financial statements.
As explained in the Chair’s Statement, the Board has announced a
fourth interim dividend of 3.95 pence per share. This will be paid on
20 December 2024 to Shareholders on the register on 6 December
2024. This dividend, together with the other three interim dividends
paid in respect of the financial year ended 30 September 2024
makes a total dividend of 12.50 pence per share. This represents an
increase of 2.9% over the 12.15 pence per share paid in respect of
the previous financial year.
Dividend policy
The Company expects to pay four, quarterly interim dividends in
March, June, September and December each year.
As dividends are paid quarterly as interim dividends in March,
June, September and December, the Company does not pay a final
dividend in February that would require formal Shareholder approval
at the AGM. However, formal approval of the Company’s dividend
policy of paying four quarterly interim dividends in each financial
year will be sought at the AGM (Resolution 2).
Company status
The Company is a public limited company and an investment
company as defined by section 833 of the Companies Act 2006.
The Company is limited by shares and is registered in England and
Wales with company registration number 02732011. It is subject
to the FCA’s UK Listing Rules sourcebook, UK legislation and
regulations including company law, financial reporting standards,
taxation law and its own articles of association.
The Company is exempt from Streamlined Energy and Carbon
Reporting Disclosures as it has consumed less than 40,000 Kwh
of energy in the United Kingdom during the year.
Taxation
As set out on page 34 and in note 7 to the accounts, as an
investment trust, the Company is exempt from UK Corporation Tax
on its worldwide dividend income and from UK Corporation Tax on
any capital gains arising from its portfolio of investments, provided
it complies at all times with section 1158 of the Corporation Tax
Act 2010. Dividends received from investee companies domiciled
outside the UK are subject to taxation in those countries in
accordance with relevant double taxation treaties.
38 | CT UK Capital and Income Investment Trust PLC
Accounting and going concern
The financial statements, starting on page 61, comply with current
UK financial reporting standards, supplemented by the Statement
of Recommended Practice “Financial Statements of Investment
Trust Companies and Venture Capital Trusts” (“SORP”). The
significant accounting policies of the Company are set out in note
2 to the accounts. The unqualified auditor’s opinion on the financial
statements appears on pages 56 to 60. As discussed in the Five
Year Horizon Statement on page 30 and note 20 to the financial
statements on page 75, additional considerations were given to
assessing the applicability of the going concern basis of accounting
this year. Recently, the war in Ukraine, events in the Middle East
and the after-effects of a high inflation environment have resulted
in increased volatility in financial markets and economic disruption.
When assessing going concern the Directors have therefore
considered these in addition to the Company’s objective, strategy
and policy, its current cash position, the availability of its loan facility
and compliance with its covenants and the operational resilience of
the Company and its service providers.
The Board has considered the impact of falls in the NAV of the
Company and the ability of it to meet its banking covenants. The
primary risk is that there is a very substantial decrease in the NAV
of the Company in the short to medium term. The Board considers
that the possibility of a fall of this magnitude is remote. In addition,
the Company has remedial measures if such a covenant breach
appeared possible.
Further details on this assessment are provided on pages 28, 30 and 75.
Based on this assessment, and in light of the controls and
monitoring processes that are in place, the Directors believe that
the Company has adequate resources to continue in operational
existence for the twelve month period from the date of the approval
of the financial statements. Accordingly, it is reasonable for the
financial statements to continue to be prepared on a going concern
basis. The Company’s longer term viability is considered in the Future
Prospects “Five Year Horizon” Statement on page 30.
Capital structure
As at 30 September 2024 there were 107,289,022 ordinary shares
of 25 pence each in issue including 7,243,177 shares held in
treasury.
As at 26 November 2024 (being the latest practicable date before
publication of this report) the number of ordinary shares in issue was
107,289,022 including 7,875,677 shares held in treasury.
All ordinary shares rank equally for dividends and distributions and
carry one vote each. There are no restrictions concerning the transfer
of securities in the Company, no special rights with regard to control
attached to securities, no agreements between holders of securities
regarding their transfer known to the Company and no agreement
which the Company is party to that affects its control following a
takeover bid. Details of the capital structure can be found in note
15 to the accounts. The revenue profits of the Company (including
accumulated revenue reserves), together with the realised capital
profits, are available for distribution by way of dividends to the
holders of the ordinary shares. Upon a winding up, after meeting the
liabilities of the Company, the surplus assets would be distributed
to Shareholders pro rata to their holdings of ordinary shares. Full
details are set out in the Company’s articles of association.
Issue and buyback of shares
At the AGM held on 7 March 2024 Shareholders renewed the
Board’s authority to issue ordinary shares up to 10% of the number
then in issue.
Subject to annual Shareholder approval, the Company may also
purchase up to 14.99% of its own issued ordinary shares at a
discount to NAV per share. The shares bought back can either be
cancelled or held in treasury to be sold as and when the share price
returns to a premium. At the AGM held on 7 March 2024 Shareholders
gave the Board authority to buyback ordinary shares up to 14.99% of
the number then in issue. During the year under review 4,290,000
shares with an aggregate nominal value of £1,072,500 were
purchased, representing 4.0% of the number of shares issued and
fully paid at 30 September 2023 (including shares held in treasury),
in 40 tranches and held in treasury. The price paid ranged from 273.5
pence per share to 340.0 pence per share.
Since the year end to 26 November 2024, the Company has bought
back 632,500 shares with an aggregate nominal value of £158,125
to be held in treasury. No shares have been issued.
Voting rights
As at 26 November 2024 the Company had 107,289,022 ordinary
shares in issue including 7,875,677 shares held in treasury. Total
voting rights were therefore 99,413,345. As at 30 September 2024
and 26 November 2024 no notifications of significant voting rights
had been received under the Financial Conduct Authority’s Disclosure
Guidance and Transparency Rules.
Borrowings and financial risk management
The Company has a one year multicurrency revolving facility
agreement of £30 million with The Royal Bank of Scotland
International Limited expiring in March 2025. The interest rate
margin and the commitment fees on the facility have been set at
commercial rates. It is anticipated that a replacement facility will be
entered into upon the expiry of the current facility.
Details of the financial risk management of the Company are
provided in note 21 beginning on page 76. An ongoing overdraft
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Other Information
Chair’s StatementOverview Auditors’ Report
Governance Report
arrangement is available to the Company by the Custodian for
settlement of investment trades if necessary.
Remuneration Report
The Directors’ Remuneration Report, which can be found on pages
47 to 49, provides detailed information on the remuneration
arrangements for Directors of the Company including the Directors’
Remuneration Policy. Shareholders are asked to approve the policy
at an AGM every three years. There have been no changes to the
policy since approval by Shareholders at the Company’s AGM held
in March 2023. Remuneration is set at a level commensurate with
the skills and experience necessary for the effective stewardship of
the Company and the expected contribution of the Board as a whole
in continuing to achieve the investment objective. It is intended that
this policy will continue for the three year period ending at the AGM
in 2026. Shareholders will be asked to approve the Remuneration
Report in respect of the financial year ended 30 September 2024 at
the upcoming AGM (Resolution 3).
As detailed on page 47, the Directors’ fees are reviewed each
year. Following this review in respect of the financial year ended
30 September 2024, the Directors have agreed that the annual
remuneration of the Chair will increase from £42,750 to £44,750,
the Chair of the Audit and Risk Committee from £35,750 to
£37,500, the Senior Independent Director from £31,500 to £32,500
and other Directors from £28,500 to £30,000. These increases
were effective from 1 October 2024. The previous increase to
Directors’ annual remuneration occurred on 1 October 2023.
The fees for the non-executive Directors are determined within the
limits set out in the Company’s Articles of Association. The present
limit is £250,000 per annum and may not be changed without
seeking shareholder approval at a general meeting. At the Annual
General Meeting to be held on 6 March 2025 the Board will seek
shareholder approval to increase this limit to £350,000 per annum.
The limit was last increased, with the approval of Shareholders, in
February 2021.
This rise would facilitate any temporary increases in the size of the
Board that may occur in the future. These transitional periods would
allow the transfer of experience and knowledge between Directors.
(Resolution 4).
Director election or re-elections
The names of the current Directors, along with their biographical
details, are set out on page 36.
During the year, Tim Scholefield retired on 7 March 2024.
Christopher Metcalfe was appointed to the Board on 8 March 2024.
All Directors, with the exception of Jane Lewis, will seek election or
re-election at the forthcoming AGM. Jane Lewis will retire from the
Board at the conclusion of the Company’s forthcoming AGM to be
held on 6 March 2025, having served nine years.
Following a review of their performance, the Board believes that
each of the Directors standing for election or re-election has made
a valuable and effective contribution to the Company. The skills
and experience each Director brings to the Board for the long term
sustainable success of the Company are set out below. The Board
recommends that Shareholders vote in favour of the election or re-
election of the Directors (Resolutions 5 to 8).
Resolution 5 relates to the re-election of Nicky McCabe who was
appointed to the Board on 1 January 2021 and became Chair of
the Management Engagement Committee on 16 September 2021.
She was appointed Senior Independent Director on 7 March 2024.
Nicky was last re-elected by Shareholders on 7 March 2024.
Nicky has extensive sector experience as she was formerly Head
of Product and Investment Trusts at Fidelity International as well
as a director and Chief Operating Officer of a number of Fidelity
companies. Nicky is currently a non-executive director of abrdn
Asian Income Fund Ltd, Artemis Investment Management Limited
and EFG Asset Management (UK) Limited. It is intended that Nicky
will be appointed Chair of the Board upon the retirement of Jane
Lewis at the conclusion of the Company’s AGM to be held on 6
March 2025.
Resolution 6 relates to the re-election of Dunke Afe. Dunke was
appointed to the Board on 1 June 2023 and became Chair of
the Nomination and Remuneration Committee on 20 July 2023.
She was elected by Shareholders on 7 March 2024. Dunke is
an accomplished business professional with extensive Brand
Development, Marketing, Innovation and Strategy experience.
She was formerly Executive Director of Global Marketing at Estee
Lauder Companies and prior to that, held Senior leadership roles
in other blue chip multinationals including Unilever and Kimberly
Clark. She is also a non-executive Director of Blackrock Smaller
Companies Trust PLC.
Resolution 7 relates to re-election of Patrick Firth who was
appointed to the Board on 21 July 2022 and became Chair of
the Audit and Risk Committee on 1 January 2023. Patrick is a
qualified Chartered Accountant and a member of the Chartered
Institute for Securities and Investment. He worked in the fund
industry in Guernsey from 1992 and was Managing Director of
third-party fund administration businesses and a non-executive
director of a number of management companies, general partners
and investment companies. Currently he is Chair of the Audit and
Risk Committee of India Capital Growth Fund Limited. It is intended
that Patrick will be appointed Senior Independent Director at the
conclusion of the Company’s Annual General Meeting to be held on
6 March 2025.
40 | CT UK Capital and Income Investment Trust PLC
Resolution 8 relates to the election of Christopher Metcalfe.
Christopher was appointed to the Board on 8 March 2024. He is
Chairman of Martin Currie Global Portfolio Trust plc and the Senior
Independent non-executive Director of JP Morgan US Smaller
Companies Investment Trust plc. He is also a non–executive
Director of Herald Investment Trust plc. He has extensive equity
fund management and investment trust experience having previously
worked in senior positions at Newton Investment Management,
Schroder Investment Management and Henderson Administration
Group. It is intended that Christopher will be appointed Chair of
the Management Engagement Committee at the conclusion of the
Company’s Annual General Meeting to be held on 6 March 2025.
Directors’ interests and indemnification
There were no contracts to which the Company was a party and in
which a Director is, or was, materially interested during the year.
There are no agreements between the Company and its Directors
concerning compensation for loss of office.
The Company has granted a deed of indemnity to the Directors in
respect of liabilities that may attach to them in their capacity as
Directors of the Company. This covers any liabilities that may arise
to a third party for negligence, default or breach of trust or duty. This
deed of indemnity is a qualifying third party provision (as defined
by section 234 of the Companies Act 2006) and has been in force
throughout the period under review and remains in place as at the
date of this report. It is available for inspection at the Company’s
registered office during normal business hours and will be available
for inspection at the AGM. The Company also maintains directors’
and officers’ liability insurance.
Statement as to disclosure of information to the auditors
Each of the Directors confirms that, to the best of his or her
knowledge and belief, there is no information relevant to the
preparation of the Report and Accounts of which BDO LLP are
unaware and they have taken all the steps a Director might
reasonably be expected to have taken to be aware of relevant
audit information and to establish that BDO LLP is aware of that
information.
Appointment of auditor and auditor’s remuneration
The auditor of a company has to be appointed at each Annual
General Meeting at which accounts are laid before Shareholders.
BDO LLP has expressed their willingness to continue in office as
auditor and resolutions proposing their re-appointment and for the
Audit and Risk Committee to determine their remuneration for the
financial year ended 30 September 2025 will be proposed at the
AGM. (Resolutions 9 and 10).
Safe custody of assets
The Company’s listed investments are held in safe custody by JP
Morgan Chase Bank (the “Custodian”). Operational matters with the
Custodian are carried out on the Company’s behalf by the Manager in
accordance with the provisions of the management agreement. The
Custodian is paid a variable fee dependent on the number of trades
transacted and location of the securities held.
Depositary
JPMorgan Europe Limited acts as the Company’s Depositary (the
“Depositary”) in accordance with the AIFMD. The Depositary’s
responsibilities, which are set out in an Investor Disclosure
Document on the Company’s website, include: cash monitoring;
ensuring the proper segregation and safekeeping of the Company’s
financial instruments that are held by the Custodian; and monitoring
the Company’s compliance with investment and leverage limits
requirements. The Depositary receives for its services a fee of one
basis point per annum on the value of the Company’s net assets,
payable monthly in arrears.
Although the Depositary has delegated the safekeeping of all assets
held within the Company’s investment portfolio to the Custodian,
in the event of loss of those assets that constitute financial
instruments under the AIFMD, the Depositary will be obliged to
return to the Company financial instruments of an identical type,
or the corresponding amount of money, unless it can demonstrate
that the loss has arisen as a result of an external event beyond its
reasonable control, the consequences of which would have been
unavoidable despite all reasonable efforts to the contrary.
The Manager’s fee
A quarterly fee of 0.1% of funds under management is payable
in arrears to the Manager in respect of the management,
administration and ancillary services provided to the Company (see
note 4 to the accounts).
AGM
The Notice of the AGM to be held on 6 March 2025 is set out on
pages 84 to 87.
As well as the matters set out above, the Board will propose at the
AGM resolutions in relation to the following matters.
Authority to allot shares and sell shares from treasury
(resolutions 11 and 12)
Resolutions 11 and 12 are similar in content to the authorities
and power previously given to the Directors by Shareholders. By
law, the Directors are not permitted to allot new shares (or to grant
rights over shares) unless authorised to do so by Shareholders. In
addition, the Directors require specific authority from Shareholders
before allotting new shares (or granting rights over shares) or selling
shares out of treasury for cash without first offering them to existing
Shareholders in proportion to their holdings.
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Chair’s StatementOverview Auditors’ Report
Governance Report
Resolution 11 gives the Directors, for the period until the conclusion
of the Annual General Meeting in 2026 or, if earlier, 15 months
from the passing of the resolution, the necessary authority to allot
securities up to an aggregate nominal amount of £2,485,333
(9,941,334 ordinary shares). This is equivalent to approximately
10% of the issued share capital of the Company as at 26 November
2024 excluding shares held in treasury.
Resolution 12, which will be proposed as a special resolution
and which is conditional on the passing of Resolution 11, seeks
authority for the Directors to allot shares or sell shares held in
treasury on a non pre-emptive basis for cash up to an aggregate
nominal amount of £2,485,333 (representing 10% of the issued
ordinary share capital of the Company (excluding shares held in
treasury) as at 26 November 2024). These authorities and powers
will provide the Directors with a degree of flexibility to increase
the assets of the Company by the issue of new shares or the sale
of treasury shares, in accordance with the policies set out on
page 34 or should any other favourable opportunities arise to the
advantage of Shareholders. The Directors anticipate that they will
principally use the authorities granted by Resolutions 11 and 12 to
satisfy demand from participants in the CT Savings Plans when they
believe it is advantageous to plan participants and the Company’s
Shareholders to do so. In no circumstances would the Directors use
these authorities to issue or sell any shares from treasury unless the
existing shares in issue are trading at a premium to NAV. As at
26 November 2024, 7,875,677 ordinary shares (representing 7.9%
of the issued ordinary share capital of the Company (excluding
shares held in treasury)) were held by the Company in treasury.
These authorities will expire at the conclusion of the 2026 annual
general meeting of the Company or, if earlier, on that date which is
15 months after the date on which the resolutions are passed.
Authority for the Company to purchase its own shares
(resolution 13)
Resolution 13, which will be proposed as a special resolution,
authorises the Company to purchase up to a maximum of
14,902,060 ordinary shares (equivalent to approximately 14.99%
of the issued share capital excluding shares held in treasury as at
26 November 2024) at a minimum price of 25 pence per share and
a maximum price per share (exclusive of expenses) of the higher
of (i) 5% above the average of the middle market quotations for an
ordinary share (as derived from the London Stock Exchange Daily
Official List) for the five business days immediately before the date
of purchase and (ii) the higher of the last independent trade and
the highest current independent bid on the London Stock Exchange.
The Directors intend to use this authority with the objective of
enhancing Shareholder value. Purchases would only be made, within
guidelines established from time to time by the Board, through the
market for cash at prices below the prevailing Net Asset Value per
ordinary share which would have the effect of enhancing that value
for remaining Shareholders. Any ordinary shares that are purchased
would either be placed into treasury or cancelled. The authority will
expire at the conclusion of the 2026 annual general meeting of
the Company or, if earlier, on the date which is 15 months after the
date on which Resolution 13 is passed.
Approval for the Cancellation of the Share Premium
Account (Resolution 14)
Resolution 14, which will be proposed as a special resolution,
seeks shareholder approval for the cancellation of the entire
amount standing to the credit of the Company’s share premium
account, pursuant to the Companies Act 2006 (the “Act”) and
subject to the confirmation of the High Court (the “Cancellation”).
Subject to confirmation by the High Court and the Cancellation
taking effect, the amounts so cancelled will be credited to the
Company’s distributable reserves. This will improve the Company’s
distributable reserves position and will provide the Company with
flexibility to support, amongst other things, share buy backs and
the payment of dividends or other distributions to Shareholders in
the future.
Form of proxy
Registered Shareholders will find enclosed a form of proxy for use
at the AGM. Shareholders also have the option of lodging their
proxy votes electronically as set out in Note 4 of the Notice of
AGM. For shares held through CREST, proxy appointments may be
submitted via the CREST proxy voting system. Proxy appointments
should be lodged as soon as possible and, in any event, not later
than 12.30pm on 4 March 2025.
Form of direction
If you are an investor in any of the CT Savings Plans you will have
received a form of direction for use at the AGM and you will also
have the option of lodging your voting directions electronically as
set out in Note 4 of the Notice of AGM.
All voting directions should be submitted as soon as possible in
accordance with the instructions on the form of direction and, in
any event, not later than 12:30pm on 26 February 2025.
Recommendation
The Board considers that the resolutions to be proposed at the
meeting are in the best interests of the Company and Shareholders
as a whole. The Directors recommend that Shareholders vote in
favour of each resolution, as they intend to do in respect of their
own beneficial holdings.
By order of the Board
Columbia Threadneedle Investment Business Limited
Secretary
28 November 2024
42 | CT UK Capital and Income Investment Trust PLC
Company’s strategy, operations and compliance with regulations.
The Manager is the Company’s AIFM.
Articles of association
The Company’s articles of association may only be amended by
special resolution at general meetings of Shareholders.
The Board
The Board’s responsibilities are outlined on page 15. More
specifically, the Board is responsible for the effective stewardship
of the Company’s affairs and has adopted a formal schedule
of matters reserved for its decision. It has responsibility for all
corporate strategic issues, corporate governance matters, dividend
policy, share issue and buyback policy, risk and control assessment,
investment performance monitoring and budget approval. It is also
responsible for the review and approval of annual and half yearly
reports and other public documents.
In order to enable the Directors to discharge their responsibilities,
they all have full and timely access to relevant information. The
Board normally meets at least four times a year and also holds a
strategy meeting. At each meeting, the Board reviews the Company’s
management information, which includes reports on investment
performance and strategic matters and financial analyses.
Income forecasts and costs are reviewed within set budgets. The
Board monitors compliance with the Company’s objectives and
is responsible for setting the asset allocation, investment and
gearing ranges within which the Manager has discretion to act. Key
representatives of the Manager attend each Board meeting. Board
meetings are also held on an ad hoc basis to consider particular
issues as they arise. The following table sets out the Directors’
meeting attendance in the year under review. Committees of the
Board met during the year to undertake business such as the
approval of the Company’s final results and dividends.
Each Director has a signed letter of appointment to formalise the
terms of their engagement as a non-executive Director, copies of
which are available for inspection at the Company’s registered
office during normal business hours and are also available at each
Shareholder meeting.
Introduction
The Board adheres to the principles and recommendations of
the revised AIC Code of Corporate Governance (the “AIC Code”)
published in 2019.
The Board believes that the Company has complied with the current
recommendations of the AIC Code during the year under review and
up to the date of this report and, except as regards the provisions
set out below, has thereby complied with the relevant provisions
of the 2018 revision to the UK Corporate Governance Code (“UK
Code”):
The UK Code includes provisions relating to:
• the role of the chief executive;
• executive directors’ remuneration; and
• the need for an internal audit function.
For the reasons set out in the AIC Corporate Governance Guide for
Investment Companies, the Board considers these provisions as
not being relevant to the Company, as it is an externally managed
investment company. In particular, all of the Company’s day-to-day
management and administrative functions have been delegated to
the Manager. As a result, the Company has no executive Directors,
employees or internal operations. Therefore, with the exception
of the need for an internal audit function, which is addressed on
page 51, the Company has not reported further in respect of these
provisions.
Detailed information on the Directors’ Remuneration can be found in
the Directors’ Remuneration Report on pages 47 to 49 and in note 5
to the accounts.
Copies of both codes may be found on the respective websites
theaic.co.uk and frc.org.uk.
AIFMD
The Company is defined as an Alternative Investment Fund (“AIF”)
under the AIFMD issued by the European Parliament, and which
has been implemented into UK law. This requires that all AIFs must
appoint a Depositary and an Alternative Investment Fund Manager
(“AIFM”). The Board remains fully responsible for all aspects of the
Corporate Governance Statement
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Chair’s StatementOverview Auditors’ Report
Governance Report
Board effectiveness
During the year, in order to review the effectiveness of the Board,
its Committees and the individual Directors, the Board carried out
a process of formal annual self appraisal. This was facilitated by
way of confidential interviews between the Chair and each Director.
The appraisal of the Chair was carried out by the Board under
the leadership of the Senior Independent Director. The Board
considers that the appraisal process is a constructive means of
evaluating the contribution of individual Directors and identifying
ways to improve the functioning and performance of the Board and
its committees and building on and improving collective strengths,
including assessing any training needs. The option of using external
consultants to conduct this evaluation is kept under review. It is
anticipated that a review conducted by an external consultant will be
undertaken during 2025.
Independence of Directors
The Board, which is composed solely of independent non-executive
Directors, regularly reviews the independence of the individual
Directors. All the Directors have been assessed by the Board as
remaining independent of the Manager and of the Company itself;
none has a past or current connection with the Manager and
each remains independent in character and judgement with no
relationships or circumstances relating to the Company that are likely
to affect that judgement.
Conflicts of interest
A company director has a statutory obligation to avoid a situation
in which he or she has, or potentially could have, a direct or
indirect interest that conflicts with the interests of the Company (a
“situational conflict”). The Board therefore has procedures in place
for the authorisation and review of situational conflicts relating to the
Company’s Directors.
Director attendance – year ended 30 September 2024
Board
Strategy
Meeting
Annual General
Meeting
Audit and Risk
Committee
Management
Engagement
Committee
Nomination and
Remuneration
Committee
No. of meetings
Jane Lewis
(1)
4 1 1 3 1 2
Dunke Afe 4 1 1 3 1 2
Patrick Firth 4 1
1 3 1
2
Nicky McCabe 4 1 1 3 1 2
Christopher Metcalfe
(2)
2 1 N/A 2 1 1
Tim Scholefield
(3)
2 N/A 1 1 N/A 1
(1) The Chair of the Company is invited to attend the Audit and Risk Committee although she is not a member.
(2) Attended all meetings since appointment on 8 March 2024.
(3) Attended all meetings until retirement on 7 March 2024.
The Board also held three committee meetings during the year.
Directors are able to seek independent professional advice at the
Company’s expense in relation to their duties. No such professional
advice was taken by Directors during the year under review. The
Board has direct access to the company secretarial advice and
services of the Manager which, through its nominated representative,
is responsible for ensuring that Board and committee procedures
are followed and applicable regulations are complied with. The
proceedings at all Board and other meetings are fully recorded
through a process that allows any Director’s concerns to be recorded
in the minutes. The Board has the power to appoint or remove
the Secretary in accordance with the terms of the management
agreement. The powers of the Board relating to the buying back or
issuance of the Company’s shares are explained on pages 40 and 41.
Appointments
Under the articles of association of the Company, the number of
Directors on the Board cannot exceed ten. The Board anticipates
that the number of Directors appointed to the Board will, in normal
circumstances, be five. An induction process takes place for new
appointees and all Directors are encouraged to attend relevant
training courses and seminars. Directors may be appointed by
the Company by ordinary resolution or by the Board. All new
appointments by the Board are subject to subsequent election by
Shareholders at the next Annual General Meeting. All Directors will
stand for re-election by Shareholders annually.
Directors must seek Board approval prior to accepting additional
listed external roles.
44 | CT UK Capital and Income Investment Trust PLC
Other than the formal authorisation of the Directors’ other
directorships and appointments, no authorisations have been
sought. They are reviewed throughout the year at each Board
meeting and the authorisation of each individual Director’s conflicts
or potential conflicts annually. These authorisations were reviewed in
July 2024 when it was concluded that in each case these situational
conflicts had not affected any individual in their role as a Director
of the Company. Aside from situational conflicts, the Directors must
also comply with the statutory rules requiring Company Directors
to declare any interest in an actual or proposed transaction or
arrangement with the Company.
In the year under review there have been no instances of a Director
being required to be excluded from a discussion or abstain from
voting because of a conflict of interest.
Relations with Shareholders
The Company welcomes the views of Shareholders and places
importance on communication with its members. Representatives
of the Manager hold meetings with the Company’s largest
Shareholders and report back to the Board on these meetings.
Each year, the Company will hold an Annual General Meeting to be
followed by a presentation by the Fund Manager in London.
In accordance with the UK Code, in the event that votes of 20 per
cent or more are cast against a resolution at a General Meeting
the Company will announce the actions it intends to take to consult
Shareholders to understand the reasons behind the result. A
further update will be published within six months. No such votes
were received during 2024.
It is intended that Nicky McCabe will be the Senior Independent
Director until her appointment as Chair of the Company at the
conclusion of the Company’s AGM to be held on 6 March 2025.
Upon this, it is intended that Patrick Firth will be appointed
Senior Independent Director. The Senior Independent Director is
available to Shareholders if they have concerns which initial contact
through the Chair or Company Secretary has failed to resolve or
for which such contact is inappropriate. Shareholders wishing to
communicate with the Chair or other members of the Board may do
so by writing to CT UK Capital and Income Investment Trust PLC,
Cannon Place, 78 Cannon Street, London, EC4N 6AG.
By order of the Board
Columbia Threadneedle Investment Business Limited
Secretary
28 November 2024
Report and Accounts 2024 | 45
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
Governance Report
On 7 March 2024, Tim Scholefield, the Company’s Senior Independent
Director retired from the Board having served nine years. Upon his
retirement, Nicky McCabe was appointed Senior Independent Director.
As part of the Board’s succession planning, Fletcher Jones, a search
company without connection to the Company or any individual Director,
was commissioned to find a new Director for the Board. Following this
selection process, Christopher Metcalfe, was appointed to the Board
and its committees with effect from 8 March 2024.
On 6 March 2025, at the conclusion of the AGM, Jane Lewis, the
Chair of the Company will retire having served nine years. Upon this
retirement, it is intended that Nicky McCabe, the Company’s Senior
Independent Director, who was appointed to the Board in January 2021
will become Chair. Nicky has extensive sector experience as she was
formerly Head of Product and Investment Trusts at Fidelity International
as well as a director and Chief Operating Officer of a number of Fidelity
companies. Nicky is currently a non-executive director of abrdn Asian
Income Fund Ltd, Artemis Investment Management Limited and EFG
Asset Management (UK) Limited.
In addition, at the conclusion of the 2025 AGM, it is intended that
Patrick Firth will be appointed Senior Independent Director and
Christopher Metcalfe Chair of the Management Engagement Committee.
As a further part of the Board’s succession planning, Nurole, a search
company without connection to the Company or any individual director,
was commissioned to find a new Director for the Board. It is anticipated
that a new Director will be appointed to the Board shortly.
Diversity and tenure
The Board’s diversity policy, objective and progress in achieving it are set
out on page 34. In normal circumstances the Chair and Directors are
expected to serve for no more than nine years, but this may be adjusted
for reasons of flexibility and continuity.
Role of the Nomination and Remuneration Committee (“the
Committee”)
The Committee met twice during the year. Its primary role is to review
and make recommendations to the Board with regard to Board
structure, size and composition, the balance of knowledge, experience,
skill ranges and diversity, consider succession planning and tenure
policy and remuneration policy and levels. Its responsibilities include:
• Board structure and size of the Board and its composition,
particularly in terms of succession planning and the experience and
skills of the individual Directors and diversity across the Board as a
whole;
• tenure policy;
• the criteria for future Board appointments and the methods of
recruitment, selection and appointment;
• the reappointment of those Directors standing for re-election at
Annual General Meetings;
• the attendance and time commitment of the Directors in fulfilling
their duties, including the extent of their other directorships;
• the question of each Director’s independence prior to publication of
the Report and Accounts;
• the authorisation of each Director’s situational conflicts of interests
in accordance with the provisions of the Companies Act and the
policy and procedures established by the Board in relation to these
provisions;
• remuneration policy; and
• the periodic review of the level of Directors’ fees, including the Chair
of the Board and Committees.
Composition of the Committee
All of the Directors are members of the Committee.
The Committee is chaired by Dunke Afe.
The terms of reference of the Committee can be found on the
Company’s website at ctcapitalandincome.co.uk.
Directorate change and succession planning
Appointments of all new Directors are made on a formal basis, normally
using independent, professional search consultants, with the Committee
agreeing the selection criteria and the method of recruitment, selection
and appointment.
Report of the Nomination and
Remuneration Committee
46 | CT UK Capital and Income Investment Trust PLC
Committee evaluation
The activities of the Committee were considered as part of the Board
appraisal process completed in accordance with standard governance
arrangements as summarised on page 53. The conclusion from the
process was that the Committee was operating effectively, with the right
balance of membership, experience and skills.
Dunke Afe
Chair of the Nomination and Remuneration Committee
28 November 2024
Report and Accounts 2024 | 47
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
Governance Report
The fees are fixed and are payable in cash, quarterly in arrears. The
fees are reviewed each year. Following this review the Board agreed that
the annual remuneration of the Chair will increase from £42,750 to
£44,750, the Chair of the Audit and Risk Committee from £35,750 to
£37,500, the Senior Independent Director from £31,500 to £32,500
and other Directors from £28,500 to £30,000. These increases were
effective from 1 October 2024. The previous increase to Directors’
annual remuneration occurred on 1 October 2023.
The Board is composed solely of non-executive Directors, none of whom
has a service contract with the Company. Each new Director is provided
with a letter of appointment. There is no provision for compensation
upon early termination of appointment. The letters of appointment
are available for inspection at the Company’s registered office during
business hours and will be available for 15 minutes before and during
the forthcoming AGM.
The dates on which each Director was appointed to the Board and
was last elected or re-elected by Shareholders are set out on page 36.
Each Director’s appointment is subject to election at the first Annual
General Meeting and continues thereafter subject to re-election at
each subsequent Annual General Meeting. The appointment can be
terminated on one month’s notice. All the Directors, with the exception
of Jane Lewis, will stand for election or re-election at the AGM on
6 March 2025.
The fees for specific responsibilities are set out in the table below.
Annual fees for Board Responsibilities
For the year ending 30 September
2025
£’000s
2024
£’000s
2023
£’000s
Chair 44.8 42.8 40.5
Director 30.0 28.5 27.0
Senior Independent Director 32.5 31.5 28.5
Audit and Risk Committee Chair 37.5 35.8 32.5
Dear Shareholder,
I am pleased to introduce the Directors’ Remuneration Report for the
year ended 30 September 2024. This report sets out the Company’s
forward looking Directors’ Remuneration Policy and the Remuneration
Report which describes how this policy has been applied during the
year. I would welcome any comments you may have.
Directors’ Remuneration Policy
The Board’s policy is to set Directors’ remuneration at a level
commensurate with the skills and experience necessary for the
effective stewardship of the Company and the expected contribution of
the Board as a whole in continuing to achieve the investment objective.
The policy aims to be fair and reasonable in relation to comparable
investment trusts and other similar sized financial companies. Time
committed to the Company’s affairs and the role that individual
Directors fulfil in respect of Board and Committee responsibilities
are taken into account. The policy also provides for the Company’s
reimbursement of all reasonable travel and associated expenses
incurred by the Directors in attending Board and committee meetings,
including those treated as a benefit in kind subject to tax and national
insurance. The Directors are not eligible for bonuses, pension benefits,
share options, long term incentive schemes or other benefits. This
policy was last approved by Shareholders in March 2023 with 94.5%
voting in favour and 5.5% against. The policy will next be put to
Shareholders for renewal at the AGM to be held in 2026. The Board
has not received any views from Shareholders in respect of the levels
of Directors’ remuneration.
The fees for the non-executive Directors are determined within the
limits set out in the Company’s Articles of Association. The present
limit is £250,000 per annum and may not be changed without seeking
Shareholder approval at a general meeting.
At the Annual General Meeting to be held on 6 March 2025 the Board
will seek shareholder approval to increase this limit to £350,000 per
annum. This rise would facilitate any temporary increases in the size of
the Board that may occur in the future. These transitional periods would
allow the transfer of experience and knowledge between Directors. This
limit was last increased, with the approval of Shareholders, in February
2021.
Directors’ Remuneration Report
48 | CT UK Capital and Income Investment Trust PLC
Directors’ Shareholdings – Directors’ share interests (audited)
At 30 September 2024 2023
Number of shares held
(audited)
Number of shares held
(audited)
Jane Lewis 3,095 3,095
Dunke Afe – –
Patrick Firth 3,400 –
Nicky McCabe 3,420 3,420
Christopher Metcalfe* 3,460 n/a
As at 30 September 2024 the shareholding of the Company’s fund manager, Julian Cane, was
350,176 shares (2023: 337,329 shares).
The Company’s register of Directors’ interests contains full details of Directors’
shareholdings.
*Appointed as a non-executive Director with effect from 8 March 2024.
There have been no changes in any of the Directors’ shareholdings
detailed above between 30 September 2024 and the date of this
report. No Director held any interests in the issued shares of the
Company other than as stated above. There is no requirement for
the Directors to hold shares in the Company.
Policy implementation
The Directors’ Remuneration Report is subject to an annual advisory
vote and therefore an ordinary resolution for its approval will be
put to Shareholders at the forthcoming AGM. At the last meeting,
Shareholders approved the Directors’ Remuneration Report in
respect of the year ended 30 September 2023. 94.0% of votes were
cast in favour of the resolution and 6.0% against.
Directors’ remuneration report
The Directors who served during the year received the following
amounts for services as non-executive Directors for the years ended
30 September 2024 and 2023.
Fees for services to the Company (audited)
Fees
£’000s
(audited)
Taxable
Benefits
(1)
£’000s
(audited)
Total
£’000s
(audited)
Director 2024 2023 2024 2023 2024 2023
Jane Lewis
42.8 30.3 3.2 2.4 46.0 32.7
Tim Scholefield
(2)
13.7 28.5 1.1 1.8 14.8 30.3
Nicky McCabe
(3)
30.2 27.0 5.0 5.0 35.2 32.0
Patrick Firth
35.8 31.1 2.7 2.6 38.5 33.7
Dunke Afe
28.5 9.0 3.7 – 32.2 9.0
Christopher Metcalfe
(4)
16.1 n/a 0.3 n/a 16.4 n/a
Total
167.1 125.9 16.0 11.8 183.1 137.7
(1) Comprises amounts reimbursed for expenses incurred in carrying out business
for the Company, which have been grossed up at the Director’s marginal tax rate
to include PAYE and NI contributions.
(2) Retired 7 March 2024
(3) Appointed Senior Independent Director with effect from 7 March 2024.
(4) Appointed as a non-executive Director with effect from 8 March 2024.
The table below sets out the annual percentage change in fees for
each Director who served in the year under review.
Fees annual percentage change
Director
2024
(audited)
%
2023
(audited)
%
2022
(audited)
%
2021
(audited)
%
Jane Lewis
(1)
+41.3
+18.8 +4.1 –
Tim Scholefield
(2)
-51.9 +5.6 +8.4 +1.6
Nicky McCabe
(3)
+11.9 +5.9 +38.8 n/a
Patrick Firth
(4)
+15.1
+522.0 n/a n/a
Dunke Afe
(5)
+216.7
n/a n/a n/a
Christopher Metcalfe
(6)
n/a
n/a n/a n/a
(1) Appointed Chair with effect from 1 July 2023.
(2) Retired 7 March 2024.
(3) Appointed as a non-executive Director with effect from 1 January 2021 and Senior
Independent Director from 7 March 2024.
(4) Appointed as non-executive Director with effect from 21 July 2022 and Audit and Risk
Committee Chair from 1 January 2023.
(5) Appointed as a non-executive Director with effect from 1 June 2023.
(6) Appointed as a non-executive Director with effect from 8 March 2024.
Report and Accounts 2024 | 49
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
Governance Report
The table below shows the actual expenditure during the year
on Directors’ fees (excluding taxable benefits) compared to the
Shareholder distributions of dividends and share buybacks:
Relative importance of pay
Actual Expenditure
Year ended 30 September
2024
£’000s
2023
£’000s
%
Change
Aggregate Directors’ fees
167.1
164.5
1.6
Aggregate cost of ordinary shares repurchased
13,586.0
7,245.0 87.5
Dividends paid to Shareholders
+
12,710.0
12,819.0
(0.9)
+
The reduction in dividends paid to Shareholders is a consequence of the
Company’s share buybacks. Dividends per share paid increased from 12.10 pence
during the year ended 30 September 2023 to 12.45 pence for the equivalent period
in 2024.
Company performance
The Board is responsible for the Company’s investment strategy
and performance. The management of the investment portfolio is
delegated to the Manager. An explanation of the performance of the
Company for the year ended 30 September 2024 is given in the
Chair’s Statement and Fund Manager’s Review.
A comparison of the Company’s performance over the required
ten year period is set out in the graph. This shows the total return
(assuming all dividends are reinvested) to ordinary Shareholders
against the Benchmark.
Dunke Afe
Chair of the Nomination and Remuneration Committee
28 November 2024
90
100
110
120
130
140
150
160
170
180
190
200
FTSE All-Share – total return
CT UK Capital and Income - share price total return
2014 2015 2016 2017 2018 2019 2020 202320222021 2024
Shareholder total return vs Benchmark total return over ten years
(rebased to 100 at 30 September 2014) (%)
Source: Refinitiv Eikon
50 | CT UK Capital and Income Investment Trust PLC
the impact of the war in Ukraine, events in the Middle East and the after-
effects of a high inflation environment upon the risks, operations and
accounting basis of the Company.
Mindful of the guidance issued by the Financial Reporting Council, when
assessing going concern the Directors have considered this in addition
to taking note of the Company’s objective, strategy and policy, its cash
position, availability of the loan facility and the operational resilience
of its service providers. Further analysis of the application of the going
concern principle is detailed in note 20 to the Financial Report.
The Board retains ultimate responsibility for all aspects relating to
external financial statements and other significant published financial
information as is noted in the Statement of Directors’ Responsibilities
on page 54. On broader control policy issues, the Committee has
received confirmation that bribery and corruption are managed by
the Manager’s Global Code of Conduct and Anti-Corruption Policy and
Guidelines. The Manager and its employees are subject to both the
Code and the Policy. The Committee has also received confirmation
that the Manager has in place a Whistleblowing Policy under which its
directors and staff may, in confidence, raise concerns about possible
improprieties in financial reporting or other matters. The necessary
arrangements are in place for communication to this Committee
where matters might impact the Company with appropriate follow up
action. In the year under review, there were no such concerns raised
with the Committee.
Composition of the Committee
All the Directors of the Company are independent. All Directors, with the
exception of the Chair of the Company, were members of the Committee.
This is in accordance with developing Corporate Governance best
practice. The Chair, however, has been invited to attend. The Committee
is chaired by Patrick Firth. He is a qualified Chartered Accountant and
a member of the Chartered Institute for Securities and Investment. He
has worked in the fund industry in Guernsey since 1992 and has been
a director of a number of management companies, general partners and
investment companies, including Chair of the Audit and Risk Committees.
The other members of the Committee have a combination of relevant
financial, investment and business experience through the senior posts
Role of the Committee
The Committee met on three occasions during the year, and the
attendance of each of the members is set out on page 43. The Trust
Accountant, the Fund Manager and Risk Managers of the Manager
were invited to attend certain meetings to report on relevant matters.
The external auditor, BDO LLP, attended two of the committee meetings
and also met in private session with the Committee Chair.
The Committee considered, monitored and reviewed the following
matters:
• The audited annual results statement and Report and Accounts
and the unaudited half yearly results statement and Report and
Accounts;
• The accounting policies of the Company;
• The principal risks faced by the Company and the effectiveness of
the Company’s internal control and risk management environment,
including consideration of the assumptions underlying the Board’s
future prospects statement on viability;
• The effectiveness of the external audit process and the current
independence and objectivity of BDO LLP;
• The policy on the engagement of the external auditor to supply non-
audit services and approval of any such services;
• The need for the Company to have its own internal audit function;
• The ISAE/AAF and SSAE16 reports or their equivalent from the
Manager, the Custodian, Depositary and a due diligence report
from the Company’s share registrar; and
• The Committee’s terms of reference, which can be found on the
website at ctcapitalandincome.co.uk.
Comprehensive papers and reports relating to each of these matters
were considered by the Committee and recommendations were then
made to the Board as appropriate.
As noted within Principal Risks and Future Prospects on page 28 the
Directors have reviewed the risk register of the Company.
Throughout the preparation processes for both the interim report for
the six month period ended 31 March 2024 and the annual report for
the year ended 30 September 2024 the Committee has considered
Report of the Audit and Risk Committee
The primary responsibilities of the Audit and Risk Committee (the “Committee”) are to ensure the
integrity of the financial reporting of the Company and the appropriateness of the internal controls
and risk management processes.
Report and Accounts 2024 | 51
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
Governance Report
procedures in operation and tests for the period to 1 October 2023 (the
“ISAE/AAF Report”). The Manager has provided further assurance
that controls have operated satisfactorily since that date. This had
been prepared by the Manager for all its investment trust clients to the
International Standard on Assurance Engagement (“ISAE”) No.3402
and to the standards of the Institute of Chartered Accountants in
England and Wales Technical Release AAF (01/20).
The ISAE/AAF Report, containing an unqualified opinion from
independent reporting accountants KPMG, sets out the Manager’s
control policies and procedures with respect to the management of
its clients’ investments and maintenance of their financial records.
Procedures are also in place to capture and evaluate any failings and
weaknesses within the Manager’s control environment and those
extending to any outsourced service providers to ensure that action
would be taken to remedy any significant issues. Any errors or breaches
relating to the Company are reported at each Board meeting by the
Manager. No failings or weaknesses material to the overall control
environment and financial statements were identified in the Company’s
year under review. The Committee also reviewed the control reports of
the Custodian and the Depositary and were satisfied that there were no
material exceptions.
Through the reviews and reporting arrangements set out above and
by direct enquiry of the Manager and other relevant parties, the
Committee and the Board have satisfied themselves that there were
no material control failures or exceptions affecting the Company’s
operations during the year or to the date of this report.
Based on review, observation and enquiry by the Committee and Board
of the processes and controls in place within the Manager, including
the unqualified opinion of a reputable independent accounting firm that
those controls operated satisfactorily, the Committee has concluded
that there is no current need for the Company to have an internal audit
function and the Board has concurred.
External audit process and significant issues considered by
the Committee
In carrying out its responsibilities, the Committee has considered the
planning arrangements, scope, materiality levels and conclusions of
the 2024 external audit. The table on the next page describes the
significant judgements and issues considered by the Committee in
conjunction with BDO LLP in relation to the financial statements for
the year and how these issues were addressed. The Committee also
included in their review the areas of judgement referred to in note
2(c)(xv) to the accounts.
The Committee met in November 2024 to discuss the draft
Report and Accounts, with representatives of BDO LLP and the
Manager in attendance. BDO LLP submitted their Year End report
held throughout their careers. The Committee considers that collectively
the members have sufficient recent and relevant sector and financial
experience to discharge their responsibilities. The performance of the
Committee was evaluated as part of the Board appraisal process.
Management of risk
The Manager’s Business Risk department provides regular control
report updates to the Committee covering risk and compliance while
any significant issues of direct relevance to the Company are required
to be reported to the Board immediately. During the year the internal
audit function of the Manager presented to the Board on their recent
and planned activities within Columbia Threadneedle Investments.
A key risk register is produced by the Manager in consultation with
the Board to identify the risks to which the Company is exposed, the
controls in place and the actions being taken to mitigate them. The
Board has a robust process for considering the resulting risk matrix and
reviews the significance of the risks and the reasons for any changes.
The Company’s Principal Risks and their mitigations are set out on
pages 28 and 29 with additional information given in note 21 to the
accounts. The integration of these risks into the analyses underpinning
the “Five Year Horizon” Statement on page 30 was fully considered
and the Committee concluded that the Board’s statement was soundly
based.
Internal controls
The Board has overall responsibility for the Company’s systems of
internal controls, for reviewing their effectiveness and ensuring that
risk management and control processes are embedded in the day-to-
day operations, which are managed by the Manager. The Committee
has reviewed and reported to the Board on these controls, which aim
to ensure that the assets of the Company are safeguarded, proper
accounting records are maintained, and the financial information used
within the business and for publication is reliable. Control of the risks
identified, covering financial, operational, compliance and overall risk
management, is exercised by the Committee and the Board through
regular reports provided by the Manager. The reports cover investment
performance, compliance with agreed and regulatory investment
restrictions, financial analyses, revenue estimates, performance of the
third party administrators of the CT Savings Plans and other relevant
management issues.
The systems of internal controls are designed to manage rather than
eliminate risk of failure to achieve business objectives and can only
provide reasonable, but not absolute, assurance against material
misstatement, loss or fraud. Further to the review by the Committee,
the Board has assessed the effectiveness of the Company’s internal
control systems. The assessment included a review of the Manager’s
risk management infrastructure and the report on policies and
52 | CT UK Capital and Income Investment Trust PLC
Significant matters considered by the Committee in 2024
Matter Action
Investment Portfolio Valuation
The Company’s portfolio is invested
in listed securities. Although the
vast majority of the securities
are highly liquid and listed on
recognised stock exchanges,
errors in the valuation could have a
material impact on the Company’s
Net Asset Value per share.
The Board reviews the full portfolio valuation at each Board meeting and receives quarterly
monitoring and control reports from the AIFM and Depositary. The Committee reviewed the
Manager’s ISAE/AAF Report for the period ended 1 October 2023, which is reported on by
independent external accountants and which details the systems, processes and controls
around the daily pricing of equity and fixed interest securities. The Manager has provided further
assurance that controls have operated satisfactorily since that date. The valuation and existence
of investments were tested and reported on by the auditors as set out on page 57.
Ownership and Existence of Assets
Misappropriation or non-existence
of the Company’s investments
or cash balances could have a
material impact on its Net Asset
Value per share.
The Committee reviewed the Manager’s ISAE/AAF Report for the period ended 1 October 2023, which
details the controls around the reconciliation of the Manager’s records to those of the Custodian. The
Committee also reviewed the Custodian’s annual internal control report to 31 March 2024, which
is reported on by independent external accountants and which provides details regarding its control
environment. Regular updates from the Manager, Depositary and Custodian, in respect of controls
operating in subsequent periods up to 30 September 2024, were also reviewed and agreed as being
satisfactory.
Income Recognition
Incomplete or inaccurate income
recognition could have an adverse
effect on the Company’s Net Asset
Value and earnings per share and
its level of dividend cover.
The Committee reviewed the Manager’s ISAE/AAF Report and subsequent confirmation referred to
above. It also assessed the final level of income received for the year against the budget which was
set at the start of the year and discussed the accounting treatment of special dividends with the
Manager. Investment income was also tested and reported on by the auditors as set out on page 57.
to the Committee and confirmed that they anticipated issuing an
unqualified audit opinion in respect of the Report and Accounts.
The Committee established that there were no material issues
or findings arising which needed to be brought to the attention of
the Board and confirmed that the Report and Accounts were in
their view fair, balanced and understandable in accordance with
accounting standards, regulatory requirements and best practice. The
Independent Auditors’ Report, which sets out their unqualified audit
opinion, the scope of the audit and the areas of focus, in compliance
with applicable auditing standards, can be found on pages 56 to 60.
Auditor assessment and independence
The Committee has been satisfied with the effectiveness of BDO LLP’s
performance on the audit of the Company’s accounts. BDO LLP has
confirmed its independence of the Company and has complied with
relevant auditing standards. In evaluating BDO LLP , the Committee
took into consideration the standing, skills and experience of the
firm and the audit team and also took note of BDO LLP’s audit
performance through the FRC’s Audit Quality Review. The fee for
the audit was £45,750 (2023: £42,000) as shown in note 5 to the
accounts.
Non-audit services
The Committee regards the continued independence of the auditor to be
a matter of the highest priority. The Company’s policy with regard to the
provision of non-audit services by the external auditor ensures that no
engagement will be permitted if:
• the provision of the services would contravene any regulation or
ethical standard;
• the auditors are not considered to be expert providers of the non-
audit services;
• the provision of such services by the auditor creates a conflict of
interest for either the Board or the Manager; and
• the services are considered to be likely to inhibit the auditor’s
independence or objectivity as auditors.
In particular, the Committee has a policy that the costs of all non-audit
services sought from the auditors in any one year should not exceed 70%
of the average audit fee paid over the last three consecutive years.
There were no non-audit services for the year ended 30 September 2024.
Patrick Firth
Chair of the Audit and Risk Committee
28 November 2024
Report and Accounts 2024 | 53
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
Governance Report
Role of the Management Engagement Committee (“the
Committee”)
The primary role of the Committee is to review annually the
performance of, and the fee paid to, the Manager for the services it
provides under the management agreement together with the terms
of the agreement. As part of this process it receives reports on any
services delegated by the Manager to outsourced service providers.
The Committee considers any extra charges and services proposed by
the Manager in addition to the management fees.
The Committee reviews annually the performance of all service
providers to the Company and monitors fees payable to them. It will
make any necessary recommendations to the Board.
Composition of the Committee
Due to the size of the Board, all of the Directors are members of the
Committee. The Committee is chaired currently by Nicky McCabe. It
is intended that Christopher Metcalfe will be appointed Chair of the
Committee at the conclusion of the Company’s AGM to be held on 6
March 2025.
The terms of reference can be found on the website at
ctcapitalandincome.co.uk.
Manager and supplier evaluation process
Investment performance is considered by the Board at every meeting,
with the formal annual evaluation undertaken by the Committee
including the wider services provided by the Manager. In evaluating the
performance, the Committee considers a range of factors including
the investment performance of the portfolio and the skills, experience
and depth of the team involved in managing the Company’s assets.
For the purposes of its ongoing monitoring, the Board had received
detailed reports and views from the Fund Manager on investment
policy, asset allocation, gearing and risk. The Board had also received
comprehensive performance and risk management schedules to
enable it to assess: the success or failure of the management of
the portfolio against the performance objectives set by the Board;
the sources of positive and negative contribution to the portfolio in
terms of gearing, asset allocation and stock selection; and the risk/
return characteristics. The Committee also monitors the level of the
Report of the Management
Engagement Committee
Manager’s fee, the service provided by the Manager and the service
and fees of all of the Company’s third party service providers.
Manager reappointment
The annual evaluation that took place in May 2024 included a
presentation from the Manager’s Head of Investment Trusts. The
Manager continued to commit the necessary resources in all areas
of its responsibilities, including investment, ESG, marketing and
administrative services towards the achievement of the Company’s
objective. The Committee met in closed session following the
presentation and concluded that in its opinion, in the light of
investment performance and the quality of the overall service provided,
the continuing appointment of the Manager on the terms agreed was
in the interests of Shareholders as a whole. The Board ratified this
recommendation.
Nicky McCabe
Chair of the Management Engagement Committee
28 November 2024
54 | CT UK Capital and Income Investment Trust PLC
reasonable steps for the prevention and detection of fraud and
other irregularities.
The Report and Accounts is published on the website
ctcapitalandincome.co.uk, which is maintained by the Manager. The
Directors are responsible for the maintenance and integrity of the
Company’s website. Visitors to the website need to be aware that
legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in
other jurisdictions.
Statement under Disclosure Guidance and Transparency
Rule 4.1.12
Each of the Directors listed on page 36 confirm to the best of their
knowledge that:
• the financial statements, prepared in accordance with
applicable accounting standards give a true and fair view of the
assets, liabilities, financial position and profit of the Company;
• the Strategic Report includes a fair review of the development
and performance of the business and the position of the
Company, together with a description of the principal risks and
uncertainties that they face; and
• the Annual Report and financial statements, taken as a
whole, are fair, balanced and understandable and provide
the information necessary for Shareholders to assess the
Company’s position and performance, business model and
strategy.
On behalf of the Board
Jane Lewis
Chair
28 November 2024
The Directors are responsible for preparing the Report and
Accounts, the Directors’ Remuneration Report and the financial
statements in accordance with applicable law and regulations.
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 United Kingdom
Accounting Standards, comprising FRS 102 and applicable law
(United Kingdom Generally Accepted Accounting Practice).
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 these financial
statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
• state whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the financial statements respectively;
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business; and
• prepare a Directors’ Report, a Strategic Report and a Directors’
Remuneration Report which comply with the requirements of
the Companies Act 2006.
The Directors confirm that they have complied with the above
requirements in preparing the financial statements.
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. They are also responsible
for safeguarding the assets of the Company and hence for taking
Statement of Directors’ Responsibilities
Report and Accounts 2024 | 55
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
Governance Report
Management and Advisers
The Manager
CT UK Capital and Income Investment Trust
PLC is managed by Columbia Threadneedle
Investment Business Limited, a wholly-
owned subsidiary of Columbia Threadneedle
AM (Holdings) PLC which is ultimately owned
by Ameriprise Financial, Inc. Columbia
Threadneedle Investment Business Limited
is authorised and regulated in the UK by the
Financial Conduct Authority and is appointed
under a management agreement with the
Company setting out its responsibilities for
investment management, administration and
marketing.
The Manager also acts as the Alternative
Investment Fund Manager.
Julian Cane Fund Manager and director of
UK equities at the Manager, has managed
the Company’s investments since March
1997. He joined the Manager in 1993.
Marrack Tonkin Head of Investment Trusts
at the Manager. He has responsibility for the
relationship with the Company. He joined the
Manager in 1989.
Scott McEllen Represents the Manager as
Company Secretary and is responsible for
the Company’s statutory compliance. He
joined the Manager in 2007.
.
The Secretary and the Company’s
Registered Office
Columbia Threadneedle Investment
Business Limited
Cannon Place, 78 Cannon Street
London EC4N 6AG
Telephone: 0131 573 8300
Website: ctcapitalandincome.co.uk
Email: invest@columbiathreadneedle.com
The Auditors
BDO LLP
55 Baker Street
London W1U 7EU
The Bank
JPMorgan Chase Bank
25 Bank Street, Canary Wharf
London E14 5JP
The Custodian
JPMorgan Chase Bank
25 Bank Street, Canary Wharf
London E14 5JP
The Depositary
JPMorgan Europe Limited
25 Bank Street, Canary Wharf
London E14 5JP
The Registrars
Computershare Investor Services PLC
The Pavilions, Bridgwater Road
Bristol BS99 6ZZ
Telephone: 0370 889 4094
The Legal Counsel
Dickson Minto W.S.
Broadgate Tower, 20 Primrose Street
London EC2A 2EW
The Broker
Cavendish
1 Bartholomew Close
London EC1A 7BL
56 | CT UK Capital and Income Investment Trust PLC
Independent Auditors’ Report
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation
of the Directors’ assessment of the Company’s ability to continue to
adopt the going concern basis of accounting included:
• Evaluating the appropriateness of the Directors’ method of
assessing the going concern in light of market volatility by
reviewing the information used by the Directors in completing their
assessment;
• Assessing the liquidity of the investment portfolio, which
underpins the ability to meet the future obligations and operating
expenses for a period of 12 months from the date of approval of
these Financial Statements; and
• Reviewing the loan agreements to identify relevant covenants and
assessing the likelihood of them being breached based on the
Directors’ forecast and sensitivity analysis.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Company’s ability to continue as a going concern for a period of
at least twelve months from when the financial statements are
authorised for issue.
In relation to the Company’s reporting on how it has applied the UK
Corporate Governance Code, we have nothing material to add or draw
attention to in relation to the Directors’ statement in the financial
statements about whether the Directors considered it appropriate to
adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with
respect to going concern are described in the relevant sections of
this report.
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding of the Company
and its environment, including the Company’s system of internal
control, and assessing the risks of material misstatement in the
financial statements. We also addressed the risk of management
override of internal controls, including assessing whether there was
evidence of bias by the Directors that may have represented a risk of
material misstatement.
Opinion on the financial statements
In our opinion the financial statements:
• give a true and fair view of the state of the Company’s affairs as
at 30 September 2024 and of its profit for the year then ended;
• have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of the
Companies Act 2006.
We have audited the financial statements
CT UK Capital and
Income Investment Trust PLC
(the “Company”) for the year ended
30 September 2024 which comprise the income statement, the
statement of changes in equity, the balance sheet, the statement
of cash flows and notes to the accounts, including a summary of
significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and
United Kingdom Accounting Standards, including Financial Reporting
Standard FRS 102
The Financial Reporting Standard applicable in
the UK and Republic of Ireland
(United Kingdom Generally Accepted
Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on
Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under
those standards are further described in the Auditor’s responsibilities
for the audit of the financial statements section of our report. We
believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion. Our audit opinion is
consistent with the additional report to the audit committee.
Independence
Following the recommendation of the audit committee, we were
appointed by the Board of Directors on 11 February 2020 to audit
the Financial Statements for the year ending 30 September 2020
and subsequent financial periods. The period of total uninterrupted
engagement including retenders and reappointments is five years,
covering the years ended 30 September 2020 to 30 September
2024. We remain independent of the Company in accordance with
the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as applied
to listed public interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. The non-audit
services prohibited by that standard were not provided to the Company.
Independent auditor’s report to the members of CT UK Capital and Income Investment Trust PLC
Report and Accounts 2024 | 57
Independent Auditors’ Report
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified, including those which had the greatest
effect on: the overall audit strategy, the allocation of resources in
the audit, and directing the efforts of the engagement team. These
matters 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.
Overview
2024 2023
Key audit matters Valuation and ownership of quoted investments
Revenue recognition
Materiality Company financial statements as a whole
£3.4m (2023: £3.1m) based on 1% (2023: 1%) of
Net assets
Specific materiality
£0.57m based on 5% (2023: 5%) of net revenue returns attributable to equity
Shareholders before tax (2023: £0.71m).
Key audit matter How the scope of our audit addressed the key audit matter
Valuation and
ownership
quoted of
investments
(Note 2c (i) on
page 66 and
10 on page 72)
The investment portfolio at the year-end comprised of
quoted equity investments.
There is a risk that the prices used for the listed
investments held by the Company are not reflective of
fair value and the risk that errors made in the recording
of investment holdings result in the incorrect reflection of
investments owned by the Company.
Therefore we considered the valuation and ownership
of quoted investments to be the most significant audit
area as the quoted investments also represent the most
significant balance in the financial statements and
underpin the principal activity of the entity.
Furthermore, we consider the valuation disclosures to be
a significant area as they are expected to be a key area
of interest for the users of the financial statements.
For these reasons and the materiality of the balance
in relation to the financial statements as a whole, we
considered this to be a key audit matter.
We responded to this matter by testing the valuation and ownership of the whole portfolio of
quoted investments. We performed the following procedures:
• Confirmed the year-end bid price was used by agreeing to externally quoted prices;
• Assessed if there were contra indicators, such as liquidity considerations, to suggest bid
price is not the most appropriate indication of fair value by considering the realisation
period for individual holdings;
• Recalculated the valuation by multiplying the number of shares held per the statement
obtained from the custodian by the valuation per share;
• Obtained direct confirmation of the number of shares held per equity investment from the
custodian regarding all investments held at the balance sheet date; and
• We also considered the completeness, accuracy and clarity of investment-related
disclosures against the requirements of relevant accounting standard.
Key observations:
Based on our procedures performed we did not identify any matters to suggest the valuation or
ownership of the quoted equity investments was not appropriate.
Revenue
recognition
(Note 2c (v) on
page 66 and
Note 3 on page
68)
Income arises from dividends and is a key factor in
demonstrating the performance of the portfolio. As
such there may be an incentive to recognise income as
revenue where it is more appropriately of a capital nature.
Additionally, judgement is required by management
in determining the allocation of dividend income to
revenue or capital for certain corporate actions or special
dividends.
For this reason, we considered revenue recognition to be
a key audit matter.
We assessed the treatment of dividend income from corporate actions and special dividends and
challenged if these had been appropriately accounted for as income or capital by reviewing the
underlying reason for issue of the dividend and whether it could be driven by a capital event.
We analysed the whole population of dividend receipts to identify items for further discussion
that could indicate a capital distribution, for example where a dividend represents a particularly
high yield. In these instances, we performed a combination of inquiry with management and our
own independent research, including inspection of financial statements of investee companies, to
ascertain whether the underlying event was indeed of a capital nature.
We derived our own expectation of income for the whole portfolio during the year using data
analytics based on the investment holdings and distributions from independent sources and
traced a sample of dividend income receipts to bank.
Key observations:
Based on our procedures performed we found the judgements made by management in
determining the allocation of income to revenue or capital to be appropriate.
58 | CT UK Capital and Income Investment Trust PLC
performance materiality, to determine the extent of testing needed.
Importantly, misstatements below these levels will not necessarily
be evaluated as immaterial as we also take account of the nature of
identified misstatements, and the particular circumstances of their
occurrence, when evaluating their effect on the financial statements as
a whole.
Based on our professional judgement, we determined materiality for the
financial statements as a whole and performance materiality as follows:
Our application of materiality
We apply the concept of materiality both in planning and performing
our audit, and in evaluating the effect of misstatements. We consider
materiality to be the magnitude by which misstatements, including
omissions, could influence the economic decisions of reasonable
users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any
misstatements exceed materiality, we use a lower materiality level,
Specific Materiality
We also determined that for Revenue return before tax, a
misstatement of less than materiality for the financial statements
as a whole, specific materiality, could influence the economic
decisions of users as it is a measure of the Company’s
performance of income generated from its investments after
expenses. As a result, we determined materiality for these items
to be £0.57m (2023: £0.71m) based on 5% (2023: 5%) of net
revenue returns attributable to equity Shareholders before tax. We
further applied a performance materiality level of 75% (2023:75%)
of specific materiality to ensure that the risk of errors exceeding
specific materiality was appropriately mitigated
Reporting threshold
We agreed with the Audit Committee that we would report to
them all individual audit differences in excess of £68,000 (2023:
£62,000) for the financial statements as a whole. We also
agreed to report differences below this threshold that, in our view,
warranted reporting on qualitative grounds. We also set a separate
reporting threshold of £28,000 (2023: £35,000) for the testing of
transactions and balances that impact on the revenue return. We
also agreed to report differences below these thresholds that, in
our view, warranted reporting on qualitative grounds.
Other information
The directors are responsible for the other information. The other
information comprises the information included in the Annual
Report and Financial Statements other than the financial statements
and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon. Our responsibility is to read
the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements
or our knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required
to determine whether this gives rise to a material misstatement in
the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
Corporate governance statement
The UK Listing Rules require us to review the Directors’ statement
in relation to going concern, longer-term viability and that part of
the Corporate Governance Statement relating to the Company’s
compliance with the provisions of the UK Corporate Governance
Code specified for our review.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements or our knowledge obtained during the audit.
Company financial statements 2024 £m 2023 £m
Materiality 3.4 3.1
Basis for determining materiality 1% of Net assets 1% of Net assets
Rationale for the benchmark applied As an investment trust, the net asset value is the key
measure of performance for users of the financial
statements.
As an investment trust, the net asset value is the key
measure of performance for users of the financial
statements.
Performance materiality 2.5 2.3
Basis for determining performance
materiality
75% of materiality 75% of materiality
Rationale for the percentage applied
for performance materiality
The level of performance materiality applied was set after
having considered a number of factors including the
expected total value of known and likely misstatements
and the level of transactions in the year.
The level of performance materiality applied was set after
having considered a number of factors including the
expected total value of known and likely misstatements
and the level of transactions in the year.
Report and Accounts 2024 | 59
Independent Auditors’ Report
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies
Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Responsibilities of Directors
As explained more fully in the Statement of the Directors’
responsibilities, the Directors are responsible for the preparation
of the financial statements and for being satisfied that they give
a true and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due
to fraud or error.
In preparing the financial statements, the Directors are responsible
for assessing the Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the Directors
either intend to liquidate the Company or to cease operations, or
have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Extent to which the audit was capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud is
detailed overleaf:
Going concern and longer-term viability • The Directors’ statement with regards to the appropriateness of adopting the going concern basis of
accounting and any material uncertainties identified set out on page 38; and
• The Directors’ explanation as to their assessment of the Company’s prospects, the period this assessment
covers and why the period is appropriate set out on page 30.
Other Code provisions
• Directors’ statement on fair, balanced and understandable set out on page 54;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set
out on page 28;
• The section of the annual report that describes the review of effectiveness of risk management and
internal control systems set out on page 51; and
• The section describing the work of the audit committee set out on page 50.
Strategic report and Directors’ report In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic report and the Directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
• the Strategic report and the Directors’ report have been prepared in accordance with applicable legal
requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the
audit, we have not identified material misstatements in the strategic report or the Directors’ report.
Directors’ remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Matters on which we are required to
report by exception
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires
us to report to you if, in our opinion:
• adequate accounting records have not been kept, or returns adequate for our audit have not been received
from branches not visited by us; or
• the financial statements and the part of the Directors’ remuneration report to be audited are not in agreement
with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
60 | CT UK Capital and Income Investment Trust PLC
Our procedures in respect of the above included:
• The procedures set out in the Key Audit Matters section above
relating to revenue recognition; and
• Testing all period end journals by agreeing to supporting
documentation and evaluating whether there was evidence of
bias by the Investment Manager and Directors that represented
a risk of material misstatement due to fraud.
We also communicated relevant identified laws and regulations and
potential fraud risks to all engagement team members who were
all deemed to have appropriate competence and capabilities and
remained alert to any indications of fraud or non-compliance with
laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material
misstatement in the financial statements, recognising that the
risk of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery,
misrepresentations or through collusion. There are inherent
limitations in the audit procedures performed and the further
removed non-compliance with laws and regulations is from the
events and transactions reflected in the financial statements, the
less likely we are to become aware of it.
A further description of our responsibilities is available on
the Financial Reporting Council’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditor’s
report.
Use of our report
This report is made solely to the Company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company’s members those matters we are required to state to
them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company and the Company’s members
as a body, for our audit work, for this report, or for the opinions we
have formed.
Peter Smith (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London
28 November 2024
BDO LLP is a limited liability partnership registered in England and
Wales (with registered number OC305127).
Non-compliance with laws and regulations
Based on:
• Our understanding of the Company and the industry in which it
operates;
• Discussion with investment manager and those charged with
governance and Audit Committee; and
• Obtaining and understanding of the Company’s policies and
procedures regarding compliance with laws and regulations.
We considered the significant laws and regulations to be
Companies Act 2006, the FCA listing and DTR rules, the principles
of the AIC Code of Corporate Governance, industry practice
represented by the AIC SORP, the applicable accounting framework,
and qualification as an Investment Trust under UK tax legislation
as any non-compliance of this would lead to the Company losing
various deductions and exemptions from corporation tax.
Our procedures in respect of the above included:
• Agreement of the financial statement disclosures to underlying
supporting documentation;
• Enquiries of management and those charged with governance
relating to the existence of any non-compliance with laws and
regulations;
• Reviewing minutes of meetings of those charged with
governance throughout the period for instances of non-
compliance with laws and regulations; and
• Reviewing the calculation in relation to Investment Trust
compliance to check that the Company was meeting its
requirements to retain their Investment Trust Status.
Fraud
We assessed the susceptibility of the financial statement to
material misstatement including fraud.
Our risk assessment procedures included:
• Enquiry with management and those charged with governance
regarding any known or suspected instances of fraud;
• Obtaining an understanding of the Company’s policies and
procedures relating to:
• Detecting and responding to the risks of fraud; and
• Internal controls established to mitigate risks related to
fraud.
• Review of minutes of meetings of those charged with
governance for any known or suspected instances of fraud; and
• Discussion amongst the engagement team as to how and
where fraud might occur in the financial statements.
Based on our risk assessment, we considered the areas most
susceptible to fraud to be management override of controls and
classification of revenue.
Report and Accounts 2024 | 61
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
Financial Report
Income Statement
for the year ended 30 September
Revenue
£’000s
Capital
£’000s
2024
Total
£’000s
Revenue
£’000s
Capital
£’000s
2023
Total
£’000s
10
Gains on investments – 45,656 45,656 – 25,619 25,619
Foreign exchange (losses)/gains (3) (32) (35) (4) 4 –
3 17
Income 13,813 28 13,841 16,179 – 16,179
4 4
Management fee (735) (735) (1,470) (693) (693) (1,386)
5 5
Other expenses (806) (1) (807) (742) (1) (743)
Net return before finance costs and taxation 12,269 44,916 57,185 14,740 24,929 39,669
6 6
Finance costs (802) (802) (1,604) (662) (662) (1,324)
Net return before taxation 11,467 44,114 55,581 14,078 24,267 38,345
7 7
Taxation (28) – (28) (22) – (22)
Net return attributable to Shareholders 11,439 44,114 55,553 14,056 24,267 38,323
8 8
Return per share – basic and diluted 11.18p 43.12p 54.30p 13.26p 22.89p 36.15p
The total column of this statement is the profit and loss account of the Company. The revenue return and capital return columns are supplementary to this and are prepared under
guidance published by the AIC.
All revenue and capital items in the above statement derive from continuing operations.
A statement of Comprehensive Income is not required as all gains and losses of the Company have been reflected in the above statement.
The notes on pages 65 to 81 form an integral part of the financial statements.
Revenue notes
Capital notes
62 | CT UK Capital and Income Investment Trust PLC
Statement of Changes in Equity
for the year ended 30 September 2024
Notes
Share
capital
£’000s
Share
premium
account
£’000s
Capital
redemption
reserve
£’000s
Special
reserve
£’000s
Capital
reserve
£’000s
Revenue
reserve
£’000s
Total
Shareholders’
funds
£’000s
Balance at 30 September 2023 26,822 141,367 4,146 – 130,082 12,330 314,747
Movements during the year ended 30 September 2024
9
Dividends paid – – – – – (12,710) (12,710)
17
Ordinary shares bought back and held in treasury – – – – (13,586) – (13,586)
Costs relating to broker – – – – (10) – (10)
Net return attributable to Shareholders – – – – 44,114 11,439 55,553
Balance at 30 September 2024 26,822 141,367 4,146 – 160,600 11,059 343,994
for the year ended 30 September 2023
Notes
Share
capital
£’000s
Share
premium
account
£’000s
Capital
redemption
reserve
£’000s
Special
reserve
£’000s
Capital
reserve
£’000s
Revenue
reserve
£’000s
Total
Shareholders’
funds
£’000s
Balance at 30 September 2022 26,822 141,380 4,146 2,642 110,200 11,093 296,283
Movements during the year ended 30 September 2023
9
Dividends paid – – – – – (12,819) (12,819)
16
Ordinary shares issued from treasury – – – 224 – – 224
16
Ordinary shares bought back and held in treasury – – – (2,866) (4,380) – (7,246)
16
Costs relating to broker – (13) – – (5) – (18)
Net return attributable to Shareholders – – – – 24,267 14,056 38,323
Balance at 30 September 2023 26,822 141,367 4,146 – 130,082 12,330 314,747
The notes on pages 65 to 81 form an integral part of the financial statements.
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Balance Sheet
at 30 September
Notes
2024
£’000s
2023
£’000s
Fixed assets
10
Investments 370,968 336,112
Current assets
11
Debtors 1,312 2,833
14
Cash at bank 319 2,378
Total current assets 1,631 5,211
Current liabilities
12
Creditors: amounts falling due within one year (605) (1,576)
13,14
Bank loan (28,000) (25,000)
Total current liabilities (28,605) (26,576)
Net current liabilities (26,974) (21,365)
Total assets less current liabilities 343,994 314,747
Capital and reserves
15
Share capital 26,822 26,822
16
Share premium account 141,367 141,367
16
Capital redemption reserve 4,146 4,146
16
Special reserve – –
17
Capital reserve 160,600 130,082
17
Revenue reserve 11,059 12,330
Total Shareholders’ funds 343,994 314,747
18
Net Asset Value per ordinary share – pence 343.84 301.67
The notes on pages 65 to 81 form an integral part of the financial statements.
The Financial Statements were approved by the Board on 28 November 2024 and signed on its behalf by
Jane Lewis, Chair
64 | CT UK Capital and Income Investment Trust PLC
Statement of Cash Flows
for the year ended 30 September
Notes
2024
£’000s
2023
£’000s
19
Cash flows from operating activities before dividends and interest (2,273) (2,162)
Dividends received 13,910 15,777
Interest received 283 91
Interest paid (1,603) (1,298)
Cash flows from operating activities 10,317 12,408
Investing activities
Purchase of investments (21,121) (20,000)
Sale of investments 32,087 27,924
Other capital charges (1) (1)
Cash flows from investing activities 10,965 7,923
Cash flows before financing activities 21,282 20,331
Financing activities
9
Equity dividends paid (12,710) (12,819)
16
Net proceeds from issuance of shares from treasury – 224
16
Broker costs associated with share issues and buybacks (10) (18)
16,17
Costs of shares bought back and held in treasury (13,586) (7,246)
14
Drawdown of bank loan 28,000 1,000
14
Repayment of bank loans (25,000) –
Cash flows from financing activities (23,306) (18,859)
14
Net movement in cash and cash equivalents (2,024) 1,472
14
Cash and cash equivalents at the beginning of the year 2,378 906
14
Effect of movement in foreign exchange (35) –
14
Cash and cash equivalents at the end of the year 319 2,378
Represented by:
Cash at bank 319 2,378
319 2,378
The notes on pages 65 to 81 form an integral part of the financial statements.
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1. General information
CT UK Capital and Income Investment Trust PLC is an investment company incorporated in England (UK) with a listing on the London Stock
Exchange. The Company registration number is 02732011 and the registered office is Cannon Place, 78 Cannon Street, London, EC4N 6AG,
United Kingdom.
The Company has conducted its affairs so as to qualify as an investment trust under the provisions of Section 1158 of the Corporation Tax
Act 2010. Approval of the Company under Section 1158 has been received. The Company intends to conduct its affairs so as to enable it to
continue to comply with the requirements. Such approval exempts the Company from UK Corporation Tax on gains realised in the relevant year
on its portfolio of fixed asset investments.
The accounting policies have been applied consistently throughout the year ended 30 September 2024 with no significant changes, as set out in
note 2 below.
2. Significant accounting policies
(a) Going concern
As referred to on page 38 and note 20 to the accounts, the Directors believe that it is appropriate for the accounts to be prepared on
a going concern basis.
(b) Basis of accounting
The accounts of the Company have been prepared on a going concern basis under the historical cost convention, modified to include
fixed asset investments, and in accordance with the Companies Act 2006, Financial Reporting Standards (FRS) 102 applicable in the
United Kingdom and with the Statement of Recommended Practice ‘Financial Statements of Investment Trust Companies and Venture
Capital Trusts’ (“SORP”) issued by the Association of Investment Companies.
All of the Company’s operations are of a continuing nature. The functional and reporting currency of the Company is Pounds Sterling
because that is the currency of the primary economic environment in which the Company operates.
The Directors are of the opinion that the Company’s activities comprise a single operating segment, which is investing in the UK, US
and Europe in equities to secure long term growth in income and capital.
In accordance with the SORP, the Income Statement has been analysed between a revenue account (dealing with items of a revenue
nature) and a capital account (relating to items of a capital nature). Revenue returns include, but are not limited to, dividend income,
operating expenses and tax (insofar as the expenses and tax are not allocated to capital, as described in note 2(c)). Net revenue
returns are allocated via the revenue account to the revenue reserve, out of which four interim dividend payments are made. Capital
returns include, but are not limited to, realised and unrealised profits and losses on investments, income identified as being capital
in nature, expenses allocated to capital and currency profits and losses on cash and borrowings. Net capital returns are allocated via
the capital account to the capital reserve. Dividends paid to Shareholders are shown in the Statement of Changes in Equity.
(c) Principal accounting policies
The policies set out below have been applied consistently throughout the year ended 30 September 2024 and the prior year.
Notes to the Accounts
66 | CT UK Capital and Income Investment Trust PLC
(i) Financial instruments
Financial instruments include fixed asset investments, cash and demand deposits, debtors and creditors. Accounting standards
recognise a hierarchy of fair value measurements for financial instruments which gives the highest priority to unadjusted quoted prices
in active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs (level 3). The classification of
financial instruments depends on the lowest significant applicable input, as follows:
Level 1 – The unadjusted quoted price in an active market for identical assets or liabilities that the Company can access at the
measurement date.
Level 2 – Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or
liability, either directly or indirectly.
Level 3 – External inputs are unobservable for the asset or liability. Value is the Directors’ best estimate, based on advice from relevant
knowledgeable experts, use of recognised valuation techniques and on assumptions as to what inputs other market participants would
apply in pricing the same or similar instrument. Included within this category are unquoted investments.
All of the Company’s investments held during the year have been classified as Level 1.
(ii) Fixed asset investments and derivative financial instruments
As an investment trust, the Company measures its fixed asset investments at “fair value through profit or loss” and treats all
transactions on the realisation and revaluation of investments as transactions on the Capital Account. Purchases and sales are
recognised on a trade date basis.
Quoted investments are valued at bid value at the close of business on the relevant date on the exchange on which the investment
is quoted. Investments which are not quoted or which are not frequently traded are stated at Directors’ best estimate of fair value.
In arriving at their estimate, the Directors make use of recognised valuation techniques and may take account of recent arms’ length
transactions in the same or similar instruments. Where no reliable fair value can be estimated, investments are carried at cost or,
where subsequently revalued, at their previous carrying amount less any provision for impairment.
(iii) Debt Instruments
Loans and overdrafts are recorded initially at proceeds received, less direct issue costs, and subsequently measured at amortised
cost using the effective interest method.
(iv) Foreign currency
Monetary assets, monetary liabilities and equity investments denominated in a foreign currency are expressed in sterling at rates
of exchange ruling at the Balance Sheet date. Purchases and sales of investment securities, dividend income, interest income and
expenses are translated at the rates of exchange prevailing at the respective dates of such transactions.
Foreign exchange profits and losses on fixed asset investments are included within the changes in fair value in the capital account.
Foreign exchange profits and losses on other currency balances are separately credited or charged to the capital account except
where they relate to revenue items when they are credited or charged to the revenue account.
(v) Income
Income from equity shares is brought into the revenue account (except where, in the opinion of the Directors, its nature indicates it should
be recognised within the capital account) on the ex-dividend date or, where no ex-dividend date is quoted, when the Company’s right to
receive payment is established. Fixed returns on non-equity shares and debt securities are recognised on a time apportionment basis so
as to reflect the effective yield on the investment.
Dividends are accounted for in accordance with FRS 102 on the basis of income actually receivable. Dividends from overseas companies
are shown gross of withholding tax.
Where the Company has elected to receive its dividends in the form of additional shares rather than in cash (scrip dividends), the amount
of the cash dividend foregone is recognised as income. Any excess in the value of the shares received over the amount of the cash
dividend foregone is recognised in the capital account.
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Underwriting commission is recognised when the Company’s right to receive payment is established. Deposit interest is accounted for on
an accruals basis.
(vi) Expenses, including finance charges
Expenses, inclusive of associated value added tax (VAT), are charged to the revenue account of the Income Statement, except as
noted below:
– expenses incidental to the acquisition or disposal of fixed asset investments which are recognised immediately in the capital
return of the Income Statement and are thus charged to capital reserve – realised; and
– 50% of management fees and 50% of finance costs are allocated to capital reserve – realised, in accordance with the Board’s
long term expected split of returns from the investment portfolio of the Company.
All expenses are accounted for on an accruals basis.
Finance charges are accrued using the effective interest method and are added to the carrying amount of the instrument to the
extent that they are not settled in the period.
(vii) Taxation
Deferred tax is provided for in accordance with FRS102 on all timing differences that have been enacted at the Balance Sheet date
and are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax assets are only recognised
if it is considered more likely than not that there will be sufficient profits from which the future reversal of timing differences can be
deducted. In line with the recommendations of the SORP, the allocation method used to calculate the tax relief on expenses charged
to capital is the “marginal” basis. Under this basis, if taxable income is capable of being offset entirely by expenses charged through
the revenue account, then no tax relief is transferred to the capital account.
(viii) Dividends payable
Dividends are included in the financial statements on the date on which they are declared.
Dividends paid and payable in respect of the year are set out in note 9. The amount estimated to be transferred to revenue reserves
is less than the maximum allowed under rules in the Corporation Tax Act 2010. The Board assesses the minimum level of dividend
payable in respect of any period in accordance with section 1158 rules, after taking into account the audited annual net revenue
available for distribution, and ensures that payments for each period comfortably exceed that minimum level.
(ix) Share capital
Share capital represents the nominal value of ordinary shares in issue.
(x) Share premium account (non-distributable reserve)
The surplus of net proceeds received from the issue of shares over the nominal value of such shares, less any associated costs of
issuance, is credited to this account.
(xi) Capital Redemption Reserve
The nominal value of ordinary share capital purchased and cancelled is transferred out of called-up share capital and into the capital
redemption reserve on the trade date.
(xii) Special reserve (distributable reserve)
The following are accounted for in this reserve:
– costs of purchasing shares for cancellation; and
– costs of purchasing or selling shares to be held in, or sold out of, treasury.
These costs were accounted for in the special reserve until it was exhausted and from then have been accounted for in the capital
reserve.
68 | CT UK Capital and Income Investment Trust PLC
(xiii) Capital reserves (distributable reserves)
Capital reserve – arising on investments sold
The following are accounted for in this reserve:
– gains and losses on the disposal of fixed asset investments and derivatives;
– settled foreign exchange differences of a capital nature;
– costs of professional advice, including related irrecoverable VAT, relating to the capital structure of the Company;
– other capital charges and credits charged or credited to this account in accordance with the above policies.
– costs of purchasing shares for cancellation; and
– costs of purchasing or selling shares to be held in, or sold out of, treasury.
Capital reserve – arising on investments held
The following are accounted for in this reserve:
– increases and decreases in the valuation of fixed asset investments and derivatives held at the year-end; and
– unsettled foreign exchange valuation differences of a capital nature.
(xiv) Revenue reserve
The revenue reserve represents accumulated revenue profits retained by the Company that have not currently been distributed to
Shareholders as a dividend.
(xv) Use of judgements
The presentation of the financial statements in accordance with accounting standards requires the Board to make judgements and
assumptions that affect the accounting policies and reported amounts of assets, liabilities, income and expenses. Judgements
are continually evaluated and are based on perceived risks, historical experience, expectations of plausible future events and other
factors. Actual results may differ from these estimates.
The areas requiring the most significant judgement in preparation of the financial statements are recognising and classifying unusual or
special dividends received as either revenue or capital in nature. Dividends received which appear to be unusual in size or circumstance
are assessed on a case-by-case basis, based on interpretation of the investee companies’ relevant statements, to determine their
allocation in accordance with the SORP to either the Revenue or Capital accounts. Dividends which have clearly arisen out of the
investee company’s reconstruction or reorganisation are usually considered to be capital in nature and allocated to Capital Reserves.
Investee company dividends which appear to be paid in excess of current year profits may nevertheless still be considered to be
wholly revenue in nature unless evidence suggests otherwise. The value of dividends received in the year treated as capital in
nature is disclosed in note 17 to the accounts. The value of special dividends receivable in any period cannot be foreseen as such
dividends are declared and paid by investee companies without prior reference to the Company.
3. Income
2024
£’000s
2023
£’000s
Income from investments:
UK dividend income 12,383 14,270
UK dividend income – special dividends
(1)
– 527
Overseas dividend income 186 390
Property income distributions 961 901
13,530 16,088
Other income:
Interest on cash and cash equivalents 210 91
Underwriting commission 73 –
Total income 13,813 16,179
(1) Special dividends classified as revenue in nature in accordance with note 2(c)(xv).
Dividends recognised as capital in nature, per judgements note 2c(xv), during the year totalled £28,000 (2023: £nil).
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4. Management fee
2024 2023
Revenue
£’000s
Capital
£’000s
Total
£’000s
Revenue
£’000s
Capital
£’000s
Total
£’000s
Management fee 735 735 1,470 693 693 1,386
The Manager provides investment management and general administrative services to the Company for a quarterly management fee payable
in arrears equal to 0.1% of the funds under management. Funds under management represents total assets less current liabilities excluding
borrowings and adjusted for the proceeds of recent share issues and buybacks. The management agreement may be terminated upon six months’
notice given by either party. The Company may terminate this agreement upon 60 days’ written notice to the Manager if there is a change of control
of the Manager, provided such notice is served within six months of the said change of control. Management fees have been allocated 50% to
capital reserve in accordance with the Company’s accounting policy.
5. Other expenses
2024 2023
Revenue
£’000s
Capital
£’000s
Total
£’000s
Revenue
£’000s
Capital
£’000s
Total
£’000s
Auditors’ remuneration:
– for audit services
(1)
55 – 55 50 – 50
Directors’ fees for services to the Company
(2)
167 – 167 165 – 165
Directors’ and Officers’ liability insurance 12 – 12 12 – 12
Loan commitment fee 18 – 18 10 – 10
Marketing 89 – 89 88 – 88
Professional fees 134 – 134 117 – 117
Printing and postage 85 – 85 85 – 85
Registrars’ fees 35 – 35 31 – 31
Subscriptions and listing fees 64 – 64 58 – 58
Sundry expenses 147 1 148 126 1 127
Total other expenses 806 1 807 742 1 743
All expenses are stated gross of irrecoverable VAT, where applicable.
(1) Total Auditors’ remuneration for 2024 audit services, exclusive of VAT amounts to £45,750 (2023: £42,000).
(2) See the Directors’ Remuneration Report on pages 47 to 49.
6. Finance costs
2024 2023
Revenue
£’000s
Capital
£’000s
Total
£’000s
Revenue
£’000s
Capital
£’000s
Total
£’000s
Loan interest 802 802 1,604 661 661 1,322
Overdraft interest – – – 1 1 2
Total finance cost 802 802 1,604 662 662 1,324
Finance costs have been allocated 50% to capital reserve in accordance with the Company’s accounting policy.
70 | CT UK Capital and Income Investment Trust PLC
7. Taxation on ordinary activities
(a) Analysis of tax charge for the year
2024 2023
Revenue
£’000s
Capital
£’000s
Total
£’000s
Revenue
£’000s
Capital
£’000s
Total
£’000s
Overseas taxation 28 – 28 22 – 22
Total taxation charge (see note 7(b)) 28 – 28 22 – 22
The tax assessed for the year is lower than the standard rate of corporation tax in the UK (25%) (2023: 22%). Factors affecting the
taxation charge are set out below.
(b) Factors affecting the current tax charge for the year
2024 2023
Revenue
£’000s
Capital
£’000s
Total
£’000s
Revenue
£’000s
Capital
£’000s
Total
£’000s
Net return on ordinary activities before taxation 11,467 44,114 55,581 14,078 24,267 38,345
Return on ordinary activities multiplied by the pro rata effective rate of corporation tax of
25% (2023: 22%) 2,867 11,029 13,896 3,097 5,339 8,436
Effects of:
Dividends (3,122) (7) (3,129) (3,341) – (3,341)
Excess expenses not utilised in the year 255 384 639 244 298 542
Overseas taxation not relieved 28 – 28 22 – 22
Capital returns – (11,406) (11,406) – (5,637) (5,637)
Total taxation (see note 7(a)) 28 – 28 22 – 22
The Company is not subject to corporation tax on capital gains or on dividend income. It therefore has unutilised expenses of £33.6 million
(2023: £30.9 million. This results in a potential deferred tax asset of £8.4 million based on the 25% Corporation Tax rate at 30 September
2024 (2023: £7.7 million) which has not been recognised as it is unlikely that these expenses will be utilised.
8. Return per share
2024 2023
Revenue Capital Total Revenue Capital Total
Net return attributable to equity Shareholders – £’000s 11,439 44,114 55,553 14,056 24,267 38,323
Return per share – pence 11.18 43.12 54.30 13.26 22.89 36.15
Both the revenue and capital returns per share are based on a weighted average of 102,309,411 ordinary shares in issue during the year
(2023: 106,023,426).
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9. Dividends
Dividends on ordinary shares Register date Payment date
2024
£’000s
2023
£’000s
Fourth of four interims for the year ended 30 September 2022 of 3.85p per share 09-Dec-22 19-Dec-22 – 4,108
First of four interims for the year ended 30 September 2023 of 2.75p per share 10-Mar-23 31-Mar-23 – 2,928
Second of four interims for the year ended 30 September 2023 of 2.75p per share 16-Jun-23 30-Jun-23 – 2,907
Third of four interims for the year ended 30 September 2023 of 2.75p per share 08-Sep-23 30-Sep-23 – 2,876
Fourth of four interims for the year ended 30 September 2023 of 3.90p per share 08-Dec-23 18-Dec-23 4,046 –
First of four interims for the year ended 30 September 2024 of 2.85p per share 08-Mar-24 28-Mar-24 2,918 –
Second of four interims for the year ended 30 September 2024 of 2.85p per share 14-Jun-24 28-Jun-24 2,882 –
Third of four interims for the year ended 30 September 2024 of 2.85p per share 06-Sep-24 30-Sep-24 2,864 –
12,710 12,819
The Directors have declared a fourth interim dividend in respect of the year ended 30 September 2024 of 3.95 pence per share, payable
on 20 December 2024 to all Shareholders on the register at close of business on 6 December 2024. The fourth interim dividend has not
been included as a liability in these financial statements. The dividends paid and payable in respect of the financial year ended
30 September 2024, which form the basis of the retention test for section 1159 of the Corporation Tax Act 2010, are set out below:
2024
£’000s
Net revenue return attributable to Shareholders 11,439
First of four interims for the year ended 30 September 2024 of 2.85p per share (2,918)
Second of four interims for the year ended 30 September 2024 of 2.85p per share (2,882)
Third of four interims for the year ended 30 September 2024 of 2.85p per share (2,864)
Fourth of four interims for the year ended 30 September 2024 of 3.95p per share
(1)
(3,927)
Transferred to revenue reserve (1,152)
(1) Based on shares in issue and their entitlement to the dividend at 26 November 2024.
72 | CT UK Capital and Income Investment Trust PLC
10. Investments
2024
Total
(Level 1)
£’000s
2023
Total
(Level 1)
£’000
Cost brought forward 256,528 260,060
Gains brought forward 79,584 58,736
Fair value of investments brought forward 336,112 318,796
Purchases at cost 32,061 16,946
Sales proceeds (42,952) (25,353)
Gains on investments sold in year 5,944 4,771
Gains on investments held at year end 39,803 20,952
Fair value of investments at 30 September 370,968 336,112
Cost at 30 September 251,672 256,528
Gains at 30 September 119,296 79,584
Fair value of investments at 30 September 370,968 336,112
2024
£’000s
2023
£’000s
Gains on investments sold in year 5,944 4,771
Gains on investments held at year end 39,803 20,952
Investment transaction costs (91) (104)
Total gains in year 45,656 25,619
All investments held by the Company were classified as Level 1 in nature as described in note 2(c)(i) and are listed on recognised stock
exchanges.
Investments sold during the year have been revalued over time since their original purchase, and until they were sold any unrealised gains
or losses were included in the fair value of the investments.
The investment portfolio is set out on page 23.
11. Debtors
2024
£’000s
2023
£’000s
Accrued income 1,199 1,607
Investments sold awaiting settlement – 1,116
Prepayments 31 24
Overseas taxation recoverable 82 86
1,312 2,833
12. Creditors: amounts falling due within one year
2024
£’000s
2023
£’000s
Management fee 374 339
Investments purchased awaiting settlement – 1,041
Loan interest 36 35
Accruals 195 161
605 1,576
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13. Loans
2024
£’000s
2023
£’000s
Sterling loans: falling due within one year 28,000 25,000
Until March 2024, the Company had a £40 million multi-currency revolving loan facility with The Bank of Nova Scotia. In March 2024 the
loan facility matured and the amounts drawn down at this time were repaid to The Bank of Nova Scotia. At this time, the Company entered
into a £30 million multi-currency revolving loan facility with the Royal Bank of Scotland International Limited which is available until March
2025. The loan is subject to compliance with the loan covenants which have all been met during the period. The amount utilised and the
interest rate thereon are set on a short term basis. Interest rates and commitment fees payable on non-utilised amounts are based on the
commercial terms agreed with the Royal Bank of Scotland International Limited.
As at 30 September 2024 the Company had drawn down £28 million of the loan facility.
14. Analysis of changes in net debt
Cash
£’000s
Bank loans
£’000s
2024
Total
£’000s
Cash
£’000s
Bank loans
£’000s
2023
Total
£’000s
Net debt brought forward 2,378 (25,000) (22,622) 906 (24,000) (23,094)
Cash flows:
Drawdown of bank loan – (28,000) (28,000) – (7,000) (7,000)
Repayment of bank loan – 25,000 25,000 – 6,000 6,000
Net movement in cash and cash equivalents (2,024) 36 (1,988) 1,472 35 1,507
Non-cash:
Interest Accrual – (36) (36) – (35) (35)
Effect of movement in foreign exchange (35) – (35) – – –
Net debt carried forward as at 30 September 319 (28,000) (27,681) 2,378 (25,000) (22,622)
15. Share capital
Total Listed Held in Treasury
2024
Issued and fully paid
2023
Issued and fully paid
Number £’000s Number £’000s Number £’000s Number £’000s
Ordinary shares of 25 pence each
Balance brought forward 107,289,022 26,822 2,953,177 737 104,335,845 26,085 106,706,203 26,677
Ordinary shares issued from
treasury
– – – – – – 75,000 19
Ordinary shares bought back &
held in treasury
– – 4,290,000 1,073 (4,290,000) (1,073) (2,445,358) (611)
Balance at 30 September 107,289,022 26,822 7,243,177 1,810 100,045,845 25,012 104,335,845 26,085
During the year ended 30 September 2024, nil (2023: 75,000) ordinary shares of 25p each in nominal value were issued from treasury
with a total consideration of £nil (2023: £223,000) and 4,290,000 (2023: 2,445,358) ordinary shares were bought back and held in
treasury at a cost of £13,586,000 (2023: £7,245,000).
From 30 September 2024 until 26 November 2024, the last practicable date prior to publication, the Company has bought back 632,500
shares to be held in treasury. No shares have been issued.
74 | CT UK Capital and Income Investment Trust PLC
16. Reserves
Share
Premium
account
£’000s
Capital
Redemption
Reserve
£’000s
Special
Reserve
£’000s
Balance brought forward as at 1 October 2023 141,367 4,146 –
Balance carried forward as at 30 September 2024 141,367 4,146 –
Balance brought forward as at 1 October 2022 141,380 4,146 2,642
Ordinary shares issued from treasury – – 224
Ordinary shares bought back and cancelled or held in treasury – – (2,851)
Stamp duty on shares bought back – – (15)
Broker costs associated with the issue of new issues (13) – –
Balance carried forward as at 30 September 2023 141,367 4,146 –
17. Other reserves
Capital reserve
– realised
£’000s
Capital reserve
– unrealised
£’000s
Capital reserve
– total
£’000s
Revenue
reserve
£’000s
Movements during the year ended 30 September 2024:
Gains on investments sold in year (see note 10) 5,944 – 5,944 –
Gains on investments held at year end (see note 10) – 39,803 39,803 –
Transaction costs (91) – (91) –
Foreign exchange gains (32) – (32) –
Capital special dividends 28 – 28 –
Management fee (see note 4) (735) – (735) –
Finance costs (see note 6) (802) – (802) –
Ordinary shares bought back and held in treasury (13,518) – (13,518) –
Stamp duty on shares bought back (68) – (68) –
Broker costs associated with share buybacks (10) – (10) –
Other capital charges (see note 5) (1) – (1) –
Revenue return – – – 11,439
Return attributable to Shareholders (9,285) 39,803 30,518 11,439
Dividends paid in year (see note 9) – – – (12,710)
Balance at 30 September 2023 50,497 79,585 130,082 12,330
Balance at 30 September 2024 41,212 119,388 160,600 11,059
Included within the capital reserve movement for the year are £77,000 of transaction costs including stamp duty on purchases of
investments (2023: £91,000) and £14,000 of transaction costs on sales of investments (2023: £13,000).
Included within the capital reserve movement for the year is £28,000 (2023: £nil) of dividend receipts recognised as capital in nature.
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Financial Report
18. Net Asset Value per ordinary share
2024 2023
Net asset value per share – pence 343.84 301.67
Net assets attributable at the year end – (£'000s) 343,994 314,747
Number of ordinary shares in issue at the year end 100,045,845 104,335,845
19. Reconciliation of total return before taxation to net cash flows from operating activities
2024
£’000s
2023
£’000s
Net return on ordinary activities before taxation 55,581 38,345
Adjustments for non-cash flow items, dividend income and interest:
Gains on investments (note 10) (45,656) (25,619)
Transaction costs on investments (note 10) (91) (104)
Foreign exchange movements 35 –
Non-operating expenses of a capital nature (note 5) 1 1
Dividend income receivable (note 3) (13,530) (16,088)
Interest and underwriting commission receivable (note 3) (283) (91)
Interest payable (note 6) 1,604 1,324
Increase in other debtors (3) (9)
Increase in other creditors 69 79
(57,854) (40,507)
Cash outflows from operating activities before dividends and interest (2,273) (2,162)
20. Going concern
In assessing the going concern basis of accounting the Directors have had regard to the guidance issued by the Financial Reporting
Council. They have also considered the Company’s objective, strategy and policy, the current cash position of the Company, the availability
of the loan facility and compliance with its covenants and the operational resilience of the Company and its service providers.
At present the global economy continues to suffer disruption due to the effects of the war in Ukraine, events in the Middle East and the
after-effects of a high inflation environment and the Directors have given serious consideration to the consequences for this Company.
The Company has a number of banking covenants and at present the Company’s financial position does not suggest that any of these are
close to being breached.
The primary risk is that there is a very substantial decrease in the Net Asset Value of the Company in the short to medium term. The
Directors have considered the remedial measures that are open to the Company if such a covenant breach appears possible. As at
26 November 2024, the last practicable date before publication of this report, borrowings amounted to £28 million. This is in comparison
to a Net Asset Value of £332 million. In accordance with its investment policy the Company is invested mainly in readily realisable, FTSE
All-Share listed securities. These can be realised, if necessary, to repay the loan facility and fund future dividend payments.
The Company’s £30 million multi-currency revolving loan facility with the Royal Bank of Scotland International Limited, is due to expire in
March 2025. It is anticipated that a replacement facility will be entered into upon its expiry.
The Company operates within a robust regulatory environment. The Company retains title to all assets held by the Custodian. Cash is held
with banks approved and regularly reviewed by the Manager and the Board.
At the Annual General Meeting of the Company held on 9 March 2023, Shareholders voted 99.5% in favour of the continuation of the
Company. The next continuation vote for the Company is scheduled to be held in 2028.
76 | CT UK Capital and Income Investment Trust PLC
Accordingly, based on this information the Directors believe that the Company has the ability to meet its financial obligations as they fall
due for a period of twelve months from the date of approval of these financial statements. Accordingly, these financial statements have
been prepared on a going concern basis.
21. Financial Risk Management
The Company is an investment company, listed on the London Stock Exchange, and conducts its affairs so as to qualify in the United
Kingdom (“UK”) as an investment trust under the provisions of section 1158 of the Corporation Tax Act. In so qualifying, the Company is
exempted in the UK from Corporation Tax on capital gains on its portfolio of investments.
The Company’s investment objective is to secure long term capital and income growth from a portfolio consisting mainly of FTSE All-Share
companies. The Company can also have exposure to overseas companies, with the value of the non-UK portfolio not exceeding 10% of the
Company’s gross assets. In pursuing this objective, the Company is exposed to financial risks which could result in a reduction of either or
both of the value of the net assets and the profits available for distribution by way of dividend. These financial risks are principally related
to the market (currency movements, interest rate changes and security price movements), liquidity and credit. The Board, together with
the Manager, is responsible for the Company’s risk management, as set out in detail in the Strategic Report and Directors’ Report. The
Directors’ policies and processes for managing the financial risks are set out in (a), (b) and (c) on the following pages.
The accounting policies which govern the reported Balance Sheet carrying values of the underlying financial assets and liabilities, as well
as the related income and expenditure, are set out in note 2 to the accounts. The policies are in compliance with UK accounting standards
and best practice. The Company does not make use of hedge accounting rules.
Sensitivity analysis tables presented in the following sections relating to currency, interest and market exposures have been calculated on
the level of change considered to be a reasonable illustration based on observation of current market and economic conditions.
(a) Market risks
The fair value of equity and other financial securities held in the Company’s portfolio fluctuates with changes in market prices. Prices
are themselves affected by movements in currencies and interest rates and by other financial issues, including the market perception of
future risks. The Board sets policies for managing these risks within the Company’s objective and meets regularly to review full, timely and
relevant information on investment performance and financial results. The Manager assesses exposure to market risks when making each
investment decision and monitors ongoing market risk within the portfolio.
As up to 10% of the Company’s gross assets can be invested in non-UK assets, other assets and liabilities may be denominated in
currencies other than sterling and may also be exposed to interest rate risks. The Manager and the Board regularly monitor these risks.
The Company does not normally hold significant cash balances. Whilst it is not the Board’s general policy to borrow in currencies other
than sterling and euros, any such borrowings would be limited to amounts and currencies commensurate with the portfolio’s exposure to
those currencies, thereby limiting the Company’s exposure to future changes in foreign exchange rates.
Gearing may be short or long term in foreign currencies and enables the Company to take a long term view of the countries and markets in
which it is invested without having to be concerned about short term volatility.
Income earned in foreign currencies is converted to sterling on receipt. The Board regularly monitors the effects on net revenue of interest
earned on deposits and paid on gearing.
Currency Exposure
The principal foreign currencies to which the Company was exposed during the year were the euro and US dollar. As stated above, the
exposure to investments listed in currencies other than sterling cannot exceed 10% of the Company’s gross assets.
The exchange rates for the euro and US dollar applying against sterling at 30 September and the average rates during the year ended
30 September were as follows:
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Other Information
Chair’s StatementOverview Auditors’ Report
Financial Report
At 30 September
2024
2024
Average for
the year
At 30 September
2023
2023
Average for
the year
Euro 0.832 0.855 0.867 0.870
US dollar 0.746 0.789 0.819 0.815
The following calculations demonstrate the approximate effect of a weakening or strengthening of sterling against other currencies and are
based on the following:
– applicable balance sheet date exchange rates;
– for capital returns the financial assets and liabilities held at the year end date, including investments, cash, debtors and creditors;
– for revenue returns the current year income received in currencies other than sterling as a best estimate of future receipts; and
– for both capital and revenue, the management fee adjusted for changes in the funds under management as a result of changes in
investment values when applying different exchange rates.
A 10% change in the sterling exchange rate would have the following approximate effect on returns attributable to Shareholders and
on the NAV per share:
Weakening of sterling by 10% against other currencies
Local currency Return Local currency
Sterling
equivalent
£’000s
10% weakened
sterling fx rate
Adjusted
income, assets
and liabilities
£’000s
Impact on
management fee
£’000s
2024
Movement in
net return
£’000s
2023
Movement in
net return
£’000s
Euro Revenue 857 713 0.9152 784
–
71 77
Euro Capital 3,333 2,773 0.9152 3,050
–
277 398
US Dollar Revenue 306 228 0.8201 251
–
23 24
US Dollar Capital 15 11 0.8201 12
–
1 637
Movement in net return attributable to Shareholders 372 1,136
Shares in issue 100,045,845 104,335,845
Effect on NAV per share - pence 0.37 1.09
Strengthening of sterling by 10% against other currencies
Local currency Return Local currency
Sterling
equivalent
£’000s
10%
strengthened
sterling fx rate
Adjusted
income, assets
and liabilities
£’000s
Impact on
management fee
£’000s
2023
Movement in
net return
£’000s
2022
Movement in
net return
£’000s
Euro Revenue 857 713 0.7488 642
–
(71) (77)
Euro Capital 3,333 2,773 0.7488 2,496
–
(277) (398)
US Dollar Revenue 306 228 0.6710 205
–
(23) (24)
US Dollar Capital 15 11 0.6710 10
–
(1) (637)
Movement in net return attributable to Shareholders (372) (1,136)
Shares in issue 100,045,845 104,335,845
Effect on NAV per share - pence (0.37) (1.09)
These effects are representative of the exposure to currencies other than sterling by the Company as at 30 September 2024
although the level of exposure will fluctuate in accordance with the investment and risk management process.
78 | CT UK Capital and Income Investment Trust PLC
21. Financial Risk Management (continued)
The fair values of the Company’s assets and liabilities at 30 September by currency are shown below:
2024
Short-term
debtors
£’000s
Cash and cash
equivalents
£’000s
Short-term
creditors – other
£’000s
Short-term
creditors – loans
£’000s
Net monetary
(liabilities)/assets
£’000s
Investments
£’000s
Net
exposure
£’000s
Sterling 1,230 319 (605) (28,000) (27,056) 368,266 341,210
Other 82 – – – 82 2,702 2,784
Total 1,312 319 (605) (28,000) (26,974) 370,968 343,994
2023
Short-term
debtors
£’000s
Cash and cash
equivalents
£’000s
Short-term
creditors – other
£’000s
Short-term
creditors – loans
£’000s
Net monetary
(liabilities)/assets
£’000s
Investments
£’000s
Net
exposure
£’000s
Sterling 2,747 2,315 (1,576) (25,000) (21,514) 325,916 304,402
Other 86 63 – – 149 10,196 10,345
Total 2,833 2,378 (1,576) (25,000) (21,365) 336,112 314,747
Interest rate exposure
The exposure of the financial assets and liabilities to interest rate movements at 30 September was:
Within
one year
£’000s
More than
one year
£’000s
2024
Total
£’000s
Within
one year
£’000s
More than
one year
£’000s
2023
Total
£’000s
Exposure to floating rates:
Cash and cash equivalents 319
–
319 2,378 – 2,378
Loans (28,000)
–
(28,000) (25,000) – (25,000)
Net exposure (27,681)
–
(27,681) (22,622) – (22,622)
The Company had no exposure to fixed interest rates at the year end.
Exposures vary throughout the year as a consequence of changes in the composition of the net assets of the Company arising out of the
investment and risk management processes.
Interest received on cash balances, or paid on bank overdrafts and borrowings, is at ruling market rates.
The Company’s total returns and net assets are sensitive to changes in interest rates on cash and borrowings.
Based on the financial assets and liabilities held that are affected by changes in interest rates, such as cash and bank loans, and the
interest rates ruling at each balance sheet date, an increase or decrease in interest rates of 2% (2023: 2%) would have the following
approximate effects on the Income Statement revenue and capital returns after tax and on the NAV per share:
Increase
in rate
£’000s
2024
Decrease
in rate
£’000s
Increase
in rate
£’000s
2023
Decrease
in rate
£’000s
Revenue return (274) 274 (202) 202
Capital return (280) 280 (250) 250
Total return (554) 554 (452) 452
NAV per share – pence (0.55) 0.55 (0.43) 0.43
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Chair’s StatementOverview Auditors’ Report
Financial Report
Other market risk exposures
The portfolio of investments, valued at £370,968,000 at 30 September 2024 (2023: £336,112,000) is exposed to market price changes.
The Manager assesses these exposures at the time of making each investment decision. The Board reviews overall exposures at each meeting
against indices and other relevant information. An analysis of the portfolio by country and major industrial sector is set out in the investment
portfolio by sector and list of investments on pages 18 to 22.
Based on the portfolio of investments held at each Balance Sheet date, and assuming other factors, including the management charge, remain
constant, an increase or decrease in the fair value of the portfolio in sterling terms by 20% would have had the following approximate effects on
the net capital return attributable to Shareholders and on the NAV per share:
Increase
in value
£’000s
2024
Decrease
in value
£’000s
Increase
in value
£’000s
2023
Decrease
in value
£’000s
Capital return 74,194 (74,194) 67,222 (67,222)
NAV per share – pence 74.16 (74.16) 64.43 (64.43)
(b) Liquidity risk
The Company is required to raise funds to meet commitments associated with financial instruments and share buybacks. These funds
may be raised either through the realisation of assets or through increased borrowing. The risk of the Company not having sufficient
liquidity at any time is not considered by the Board to be significant, given: the number of quoted investments held in the Company’s
portfolio (100% at 30 September 2024 and 100% at 30 September 2023); the liquid nature of the portfolio of investments; the industrial
and geographical diversity of the portfolio (see pages 18 to 22); and the existence of an ongoing loan and overdraft facility agreement.
Cash balances are held with approved banks, usually on overnight deposit. The Manager reviews liquidity at the time of making each
investment decision. The Board reviews liquidity exposure at each meeting.
The Company has a £30 million multi-currency revolving loan facility available until March 2025.
As at 30 September 2024 the Company had drawn down £28 million of the loan facility and bank overdrafts of £nil.
The contractual maturities of the financial liabilities at each Balance Sheet date, based on the earliest date on which payment can be
required, were as follows:
2024
Three
months
or less
£’000s
More than three
months but less
than one year
£’000s
More than
one year
£’000s
Total
£’000s
Current liabilities – others 605 – – 605
Loans 28,000 – – 28,000
28,605 – – 28,605
2023
Three
months
or less
£’000s
More than three
months but less
than one year
£’000s
More than
one year
£’000s
Total
£’000s
Current liabilities – others 1,576 – – 1,576
Loans 25,000 – – 25,000
26,576 – – 26,576
80 | CT UK Capital and Income Investment Trust PLC
21. Financial Risk Management (continued)
(c) Credit risk and counterparty exposure
The Company is exposed to potential failure by counterparties to deliver securities for which the Company has paid, or to pay for securities
which the Company has delivered. Such transactions must be settled on the basis of delivery against payment (except where local market
conditions do not permit).
Responsibility for the approval, limit setting and monitoring of counterparties is delegated to the Manager. Counterparties are selected
based on a combination of criteria, including credit rating, balance sheet strength and membership of a relevant regulatory body. The rate
of default in the past has been negligible. Cash and deposits are held with approved banks.
The Company has an ongoing contract with its custodian for the provision of custody services. The contract is reviewed periodically. Details
of securities held in custody on behalf of the Company are received and reconciled monthly. The Company’s Depositary, JP Morgan Europe
Limited, has regulatory responsibilities relating to segregation and safe keeping of the Company’s financial assets, amongst other duties,
as set out in the Directors’ Report. The Board has direct access to the Depositary and receives regular reports from it via the Manager.
To the extent that the Manager carries out management and administrative duties (or causes similar duties to be carried out by third
parties) on the Company’s behalf, the Company is exposed to counterparty risk. The Board assesses this risk through regular meetings
with the management of Columbia Threadneedle Investments (including the Fund Manager) and with Columbia Threadneedle Investments’
Risk Management function. In reaching its conclusions, the Board also reviews the Manager’s parent group’s annual audit and assurance
faculty report.
(d) Fair values of financial assets and liabilities
The assets and liabilities of the Company are, in the opinion of the Directors, reflected in the Balance Sheet at fair value, or at a reasonable
approximation thereof. The carrying amount of the borrowings under loan and overdraft facilities is a reasonable approximation of fair value.
(e) Capital risk management
The objective of the Company is stated as being to secure long term capital and income growth from a portfolio consisting mainly of FTSE
All-Share companies. In pursuing this long term objective, the Board has a responsibility for ensuring the Company’s ability to continue
as a going concern. It must therefore maintain an optimal capital structure through varying market conditions. This involves the ability to:
issue and buyback share capital within limits set by the Shareholders in general meeting; borrow monies in the short and long term; and
pay dividends to Shareholders out of current year revenue earnings as well as out of brought forward revenue reserves.
Changes to ordinary share capital are set out in note 15, dividend payments in note 9 and details of loans in note 13.
22. Transactions with related parties and Manager
The following are considered related parties: the Board, including their spouses and dependents, and the Manager (Columbia
Threadneedle Investment Business Limited).
There are no transactions with the Board other than: aggregated remuneration for services as Directors as disclosed in the Directors’
Remuneration Report on page 48 and as set out in note 5; and the beneficial interests of the Directors in the ordinary shares of the
Company as disclosed on page 48. There are no outstanding balances with the Board at the year end. Transactions between the Company
and the Manager are detailed in note 4 on management fees and the outstanding balance is detailed in note 12.
23. AIFMD
In accordance with the AIFM Directive, information in relation to the Company’s leverage and the remuneration of the Company’s AIFM,
Columbia Threadneedle Investment Business Limited, is required to be made available to investors. Detailed regulatory disclosures
including those on the AIFM’s remuneration policy and costs are available on the Company’s website or from Columbia Threadneedle
Investments on request.
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Other Information
Chair’s StatementOverview Auditors’ Report
Financial Report
The Company’s maximum and average actual leverage levels at 30 September 2024 are shown below:
Leverage exposure
Gross
method
Commitment
method
Maximum limit 200% 200%
Actual 108% 108%
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.
24. Securities financing transactions (“SFR”)
The Company has not, in the year to 30 September 2024 (2023: same), participated in any: repurchase transactions; securities lending
or borrowing; buy-sell back transactions; margin lending transactions; or total return swap transactions (collectively called SFT). As such, it
has no disclosure to make in satisfaction of the EU regulations on transparency of SFT, issued in November 2015.
82 | CT UK Capital and Income Investment Trust PLC
Ten Year Record (Unaudited)
All Company data are based on assets, liabilities, earnings and expenses as reported in accordance with the Company’s accounting policies
and is unaudited but derived from the audited Accounts or specified third party data providers.
Assets
at 30 September
£'000s 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Total assets (before debt) 251,387 256,876 297,027 332,463 347,472 348,149 286,395 380,875 320,283 339,747 371,994
Loans 20,000 20,000 25,000 20,000 20,000 10,000 20,000 25,000 24,000 25,000 28,000
Net assets 231,387 236,876 272,027 312,463 327,472 338,149 266,395 355,875 296,283 314,747 343,994
Net Asset Value (NAV)
at 30 September
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
NAV per share – pence 251.8 250.5 281.1 317.1 324.0 329.0 249.7 331.7 277.7 301.7 343.8
Total Returns
(1)
(rebased to 100 at 30 September 2014)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
NAV per share 100.0 103.5 120.8 141.1 148.9 156.9 123.9 170.7 148.3 167.8 198.7
Middle market price per share 100.0 103.1 120.2 139.2 146.5 151.1 120.4 163.1 146.0 161.9 188.8
FTSE All-Share Index 100.0 97.7 114.1 127.8 135.3 138.9 115.8 148.2 142.2 161.9 183.6
Returns excluding dividends
(1)
(rebased to 100 at 30 September 2014)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
NAV per share 100.0 99.5 111.6 125.9 128.7 130.7 99.1 131.7 110.3 119.8 136.6
Middle market price per share 100.0 99.2 111.2 124.4 126.7 126.0 96.5 126.0 108.5 115.5 129.5
FTSE All-Share Index 100.0 94.4 106.3 114.6 116.8 114.9 92.9 114.9 106.5 116.8 127.7
(1) See Alternative Performance Measures on pages 91 and 92 for explanation.
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Other Information
Chair’s StatementOverview Auditors’ Report
Financial Report
Share Price
at 30 September
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Middle market price per share – pence 258.0 256.0 287.0 321.0 327.0 325.0 249.0 325.0 280.0 298.0 334.0
Premium/(discount)to NAV – % 2.5 2.2 2.1 1.2 0.9 (1.2) (0.3) (2.0) 0.8 (1.2) (2.9)
Share price high – pence 271.8 277.0 289.8 327.5 350.0 337.0 358.0 339.0 343.5 317.0 343.0
Share price low – pence 248.0 233.8 234.8 274.0 309.5 276.5 193.8 237.5 273.0 259.0 271.0
Revenue
for the year ended 30 September
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Available for ordinary shares (£’000s) 9,575 9,475 10,785 11,459 11,710 13,426 8,758 11,310 12,890 14,056 11,439
Return per share – pence 10.56 10.10 11.26 11.71 11.70 13.12 8.34 10.56 12.03 13.26 11.18
Dividends per share – pence 9.85 10.10 10.30 10.65 10.95 11.40 11.50 11.60 11.80 12.15 12.50
Revenue Performance
(rebased to 100 at 30 September 2014)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Return per share 100.0 95.6 106.6 110.9 110.8 124.2 79.0 100.0 113.9 125.6 105.9
Dividends per share 100.0 102.5 104.6 108.1 111.2 115.7 116.8 117.8 119.8 123.4 126.9
CPI 100.0 100.0 100.5 102.8 105.3 107.3 108.9 109.7 117.4 129.2 133.8
Cost of running the Company (Ongoing charges)
(1)
for the year ended 30 September
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Expressed as a percentage of average net assets:
Ongoing charges 0.66 0.64 0.64 0.59 0.58 0.58 0.58 0.59 0.59 0.66 0.67
Gearing
(1)
at 30 September
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Net gearing % 4.43 10.32 9.32 4.81 4.51 1.71 7.06 6.52 7.79 7.19 8.05
(1) See Alternative Performance Measures pages 91 and 92 for explanation
Analysis of Ordinary Shareholders (Unaudited)
Category Holding % at 30 September 2024 Holding % at 30 September 2023
CT Savings Plans 79.7 80.3
Retail Investors (excluding those investing through CT Savings Plans) 11.2 9.9
Institutions 4.8 5.0
Intermediaries 4.3 4.8
100.0 100.0
Source: Columbia Threadneedle Investments
84 | CT UK Capital and Income Investment Trust PLC
such terms as the Directors may determine, such authority to
expire at the conclusion of the next annual general meeting
of the Company held after the passing of this resolution or, if
earlier, on the date which is 15 months after the date on which
this resolution is passed (unless previously renewed, revoked
or varied by the Company in general meeting) save that the
Company may at any time prior to the expiry of this authority
make offers or enter into agreements which would or might
require shares in the Company to be allotted or Rights to be
granted after such expiry and notwithstanding such expiry the
Directors may allot shares in the Company or grant Rights in
pursuance of such offers or agreements as if the authority
conferred by this resolution had not expired.
Special Resolutions:
To consider and, if thought fit, pass the following resolutions as special
resolutions:
12. THAT, subject to the passing of Resolution 11 set out in the
notice of the annual general meeting to be held on 6 March
2025 (“Resolution 11”) and in substitution for any existing
power, but without prejudice to the exercise of any such power
prior to the passing of this resolution, the directors of the
Company (the “Directors”) be and are hereby generally and
unconditionally empowered, pursuant to sections 570 and 573
of the Companies Act 2006 (the “Act”), to allot or make offers
or agreements to allot, equity securities (within the meaning
of section 560 of the Act) for cash pursuant to the authority
conferred by Resolution 11, and/or by way of a sale of treasury
shares for cash, as if section 561(1) of the Act did not apply to
any such allotment or sale, provided that this power:
(i) shall be limited to the allotment of equity securities and the
sale of treasury shares up to an aggregate nominal amount
of £2,485,333 (representing approximately 10 per cent. of
the issued share capital of the Company (excluding treasury
shares) as at 26 November 2024); and
(ii) shall expire at the conclusion of the next annual general
meeting of the Company held after the passing of this
resolution or, if earlier, on the date which is 15 months
after the date on which this resolution is passed (unless
previously renewed, varied or revoked by the Company in
general meeting), save that the Company may before such
Notice is hereby given that the thirty-second Annual General Meeting of
the Company will be held at Cannon Place, 78 Cannon Street, London
EC4N 6AG on Thursday 6 March 2025 at 12.30pm for the following
purposes:
Ordinary Resolutions:
To consider and, if thought fit, pass the following resolutions as ordinary
resolutions:
1. To receive and adopt the audited financial statements of the
Company for the financial year ended 30 September 2024
together with the reports of the directors and the auditor on
those financial statements.
2. To approve the Company’s dividend policy as set out on page
37 of the Annual Report and Accounts for the financial year
ended 30 September 2024.
3. To receive, adopt and approve the Directors’ Remuneration
Report for the financial year ended 30 September 2024.
4. That the Company be authorised to increase the Directors’
aggregate annual remuneration cap contained in Article 110
of the Articles from £250,000 to £350,000, such increase to
take effect from 7 March 2025.
5. To re-elect Nicky McCabe as a director of the Company.
6. To re-elect Dunke Afe as a director of the Company.
7. To re-elect Patrick Firth as a director of the Company.
8. To elect Christopher Metcalfe as a director of the Company.
9. To re-appoint BDO LLP as auditors to the Company to hold
office from the conclusion of the annual general meeting until
the conclusion of the next annual general meeting of the
Company.
10. To authorise the Audit and Risk Committee to determine the
remuneration of the Company’s auditors.
11. THAT, in substitution for any existing authority, but without
prejudice to the exercise of any such authority prior to the
passing of this resolution, the directors of the Company (the
“Directors”) be and are hereby generally and unconditionally
authorised, in accordance with section 551 of the Companies
Act 2006 (the “Act”), to exercise all the powers of the
Company to allot shares in the Company and to grant rights
to subscribe for, or convert any security into, shares in the
Company (“Rights”) up to an aggregate nominal amount of
£2,485,333 (being equal to approximately 10 per cent of the
Company’s issued share capital (excluding treasury shares)
as at 26 November 2024) generally from time to time on
Notice of Annual General Meeting
Report and Accounts 2024 | 85
Notice of Meeting
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
expiry make offers and enter into agreements which would
or might require equity securities to be allotted or treasury
shares to be sold after such expiry and the Directors may
allot equity securities or sell treasury shares in pursuance
of such an offer or agreement as if the power conferred by
this resolution had not expired.
This power applies in relation to the sale of treasury shares
as if in the opening sentence of this resolution the words
“subject to the passing of Resolution 11 set out in the notice
of the annual general meeting to be held on 6 March 2025
(“Resolution 11”) and” were omitted.
13. THAT, in substitution for any existing authority but without
prejudice to the exercise of any such authority prior to the
passing of this resolution, the Company be and is hereby
generally and unconditionally authorised, pursuant to and
in accordance with section 701 of the Companies Act 2006
(the “Act”), to make market purchases (within the meaning of
section 693(4) of the Act) of fully paid ordinary shares of 25
pence each in the capital of the Company (“ordinary shares”)
on such terms and in such manner as the directors of the
Company (the “Directors”) may from time to time determine
(either for cancellation or for retention as treasury shares for
future reissue, resale, transfer or cancellation), provided that:
(a) the maximum aggregate number of ordinary shares hereby
authorised to be purchased is 14,902,060 or, if less, the
number being 14.99 per cent. of the issued ordinary share
capital of the Company (excluding ordinary shares held in
treasury) immediately prior to the passing of this resolution;
(b) the minimum price which may be paid for an ordinary share
purchased pursuant to this authority shall be 25 pence;
(c) the maximum price which may be paid for an ordinary share
purchased pursuant to this authority shall be the higher of (i)
an amount equal to 105% of the average of the middle market
quotations for an ordinary share (as derived from the London
Stock Exchange Daily Official List) over the five business days
immediately preceding the date on which the ordinary share is
contracted to be purchased; and (ii) the higher of the price of
the last independent trade of an ordinary share and the highest
current independent bid for such a share on the London Stock
Exchange at the time the purchase is carried out;
(d) the minimum and maximum prices per ordinary share referred
to in sub-paragraphs (b) and (c) of this resolution are in each
case exclusive of any expenses payable by the Company;
(e) the authority hereby conferred shall expire at the conclusion
of the next annual general meeting of the Company held after
the passing of this resolution or, if earlier, on the date which is
15 months after the date on which this resolution is passed,
unless such authority is varied, revoked or renewed prior to
such time by the Company in general meeting;
(f) the Company may, prior to the expiry of the authority hereby
conferred, enter into a contract to purchase ordinary shares
under such authority which will or may be completed or
executed wholly or partly after such expiry and may make a
purchase of ordinary shares pursuant to any such contract.
14. THAT, subject to the confirmation of the High Court (the
“Court”), the share capital of the Company be reduced by the
cancellation of the entire amount standing to the credit of the
Company’s share premium account as at the date of the final
hearing before the Court at which confirmation of the said
cancellation is sought.
By Order of the Board
Columbia Threadneedle Investment Business Limited,
Secretary
28 November 2024
Registered office:
Cannon Place
78 Cannon Street
London EC4N 6AG
Registered number: 02732011
Notes:
1. A member is entitled to appoint one or more proxies to exercise
all or any of the member’s rights to attend, speak and vote at
the meeting. A proxy need not be a member of the Company but
must attend the meeting for the member’s vote to be counted. If
a member appoints more than one proxy to attend the meeting,
each proxy must be appointed to exercise the rights attached to a
different share or shares held by that member.
2. Any person holding 3% or more of the voting rights in the Company
who appoints a person other than the Chair of the meeting as his/
her proxy will need to ensure that both he/she and such person
complies with their respective disclosure obligations under the
Disclosure Guidance and Transparency Rules.
3. A Form of Proxy is provided with this notice for members. If a
member wishes to appoint more than one proxy and so requires
additional proxy forms, the member should contact Computershare
Investor Services PLC on 0370 889 4094. To be valid, the Form of
Proxy and any power of attorney or other authority under which it
is signed (or a notarially certified copy of such authority) must be
received by post or (during normal business hours only) by hand
at the Company’s Registrar, Computershare Investor Services PLC,
86 | CT UK Capital and Income Investment Trust PLC
the purposes of determining the number of votes they may cast) at
the adjourned meeting. Changes to the register of members after
the relevant deadline shall be disregarded in determining the rights
of any person to attend and vote at the meeting.
8. If you are an institutional investor you may be able to appoint a
proxy electronically via the Proxymity platform, a process which has
been agreed by the Company and approved by the Registrar. For
further information regarding Proxymity, please go to www.proxymity.
io. Your proxy must be lodged by 12.30pm on 4 March 2025 in
order to be considered valid. Before you can appoint a proxy via
this process you will need to have agreed to Proxymity’s associated
terms and conditions. It is important that you read these carefully
as you will be bound by them and they will govern the electronic
appointment of your proxy.
9. CREST members who wish to appoint a proxy or proxies through
the CREST electronic proxy appointment service may do so for the
meeting and any adjournment(s) thereof by using the procedures
described in the CREST Manual. CREST Personal Members or other
CREST sponsored members, and those CREST members who have
appointed a voting service provider(s), should refer to their CREST
sponsor or voting service provider(s), who will be able to take the
appropriate action on their behalf.
10. In order for a proxy appointment or instruction made using the
CREST service to be valid, the appropriate CREST message
(a “CREST Proxy Instruction”) must be properly authenticated
in accordance with Euroclear UK & International Limited’s
specifications and must contain the information required for such
instruction, as described in the CREST Manual (available via www.
euroclear.com/CREST). The message, regardless of whether it
constitutes the appointment of a proxy or is an amendment to the
instruction given to a previously appointed proxy must, in order
to be valid, be transmitted so as to be received by the issuer’s
agent (ID number 3RA50) by the latest time(s) for receipt of proxy
appointments specified in notes 3 and 4. For this purpose, the time
of receipt will be taken to be the time (as determined by the time
stamp applied to the message by the CREST Application Host) from
which the issuer’s agent is able to retrieve the message by enquiry
to CREST in the manner prescribed by CREST. After this time, any
change of instructions to proxies appointed through CREST should
be communicated to the appointee through other means.
11. CREST members and, where applicable, their CREST sponsors
or voting service provider(s) should note that Euroclear UK &
International Limited does not make available special procedures
in CREST for any particular messages. Normal system timings and
limitations will therefore apply in relation to the input of CREST
Proxy Instructions. It is the responsibility of the CREST member
concerned to take (or, if the CREST member is a CREST personal
member or sponsored member or has appointed a voting service
provider(s), to procure that his CREST sponsor or voting service
provider(s) take(s)) such action as shall be necessary to ensure
that a message is transmitted by means of the CREST system by
any particular time. In this connection, CREST members and, where
applicable, their CREST sponsors or voting service provider(s)
are referred, in particular, to those sections of the CREST Manual
concerning practical limitations of the CREST system and timings
(www.euroclear.com/CREST).
The Pavilions, Bridgwater Road, Bristol BS99 6ZZ, not less than 48
hours excluding non-working days before the time of the holding of
the meeting or any adjourned meeting. Amended instructions must
also be received by the Company’s Registrar by the deadline for
receipt of Forms of Proxy.
4. Alternatively, members may register the appointment of a proxy
for the meeting electronically, by accessing the website
www.eproxyappointment.com where full instructions for the
procedure are given. The Control Number, Shareholder Reference
and PIN as printed on the Form of Proxy will be required in order
to use the electronic proxy appointment system. This website
is operated by Computershare Investor Services PLC. The proxy
appointment and any power of attorney or other authority under
which the proxy appointment is made must be received by
Computershare Investor Services PLC not less than 48 hours
excluding non-working days before the time for holding the meeting
or adjourned meeting or (in the case of a poll taken otherwise than
at or on the same day as the meeting or adjourned meeting) for the
taking of the poll at which it is to be used. If you want to appoint
more than one proxy electronically please contact Computershare
Investor Services PLC on 0370 889 4094.
5. Investors holding shares in the Company through the CT Investment
Trust ISA, Junior ISA, Child Trust Fund, General Investment
Account and/or Junior Investment Account should ensure that
forms of direction are returned to Computershare Investor
Services PLC not later than 12.30pm on 26 February 2025.
Alternatively, voting directions can be submitted electronically
at www.eproxyappointment.com by entering the Control Number,
Shareholder Reference Number and PIN as printed on the form of
direction. Voting directions must be submitted electronically no
later than 12.30pm on 26 February 2025.
6. Any person receiving a copy of this notice as a person nominated
by a member to enjoy information rights under section 146 of
the Act (a “Nominated Person”) should note that the provisions
in notes 1 to 4 above concerning the appointment of a proxy or
proxies to attend the meeting in place of a member do not apply
to a Nominated Person as only Shareholders have the right to
appoint a proxy. However, a Nominated Person may have a right
under an agreement between the Nominated Person and the
member by whom he or she was nominated to be appointed, or
to have someone else appointed, as a proxy for the meeting. If a
Nominated Person has no such proxy appointment right or does
not wish to exercise it, he/she may have a right under such an
agreement to give instructions to the member as to the exercise of
voting rights at the meeting.
7. Pursuant to Regulation 41(1) of the Uncertificated Securities
Regulations 2001 (as amended) and for the purposes of section
360B of the Act, the Company has specified that only those
members registered on the register of members of the Company
as at close of business on 4 March 2025 (the “Specified Time”)
(or, if the meeting is adjourned to a time more than 48 hours
after the Specified Time, by close of business on the day which
is two working days prior to the time of the adjourned meeting)
shall be entitled to attend and vote at the meeting in respect of
the number of shares registered in their name at that time. If the
meeting is adjourned to a time not more than 48 hours after the
Specified Time, the Specified Time will also apply for the purpose of
determining the entitlement of members to attend and vote (and for
Report and Accounts 2024 | 87
Notice of Meeting
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
12. The Company may treat as invalid a CREST Proxy Instruction in the
circumstances set out in Regulation 35(5)(a) of the Uncertificated
Securities Regulations 2001 (as amended).
13. Any corporation which is a member can appoint one or more
corporate representatives who may exercise on its behalf all of its
powers as a member provided that, if it is appointing more than one
corporate representative, it does not do so in relation to the same
shares.
14. Under section 527 of the Act, members meeting the threshold
requirements set out in that section have the right to require the
Company to publish on a website a statement setting out any
matter relating to:
(a) the audit of the Company’s Accounts (including the auditors’
report and the conduct of the audit) that are to be laid before
the meeting; or
(b) any circumstances connected with an auditor of the Company
ceasing to hold office since the previous meeting at which
annual Accounts and Reports were laid in accordance with
section 437 of the Act.
15. The Company may not require the members requesting any such
website publication to pay its expenses in complying with sections
527 or 528 of the Act. Where the Company is required to place
a statement on a website under section 527 of the Act, it must
forward the statement to the Company’s auditor not later than the
time when it makes the statement available on the website. The
business which may be dealt with at the meeting includes any
statement that the Company has been required under section 527
of the Act to publish on a website.
16. Any member attending the meeting has the right to ask questions.
The Company must cause to be answered any question relating
to the business being dealt with at the meeting put by a member
attending the meeting. However, members should note that no
answer need be given in the following circumstances:
(a) if to do so would interfere unduly with the preparation of
the meeting or would involve a disclosure of confidential
information; or
(b) if the answer has already been given on a website in the form
of an answer to a question; or
(c) if it is undesirable in the interests of the Company or the
good order of the meeting that the question be answered.
17. As at 26 November 2024, being the latest practicable date
before the publication of this notice, the Company’s issued capital
consisted of 107,289,022 ordinary shares of 25p each including
7,875,677 shares held in treasury. Therefore, the total voting rights
in the Company as at 26 November 2024 were 99,413,345.
18. This notice, together with the information required by Section 311A
of the Act, will be available at ctcapitalandincome.co.uk.
19. Copies of the letters of appointment between the Company and its
Directors; a copy of the Articles of Association of the Company; the
register of Directors’ holdings; and a deed relating to the Directors’
deeds of indemnity will be available for inspection at the registered
office of the Company during usual business hours on any weekday
(Saturdays, Sundays and Bank Holidays excluded) until the date of
the meeting and also at the place of the meeting from 15 minutes
prior to the commencement of the meeting until the conclusion
thereof.
20. No Director has a service agreement with the Company.
21. Under section 338 of the Act, a member or members meeting
the qualification criteria set out at note 23 below, may, subject to
certain conditions, require the Company to circulate to members
notice of a resolution which may properly be moved and is intended
to be moved at that meeting. The conditions are that: (i) the
resolution must not, if passed, be ineffective (whether by reason
of inconsistency with any enactment or the Company’s constitution
or otherwise); (ii) the resolution must not be defamatory of any
person, frivolous or vexatious; and (iii) the request: (a) may be in
hard copy form or in electronic form; (b) must identify the resolution
of which notice is to be given by either setting out the resolution in
full or, if supporting a resolution sent by another member, clearly
identifying the resolution which is being supported; (c) must be
authenticated by the person or persons making it; and (d) must
be received by the Company not later than six weeks before the
meeting to which the requests relate.
22. Under Section 338A of the Act, a member or members meeting
the qualification criteria set out at note 23 below, may, subject to
certain conditions, require the Company to include in the business
to be dealt with at the meeting a matter (other than a proposed
resolution) which may properly be included in the business (a
matter of business). The conditions are that: (i) the matter of
business must not be defamatory of any person, frivolous or
vexatious; and (ii) the request: (a) may be in hard copy form or in
electronic form; (b) must identify the matter of business by either
setting it out in full or, if supporting a statement sent by another
member, clearly identify the matter of business which is being
supported; (c) must be accompanied by a statement setting out the
grounds for the request; (d) must be authenticated by the person
or persons making it; and (e) must be received by the Company not
later than 6 weeks before the meeting to which the requests relate.
23. In order to be able to exercise the members’ right to require: (i)
circulation of a resolution to be proposed at the meeting (see note
21); or (ii) a matter of business to be dealt with at the meeting
(see note 22), the relevant request must be made by: (a) a member
or members having a right to vote at the meeting and holding at
least 5% of total voting rights of the Company; or (b) at least 100
members having a right to vote at the meeting and holding, on
average, at least £100 of paid up share capital.
88 | CT UK Capital and Income Investment Trust PLC
Information for Shareholders
Share dealing
Investors wishing to purchase more shares in the Company or sell
all or part of their existing holding may do so through a stockbroker.
Most banks also offer this service. Alternatively, please go to
www.computershare.com/dealing/uk for a range of dealing
services made available by Computershare.
In addition, one of the most convenient ways to invest in the
Company is through a savings plan operated by Columbia
Threadneedle Investments. Further details are provided on the
following page.
Common reporting standards
Tax legislation requires investment fund companies to provide
information annually to the local tax authority on the tax
residencies of a number of non-UK based certificated Shareholders
and corporate entities who have purchased shares in investment
trusts. All new Shareholders, excluding those whose shares are
held in CREST, who are entered onto the share register are sent a
certification form for the purpose of collecting this information.
For further information, please see HMRC’s Quick Guide: Automatic
Exchange of Information – information for account holders gov.uk/
government/publications/exchange-of-information-account-holders.
Registered in England and Wales with Company Registration No
02732011.
Net Asset Value and share price
The Company’s NAV, or Net Asset Value, per share is released
daily to the London Stock Exchange on the working day following
the calculation date. The current share price of CT UK Capital and
Income Investment Trust PLC is shown in the investment trust
section of the stock market page in most leading newspapers,
under “CT UK Capital and Income” and on the London Stock
Exchange website.
Performance information
Information on the Company’s performance is provided in the half-
yearly and final reports which are sent to Shareholders in June and
December respectively. More up-to-date performance information is
available on the Internet at ctcapitalandincome.co.uk. This website
also provides a monthly update on the Company’s geographic spread
and largest holdings, along with comments from the Fund Manager.
AIC
The Company is a member of the AIC, which publishes a monthly
statistical information service in respect of member companies.
The publication also has details of ISA and other investment plans
available. For further details, please contact the AIC on 020 7282
5555, or visit the website: theaic.co.uk
Electronic communications
Computershare provides a service to enable Shareholders to
receive Shareholder correspondence electronically (including annual
and half yearly financial reports) if they wish. If a Shareholder opts
to receive documents in this way, paper documents will only be
available on request. Shareholders who opt for this service will
receive a Notice of Availability via e-mail from Computershare with
a link to the relevant section of the Company’s website where the
documents can be viewed or printed. For more information, to view
the terms and conditions and to register for this service, please
visit Computershare’s internet site at investorcentre.co.uk (you will
need your Shareholder reference number which can be found on
your share certificate or dividend confirmation).
Report and Accounts 2024 | 89
Other Information
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
How to Invest
Charges
Annual management charges and other charges apply
according to the type of Savings Plan, these can be
found on the relevant product Presales Cost & Charges
disclosure on our website www.ctinvest.co.uk.
Annual account charge
ISA/LISA: £60+VAT
GIA: £40+VAT
JISA/JIA/CTF: £25+VAT
You can pay the annual charge from your account, or by
direct debit (in addition to any annual subscription limits).
Dealing charges
£12 per fund (reduced to £0 for deals placed through the
online Columbia Threadneedle Investor Portal) for ISA/
GIA/LISA/JIA and JISA. There are no dealing charges on a
C T F.
Dealing charges apply when shares are bought or sold but
not on the reinvestment of dividends or the investment
of monthly direct debits. Government stamp duty of 0.5%
also applies on the purchase of shares (where applicable).
The value of investments can go down as well as up
and you may not get back your original investment. Tax
benefits depend on your individual circumstances and
tax allowances and rules may change. Please ensure
you have read the full Terms and Conditions, Privacy
Policy and relevant Key Features documents before
investing. For regulatory purposes, please ensure you
have read the Pre-sales Cost & Charges disclosure related
to the product you are applying for, and the relevant Key
Information Documents (KIDs) for the investment trusts
you want to invest in, these can be found at
www.ctinvest.co.uk/documents.
How to Invest
To open a new Columbia Threadneedle Savings Plan, apply
online at www.ctinvest.co.uk Online applications are not
available if you are transferring an existing Savings Plan with
another provider to Columbia Threadneedle Investments, or
if you are applying for a new Savings Plan in more than one
name but paper applications are available at
www.ctinvest.co.uk/documents or by contacting Columbia
Threadneedle Investments.
One of the most convenient ways to invest in CT UK Capital and Income Investment Trust PLC is through one of the savings plans run by Columbia
Threadneedle Investments.
CT Individual Savings Account (ISA)
You can use your ISA allowance to make an annual tax efficient
investment of up to £20,000 for the current tax year with a
lump sum from £100 or regular savings from £25 a month.
You can also transfer any existing ISAs to us whilst maintaining
the tax benefits.
CT Junior Individual Savings Account (JISA)*
A tax efficient way to invest up to £9,000 per tax year for
a child. Contributions start from £100 lump sum or £25 a
month. JISAs or CTFs with other providers can be transferred
to Columbia Threadneedle Investments.
CT Lifetime Individual Savings Account (LISA)
For those aged 18-39, a LISA could help towards purchasing
your first home or retirement in later life. Invest up to £4,000
for the current tax year and receive a 25% Government bonus
up to £1,000 per year. Invest with a lump sum from £100 or
regular savings from £25 a month.
CT General Investment Account (GIA)
This is a flexible way to invest in our range of Investment
Trusts. There are no maximum contributions, and investments
can be made from £100 lump sum or £25 a month.
CT Junior Investment Account (JIA)
This is a flexible way to save for a child in our range of
Investment Trusts. There are no maximum contributions, and
the plan can easily be set up under bare trust (where the child
is noted as the beneficial owner) or kept in your name if you
wish to retain control over the investment. Investments can be
made from a £100 lump sum or £25 a month per account. You
can also make additional lump sum top-ups at any time from
£100 per account.
CT Child Trust Fund (CTF)*
If your child already has a CTF, you can invest up to £9,000 per
birthday year, from £100 lump sum or £25 a month. CTFs with
other providers can be transferred to Columbia Threadneedle
Investments.
90 | CT UK Capital and Income Investment Trust PLC
Capital at risk.
The material relates to an investment trust and its Ordinary Shares are traded on the main market of the London Stock Exchange.
The Investor Disclosure Document, Key Information Document (KID), latest annual or interim reports and the applicable terms & conditions are available from Columbia Threadneedle Investments Cannon Place,
78 Cannon Street, London EC4N 6AG, your financial advisor and/or on our website www.columbiathreadneedle.com. Please read the Investor Disclosure Document before taking any investment decision.
This material should not be considered as an offer, solicitation, advice or an investment recommendation. This communication is valid at the date of publication and may be subject to change without notice.
Information from external sources is considered reliable but there is no guarantee as to its accuracy or completeness.
In the UK: Issued by Columbia Threadneedle Management Limited, No. 517895, registered in England and Wales and authorised and regulated in the UK by the Financial Conduct Authority.
© 2024 Columbia Threadneedle Investments. WF560250 (01/24) UK. Expiration Date: 31/01/2025
Notes
*The CTF and JISA accounts are opened by parents in the child’s name and they have access to the money at age 18.
**Calls may be recorded or monitored for training and quality purposes.
To find out more,
visit ctinvest.co.uk
0345 600 3030, 9.00am – 5.00pm,
weekdays, calls may be recorded or
monitored for training and quality purposes.
New Customers:
Call: 0345 600 3030** (9.00am – 5.00pm, weekdays)
Email: invest@columbiathreadneedle.com
Existing Savings Plan Holders:
Call: 0345 600 3030** (9:00am – 5:00pm, weekdays)
Email: investor.enquiries@columbiathreadneedle.com
By post: Columbia Threadneedle Management Limited
PO Box 11114
Chelmsford CM99 2DG
You can also invest in the trust through online dealing platforms for private investors that offer share dealing and ISAs.
Companies include: Barclays Stockbrokers, EQi, Halifax, Hargreaves Lansdown, HSBC, Interactive Investor, Lloyds Bank, The Share
Centre
Report and Accounts 2024 | 91
Other Information
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
Alternative Performance Measures
The Company uses the following Alternative Performance Measures (“APMs”). APMs do not have a standard meaning prescribed by GAAP
and therefore may not be comparable to similar measures presented by other entities. No new APMs have been identified or added since
the prior year end.
Premium or Discount – the share price of an Investment Company is derived from buyers and sellers trading their shares on the stock
market. This price is not identical to the Net Asset Value (“NAV”) per share of the Company. If the share price is lower than NAV per share,
the shares are trading at a discount. This usually indicates that there are more sellers of shares than buyers. The discount is shown as a
percentage of the NAV per share. Shares trading at a price above NAV per share are deemed to be at a premium.
30 September
2024
pence
30 September
2023
pence
Net Asset Value per share (a) 343.84 301.67
Share price per share (b) 334.00 298.00
(Discount) or Premium (c= (b-a)/a) (c) (2.9%) (1.2%)
Gearing – this is the ratio of the borrowings of the Company to its net assets. Borrowings have a “prior charge” over the assets of a
company, ranking before ordinary Shareholders in their entitlement to capital and/or income. They may include: preference shares;
debentures; overdrafts and short and long term loans from banks; and derivative contracts. If the Company has cash assets, these may
be assumed either to net off against borrowings, giving a “net” or “effective” gearing percentage, or to be used to buy investments, giving
a “gross” or “fully invested” gearing figure. Where cash assets exceed borrowings, the Company is described as having “net cash”. The
Company’s maximum permitted level of gearing is set by the Board and is described within the Strategic Report and Directors’ Report.
30 September
2024
£’000
30 September
2023
£’000
Loan 28,000 25,000
Less cash and cash equivalents (319) (2,378)
Total (a) 27,681 22,622
Net Asset Value (b) 343,994 314,747
Gearing (c = a/b) (c) 8.05% 7.19%
92 | CT UK Capital and Income Investment Trust PLC
Ongoing Charges – are those expenses of a type which are likely to recur in the foreseeable future, whether charged to capital or revenue,
and which relate to the operation of the investment company, expressed as a proportion of the average net assets of the Company over
the reporting year (see Ten Year Record). The costs of buying and selling investments and derivatives are excluded, as are interest costs,
taxation, non-recurring costs and the costs of buying back or issuing shares. Ongoing charges are based on costs incurred in the year as
being the best estimate of future costs.
Ongoing charges calculation
30 September
2024
£’000
30 September
2023
£’000
Management fees 1,470 1,386
Other expenses 806 742
Broker fee 10 18
Less loan arrangement fees (30) –
Ad-hoc non-recurring expenses (24) (24)
Total (a) 2,232 2,122
Average daily net assets (b) 333,109 322,195
Ongoing charges (c = a/b)
(c) 0.67% 0.66%
Total Return – the theoretical return to Shareholders calculated on a per share basis by adding dividends paid in the period to the
increase or decrease in the share price or NAV in the period. The dividends are assumed to have been re-invested in the form of shares or
added to net assets respectively, on the date on which the shares were quoted ex-dividend.
Net Asset Value Share price
NAV/Share price per share at 30 September 2023 (pence) 301.67 298.00
NAV/Share price per share at 30 September 2024 (pence) 343.84 334.00
Change in the year 14.0% 12.1%
Impact of dividend reinvestments 4.4% 4.5%
Total return for the year 18.4% 16.6%
Report and Accounts 2024 | 93
Other Information
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
AAF Report – Report prepared in accordance with Audit and Assurance Faculty guidance issued by the Institute of Chartered Accountants
in England and Wales.
Administrator – State Street Bank and Trust Company.
AIC – Association of Investment Companies, the trade body for Closed-end Investment Companies.
AIC Code – the principles set out in the Association of Investment Companies Code of Corporate Governance.
AIFMD – Alternative Investment Fund Managers Directive requires that all investment vehicles (“AIFs”) must appoint a Depositary and an
Alternative Investment Fund Manager (“AIFM”). The Board of Directors of an Investment Trust, nevertheless, will remain fully responsible
for all aspects of the Company’s strategy, operations and compliance with regulations. The Company’s AIFM is the Manager.
AIM – the Alternative Investment Market.
Broker – The Broker is Cavendish, previously known as Cenkos Securities plc. The duties of the Broker include transacting buy or sell
orders in the Company’s shares, maintain a regular dialogue with core Shareholders, and provide advice on trading of the Company’s
shares and significant movements in share price.
CT Savings Plans – the CT General Investment Account, CT Junior Investment Account, CT Investment Trust ISA, CT Junior ISA, CT Lifetime
ISA and CT Child Trust Fund operated by Columbia Threadneedle Management Limited, a company authorised and regulated by the
Financial Conduct Authority.
CT UK Capital and Income Investment Trust PLC – the “Company”.
Benchmark – the FTSE All-Share Index (the “Index”) is the benchmark against which the increase or decrease in the Company’s Net Asset
Value is measured. The Index averages the performance of a defined selection of companies on the London Stock Exchange and gives
an indication of how a wide range of companies traded on the London Stock Exchange taken as a whole have performed in any period.
As the investments within the Index are not identical to those held by the Company, the Index does not take account of operating costs
and the Company’s strategy does not include replicating (tracking) this index, there is likely to be some level of divergence between the
performance of the Company and the Index.
Closed-end company – a company, including an Investment Company, with a fixed issued ordinary share capital which is traded on an
exchange at a price not necessarily related to its Net Asset Value and the shares of which can only be issued or bought back by the
Company in certain circumstances.
Cum-dividend – shares are classified as cum-dividend when the buyer of a security is entitled to receive a dividend that has been
declared, but not paid. Shares which are not cum-dividend are described as ex-dividend.
Custodian – The Custodian is JPMorgan Chase Bank. A custodian is a specialised financial institution responsible for safeguarding,
worldwide, the listed securities and certain cash assets of the Company, as well as the income arising therefrom, through provision of
custodial, settlement and associated services.
Glossary of Terms
94 | CT UK Capital and Income Investment Trust PLC
Depositary – The Depositary is JPMorgan Europe Limited. Under AIFMD rules, the Company must appoint a depositary, whose duties in
respect of investments, cash and similar assets include: safekeeping; verification of ownership and valuation; and cash monitoring. The
appointed depositary has strict liability for the loss of the financial assets in respect of which it has safe keeping duties. The Depositary’s
oversight duties will include, but are not limited to, oversight of share buy backs, dividend payments and adherence to investment limits.
Derivative – a contract between two or more parties, the value of which fluctuates in accordance with the value of an underlying security.
The contract is usually short term (for less than one year). Examples of derivatives are Put and Call Options, Swap contracts, Futures and
Contracts for Difference. A derivative can be an asset or a liability and is a form of gearing because the fluctuations in its value are usually
greater than the fluctuations in the underlying security’s value.
Distributable Reserves – Reserves distributable by way of dividend or for the purpose of buying back ordinary share capital (see note 2
to the accounts). Company Law requires that Share Capital, the Share Premium Account and the Capital Redemption Reserve may not be
distributed. The Company’s articles of association allow distributions by way of dividend out of Capital Reserves. Dividend payments are
currently made out of Revenue Reserve. The cost of any share buybacks are deducted from the Special and Capital Reserves.
Dividend Dates – Reference is made in announcements of dividends to three dates. The “record” date is the date after which buyers of
the shares will not be recorded on the register of Shareholders as qualifying for the pending dividend payment. The “payment” date is the
date that dividends are credited to Shareholders’ bank accounts. The “ex-dividend” date is normally the business day prior to the record
date.
Fund Manager – Julian Cane, an employee of the Manager with overall management responsibility for the total portfolio.
GAAP – Generally Accepted Accounting Practice. This includes UK GAAP and International GAAP (IFRS or International Financial Reporting
Standards applicable in the European Union).
Investment Company (section 833) – UK Company Law allows an Investment Company to make dividend distributions out of realised
distributable reserves, even in circumstances where it has made capital losses in any year (see note 2 to the accounts), provided the
Company’s assets remaining after payment of the dividend exceed 150% of the liabilities. An Investment Company is defined as investing
its funds in shares, land or other assets with the aim of spreading investment risk.
Investment Trust taxation status (section 1158) – UK Corporation Tax law allows an Investment Company (referred to in tax law as an
Investment Trust) to be exempted from tax on its profits realised on investment transactions, provided it complies with certain rules.
These are similar to section 833 Company law rules but further require that the Company must be listed on a regulated stock exchange
and that it cannot retain more than 15% of income received. The Directors’ Report contains confirmation of the Company’s compliance
with this law and its consequent exemption from taxation on capital gains.
ISAE Report – Report prepared in accordance with the International Standard on Assurance Engagements.
Leverage – as defined under AIFMD rules, leverage is any method by which the exposure of an AIF (being an investment vehicle under the
AIFMD) is increased through borrowing of cash or securities or leverage embedded in derivative positions. Leverage is broadly equivalent
to gearing, but is expressed as a ratio between the net assets (excluding borrowings) and the net assets (after taking account of
borrowings). Under the gross method, exposure represents the sum of the Company’s positions after deduction of cash balances, without
taking account of any hedging or netting arrangements. Under the commitment method, exposure is calculated without the deduction of
cash balances and after certain hedging and netting positions are offset against each other.
Manager – Columbia Threadneedle Investment Business Limited, (AIFM), and its sister company Columbia Threadneedle Management
Limited. These two companies are owned by Ameriprise Financial, Inc.
Report and Accounts 2024 | 95
Other Information
Strategic Report Governance Report Financial Report Notice of Meeting
Other Information
Chair’s StatementOverview Auditors’ Report
Net Asset Value (NAV) – the assets less liabilities of the Company, as set out in the Balance Sheet, all valued in accordance with
the Company’s Accounting Policies (see note 2 to the accounts) and UK Accounting Standards. The net assets correspond to Total
Shareholders’ Funds, which comprise the share capital account, capital redemption reserve, share premium account, special reserve and
capital and revenue reserves.
Non-executive Director – a Director who has a contract for services, rather than a contract of employment, with the Company.
The Company does not have any executive Directors. Non-executive Directors’ remuneration is described in detail in the Directors’
Remuneration Report. The duties of the Directors, who govern the Company through the auspices of a Board and Committees of the
Board, are set out in the Corporate Governance Statement.
Open-end investment vehicle – a collective investment scheme which issues shares or units directly to investors, and redeems directly
from investors, at a price that is linked to the Net Asset Value of the fund.
Price/earnings multiple – This is a calculation carried out as a simple assessment of a company’s valuation. It is the result of dividing
the share price of a company by its earnings per share, therefore showing the multiple of earnings at which the shares trade.
Registrar – Computershare Investor Services PLC provide share registration services to the Company. They maintain the register of
members and arrange the payment of dividends. Shares held by investors in the CT Savings Plans are held on the register in one nominee
account under the name of State Street Nominees Limited.
SORP – Statement of Recommended Practice. The accounts of the Company are drawn up in accordance with the Investment Trust SORP,
issued by the AIC, as described in note 2 to the accounts.
SSAE16 – Statement on Standards for Attestation Engagements 16, issued by the American Institute of Certified Public Accountants, is an
independent snapshot of an organisation’s control environment.
Total Return – The return to Shareholders calculated on a per share basis by adding dividends paid in the period to the increase or decrease
in the Share Price or NAV in the period. The dividends are assumed to have been re-invested in the form of shares or net assets, respectively,
on the date on which the shares were quoted ex-dividend.
UK Code of Corporate Governance (UK Code) – the standards of good practice in relation to board leadership and effectiveness,
remuneration, accountability and relations with Shareholders that all companies with a listing on the London Stock Exchange are required
to report on in their Annual Report and Accounts.
96 | CT UK Capital and Income Investment Trust PLC
Warning to Shareholders – Beware of Share Fraud.
Fraudsters use persuasive and high-pressure tactics to lure investors into scams. They may offer to sell to you shares that turn out to be worthless or
non-existent, or to buy your shares at an inflated price in return for an upfront payment following which the proceeds are never received.
If you receive unsolicited investment advice or requests:
• Check the Financial Services Register from fca.org.uk to see if the person or firm contacting you is authorised by the FCA
• Call the Financial Conduct Authority (“FCA”) on 0800 111 6768 if the firm does not have contact details on the Register or you are told they are out
of date
• Search the list of unauthorised firms to avoid at fca.org.uk/scams
• Consider that if you buy or sell shares from an unauthorised firm you will not have access to the Financial Ombudsman Service or Financial Services
Compensation Scheme
• Think about getting independent financial and professional advice
If you are approached by fraudsters please tell the FCA by using the share fraud reporting form at fca.org.uk/scams where you can find out more
about investment scams. You can also call the FCA Consumer Helpline on 0800 111 6768. If you have already paid money to share fraudsters you
should contact Action Fraud on 0300 123 2040.
CT UK Capital and Income
Investment Trust PLC
Report and Accounts
For the Year Ended
30 September 2024
To find out more visit columbiathreadneedle.com
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Contact us
Registered office:
Cannon Place, 78 Cannon Street, London EC4N 6AG
0131 573 8300
ctcapitalandincome.co.uk
invest@columbiathreadneedle.com
Registrars:
Computershare Investor Services PLC
The Pavilions, Bridgwater Road
Bristol BS99 6ZZ
0370 889 4094
computershare.com
web.queries@computershare.co.uk