Capital Gearing Trust P.l.c. - Final Results for the Year Ended 31 March 2026

PR Newswire

LONDON, United Kingdom, June 04

LONDON STOCK EXCHANGE ANNOUNCEMENT

Capital Gearing Trust P.l.c.

(the 'Company')

Final Results for the Year Ended 31 March 2026

Legal Entity Identifier: 213800T2PJTPVF1UGW53

Information disclosed in accordance with DTR 4.1.3

Capital Gearing Trust (LSE: CGT), the FTSE 250 investment trust focused on preserving and, over time, growing shareholders' real wealth, announces its Final Results for the year ended 31 March 2026 .

Financial Highlights

	31 March 2026	31 March 2025
Share price	4,985.0p	4,785.0p
NAV per Ordinary share	5,104.5p	4,924.8p
Dividends per share	66p	102p
Share price discount to NAV per share(1)	2.3%	2.8%
Shareholders' funds	£801.3m	£885.0m
Market capitalisation	£782.6m	£859.9m
Ongoing charges ratio(1)	0.59%	0.56%

Total return performance to 31 March 2026

	One year	Three years	Five years	Ten years
Share price total return(1)	6.4%	11.1%	14.1%	61.5%
NAV total return(1)	5.8%	12.1%	19.4%	68.6%
Consumer Price Index(2)	3.3%	9.4%	28.9%	40.7%

(1) Please refer to the Company's Annual Report and Financial Statements for the year ended 31 March 2026 ('2026 Annual Report') for definitions and a reconciliation of the Alternative Performance Measures to the year-end results.

(2) The Company does not have a formal benchmark but uses the Consumer Price Index ('CPI') as a relative measure over the medium to longer term.

Highlights

Over the year to 31 March, the Company delivered a NAV return of +5.8% and a share price return of +6.4% for the year. This compares with CPI inflation of +3.3%. All major parts of the portfolio delivered a positive contribution.
Over the year ended 31 March 2026, the Company has repurchased 2,272,529 shares (2025: 4,067,965 shares) for a total cost of £111.2 million (2025: £194.5 million). No shares were issued. As a result of this policy, over the year the discount averaged 2.0%.
The Board has recommended a final dividend of 66p per share which will be paid, subject to shareholder approval, on 15 July 2026 to shareholders on the register on 12 June 2026. The ex-dividend date will be 11 June 2026.
As a consequence of the Company's exceptional performance since launch, the share price has risen sharply and stood at 4,985.0p (or £49.85) as at 31 March 2026. The Board believes that the high share price may be unhelpful for those investing smaller amounts, monthly savers, and dividend re-investment programmes. Therefore, it is proposing to sub-divide the shares on a ten for one basis, which if approved by shareholders at the Annual General Meeting it is expected that dealings in the Existing Ordinary Shares will cease as at close of business on 22 July 2026 and admission of the New Ordinary Shares to the Official List and to trading on the London Stock Exchange, and dealings in the New Ordinary Shares, will commence 23 July 2026.
The next opportunity to hear from the Investment Managers is on Thursday, 4 June 2026 at 2.30 p.m., when the investment team will present the Company's year-end results via Investor Meet Company's webcasting service. Investors and potential investors can sign up to Investor Meet Company for free and add "to meet CG Asset Management" via: https://www.investormeetcompany.com/cg-asset-management/register-investor

Chairman's Statement

I am pleased to present the Annual Report of Capital Gearing Trust P.l.c. (the 'Company' or 'CGT') for the year ended 31 March 2026. This is my first as your Chairman.

Performance is the most important information in every chairman's statement. Over the year ended 31 March 2026, the Company's net asset value ('NAV') total return was +5.8%. This compares with inflation of +3.3% over the same year, as measured by the Consumer Price Index ('CPI'). The share price total return over the year was +6.4%.

The Company's objective is to preserve and, over time, to grow shareholder's real wealth. It does this by having two combined aims. The first is to protect investors' wealth by cushioning the effect of falling asset prices. The second aim is to beat inflation over the medium term by at least 2%, compounded over time. During the most recent reporting period, CGT's NAV return outperformed inflation by 2.5%.

There is further analysis of historical returns for the Company in the Company's Annual Report & Financial Statements for the year ended 31 March 2026 ('2026 Annual Report').

Working with the Investment Manager, the Board has given significant attention to what returns shareholders might reasonably expect in future, particularly in the light of current market conditions. We began with three specific observations. Firstly, when interest rates were first tightened in 2022, equity markets fell substantially, and the Company's NAV cushioned the decline by less than it had in the past. Secondly, when Peter Spiller began to manage the Company's assets in 1982, UK inflation-linked bond yields were more than 4% real, whereas during the height of quantitative easing in 2008-2009, the real yield was negative if bonds were held to maturity. Peter's tenure commenced from a radically less favourable environment than the investment team faces today. Thirdly, the long-duration conventional bond has, in the past, provided a source of positive returns even as other asset prices fell; to such an extent that the Company was able to report a positive year even when equity markets had fallen by 50%. Now long-duration government bonds have become positively correlated with equity markets.

The conclusion of our deliberations is that we cannot simply point to the returns delivered since inception and suggest that those returns can be a guide to future returns. We have moved from a disinflationary world with falling interest rates to an inflationary environment with higher interest rates.

Nevertheless, the Board believes that the Company's dual targets stated above are achievable, and attractive for shareholders. To deliver at least 2% real p.a., with lower volatility than investment in a global equity tracker fund should be an important anchor in all portfolios. Other asset classes may ultimately perform better, but they will have much scarier interludes. Having CGT in a portfolio makes it easier to weather those rougher seas without panicking. Moreover, if markets finally start to price in greater inflation and inflation volatility, CGT should perform much better than the 30% or 40% in conventional bonds that investors are often herded into owning as they approach retirement.

Discount/Premium Control Policy ('DCP')

Our DCP, which aims to ensure that, in normal market conditions, the Company's ordinary shares trade at close to underlying asset value, requires us to buy or sell shares in the Company to maintain a narrow discount or premium. Over the year ended 31 March 2026, the Company has repurchased 2,272,529 shares (2025: 4,067,965 shares) for a total cost of £111.2 million (2025: £194.5 million). No shares were issued. As a result of this policy, over the year the discount averaged 2.0%.

Shares which are bought back are held in Treasury rather than cancelled as they can be reissued from Treasury more efficiently than issuing new shares. Whilst it is pleasing to note that the rate of buybacks is slowing, the repurchase of the Company's shares this year has continued to shrink the assets of the Company. However, the Board notes that due to the vast majority of the Company's expenses being charged on an ad valorem basis, that is they rise and fall commensurably with the Company's assets, there is only a marginal increase (from 0.56% in the prior year to 0.59% in the current year) in the Company's ongoing charges ratio. We believe that the DCP remains in the best interests of the Company and its shareholders.

Reflecting both the quantum of buybacks completed by the Company and the Board's commitment to the DCP, the Company held a General Meeting in April 2026 to renew shareholder authority to buy back shares to ensure that the Company would not be left in a position where it had run out of buy-back authority. The renewal was approved by shareholders and a further 51,386 Ordinary shares for a total cost of £2.6 million have been repurchased in the Company's new financial year to date. Since the renewed authority will automatically expire at the conclusion of the Company's forthcoming Annual General Meeting, in line with usual practice, the Company will ask shareholders to approve a further renewal of the authority to repurchase up to 14.99% of its capital at a discount to estimated NAV at the forthcoming Annual General Meeting.

Income and Distributions

The amount the Company receives in dividends and interest is the outcome of the application of its investment policy rather than a target. The amounts distributed to shareholders are largely determined by the net revenue received by the Company in any year and are designed to satisfy the Company's annual income distribution test to ensure that it maintains its investment trust status.

In respect of the Company's year ended 31 March 2025, the Company took advantage of the UK interest streaming rules, which allow approved investment trusts which have income from interest-bearing assets to treat all or part of a distribution as an interest distribution, rather than a conventional dividend. By doing this, the Company received a corresponding deduction in its corporation tax liability.

The receipt of income has fallen since last year, nevertheless the Company is again designating a proportion of the total distribution as an interest distribution. Accordingly, the Board has recommended a final dividend of 66p per share which will be paid, subject to shareholder approval, on 15 July 2026 to shareholders on the register on 12 June 2026. The ex-dividend date will be 11 June 2026. For the purpose of personal taxation calculations, the Board has designated the payment as follows:

Interest distribution per Ordinary share: 43p

Dividend distribution per Ordinary share: 23p

Total distribution per Ordinary share: 66p

The total distribution represents a decrease of 35% from the 102p paid to shareholders in respect of the Company's financial year ended 31 March 2025.

Share Split

As a consequence of the Company's exceptional performance since launch, the share price has risen sharply and stood at 4,985.0p (or £49.85) as at 31 March 2026. Whilst this is an excellent badge of honour for existing long-term shareholders, the Board believes that the high share price may be unhelpful for those investing smaller amounts, monthly savers, and dividend re-investment programmes. Therefore, it is proposing to sub-divide the shares on a ten for one basis. This is known as a 'share split'. Following the share split, each shareholder will hold ten new ordinary shares for each ordinary share held immediately prior to the share split.

We hope that sub-dividing the Company's ordinary shares will make buying the shares more attractive to new investors and increase market liquidity. I would like to reassure existing shareholders that the splitting of the shares will not affect the overall value of their holdings in the Company as the reduction in the price per share will be offset by a commensurate increase in the number of shares they hold. By way of example, taking the price as at 31 March 2026 of 4,985.0p per share, following the sub-division each holder of one existing ordinary share would receive ten new ordinary shares, each of which would have an equivalent theoretical price of 498.50p per share or £4.985 per share immediately after the share split. Shareholders will have the opportunity to vote on this proposal at the forthcoming Annual General Meeting and more details are set out in the 2026 Annual Report.

If resolution 11 is approved at the Annual General Meeting it is expected that dealings in the Existing Ordinary Shares will cease as at close of business on 22 July 2026 and admission of the New Ordinary Shares to the Official List and to trading on the London Stock Exchange, and dealings in the New Ordinary Shares, will commence 23 July 2026.

Company's Marketing, Promotion and Shareholder Interaction

The Board is continuing to work with CGAM to increase the Company's profile via various media including video conferences, podcasts and in-person meetings, together with ongoing interaction with national and investment industry journalists. The Board's view is that enhancing the Company's profile will benefit all shareholders if a better understanding of the Company and its objectives can be translated into sustained demand for its shares.

During the year, the Company launched a redesigned website to provide a clearer, more informative, and accessible online experience for shareholders. The site provides the history and background of the Company, insights, regulatory documents, performance data, shareholder communications, and investor tools. The new site can be found here: https://capitalgearingtrust.com

The next opportunity to hear from the Investment Managers is on Thursday, 4 June 2026 at 2.30 p.m., when the investment team will present the Company's year-end results via Investor Meet Company's webcasting service. Questions can be submitted at any time during the live presentation. Investors and potential investors can sign up to Investor Meet Company for free and add "to meet CG Asset Management" via: https://www.investormeetcompany.com/cg-asset-management/register-investorInvestors who already follow CG Asset Management on the Investor Meet Company platform will automatically be invited. To ensure you get early notification of future presentations and events you can register for email and news alerts concerning the Company using the following link: https://capitalgearingtrust.com/contact/alerts

The Board is also keen to engage with shareholders. If any shareholder wishes to communicate with me as Chairman or Wendy Colquhoun as Senior Independent Director, please contact our Company Secretary at info@frostrow.comor by using the contact details listed at the end of this announcement.

Annual General Meeting ('AGM')

The AGM will be held on Wednesday, 8 July 2026 at 11.00 am at the Chartered Accountants Hall, 1 Moorgate Place, London EC2R 6EA. I hope as many shareholders as possible will be able to attend to take the opportunity to meet the Board and to hear a presentation from the Investment Manager. However, if you are unable to attend in person, you can watch the Investment Manager's presentation soon after the AGM when a recording will be posted on the Company's website.

Details on the resolutions to be proposed at the AGM can be found in the 2026 Annual Report. The Board firmly believes that all the resolutions being proposed are in the best interests of the Company and its shareholders and encourages shareholders to vote by proxy in favour of the resolutions, as the Directors intend to do in respect of their own shareholdings. We would encourage shareholders to return their votes by electronic proxy, including by instructing their platform providers to vote on their behalf if their shares are held through platform nominees.

Outlook

In the 1970s the world economy experienced price shocks from the oil market and a wage-price spiral, more emphatically in the UK than elsewhere. The one positive from inflation was that it allowed the corporate and government sectors to deleverage. But high inflation causes redistribution of income and wealth, distorts economic decision-taking, and deters investment by companies.

The response of governments and central banks was to raise interest rates to control the growth in credit and money stock. Under Paul Volcker's Chairmanship of the Federal Reserve, US interest rates peaked at 17%, with the stalwart support of the US President, despite the side-effect of a recession, and creating unemployment. The subsequent fall in inflation was magnified by secular trends of globalisation, deregulation, and deunionisation. These disinflationary forces were taken by policymakers as marks of their own policy competence.

Once inflation was under control, the Federal Reserve embarked on a multi-decade cycle of loosening monetary policy. When William Chesney Martin was the Federal Reserve Chairman in the 1970s, he described the role of the central bank as removing the punch bowl just as the party got going. In fact, the opposite happened. As monetary policy became looser there followed a series of bubbles in stock markets, then property markets, then emerging markets, then dot. com, then the US housing market, and so on. As each bubble burst, the central bank response was to cut interest rates, and merely move the venue of the party to another asset class. The culmination of this long period of falling interest rates was the deliberate creation of money at near-zero interest rates.

The hubris of central bankers was revealed, with an inflationary impulse from printing money. At the same time, these global disinflationary forces started to reverse. Tariffs are back, used as geopolitical and now geo-economic weapons. Globalisation is challenged as the US, and other countries, start to focus on security of supply, with price levels taking a back seat. Power has shifted in labour markets as the populations of the developed countries are no longer growing; in Japan, the population is falling; and in China, the working age population will fall by five hundred million as a result of its one-child policy. The need to re-arm in response to Russia and threats as far away as Iran is heaping pressure on government finances and borrowing. Nearly all wars have been inflationary.

The Board agrees with the Investment Manager that the new super-cycle is one of higher and more variable inflation. The economic challenges feel more like the 1970s redux than anything experienced by most active managers today. We are in a bear market for long-dated bonds as governments struggle to finance themselves and ultimately other asset classes like equities will come under pressure from much higher government bond yields. Policy-makers may try to put off the day of reckoning by intervening in bond markets to keep longer rates lower; and they may yet force banks and even growing pension funds to own domestic government debt. All such interventions are ultimately inflationary. As Jean-Claude Juncker articulated it, most politicians know what they need to do; they just don't know how to get re-elected afterwards.

Karl Sternberg

Chairman

3 June 2026

Investment Manager's Report

Review

Over the year to 31 March 2026, the Company delivered a NAV return of +5.8% and a share price return of +6.4% for the year. This compares with CPI inflation of +3.3%, and a global equity return of +16.6%. All major parts of the portfolio delivered a positive contribution.

Attribution analysis

Return on portfolio	%	%
Cash & treasury-bills	0.4
Credit	0.7
Managed Liquidity Reserve		1.1
Inflation-linked bonds		1.0
Gold	0.5
Infrastructure	0.8
Alternatives	0.3
Property	0.1
Equities	2.3
Risk assets		4.0
Gross return		6.1
NAV accretion from buyback	0.3
Management fee and other costs	(0.6)
Net return		5.8

(1) Alternative Performance Measure ('APM'). Please refer to the 2026 Annual Report for a glossary of terms and definitions and for a reconciliation of the Alternative Performance Measures to the year-end results.

Source: CGAM and Frostrow. All figures are on a total return basis. Contributions calculated using arithmetic methodology.

The Company's financial year began and ended with two significant political and economic shocks. On 2 April 2025, the US President announced sweeping trade tariffs. This was followed by a bewildering array of increases, decreases and exemptions. For the time being, the situation appears to have normalised. Tariffs currently range from 10% to 100%, with the average effective rate for goods entering the US in the low teens. The reaction has been muted with few retaliatory tariffs enacted.

Then, on 27 February 2026 the US and Israel jointly began a war with Iran. At the time of writing a fragile ceasefire is underway and talks are being intermediated by the government of Pakistan.

Both events proved to be a good test of the resilience of the portfolio. From its peak in the middle of February to its trough in April 2025, the MSCI World Index fell by 18% in sterling terms. Over the same period, the Company's NAV fell 2%. The initial fall in the MSCI World Index since the start of the Iran war was only 7%. On this occasion, the NAV of the company fell around 2%.

Markets have rallied since then, despite the inflationary shock of rising oil prices and interruptions in supply, driven by excitement about the potential for AI and the huge investments required in data centres to enable uptake of AI.

It remains unclear how the war will unfold, although the most immediate consequence is elevated inflation. It is therefore necessary that alongside preserving capital during such crises, the Company also grows investors' real wealth by delivering returns in excess of inflation. CGT has outperformed CPI by 1.9% per annum over ten years and 2.5% per annum over 20 years. Under the Manager's tenure, the Company has exceeded inflation in 37 of the last 44 financial years.

High inflation is negative for both bonds and equities and, accordingly, both fell following the outbreak of war. Perhaps more surprising was that gold did not prove to be a haven and fell 17% following the start of the conflict. However, for many months, the behaviour of gold had been unusual, with it trading more like a speculative asset. In 2025, it reached record levels at the same time as equities. Traditionally, gold has been a safe-haven but, during this shock, it did not perform that role. We sold all the Company's gold at a price of $5,105 per ounce in February, although it represented only 1% of the portfolio.

For some time, the Company's most direct form of inflation protection has come from its inflation-linked government bond portfolio. At the end of the year, inflation-linked bonds comprised 46% of the Company's portfolio, with an overall duration of five years. This is allocated across US TIPS (25% of the portfolio) and inflation-linked gilts (21% of the portfolio). While the real yield is broadly similar across both portfolios (1.0% over US CPI for TIPS, and 1.2% over UK CPI 1 ), the Company's portfolio currently favours TIPS, held unhedged. This is on the basis that the US dollar currency exposure helps to protect investors from the impact of devaluation of sterling which may follow from, for example, a continued expansionary fiscal stance.

In both jurisdictions, inflation-linked bond positioning is materially shorter than respective benchmark indices, and emphasises the belly of the curve. This short positioning ensures that the return on the portfolio more closely tracks accruals of realised inflation over market expectations - with some exposure to the 'belly' of the curve (i.e. five to ten years) to ensure that the portfolio benefits from the relative steepness of both yield curves, without creating undue sensitivity to volatility from long-term interest rates.

The Company's exposure to risk assets is predominantly via investment trusts. Our strategy for conventional equity trusts is to buy them on discounts where we believe there is a catalyst for those discounts to close. We have extensive experience in this approach and only rarely get the discounts wrong. What is more uncertain is the performance of the underlying sector and whether the fund manager underperforms, our approach seeks to identify sectors that we like and quality underlying fund managers with robust processes across a wide spread of investments. This increases the likelihood that the performance of our equities will reflect a broadly diversified basket of equities, with additional returns harvested from discount narrowing.

Notable successes in the year, where both the discount narrowed and the underlying performance was strong, include Blackrock Energy & Resource Income Trust (+73%), Monks (+32%), Fidelity Emerging Markets (+61%) and Aberdeen Asia Focus (+27%). Notable underperformers included Smithson Investment Trust (+2%), Finsbury Growth & Income Trust (-16%) and Mobius Investment Trust (-12%). In the case of the underperformers, the underlying discounts on the trusts narrowed materially but that was not sufficient to overcome their poor performance at the NAV level.

The Company's largest equity holding, North Atlantic Smaller Companies, had a disappointing year delivering a return of -4%. This level of performance is not good enough and we are engaging with the Company to improve corporate governance.

The average discount on the investment trust portfolio stands at 16%, an increase over last year, which holds the promise of attractive future returns. The Company's infrastructure holdings delivered a return of +11.4% for the year, outperforming their underlying benchmark. On the back of a sharp rally in the summer, we sold the majority of the Company's renewable infrastructure holdings. This proved prudent, as they have since materially underperformed both the Company's core equity infrastructure holdings and equity markets more broadly.

Property holdings delivered positive, though unexciting returns. Two of the largest positions - PRS REIT and Empiric Student Property - were bid for in the year. In the case of Empiric the consideration was a mix of cash and shares in Unite, the acquiror. Frustratingly, these fell sharply after a profit warning from Unite after the deal was announced but before closing.

2025 did not seem an opportune time to take credit risk as spreads were at near record lows. The company harvested a number of positions that were built following the Truss Crisis and generally reduced duration and spread risk. The return of +6.3%, outperformed the credit market return of +4.7%. High yield bonds also returned +13.9% for the year which was satisfactory though, given the low weighting, the overall contribution was modest.

Outlook

Since 1945, every global inflationary episode has been caused either by war or by an energy price shock. Often, as today, the two coincide. How long the shock will persist is unknowable. At the time of writing the price of Brent for delivery next year is $84 which is about 25% higher than the average over the year before the start of hostilities in the Middle East. This increase masks much greater price rises elsewhere. In the UK since the start of the war, the price of heating oil has doubled and the price of red diesel has increased by 75%. Even if the war proves short-lived, the same may not be true of the inflationary impulse. Damage to production facilities will need to be repaired. Shipowners and insurers may take time to become comfortable sending their vessels through the Strait of Hormuz. Even more pernicious are the second-order inflationary effects. Energy prices feed first into food and shipping costs and from there into core inflation via wage demands.

In 2023 the IMF published a wide-ranging study of inflationary shocks 2 . The key conclusion was that in nearly half of instances they took longer than five years to resolve. If history is a guide inflation will be anything other than transitory.

High energy prices and physical shortages also reduce growth. The combination of lower growth and higher inflation should have a negative impact on both nominal bonds and equities. Nominal bond yields rise as investors anticipate lower real returns and higher short term nominal interest rates. Equities suffer from the triple whammy of lower revenue growth, lower margins and rising discount rates.

The outlook for the UK economy is not good. Growth is slowing. Consumers are reeling from increased energy costs. The government is going to have to find new money for defence, to tackle iniquitous student loans, and to fund higher interest costs. Put together it seems likely that the Chancellor's fiscal headroom will have evaporated. Some or all of higher taxes, a steeper yield curve and weaker sterling will result. The UK political environment is becoming more volatile with the five major parties all polling within 15% of each other. Outflanked by a populist Green Party, Labour is likely to be forced to the left and promise higher spending resulting in either higher borrowing and/or higher taxes.

For these reasons, we maintain a high allocation to inflation-linked bonds which, unlike conventional bonds and equities, we believe will perform well in a stagflationary world. Given our concerns about the outlook for government debt, which places foreseeable upward pressure on long-term yields, duration has been kept relatively short (circa five years). If held to maturity, the Company's TIPS and inflation-linked gilt portfolios should yield around 1.0% per annum over their respective domestic rates of inflation 3 . Despite the recent global inflation shock, market expectations of inflation remain undemanding at the five-year point, further underscoring the value in this portfolio in an increasingly volatile inflationary outlook 4 .

The Company's return profile is very unusual. Bonds typically offer low volatility, the downside of which is that most of the return comes as income. Equities offer capital gains, which means that returns can be highly volatile. The Company's portfolio is constructed to compound investors' capital with low tax drag, low volatility and high levels of inflation protection. We hope our shareholders value this approach. As investors ourselves, we do.

Peter SpillerAlastair LaingChris Clothier

CG Asset Management Limited

3 June 2026

(1) Calculated by applying a 75bp RPI-CPI wedge for four of the five years, noting that RPI indexation will cease in 2030.

(2) Anil Ari, Carlos Mulas-Granados, Victor Mylonas, Lev Ratnovski, and Wei Zhao. "One Hundred Inflation Shocks: Seven Stylized Facts", IMF Working Papers 2023, 190 (2023).

(3) The real yield on the Company's TIPS portfolio was 1.0% over US CPI at 31 March 2026. The real yield on the Company's inflation-linked gilt portfolio was 0.6% over UK RPI at the same date. Adjusting for the differential between RPI and CPI over the period (75 basis points to 2030) gives an adjusted real yield of approximately 1.2% over UK CPI.

(4) At year end, the five-year breakeven on TIPS was 2.6% (US CPI). The five year breakeven on inflation-linked gilts was 3.9% (UK RPI, or 3.3% over UK CPI).

Strategic Review

Business model and investment strategy

The Company, as an investment trust, is a UK closed-ended public limited company which invests in a diversified portfolio of assets meeting the investment trust tax conditions. Investment trusts, such as the Company, are long-term investment vehicles and are typically externally managed and overseen by experienced independent non-executive Directors.

The Company has no employees, and the Board outsources its entire operational infrastructure to third party organisations. In particular, the Board appoints and oversees CG Asset Management Limited ('CGAM'), as independent Investment Manager, to manage the investment portfolio. CGAM also acts as the Company's Alternative Investment Fund Manager. The Board sets the Company's strategy, decides the appropriate financial policies to manage the assets of the Company, ensures compliance with tax, legal and regulatory requirements and reports regularly to shareholders on the Company's performance.

The Company seeks to preserve shareholders' real wealth and deliver absolute total returns through the construction of a multi-asset portfolio. Portfolio construction is the key tool used to mitigate capital loss in any given year. The Investment Manager allocates across asset classes based on an assessment of capital markets and macro-economic risks, with the aim of avoiding capital loss. In addition, a portion of the portfolio is invested into closed-ended investment companies with the aim of generating risk adjusted returns that are superior to those available in more liquid equity markets.

One of the unique characteristics of the Company is the implementation of the Investment Manager's macro views on risk assets through the Company's holdings in investment companies. Investment companies provide an opportunity to benefit from an additional return from discounts narrowing, alongside the underlying asset performance. There are also risks from discounts widening. The macro impact of rising interest rates and inflation particularly affects investment companies investing in illiquid assets, such as infrastructure, property, private equity and credit. In addition, the investment companies sector has a UK equity bias, which means the impact of a non-UK equity market rally can be difficult to capture. The Investment Manager believes the investment companies market continues to be an appropriate way to allocate a significant portion of the Company's risk assets and that the current market offers a number of compelling investment opportunities.

Objective

The Company's objective is to preserve and, over time, to grow shareholders' real wealth.

Investment policy

As preserving shareholders' real wealth is core to the investment objective, greater emphasis is placed on avoiding loss than maximising returns. Achieving the investment objective implies returns at least in line with inflation over the short term and significantly ahead of inflation over the long term.

The Company does not have a formal benchmark but reports against the UK Consumer Price Index ('CPI') (a measure of inflation).

The Investment Manager has the authority to invest in equities, bonds, commodities and cash. Equity investments are typically in listed collective investment vehicles, including investment companies, ETFs, investment holding companies and property companies.

Asset allocation is flexible and responds to changes in asset values and to the macro-economic environment. A broad mix of assets will be maintained, with a maximum equity exposure of 80% and a minimum of 20%. The Investment Manager has the authority to invest in any geographical region and has no set limits on industry sector or country exposure.

The Company will not invest more than 15% of its investment portfolio in any single security. The Investment Manager is not permitted to invest in derivatives (such as options, swaps or forward contracts) without prior Board approval. Investments in other funds managed by the Investment Manager also requires Board approval.

The Company has the authority to borrow up to 20% of net assets, subject to prior Board approval.

Promoting the success of the Company

The Board is required to describe to the Company's shareholders how the Directors have discharged their duties and responsibilities over the course of the financial period under section 172 of the Companies Act 2006 (the 'Section 172 Statement'). This requires an explanation of how the Directors have promoted the success of the Company for the benefit of its members as a whole, taking into account the likely long-term consequences of decisions, the need to foster relationships with all stakeholders in the Company and the impact of the Company's operations on the environment.

Role of the Board

The Board comprises five independent non-executive Directors who have a broad range of skills and experience across all major functions that affect the Company. The Board has responsibility for decisions relating to the Company's investment objective and policy, gearing, corporate governance and strategy, and for monitoring the performance of the Company's various service providers. The Board's philosophy is that the Company should foster a culture where all parties are treated fairly and with respect and the Board recognises the importance of keeping the interests of the Company's stakeholders, and of acting fairly between them, front of mind in its key decision making.

The Board has identified the following as its key stakeholders:

How the Board engages with stakeholders

The Board considers its stakeholders at Board meetings and receives feedback on the Investment Manager's interactions with them.

Stakeholder	How we engage
Shareholders	Shareholders are key stakeholders and the Board places great importance on communication with them, both through written communication from the Company and the Investment Manager. The Board welcomes all shareholders' views and aims to act fairly between shareholders. The Company's shareholder register is retail investor orientated both directly and through wealth managers and private client brokers representing private investors. As a constituent of the FTSE-250 Index, the Company also has index tracking investors. The Investment Manager and Company's broker regularly meet with current and prospective shareholders to discuss the Company, its performance and outlook. The Chairman is available to talk directly with shareholders. Shareholder feedback is discussed by the Directors at Board meetings. The Board is kept appraised of changes to the share register and the Investment Manager is in contact with investor platforms to identify how best to communicate with the direct retail investor community. The operation of the DCP provides secondary market liquidity for investors and in providing stability of pricing at close to the prevailing net asset value. Regular updates are provided to shareholders through the Annual Report, Half Yearly Report, announcements, including daily net asset value announcements, and the Company's website. The Investment Manager prepares monthly factsheets and quarterly reports and maintains a website which includes current information for investors. The Company's Annual General Meeting typically provides a forum, both formal and informal, for shareholders to meet and discuss issues with the Directors and Investment Manager. The Board encourages as many shareholders as possible to attend the Annual General Meeting and to provide feedback on the Company. The Company Secretary also deals with regular shareholder queries on behalf of the Board. The Board encourages shareholders to vote on all Company business, which includes specific exercises to obtain votes for general meetings to maintain issuance and buyback authorities should they become exhausted between annual general meetings.
Investment Manager	The Investment Manager's Report above details the key investment decisions taken during the year. The Investment Manager has continued to manage the Company's assets in accordance with the Company's investment policy, with the oversight of the Board. The Investment Manager is represented at all formal Board meetings. The Board regularly reviews the Company's performance against the investment objective and the application of its investment policy and restrictions. The Board undertakes an annual strategy review meeting to ensure that the Company is positioned well for the future delivery of its investment objective. The Board receives presentations from the Investment Manager at every Board meeting to help it to exercise effective oversight of the Investment Manager and the Company's strategy in operation. The Board, through the Management Engagement Committee, formally reviews the performance of the Investment Manager at least annually. Risks and emerging risks are considered at each Board meeting.
Investee companies	The Board monitors the activities of investee companies through its delegation to the Investment Manager. The Investment Manager has discretionary powers to exercise voting rights on all resolutions proposed by the investee companies. The Board monitors investments made and divested and can query the rationale for exposures taken and the Investment Manager's engagement with investee companies.
Communities and the environment	The Board supports the Investment Manager on Environmental, Social and Governance ('ESG') matters in line with good stewardship practices, and an approach agreed with the Board. The Board is also acutely aware of the importance of providing an investment product which meets the needs of its investors in both protecting and growing value over time. The Board takes appropriate account of broader ESG concerns and the need for the Company to act as a good 'corporate citizen'. An investment approach that meets the needs of investors provides a service valuable to the communities in which the Company operates, not least as a means for financial planning and saving. See the ESG/engagement section in the 2026 Annual Report.
Other service providers	The Board seeks to maintain constructive relationships with all of the Company's suppliers either directly or through the Investment Manager and/or Company Secretary with regular communications and meetings. The Management Engagement Committee conducts an annual review of the performance and terms and conditions of engagement of the Company's main service providers to ensure they are performing in line with Board expectations and providing value for money.

Specific examples of stakeholder consideration during the year

The Chairman and his fellow Directors always make themselves available to engage with shareholders as required. The Investment Manager also holds an annual Investor Day, which was held on 2 December in 2025. The Investor Day, which is always well attended, is open to all shareholders and potential investors.

Annual income distribution / corporation tax savings

The amount the Company receives in dividends and interest is the outcome of the application of its investment policy, and the amounts distributed to shareholders are designed to satisfy the Company's annual income distribution test to ensure that it maintains its investment trust status.

In relation to the annual income distribution to shareholders for the Company's year ended 31 March 2025, which was paid in July 2025, the Board decided to take advantage of the UK interest streaming rules, which allow approved investment trusts which have income from interest bearing assets to treat all or part of a distribution as an interest distribution, rather than a conventional dividend. By doing this, the Company received a corresponding deduction in its corporation tax liability, which is of benefit to all shareholders. The receipt of income has fallen since last year, nevertheless the Company is again designating a proportion of the total distribution as an interest distribution to again result in a deduction in corporation tax liability.

Revised terminology

To achieve the Company's objective, the Investment Manager follows a flexible multi-asset strategy using a diversified portfolio of equities, Inflation-Linked bonds, and other assets to deliver consistent, risk-adjusted returns.

Long-term shareholders will be familiar with the terms we have used for many years to describe the various assets available to the team - namely: Dry Powder, Index-Linked Bonds and Risk Assets. Whilst there has not been any change to the investment strategy, the Board worked with the Investment Manager over the year to find new labels which better reflect and explain their role in achieving the investment objective. We hope this new terminology, as detailed below, is helpful:

Managed Liquidity Reserve(formerly Dry Powder) - Cash and short-dated bonds that provide the Investment Manager with liquidity and optionality in uncertain markets.
Inflation-Linked Bonds(formerly Index-Linked Bonds) - These government bonds protect against inflation and are a key component of the capital preservation strategy.
Risk Assets(label unchanged) - Chiefly comprising listed investment trusts, ETFs, and property companies offering long-term growth potential.

Share split

As a consequence of the Company's strong performance since launch, the share price has risen sharply and stood at 4,985.0p (or £49.85) as at 31 March 2026. The Board believes that the high share price may be unhelpful for those shareholders investing smaller amounts, monthly savers and dividend re-investment programmes and therefore it took the decision over the year to propose a sub-division of the Company's shares on a ten for one basis, known as a 'share split'. If approved by shareholders at the forthcoming Annual General Meeting, each shareholder will hold ten new ordinary shares for each share held immediately prior to the share split.

It is hoped that sub-dividing the Company's ordinary shares will make buying the shares more attractive to new investors and increase market liquidity. More details are set out in the Chairman's Statement above and in the 2026 Annual Report.

Discount control policy ('DCP')

The operation of the DCP is a fundamental part of the Company's operating structure. It offers liquidity in the secondary market close to the prevailing net asset value and the removal of pricing volatility around net asset value either when selling or buying shares in the Company. Ensuring that the DCP continues to operate effectively requires constant monitoring, maintaining the requisite authorities, and having sufficient liquidity in the portfolio. To ensure the continued operation of the DCP, the Board called and held a General Meeting in 2026 to renew the Company's buyback authority, since the existing authority could have been fully exhausted by the time of the next opportunity to renew (the forthcoming Annual General Meeting). The renewal was supported by shareholders and hence the Company has been able to continue the operation of the DCP. Since the renewed authority will expire at the conclusion of the Company's forthcoming Annual General Meeting, and in line with usual practice, the Company will ask shareholders to approve the repurchase of up to 14.99% of its capital at a discount to estimated NAV at the forthcoming Annual General Meeting.

Ongoing

Overall the Board is always mindful of its responsibilities to the stakeholders of the Company and the impact of key decisions on the stakeholders, and this has been part of both scheduled Board meetings and discussions between these meetings as required.

Management of the portfolio

The Investment Manager's Report above details the key investment decisions taken during the year ended 31 March 2026. The overall diversified shape and structure of the investment portfolio is an important factor in delivering the Company's stated investment objective.

As explained in the 2026 Annual Report, during the year, the Management Engagement Committee agreed that the continuing appointment of the Investment Manager was in the best interests of shareholders.

Key performance indicators ('KPIs')

The Board has chosen KPI indices and ratios for the purpose of assessing and reporting investment performance. The KPIs have been chosen to allow the Board to monitor the performance of the Investment Manager against CPI over the short-term (three years) and over the longer-term (ten years). Further information on these performance measures can be found on in the 2026 Annual Report.

Tables and graphs showing the performance of the Company's NAV per share compared with CPI are shown on in the 2026 Annual Report.

In addition, the Board monitors the following KPIs:

Share price discount/premium to NAV per share, an important measure of demand for the Company's shares and a key indicator of the need for shares to be bought back or issued. At the start of the year under review the discount to NAV was 2.8%, compared with a discount of 2.3% at 31 March 2026, with an average discount of 2.0% for the year ended 31 March 2026; and
Ongoing charges ratio ('OCR'), calculated using the methodology recommended by the Association of Investment Companies which enables the Board to measure and monitor the control of costs. This was 0.59% for the year to 31 March 2026 (2025: 0.56%).

Both share price discount/premium to NAV per share and OCR are Alternative Performance Measures ('APMs'). Please refer to the 2026 Annual Report for a glossary of terms and definitions and for a reconciliation of the APMs to the year-end results.

Principal and emerging risks

The Company has been subject to significant economic headwinds, such as substantial market movements, inflationary pressures and increasing interest rates. This makes preserving shareholders' real wealth, far less growing it, challenging. The central aims remain to preserve value in the Company's portfolio and liquidity in the Company's shares.

The Directors aim to ensure that the Company maintains its investment strategy, has operational resilience, meets its regulatory requirements as an investment trust and navigates the financial and economic circumstances.

Through the remit of the Audit and Risk Committee, Directors have carried out a robust assessment of the principal and emerging risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. The principal risks and uncertainties facing the Company, together with the mitigating actions the Board takes, are set out below.

This year the Board has identified the emergence of Artificial Intelligence ('AI') as a key emerging risk. While AI presents substantial opportunities and can be a force for good, it also introduces growing risks for businesses and society. Advances in computing power have made AI a powerful tool with far-reaching applications, including the potential to disrupt - and in some cases harm - existing models. AI adoption may significantly reshape business processes and entire companies, increasing uncertainty in corporate valuations. In this environment, markets are likely to identify real or perceived winners and losers from AI, which could heighten share price volatility in investee companies. It may also influence how retail investors approach investing, including increased thematic positioning and momentum-driven flows tied to AI narratives.

Risk

Mitigation

Investment strategy and performance

The Board is responsible for setting the investment strategy of the Company and monitoring investment performance. Inappropriate strategy and/or poor investment performance may have an adverse effect on shareholder returns.

Risk remains relatively unchanged

The Company's strategy is formally reviewed by the Board at least annually, considering investment performance, shareholder views, developments in the marketplace and the structure of the Company.

Investment performance is reviewed by the Board on a regular basis against CPI. The composition of the portfolio is provided at each Board meeting and allows the monitoring of the spread of investments and associated investment risks.

The Investment Manager is formally appraised at least annually by the Management Engagement Committee.

Geopolitical

There are a growing number of geopolitical conflicts which pose an increased risk to market stability. As of 2026, the global security situation is unusually tense, with a high number of simultaneous conflicts. Analysts note that the number of armed conflicts worldwide is at its highest level since World War II, with a mix of full-scale wars, regional confrontations, insurgencies and a broader resurgence of economic nationalism. These factors, along with uncertainty surrounding interest rate and inflation, could weigh on market stability and investment opportunities and may adversely affect the Company's performance.

Increased overall risk due to inflation, higher interest rates, supply issues and ongoing and increasing global political tensions and the impact of heightened interest rates.

This risk is managed to some extent by diversification of investments and by regular communication with the Manager on matters of investment strategy and portfolio construction which will directly or indirectly include an assessment of these risks. The Board receives regular reports from the Manager regarding market outlook and considers thematic and factor risks, together with stock selection on a regular basis and has set investment restrictions and guidelines which are monitored and reported on by the Manager. The Board can, with shareholder approval, look to amend the investment policy and objectives of the Company to gain exposure to or mitigate the risks arising from geopolitical instability.

Premium/discount level

The Company's share price could be impacted by a range of factors causing it to be higher than (at a premium to) or lower than (at a discount to) the underlying NAV per share.

Excessive demand for, or supply of, shares can create liquidity issues, restricting the ability of investors to buy and sell shares in the secondary market.

Fluctuations in the share price can cause volatility which may not be reflective of the underlying investment portfolio.

Risk remains relatively unchanged

The Company operates a discount/premium control policy ('DCP'), under which it aims to purchase or issue shares to ensure, in normal market conditions, that the shares trade close to their underlying NAV per share. The DCP increases liquidity and reduces volatility by preventing the build-up of excessive demand and/or supply for the Company's shares which, the Board believes, is in the best interests of shareholders. The DCP continues to be reviewed to ensure liquidity for issuance and buyback.

The levels of issuance/buyback of shares are reported to the Board on an ongoing basis and at each Board meeting the Board considers the Investment Manager's ability to invest new proceeds (in the case of issuance) and maintain sufficient liquidity (in the case of buybacks) to meet the demands of the DCP. Since the inception of the DCP, the Company has issued and bought back a substantial number of shares, with the more recent trend being buying back.

Operational

The Company is reliant on third-party service providers and key teams at such service providers. Failure of the internal control systems of these third parties could result in inaccurate information being reported or risk to the Company's assets.

Risk reduced since it has been more than a year since two new key service providers have been in place and there has been a seamless transition.

The Audit and Risk Committee formally reviews each service provider at least annually, considering their reports on internal controls, information security, and the resources available to them. The Management Engagement Committee reviews the service levels and how the service providers have performed.

The operational requirements of the Company from its service providers are subject to rigorous testing including the use of office/home working and online communication. Additionally, the Investment Manager's and Administrator's technology environments are continually maintained and subject to regular testing, vulnerability scans and patch management. As part of this review the Board considers the measures taken by each supplier to mitigate its cybersecurity risk.

Further details of the Company's internal control and risk management system is provided in the 2026 Annual Report.

Regulatory and governance

The Company operates in a regulatory environment. Failure to comply with section 1158 of the Corporation Tax Act 2010 could result in the Company losing investment trust status and being subject to tax on capital gains. Failure to comply with other regulations could result in financial penalties or the suspension of the Company's listing on the London Stock Exchange.

Risk remains relatively unchanged

Compliance with relevant regulations is monitored on an ongoing basis by the Company Secretary and Investment Manager who report regularly to the Board. The Board also takes into account increasing governance requirements and complies with them wherever practical or explains why there is any divergence.

The Board monitors changes in the regulatory environment and receives regulatory updates from the Investment Manager, Company Secretary, lawyers and auditor as relevant.

The Board is appraised of corporate governance issues and changes and as far as practical the Company complies with governance guidance or explains where it does not and meets the guidance of the AIC Corporate Governance Code (refer to the 2026 Annual Report).

Financial and economic

The Company's investments are impacted by financial and economic factors including market prices, interest rates, foreign exchange rates and credit which could cause losses to the investment portfolio.

Risk has been heightened by geopolitical events

The Board regularly reviews and monitors the management of market risk, interest rate risk, foreign currency risk and credit risk. These are explained in detail in Note 15 to the financial statements below. Inflation, and geopolitical risks, are considered a component of market risk, with the impact of higher inflation and interest rates taken into account.

The Board has authorised the purchase of hedged Japanese and US Treasury Bills, which are hedged back to sterling to remove some of the currency risk.

The Company has sufficient cash resources and liquidity in its portfolio to meet its operating requirements, including the operation of DCP. In common with most commercial operations, there are always exogenous risks and consequences, which are difficult to predict and plan for in advance. The Company does what it can to address these risks when they emerge, not least operationally and in trying to meet its investment objective.

Share buybacks

During the year the Company bought back 2,272,529 shares at an average price of 4,893.01p per share and for an aggregate consideration of £111.2 million (2025: 4,067,965 shares at an average price of 4,746.7p per share and for an aggregate consideration of £194.5 million). Shares are repurchased at a discount to the NAV thereby covering the costs of the DCP and associated portfolio transaction costs and providing some accretion to the NAV per share. All shares were bought back in accordance with the DCP, which is detailed further in the Chairman's Statement above. Since the year-end, the Company has repurchased a further 51,386 shares.

Going concern

The Audit and Risk Committee has undertaken an assessment of whether the Company is a going concern. The Company's investment objective and business activities, together with the main factors likely to affect its future development and performance, including prevailing macro-economic conditions, are described above.

The financial position of the Company, including its cash flows and liquidity positions, is set out in detail in the financial statements. Note 15 to the financial statements describes the Company's processes for managing its capital, its financial risk management objectives, details of its financial instruments and its exposures to market price, interest rates, foreign currency, credit and liquidity risk. The Board works closely with the Investment Manager and the Company Secretary to ensure that the Company's operations are resilient, and its portfolio robust enough to meet challenges and opportunities.

The Directors also take into account the liquidity of the portfolio and scenario stress testing when considering the viability of the Company and its ability to meet liabilities as they fall due and to fulfil the ongoing operation of the DCP. The stress tests examined downside scenarios which combined a substantial fall (up to 25%) in stock markets, and therefore asset values, with a considerable loss of income. The impact of such severe scenarios are then mitigated by a significant reduction in management fees and most expenses. The results of the stress testing indicated that there was sufficient portfolio liquidity and net income for the Company to continue in operation and meet its liabilities as they fall due for a period of at least 12 months from the date of approval of these financial statements.

The stress tests also examined the operation of the DCP in the event of the Company having to buy back a substantial number of shares.

The Directors believe that the Company is well placed to manage its business risks successfully and consider that the Company currently has adequate resources, an appropriate financial structure and suitable management arrangements in place to continue in operational existence. For this reason, they continue to adopt the going concern basis in preparing the annual report and financial statements. The Directors do not consider that there are any material uncertainties to the Company's ability to continue to adopt this approach over a period of at least 12 months from the date of approval of these financial statements.

Viability statement

The Board has carried out a robust assessment of the principal risks facing the Company including those that would threaten its business model, future performance, solvency or liquidity. The Board has drawn up a matrix of the risks facing the Company and has put in place appropriate processes and controls in order to mitigate these risks as far as practicable. The principal risks which have been identified, and the steps taken by the Board to manage these, are detailed above.

The Company is a long-term investor and the Board believes it is appropriate to assess the Company's viability over a five-year period in recognition of the balance between the Investment Manager's long-term horizon and also what the Directors believe to be investors' horizons, taking account of the Company's current position and the potential impact of the principal risks and uncertainties, the operation of the DCP and the circumstances of investment companies more generally.

As mentioned under the going concern paragraph above, the Directors also take into account the liquidity of the portfolio and scenario stress testing when considering the viability of the Company. The results of the stress testing indicated there was sufficient portfolio liquidity and net income for the Company to continue in operation for at least three years.

The Directors do not expect there to be any significant change in the principal risks that have been identified and the adequacy of the controls in place. Also, the Directors do not envisage any change in the Company's strategy or its objective, or any events, that would prevent the Company from continuing to operate over that period as the Company's assets are liquid, its commitments are limited, and the Company intends to continue to operate as an investment trust. The Directors believe that only a dramatic downturn in financial markets, deteriorating economic circumstances, or other crises besetting global markets, could have an impact on this assessment.

Based on this assessment, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the next five years.

The Board's Strategic Report has been approved by the Board and signed on its behalf by:

Karl Sternberg

Chairman

3 June 2026

Directors' Responsibilities Statement

in Respect of the Annual Report and the Financial Statements

The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', and applicable law) and applicable law and regulation.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', and applicable law). 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 net return of the Company for that year. In preparing these financial statements, the Directors are required to:

select suitable accounting policies and then apply them consistently;
state whether applicable UK Accounting Standards, comprising FRS 102, have been followed, subject to any material departures disclosed and explained in the financial statements;
make judgements and accounting estimates that are reasonable and prudent;
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 directors' remuneration report which comply with the requirements of the Companies Act 2006.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006.

The Directors are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for ensuring that 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 performance, business model and strategy.

The Annual Report and Financial Statements are published on the Company's website which is maintained by the Investment Manager. The Investment Manager is responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

Declaration

Each of the Directors, whose names and functions are listed in the Governance Report, confirms that, to the best of his or her knowledge:

the Company's Financial Statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102, and applicable law), give a true and fair view of the assets, liabilities, financial position and net return of the Company; and
the Board's 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 it faces.

For and on behalf of the Board

Karl Sternberg

Chairman

3 June 2026

Income Statement

for the year ended 31 March 2026

		Year ended 31 March 2026			Year ended 31 March 2025
	Note	Revenue	Capital	Total	Revenue	Capital	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000
Net gains on investments	8	-	16,995	16,995	-	13,059	13,059
Net gains on currency swap contracts		-	15,541	15,541	-	1,354	1,354
Net currency gains		-	4	4	-	51	51
Investment income	2	17,682	-	17,682	26,694	-	26,694
Other income	2	95	-	95	339	-	339
Gross return		17,777	32,540	50,317	27,033	14,464	41,497
Investment management fee	3	(3,447)	-	(3,447)	(3,950)	-	(3,950)
Other expenses	4	(1,482)	-	(1,482)	(1,513)	-	(1,513)
Net return before tax		12,848	32,540	45,388	21,570	14,464	36,034
Tax	5	-	-	-	(43)	-	(43)
Net return attributable to
equity shareholders		12,848	32,540	45,388	21,527	14,464	35,991
Net return per Ordinary share	7	76.90p	194.80p	271.70p	107.54p	72.26p	179.85p

The total column of this statement represents the income statement of the Company. The revenue return and capital return columns are supplementary to this and are prepared under guidance issued by the Association of Investment Companies.

All revenue and capital items in the above statement derive from continuing operations.

There are no gains or losses other than those recognised in the income statement and therefore no statement of comprehensive income has been presented.

The notes below form an integral part of these financial statements.

Statement of Changes in Equity

for the year ended 31 March 2026

	Note	Called-up share capital £'000	Capital redemption reserve £'000	Special reserve(1) £'000	Realised capital reserve(1) £'000	Unrealised capital reserve(1) £'000	Revenue reserve(1) £'000	Totalequity share- holders' funds £'000
Opening balance at 1 April 2024		6,645	16	1,037,403	7,670	(9,215)	17,654	1,060,173
Net return for the year		-	-	-	21,205	(6,741)	21,527	35,991
Shares bought back into treasury	11	-	-	(194,541)	-	-	-	(194,541)
Dividends paid	6	-	-	-	-	-	(16,598)	(16,598)
Closing balance at 31 March 2025		6,645	16	842,862	28,875	(15,956)	22,583	885,025
Opening balance at 1 April 2025		6,645	16	842,862	28,875	(15,956)	22,583	885,025
Net return for the year		-	-	-	13,354	19,186	12,848	45,388
Shares bought back into treasury	11	-	-	(111,195)	-	-	-	(111,195)
Dividends paid	6	-	-	-	-	-	(17,907)	(17,907)
Closing balance at 31 March 2026		6,645	16	731,667	42,229	3,230	17,524	801,311

(1) These reserves are available for distribution (except for the unrealised gains on Level 3 investments detailed in Note 15 below).

The notes below form an integral part of these financial statements.

Statement of Financial Position

as at 31 March 2026

			Restated(1)
		31 March	31 March
		2026	2025
	Note	£'000	£'000
Fixed assets
Investments held at fair value through profit or loss	8	776,813	860,407
Current assets
Debtors	9	3,149	5,448
Investments - derivative financial instruments (1)	15	16,439	4,455
Cash at bank		7,376	42,859
		26,964	52,762
Creditors: amounts falling due within one year
Investments - derivative financial instruments (1)	15	-	(1,524)
Other creditors	10	(2,466)	(26,620)
Net current assets		24,498	24,618
Total assets less current liabilities		801,311	885,025
Capital and reserves
Called-up share capital	11	6,645	6,645
Capital redemption reserve		16	16
Special reserve	12	731,667	842,862
Capital reserve		45,459	12,919
Revenue reserve		17,524	22,583
Total equity shareholders' funds		801,311	885,025
Net asset value per Ordinary share	13	5,104.5p	4,924.8p

The financial statements were approved by the Board on 3 June 2026 and signed on its behalf by:

Karl Sternberg

Chairman

The notes below form an integral part of these financial statements.

Cash Flow Statement

for the year ended 31 March 2026

		Year ended	Year ended
		31 March	31 March
		2026	2025
	Note	£'000	£'000
Net cash inflow from operating activities	14	13,711	10,689
Payments to acquire investments		(744,867)	(1,072,259)
Receipts from sale of investments		823,116	1,307,502
Settlement on currency swap contracts		2,033	(1,577)
Net cash inflow from investing activities		80,282	233,666
Equity dividends paid	6	(17,907)	(16,598)
Repurchase of Ordinary shares		(111,573)	(196,592)
Net cash outflow from financing activities		(129,480)	(213,190)
(Decrease)/increase in cash and cash equivalents		(35,483)	31,216
Cash and cash equivalents at start of year		42,859	11,643
Gains on currency translations		4	51
Cash and cash equivalents at end of year		7,376	42,859

The notes below form an integral part of these financial statements.

Notes to the Financial Statements

1 Significant accounting policies

a) Basis of accounting

Capital Gearing Trust P.l.c. is a public company limited by shares, incorporated and domiciled in Northern Ireland and carries on business as an HMRC approved investment trust.

The accounts are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice (Accounting Standards 'UK GAAP') including Financial Reporting Standard (FRS) 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' (the 'SORP') issued by the Association of Investment Companies ('AIC') in 2022. All of the Company's operations are of a continuing nature.

The accounts have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation of investments held at fair value through profit or loss. The Directors carried out a robust assessment, taking into account the liquidity of the portfolio, forecasts and obligations under the DCP, and determined that the Company has adequate resources to continue in operational existence for the foreseeable future and has the ability to meet its financial obligations as they fall due for a period of at least twelve months from the date of approval of this Annual Report.

The principal accounting policies are set out below. These policies have been applied consistently throughout the current year and prior period.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

As at 31 March 2026, the Company's holdings in unquoted investments of £321,000 (2025: £563,000) are considered immaterial. Consequently, the Directors do not consider there to be any significant accounting estimates or judgments applied that have a significant risk of resulting in a material adjustment to the carrying amount of assets and liabilities within the next financial year.

b) Valuation of investments

The Company has elected to adopt Sections 11 and 12 of FRS 102 in respect of investments and other financial instruments. The Company's business is investing in financial assets with a view to profiting from their total return in the form of income and capital growth. This portfolio of financial assets is managed and its performance evaluated on a fair value basis in accordance with a documented investment strategy and information is provided internally on that basis to the Board. Accordingly, upon initial recognition the investments are designated by the Company as "held at fair value through profit or loss". Investments are included initially at fair value which is taken to be their cost, including expenses incidental to purchase. Subsequently the investments are valued at fair value, which are quoted bid prices for investments traded in active markets. Where trading in the securities of an investee company is suspended, the investment is valued at the Board's estimate of its fair value following a detailed review and appropriate challenge of the valuations proposed by the Investment Manager. The Investment Manager applies techniques consistent with the International Private Equity and Venture Capital Valuation Guidelines 2022 ('IPEV') (as detailed in Note 15). The investments are valued according to a three monthly cycle of measurement dates, or where there is an indication of a change in fair value as defined in the IPEV guidelines.

All purchases and sales are accounted for on a trade date basis.

c) Accounting for reserves

Gains and losses on sales of investments and any other capital charges are included in the Income Statement and dealt with in the capital reserve. Increases and decreases in the valuation of investments held at the year-end and foreign exchange gains and losses on cash balances held at the year-end are also included in the Income Statement and dealt with in the capital reserve. The cost of repurchasing the Company's own shares for cancellation including the related stamp duty and transaction costs is charged to the distributable element of the capital reserve. The costs relating to the issue of new Ordinary shares are charged to the share premium account.

d) Dividends

In accordance with FRS 102 the final dividend is included in the financial statements in the year that it is approved by shareholders.

e) Income

Dividends receivable on listed equity shares are recognised on the ex-dividend date as a revenue return, and the return on zero dividend preference shares is recognised as a capital return.

Dividends receivable on equity shares where no ex-dividend date is quoted are recognised when the Company's right to receive payment is established.

Special dividends receivable are taken to capital where relevant circumstances indicate that the dividends are capital in nature. Otherwise they are taken to revenue.

Income from fixed-interest securities is recognised as revenue on an effective interest rate basis so as to reflect their effective yield.

Income from securities where the return is linked to an inflation index is accrued as earned and is included in the income column of the Income Statement. In accordance with the Company's commercial objective and as permitted by the AIC SORP, the movement in capital value is recognised in the capital column of the Income Statement. The amount recognised as a capital return on inflation-linked securities in the year is disclosed in Note 8 - Investments held at fair value through profit or loss.

f) Expenses

All expenses are charged to revenue and include, where applicable, value added tax ('VAT'). All expenses are accounted for on an accruals basis.

g) Taxation policy

Current tax payable is based on the taxable profit for the year. Deferred taxation is measured based on timing differences, calculated at the rate at which it is anticipated the timing differences will reverse. Owing to the Company's status as an investment trust, and the intention to continue to meet the conditions required to obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation of investments.

h) Other debtors and creditors

Other debtors and creditors do not carry any interest, are short-term in nature and initially recognised at fair value and then held at amortised cost, with debtors reduced by appropriate allowances for estimated irrecoverable amounts.

Cash at bank and in hand may comprise cash and demand deposits which are readily convertible to a known amount of cash and are subject to insignificant risk of changes in value.

i) Foreign currency

The results and financial position of the Company are expressed in pounds sterling, which is the functional and presentational currency of the Company. The Directors, having regard to the currency of the Company's share capital and the predominant currency in which the Company operates, have determined the functional currency to be sterling.

Transactions denominated in foreign currencies are recorded in the functional currency at actual exchange rates as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the year-end are reported at the rates of exchange prevailing at the year-end.

j) Reserves

The following are accounted for in the capital reserve:

gains and losses on the realisation of investments;
increases and decreases in the valuation of investments held at the year-end;
realised foreign currency differences of a capital nature; and
unrealised foreign currency differences of a capital nature.

Other reserves:

The share premium account includes the premium above nominal value from proceeds on issue of any equity share capital comprising Ordinary shares of 25p each and is not distributable.
The revenue reserve reflects all the income and costs which are recognised in the revenue column of the income statement and is distributable.
The special reserve results from the shareholder and court approved cancellation of the share premium account, is distributable and will be applied for share buy backs.
The capital redemption reserve arises from the buy back and cancellation of shares and is not distributable.

k) Repurchases of shares into treasury and subsequent re-issue

The proceeds from issuing Ordinary shares less issue costs are taken to equity and the costs of repurchasing Ordinary shares, including related stamp duty and transaction costs, are taken directly to equity and reported through the Statement of Changes in Equity, with the cost of repurchase being charged to a distributable reserve. Share issues and repurchase transactions are accounted for on a trade-date basis. The nominal value of Ordinary share capital repurchased and cancelled is transferred out of called-up share capital and into the capital redemption reserve, in accordance with section 733 of the Companies Act 2006.

Where shares are repurchased and held in treasury, the transfer to the capital redemption reserve is made if and when such shares are subsequently cancelled.

The sales proceeds of treasury shares re-issued are treated as a realised profit up to the amount of the purchase price of those shares and is transferred to capital reserves. The excess of the sales proceeds over the purchase price is transferred to 'share premium'.

l) Derivative financial instruments

Derivative instruments are prohibited for the purpose of investment under the Company's Investment Policy, but with the Board's prior approval, can be used to hedge certain market risk exposures such as foreign currency risk.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in the Income Statement and entirely recognised as capital, as the sole purpose of the derivative contracts is to protect the currency fluctuations on the underlying investments.

2 Investment income

	2026	2025
	£'000	£'000
Income from Investments:
Income from overseas equity and non-equity investments	4,271	6,531
Income from UK equity and non-equity investments	3,729	6,200
Interest from inflation-linked overseas bonds	3,389	4,759
Interest from conventional UK bonds	2,730	5,423
Interest from inflation-linked UK bonds	2,214	2,688
Interest from conventional overseas bonds	1,349	1,093
Total income from investments	17,682	26,694

	2026	2025
	£'000	£'000
Total income comprises:
Interest from bonds	9,682	13,963
Dividends	6,832	11,266
Property income and interest distributions	1,168	1,465
Deposit interest	95	339
	17,777	27,033

	2026	2025
	£'000	£'000
Income from investments comprises:
UK	8,673	14,311
Overseas	9,009	12,383
	17,682	26,694

3 Investment management fee

	2026	2025
	£'000	£'000
Investment management fee	3,447	3,950

The Company's Investment Manager CG Asset Management Limited received an annual management fee equal to 0.60% of the net assets of the Company up to £120m, 0.45% on net assets above £120m to £500m and 0.30% thereafter (2025: the same basis). At 31 March 2026 £184,000 (31 March 2025: £307,000) was payable. The terms of the investment management agreement are detailed in the 2026 Annual Report.

4 Other expenses

	2026	2025
	£'000	£'000
Company secretarial and administration services	506	571
Directors' remuneration (refer to Directors' Remuneration Report)	214	197
Depositary fees	83	96
Stock Exchange and FCA fees	105	110
Custody fees	59	65
Registrar fees	50	48
Fees payable to the Company's auditor for the audit of Company financial statements (1)	52	82
General expenses	413	344
	1,482	1,513

(1) Audit fees for the year ended 31 March 2025 included a non-recurring charge of £27,000 relating to additional costs incurred in respect of the prior year audit and also a £5,000 one-off charge for additional audit procedures performed in relation to the change in the Company's Administrator.

The above expenses exclude VAT where appropriate. Irrecoverable VAT is included within general expenses.

5 Taxation

	2026			2025
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Current tax:
Overseas withholding tax	-	-	-	43	-	43
Corporation tax	-	-	-	-	-	-
Current tax charge	-	-	-	43	-	43

The tax assessed for the year is lower (2025: lower) than the standard rate of corporation tax in the UK of 25% (2025: 25%). The differences are explained below:

	2026			2025
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Net return before tax	12,810	32,540	45,350	21,570	14,464	36,034
Net return multiplied by the standard rate of UK corporation tax	3,203	8,135	11,338	5,393	3,616	9,009
Adjusted for the effects of:
Non-taxable UK franked dividends	(1,565)	-	(1,565)	(2,537)	-	(2,537)
Non-taxable capital returns	-	(8,135)	(8,135)	-	(3,616)	(3,352)
Tax impact on dividends designated as interest distribution	(1,647)	-	(1,647)	(2,856)	-	(2,856)
Irrecoverable overseas withholding tax	-	-	-	43	-	43
Current tax charge	-	-	-	43	-	43

The Company has no unrelieved management expenses.

6 Dividends paid

	2026	2025
	£'000	£'000
Ordinary shares
2024 dividend paid 5 July 2024 (78p per share)	-	16,598
2025 dividend paid 5 July 2025 (102p per share)	17,907	-
	17,907	16,598

The 2025 dividends were paid on 5 July 2025 to shareholders on the register on 6 June 2025 when there were 17,556,324 Ordinary shares with voting rights in issue. The 2024 dividends were paid on 4 July 2024 to shareholders on the register on 7 June 2024 when there were 21,257,727 Ordinary shares with voting rights in issue.

The Directors have recommended to shareholders a final dividend of 66p per share, comprising 43p in interest distribution and 23p in ordinary equity dividends for the year ended 31 March 2026. If approved, this dividend will be paid to shareholders on 15 July 2026. This dividend is subject to approval by shareholders at the AGM and, therefore, in accordance with FRS 102, it has not been included as a liability in these financial statements. The total estimated dividend to be paid, based on the number of shares in issue at 31 March 2026, is £10,361,000. However the actual amount of the dividend to be paid will be based on the number of shares in issue on 12 June 2026, the dividend record date.

	2026	2025
	£'000	£'000
Revenue available for distribution by way of dividend for the year	12,848	21,527
Proposed final dividend of 66p for the year ended 31 March 2026 (2025: paid final dividends of 102p per share)	(10,361)	(17,907)
Surplus/(deficit) available to carry forward	2,487	3,620

7 Net return per Ordinary share

The net return per share of 271.70p (2025: 179.85p), net revenue per share of 76.90p (2025: 107.54p) and net capital return per share of 194.80p (2025: 72.26p) are calculated based on the net return, net revenue income and net capital gain figures reported in the Income Statement and the weighted average number Ordinary shares in issue of 16,704,520 (2025: 20,011,591) during the year.

8 Investments held at fair value through profit or loss

	2026	2025
	£'000	£'000
Inflation-linked government and corporate bonds - UK	203,795	98,924
Inflation-linked government and corporate bonds - overseas	201,420	259,448
UK equities (1)	165,697	209,298
Conventional government and corporate bonds - overseas	105,497	164,560
Conventional government and corporate bonds - UK	83,193	81,592
Overseas equities (including offshore ETFs)	17,211	46,586
	776,813	860,407
Opening cost of investments	879,297	1,063,115
Unrealised losses	(18,890)	(9,323)
Opening fair value of investments	860,407	1,053,792
Additions at cost	721,131	1,092,046
Effective yield adjustment (2)	3,157	8,689
Sales proceeds	(824,877)	(1,307,179)
Net gains on investments	16,995	13,059
Closing fair value of investments	776,813	860,407
Closing book cost of investments	790,029	879,297
Unrealised accumulated losses	(13,216)	(18,890)
	776,813	860,407
Realised gains on disposals	11,321	22,626
Increase/(decrease) in cumulative unrealised losses	5,674	(9,567)
Net gains on investments	16,995	13,059

(1) Includes perpetual preference and zero dividend preference shares, which are presented under "Preference Shares/Corporate Debt" instead of "Funds/Equities" in the 'List of Largest Portfolio Investment in the 2026 Annual Report.

(2) The effective yield adjustment is in relation to conventional fixed interest and inflation-linked securities. The accounting treatment for income on securities held is set out in Note 1(e) below.

The categorisation of investments at the top section of the above table has been reorganised to provide a more consistent presentation across the portfolio listings report in the Investment Manager's Report and Note 15: Financial Instruments. The 2025 categorisation has also been re-presented to reflect this change.

During the year the Company purchased £721,131,000 (2025: £1,092,046,000) of investments and incurred a total transaction cost of £258,000 (2025: £393,000). Disposals of investments amounted to £824,877,000 (202 £1,307,179,000) with a total transaction cost of £88,000 (2025: £98,000). The book cost of the disposed investments was £813,556,000 (2025: 1,284,553,000) and the transaction costs are included in the book cost of acquisitions and the net proceeds of sales.

The total amount recognised as a capital return on inflation-linked securities in the year was £4,923,000 (2025: £5,575,000).

The geographical spread of investments is shown below.

9 Debtors

		Restated(1)
	2026	2025
	£'000	£'000
Due from brokers	422	1,818
Accrued interest	2,025	1,803
Dividends receivable	617	1,002
Prepayments and other debtors	85	91
Corporation tax refund	-	734
	3,149	5,448

10 Creditors: amounts falling due within one year

	2026	2025
	£'000	£'000
Due to brokers	646	24,382
Repurchase of Ordinary shares into treasury	1,392	1,770
Accruals	428	451
Other creditors	-	17
	2,466	26,620

11 Called-up share capital

	2026		2025
	Number of		Number of
	shares	£'000	shares	£'000
Ordinary share of 25p
Ordinary shares in issue at beginning of year	17,970,762	4,493	22,038,727	5,510
Ordinary shares bought back into Treasury during year	(2,272,529)	(568)	(4,067,965)	(1,017)
Ordinary shares in issue at end of year	15,698,233	3,925	17,970,762	4,493
Treasury shares (Ordinary shares of 25p)
Treasury shares in issue at beginning of year	8,609,501	2,152	4,541,536	1,135
Ordinary shares bought back into Treasury during year	2,272,529	568	4,067,965	1,017
Treasury shares in issue at end of year	10,882,030	2,720	8,609,501	2,152
Total Ordinary shares in issue and in treasury at end of year	26,580,263	6,645	26,580,263	6,645

During the years to 31 March 2026 and 31 March 2025, the Company issued no new Ordinary shares and no Ordinary shares were sold from Treasury.

During the year to 31 March 2026, 2,272,529 (2025: 4,067,965) Ordinary shares were repurchased by the Company at an average price of 4,881.2p per share for a total cost of £111,195,000 (2025: at an average price of 4,746.7p per share for a total cost of £194,541,000). All shares were bought back at a discount to NAV. No shares were purchased for cancellation during the year (2025: nil) and at the year-end 10,882,030 shares were held in treasury (2025: 8,609,501).

12 Share premium account and special reserve

On 22 January 2024 the High Court of Justice in Northern Ireland (the 'Court') approved the cancellation of the Company's share premium account and the crediting of an equivalent amount to the Company's distributable reserves. The Order of the Court approving the cancellation became effective on 7 February 2024 when it was registered with the Registrar of Companies in Northern Ireland and this special distributable reserve was therefore established from that date.

The cost of share buybacks undertaken by the Company have been recognised through this reserve since 7 February 2024.

13 Net asset value per Ordinary share

The net asset value per Ordinary share and the net asset value attributable to the Ordinary shares at the year-end, calculated in accordance with the Articles, were as follows:

Net asset value per Ordinary share attributable to

	2026	2025
Ordinary shares	5,104.5p	4,924.8p

Net assets attributable to

	2026	2025
	£'000	£'000
Ordinary shares	801,311	885,025

Net asset value per Ordinary share is based on the net assets, as shown above, and on 15,698,233 (2025: 17,970,762) Ordinary shares, being the number of Ordinary shares in issue at the year-end, but excluding shares held in Treasury.

14 Reconciliation of net return on ordinary activities before tax to net cash inflow from operating activities

	2026	2025
	£'000	£'000
Net return on ordinary activities before tax	45,388	36,034
Net gains on investments	(32,540)	(14,464)
Decrease/(increase) in prepayments	25	(2)
Decrease in accruals	(41)	(737)
Decrease/(increase) in dividends receivable	385	(605)
Increase in accrued interest and effective interest income adjustments	(222)	(8,637)
Overseas withholding tax paid	-	(43)
UK Corporation tax repaid/(paid)	716	(857)
Net cash inflow from operating activities	13,711	10,689

During the year, the Company received dividend income of £6,304,000 (2025: £9,045,000) and interest income of £8,370,000 (2025: £7,006,000) in cash.

15 Financial instruments

The Company has the following financial instruments:

		Restated(1)
	2026	2025
	£'000	£'000
Financial assets at fair value through profit or loss
- Investments held at fair value through profit and loss	776,813	860,407
- Derivative financial instruments	16,439	4,455
Financial assets that are measured at amortised cost
- Cash at bank	7,376	42,859
- Due from brokers	422	1,886
- Accrued interest and dividends receivable	2,642	2,805
	803,692	912,412

		Restated(1)
	2026	2025
	£'000	£'000
Financial liabilities at fair value through profit or loss
- Derivative financial instruments	-	1,524
Financial liabilities measured at amortised cost
- Due to brokers	646	24,399
- Accruals	1,820	2,221
	2,466	28,144

The Company's financial instruments comprise:

investment company ordinary shares, zero dividend preference shares, exchange traded funds and fixed and inflation-linked securities that are held in accordance with the Company's investment objective;
cash and liquid resources that arise directly from the Company's operations; and
debtors and creditors.

The main risks arising from the Company's financial instruments are market risk, interest rate risk, foreign currency risk and credit risk. The Board regularly reviews and monitors the management of each of these risks and they are summarised below.

Other debtors and creditors do not carry any interest and are short-term in nature and accordingly are stated at their nominal value.

Market risk

Market risk arises mainly from uncertainty about the future prices of financial instruments held. It represents the potential loss the Company might suffer through holding market positions in the face of price movements.

The Company invests in the shares of other investment companies. These companies may use borrowings or other means to gear their balance sheets which may result in returns that are more volatile than the markets in which they invest, and the market value of investment company shares may not reflect their underlying assets.

To mitigate these risks, the Investment Manager's investment strategy is to select investments for their fundamental value. Stock selection is therefore based on disciplined financial, market and sector analysis, with the emphasis on long-term investments. An appropriate spread of investments is held in the portfolio in order to reduce both the systemic risk and the risk arising from factors specific to a country or sector. The Investment Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly to consider investment strategy. A list of the largest investments held by the Company is shown in the 2026 Annual Report. All investments are stated at bid value, which in the Directors' opinion is equal to fair value.

Price risk sensitivity

The following table illustrates the sensitivity of the net return after taxation for the year and the net assets to an increase or decrease of 10% (2025: 10%) in market prices. This level of change is considered to be reasonably possible based on an observation of current market conditions. The sensitivity analysis is based on the Company's investments at the Statement of Financial Position date with all other variables held constant.

	2026		2025
	10% increase	10% decrease	10% increase	10% decrease
	in market	in market	in market	in market
	prices	prices	prices	prices
	£'000	£'000	£'000	£'000
Income Statement - net return after tax
Revenue return	(259)	259	(296)	296
Capital return	77,681	(77,681)	86,041	(86,041)
Total return after taxation	77,422	(77,422)	85,745	(85,745)
Change to net assets attributable to shareholders	77,422	(77,422)	85,745	(85,745)

Interest rate risk

Bond and preference share yields, and as a consequence their prices, are determined by market perception as to the appropriate level of yields given the economic background. Key determinants include economic growth prospects, inflation, the Government's fiscal position, short-term interest rates and international market comparisons. The Investment Manager takes all these factors into account when making any investment decisions as well as considering the financial standing of the potential investee company.

Returns from bonds and preference shares are fixed at the time of purchase, as the fixed coupon payments are known, as are the final redemption proceeds. This means that if a bond is held until its redemption date, the total return achieved is unaltered from its purchase date. However, over the life of a bond the market price at any given time will depend on the market environment at that time. Therefore, a bond sold before its redemption date is likely to have a price different from its purchase level and a profit or loss may be incurred.

Interest rate changes affect the income the Company generates from its financial assets with floating rates, and the fair value of the interest bearing assets in the Company's portfolio. The following table illustrates the sensitivity of the net returns and the net assets to an increase or decrease of 1% (2025: 1%) in regard to the Company's monetary financial assets and financial liabilities. The financial assets affected by interest rates comprise cash at bank, conventional and inflation-linked bonds as well as corporate debt instruments. There are no financial liabilities affected by interest rates. This level of change is considered to be reasonably possible based on an observation of current market conditions. The sensitivity analysis is based on the Company's monetary financial instruments at the Statement of Financial Position date with all other variables held constant.

	2026		2025
	1% increase	1% decrease	1% increase	1% decrease
	in interest	in interest	in interest	in interest
	rates	rates	rates	rates
	£'000	£'000	£'000	£'000
Income Statement - net revenue return	74	(74)	429	(429)
Income Statement - net capital return	(83,799)	83,420	(54,955)	54,240
Change to net assets attributable to shareholders	(83,725)	83,346	(54,526)	53,811

The interest rate profile of the Company's assets at 31 March 2026 was as follows:

	Total (as per Statement of Financial Position) £'000	Floating rate £'000	Inflation- linked £'000	Other fixed rate £'000	Assets/ (liabilities) on which no interest is paid £'000	Weighted average interest rate %	Weighted average period for which rate is fixed (years)
Assets
Equity investments (1)	182,908	-	-	-	182,908	-	-
UK inflation-linked government bonds	163,659	-	163,659	-	-	0.53	5.64
UK inflation-linked non-government bonds	40,136	-	40,136	-	-	1.28	5.42
UK government bonds	25,427	-	-	25,427	-	4.42	1.52
UK non-government bonds	57,766	-	-	57,766	-	5.04	1.73
Overseas inflation-linked government bonds	197,938	-	197,938	-	-	0.69	4.92
Overseas inflation-linked non-government bonds	3,482	-	3,482	-	-	-	-
Overseas government bonds	105,497	-	-	105,497	-	1.05	0.83
Invested funds	776,813	-	405,215	188,690	182,908
Cash at bank	7,376	7,376	-	-	-	-	-
Other debtors	3,149	-	-	-	3,149	-	-
Derivative financial instruments	16,439				16,439
Liabilities
Creditors	(2,466)	-	-	-	(2,466)	-	-
Total net assets	801,311	7,376	405,215	188,690	200,030

(1) includes perpetual preference and zero dividend preference shares, which are presented under "Preference Shares/Corporate Debt" instead of "Funds/Equities" in the list of largest portfolio investments in the 2026 Annual Report.

The interest rate profile of the Company's assets at 31 March 2025 was as follows:

	Total (as per Statement of Financial Position) £'000	Floating rate £'000	Inflation- linked £'000	Other fixed rate £'000	Assets/ (liabilities) on which no interest is paid £'000	Weighted average interest rate %	Weighted average period for which rate is fixed (years)
Assets
Equity investments	255,883	-	-	-	255,883	-	-
UK inflation-linked government bonds	75,829	-	75,829	-	-	0.40	10.24
UK inflation-linked non-government bonds	23,095	-	23,095	-	-	1.03	4.58
UK government bonds	15,855	-	-	-	15,855	-	-
UK non-government bonds	65,737	-	-	65,737	-	4.26	5.15
Overseas inflation-linked government bonds	258,992	-	258,992	-	-	0.51	7.13
Overseas inflation-linked non-government bonds	456	-	456	-	-	3.05	0.39
Overseas government bonds	159,043	-	-	159,043	-	0.54	0.77
Overseas non-government bonds	5,517	-	-	5,517	-	6.22	4.34
Invested funds	860,407	-	358,372	230,297	271,738	-	-
Cash at bank	42,859	42,859	-	-	-	-	-
Other debtors	5,448	-	-	-	5,488	-	-
Derivative financial instruments (2)	4,455				4,455
Liabilities
Derivative financial instruments (2)	(1,524)				(1,524)
Other creditors	(26,620)	-	-	-	(26,620)	-	-
Total net assets	885,025	42,859	358,372	230,297	253,497

2) In the prior year the net receivable balance of £2,931,000 from derivative financial instruments was included in the "debtors" balance. In the current year derivative financial instruments have been disclosed separately under current assets and creditors: amounts falling due within one year, to comply with the presentation requirements of the Companies Act. The prior year presentation has also been restated for comparability.

Fair value of financial assets and liabilities

Financial Reporting Standard 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

Level 1: valued using unadjusted quoted prices in active markets for identical assets.

Level 2: valued using observable inputs other than quoted prices included within Level 1.

Level 3: valued using inputs that are unobservable and are valued by the Directors using International Private Equity and Venture Capital Valuation ('IPEV') guidelines, such as earnings multiples, recent transactions and net assets, which equate to their fair values.

The Company's assets are measured at fair value through profit or loss. The fair value of financial instruments traded in active markets is based on quoted market prices at the Statement of Financial Position date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis.

The financial assets and liabilities measured at fair value in the Balance Sheet are grouped into the fair value hierarchy at 31 March 2026 and 2025 as follows:

	2026				Restated(1) 2025
Financial assets at fair value through profit or loss	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Quoted securities	763,467	13,025	-	776,492	844,854	14,990	-	859,844
Currency swap contracts	-	16,439	-	16,439	-	4,455	-	4,455
Delisted equities	-	-	321	321	-	-	563	563
Total financial assets	763,467	29,464	321	793,252	844,854	19,445	563	864,862

	2026				Restated(1) 2025
Financial liabilities at fair value through profit or loss	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Currency swap contracts	-	-	-	-	-	(1,524)	-	(1,524)
Total financial liabilities	-	-	-	-	-	(1,524)	-	(1,524)
Net fair value	763,467	29,464	321	793,252	844,854	17,921	563	863,338

Quoted securities included in fair value Level 1 are actively traded on recognised stock exchanges and the fair value of these investments has been determined by reference to their quoted bid prices at the reporting date.

Quoted securities included in fair value Level 2 relate to some corporate bond holdings in the Company's portfolio, which are also traded on recognised stock exchanges but the fair value of these investments has been determined by reference to prices indicated by a group of contributing brokers at the reporting date.

The fair value of the Company's Level 3 financial assets been determined by reference to primary valuation techniques described in Note 1(b), using available auction prices, and expected or discounted expected liquidation proceeds. The fair value of these investments is influenced by the estimates, assumptions and judgements made in the valuation process, including probability of future cash flows, discounts to net asset values, and recent transaction/auction price.

During the year to 31 March 2026, four financial assets (Smithson Investment Trust, PMGR Securities ZDP 2025, SDV ZDP 2025 and PRS REIT) were moved from Level 1 to Level 3 as they delisted. During the year to 31 March 2025, four assets (Catco Reinsurance Opportunities Funds C shares, Catco Reinsurance Opportunities Funds, NB Global Monthly Income, NB Private Equity Partners ZDP 2024, Premier Miton UK Microcap) were moved from Level 1 to Level 3 as they delisted.

A reconciliation of fair value measurements in Level 3 is set out in the following table:

	2026	2025
	Total	Total
	£'000	£'000
Opening balance	563	2,421
Purchases	-	-
Sales	(13,596)	(8,569)
Transfers from Level 1	13,150	7,451
Total gains/(losses) on investments in the Income Statement:
on assets sold	(444)	38
on assets held at the end of the year	648	(778)
Closing balance	321	563

Foreign currency risk

The Company's investments in foreign currency securities are subject to the risk of currency fluctuations. The Investment Manager monitors current and forward exchange rate movements in order to mitigate this risk. The Company's investments denominated in foreign currencies are:

	2026			2025
	Cash and	Currency	Accrued	Cash and	Currency	Accrued
	Investments	Swap	interest	Investments	Swap	interest
	£'000	Contracts(1)	£'000	£'000	Contracts(1)	£'000
US Dollar	213,172	(21,767)	419	276,824	(93,824)	378
Japanese Yen	108,794	(128,213)	211	185,830	(137,165)	89
Australian Dollar	3,538	-	13	3,679	-	13
Euro	650	-	-	9,506	-	-
Canadian Dollar	5	-	-	5	-	-
Swedish Krona	-	-	-	11,993	-	39
	326,159	(149,980)	643	487,837	(230,989)	519

(1) Based on notional amounts of the currency swap contracts. The contracts were entered into for the purpose of fully hedge the FX exposures on certain US and Japanese government bond investments. Notional exposure on local currency basis are Japanese Yen 23,200,000,000 (2025: 25,750,000,000) and US Dollar 26,700,000 (2025: 104,517,000). As at 31 March 2026, the contracts in receivable position amount to £16,439,000 (2025: £4,455,000) and contracts in payable position amount to £nil (2025: £4,455,000). Overall the Company is in a net receivable position of £16,439,000 (2025: £2,931,000).

Foreign currency sensitivity

The following table illustrates the sensitivity of the net return after taxation for the year and the net assets to an increase or decrease of 10% in the rates of exchange of foreign currencies relative to Sterling. This level of change is considered to be reasonably possible based on an observation of current market conditions. The sensitivity analysis is based on the Company's foreign currency investments at the Statement of Financial Position date with all other variables held constant.

	10%	10%	10%	10%
	appreciation	depreciation	appreciation	depreciation
	of Sterling	of Sterling	of Sterling	of Sterling
	£'000	£'000	£'000	£'000
Income statement - net return after taxation
Revenue return	(674)	674	(929)	929
Capital return	(22,282)	22,282	(31,892)	31,892
Total return after taxation	(22,956)	22,956	(32,821)	32,821
Net assets attributable to shareholders	(22,956)	22,956	(32,821)	32,821

Liquidity risk

Liquidity risk is not considered to be significant as the Company has no bank loans or other borrowings and the majority of the Company's assets are investments in quoted securities which are readily realisable. All liabilities are payable within three months.

Credit risk

In addition to interest rate risk, the Company's investment in bonds, the majority of which are government bonds, is also exposed to credit risk which reflects the ability of a borrower to meet its obligations. Generally, the higher the quality of the issue, the lower the interest rate at which the issuer can borrow money. Issuers of a lower quality will tend to have to pay more to borrow money to compensate the lender for the extra risk taken. As at 31 March 2026, 76% (2025: 68%) of the portfolio was held in fixed income instruments. Of these, 63% (2025: 56%) was in government bonds issued by governments which are rated AA or better. The Investment Manager judges these to have very low credit risk given that each of the issuers are monetarily sovereign, that is to say they borrow in their own currency. Of the 13% (2025: 11%) of the portfolio that was held in corporate debt, the majority is investment grade and relatively short duration. Cash balances of 1% (2025: 5%) were held with Northern Trust which has a short-term credit rating of A-1 with Standard & Poor's. Investment transactions are carried out with a number of brokers whose standing is reviewed periodically by the Investment Manager. The Investment Manager assesses the risk associated with these investments by prior financial analysis of the issuing companies as part of his normal scrutiny of existing and prospective investments and reports regularly to the Board. Cash is held with a reputable bank with a high-quality external credit rating.

A further credit risk is the failure of a counterparty to a transaction to discharge its obligations under that transaction, which could result in a loss to the Company. The following table shows the maximum credit risk exposure.

Credit risk exposure

Within the financial asset balances reported in the Statement of Financial Position, the maximum credit risk exposure is:

			Restated(1)
	2026		2025
	Statement		Statement
	of Financial	Maximum	of Financial	Maximum
	Position	exposure	Position	exposure
	£'000	£'000	£'000	£'000
Financial assets - investments at fair value through profit and loss	793,252	610,344	864,862	608,977
Debtors - amounts due from brokers, dividends and interest receivable	3,064	3,064	4,623	4,623
Cash at bank	7,376	7,376	42,859	42,859
	803,692	620,784	912,344	656,459

(1) In the prior year the net receivable balance of £2,931,000 from derivative financial instruments was included in the "debtors" balance. In the current year derivative financial instruments have been disclosed separately under current assets and creditors: amounts falling due within one year, to comply with the presentation requirements of the Companies Act. The prior year presentation has also been restated for comparability. As a result of this restatement, the receivable leg of the derivative financial instruments of £16,439,000 (2025: £4,455,000) has now been included in the "financial assets - investments at fair value through profit and loss" line in the table below.

Capital management policies and procedures

The Company's capital management objectives are to ensure that it will be able to continue as a going concern and to maximise the total return to its equity shareholders. The Company's capital comprises its equity share capital and reserves. The Board, with the assistance of the Investment Manager, monitors and reviews the broad structure of the Company's capital on an ongoing basis. Further details can be found in the Strategic Report.

16 Transactions with the Investment Manager and related parties

Details of the Company's transactions with the Investment Manager are fully disclosed in Note 3 above. Directors are the only related parties to the Company and their fees and shareholdings are disclosed in the Directors Remuneration Report in the 2026 Annual Report. There have been no other related party transactions in the year ended 31 March 2026.

17 Company information

Capital Gearing Trust P.l.c. is a closed-ended investment company, registered in Northern Ireland No NI005574, with its Ordinary shares listed on the London Stock Exchange. The address of the registered office is Murray House, Murray Street, Belfast BT1 6DN.

18 Status of results information

2025 Financial Information

The figures and financial information for 2025 are extracted from the Annual Report and Accounts for the year ended 31 March 2025 ('2025 Annual Report') and do not constitute the statutory accounts for the year. The 2025 Annual Report has been delivered to the Registrar of Companies and included the Report of the Independent Auditors which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

2026 Financial Information

The figures and financial information for 2026 are extracted from the published Annual Report and Accounts for the year ended 31 March 2026 ('2026 Annual Report') and do not constitute the statutory accounts for that year. The 2026 Annual Report includes the Report of the Independent Auditors which is unqualified and does not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The 2026 Annual Report will be delivered to the Registrar of Companies in due course.

A copy of the 2026 Annual Report has been submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

The 2026 Annual Report will also shortly be available on the Company's website at www.capitalgearingtrust.comwhere up to date information on the Company, including daily NAV and share prices, fact sheets, quarterly reports, webinars and portfolio information can also be found.

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

-ENDS-

Frostrow Capital LLP

Company Secretary

3 June 2026

For further information contact:

CG Asset Management Limited

Investment Manager

Tel: 020 3906 1649

Frostrow Capital LLP

Company Secretary

company.secretary@capitalgearingtrust.com

company.secretary@capitalgearingtrust.comTel: 07376 982071

SEC Newgate UK

Financial Communications

cgam-cgt@secnewgate.co.uk

Tel: 020 3757 6882

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CAPITAL GEARING TRUST PLC

Capital Gearing Trust P.l.c. - Final Results for the Year Ended 31 March 2026