Murray Income Trust Regulatory News (MUT)

MURRAY INCOME TRUST PLC

Legal Entity Identifier (LEI): 549300IRNFGVQIQHUI13

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2022

An investment trust founded in 1923 aiming for high and growing income with capital growth

Investment Objective

The Company aims for a high and growing income combined with capital growth through investment in a portfolio principally of UK equities.

Financial Calendar

Performance Highlights

Chairman's Statement

Highlights

·  a poor second half resulted in full year performance behind the FTSE All-Share Index

·  total dividends per share increased by 4.3% to 36.00p, the 49th year of consecutive increase

·  the dividend yield was 4.3% based on the year end share price of 832.0p

Review of the Year ended 30 June 2022(the "Year")

Having been a little ahead of the FTSE All-Share Index (the "Benchmark") at the interim stage, it is disappointing to report that the total return numbers for the Year show your NAV decreasing by 4.0% and your share price falling marginally by 0.7%. Your Company has underperformed the Benchmark which has seen a total return of 1.6%. The pain was clearly taken in the second half and performance attribution analysis shows that the underperformance can be pinned in broadly equal parts on style rotation and stock selection. Although your Manager's investment style does not lead to a technology or an internet bias, its search for "quality" means it will typically be underweight the "value" sectors of the market. Additionally, like many other managers, their ESG work has led them to have a low exposure to oil and gas stocks. Prompted by the Nasdaq sell off that began in January, and accelerated by the Russian invasion of Ukraine that led to commodity prices rising dramatically, what were deemed low-quality resource and bank stocks have performed very strongly. Compounding this unfriendly style rotation were some stock specific issues, as ever, easier to see with hindsight. Coca Cola Hellenic, Inchcape and Mondi (representing 5.7% of NAV, in aggregate) were hit by their Russian exposure. Countryside Partnerships had problems all of its own making. The Investment Manager explains performance in further detail in the Investment Manager's Review.

The Board has declared a fourth interim dividend per share of 11.25p, payable on 15 September 2022, which makes a total for the Year of 36.0p, an increase of 4.3% on the 34.5p per share paid in the previous year. This marks the 49th consecutive year of dividend increases, securing our continued place on the AIC's list of Dividend Heroes.

Revenue per share for the year grew to an all-time high of 40.5p, up 20.2% from the previous year's 33.7p, and the 36.00p dividend was 112% covered by net income received during the Year. As a consequence, we were able to use the excess to bolster revenue reserves per share from 12.9p to 17.5p, equivalent to 48% of the current annual dividend of 36.00p, up from 37% coverage at the previous year end. The Board gave extensive consideration as to how much to grow the dividend, recognising the impact that inflation is having on shareholders' real income, and how much to add to reserves. Two factors influenced us in our decision. First, the Board's aim is that revenue reserves per share be in the range of a half to a full year's dividend per share. Second is our Investment Manager's projection that revenue per share is expected to fall next year before rising again thereafter, affected by the absence of some companies' post-Covid-19 bumper dividends and the effects of continued supply chain disruption, as well as increasing inflation.

Environmental, Social and Governance ("ESG")

ESG considerations are deeply embedded into the company analysis carried out by our Investment Manager, which is able to draw on the expertise of more than 40 in-house ESG specialists. This aims to mitigate risk and enhance returns, results in frequent dialogue with investee companies and helps to ensure that the companies in the portfolio are acting in the best long-term interests of their shareholders and society at large. It is important to note that the policy pursued by our Investment Manager on our behalf is dynamic rather than static. ESG conclusions can change if the inputs change: for example, one might look at Russia's invasion of Ukraine and conclude that the social factor of security and safety is more important now than previously considered. Similarly, one might consider energy security be given a higher weight relative to absolute CO2 emissions and come to a different conclusion on holding an oil or gas stock.

Discount

From the start to the end of the Company's year, the discount at which the Company's share traded relative to the NAV, narrowed from 6.8% to 3.8%. The average discount over the year was 6.1% and the range was 3.1% to 8.2%. The Board monitors the discount level closely and requests permission from shareholders at each AGM to renew the buyback and issuance policy.

Share Capital

The Company bought back 356,015 shares into Treasury during the Year, equivalent to 0.3% of share capital. No shares were issued or sold from Treasury. As at 30 June 2022, there were 116,690,472 Ordinary 25p shares in issue with voting rights and 2,839,060 shares held in Treasury.

Ongoing Charges

The 2020 merger with Perpetual Income & Growth Investment Trust has enabled us to reduce substantially the level of ongoing charges to shareholders. The largest cost is the investment management fee payable to abrdn which is calculated on a sliding scale with a marginal rate of 0.25% per annum on assets over £450m. The effect of expanding the Company has produced a blended management fee rate of 0.40% for the Year.

With most of the other ongoing charges being fixed costs, the Company's overall ongoing charges rate has risen marginally to 0.48%, from 0.46%, as the NAV has fallen.

Borrowing and Gearing

The Board reviews on a regular basis both the Company's borrowings and the use of those borrowings to gear the portfolio. The Company has £100m of long-term borrowings with £40m due in 2027 and £60m due in 2029 at a blended annual interest rate of 3.6%. During the Year, the short-term multicurrency facility with The Bank of Nova Scotia Limited was increased by £30m to £50m. Consequently, at the year end, the Company had £150m of borrowing facilities available representing 14.9% of net asset value. With the beta of the investment portfolio currently running at 0.9 (typical of the Investment Manager's style), the Board believes that the appropriate neutral gearing rate is 10%. At the year end the actual gearing rate was 9.4% (2021: 10.3%). The annual cost of the Company's current borrowings was 0.23% of the year end NAV.

Board Composition

As previously announced, Jean Park and Donald Cameron retired from the Board at the conclusion of the November 2021 AGM, both having served their full nine-year terms. We were pleased to announce that Nandita Sahgal Tully joined us shortly thereafter, bringing with her more than 25 years' experience in financial services, including ESG and impact investing in both the UK and emerging markets,. These changes take the Board back to its normal complement of six Directors.

Shareholder Presentation on 2 November 2022

After welcoming shareholders to our Annual General Meeting in London on 1 November 2022 we will also hold an online presentation for existing and potential shareholders at 2pm on 2 November 2022. This will include the opportunity to pose questions to your Chairman and Investment Manager.

Please register for this event at: https://events.abrdn.com/zo7Yk3 or via the Company's website. Questions may also be submitted in advance to murray.income@abrdn.com.

Annual General Meeting

The Company expects to hold the Annual General Meeting ("AGM") in its traditional format, without any restrictions imposed by measures to restrict the transmission of Covid-19. The Company will update shareholders as to any changes to the proposed arrangements for the AGM through its website at murray-income.co.uk and, where appropriate, through announcement on the London Stock Exchange.

The AGM will be held at 12.30pm on 1 November 2022 at The Mermaid Conference Centre, Puddle Dock, Blackfriars, London EC4V 3DB. One of the advantages of investing via investment trusts is that all shareholders have the opportunity to meet their Investment Manager and the Directors at the AGM. This year's meeting will commence with a presentation on the Company and market outlook from our Investment Manager, Charles Luke. There will then be the formal part of the meeting where shareholders get to ask questions about, and vote on, the AGM resolutions. After this will be an informal lunch at which shareholders will be able to chat to the Investment Manager and Directors. Shareholders may bring a guest with them to the meeting.

I always welcome questions from our shareholders at the AGM. Shareholders are asked to submit their questions prior to the meeting (and in any event by no later than 18 October 2022) by email to murray.income@abrdn.com in relation to the Annual Report, the Notice of AGM or the Company more generally. This is also the email address if you wish to attend the AGM and are unsure how to register. The Board and/or the Investment Manager will endeavour to respond to all such questions received.

Update

From 30 June 2022 to 16 September 2022, being the latest practicable date prior to approval of this Report, the share price total return and NAV per share total return were -2.8% and 1.5%, respectively, as compared to the Benchmark total return of 1.9%.

Outlook

The Outlook section of the Chairman's Statement is always the most difficult to write. It obviously has to be a considered and realistic reflection on the outlook for the Company. But there is also an expectation for a wider commentary and opinion on the outlook for markets. Plus there's scope for a personal touch. I'm still surprised at how many Chairman's statements appear to be written by the Manager instead of the Chairman. I start writing in July once the preliminary performance numbers come in and I've been briefed about our Investment Manager's review. After a couple of drafts, it is submitted to the Company Secretary who distributes it to the rest of the Board for review in late August. My fellow Directors then provide a welcome, and sometimes robust, number of edits and often a section has to be completely rewritten because it has been overtaken by events. Eventually, by the time of our September Board meeting, we agree the final wording for inclusion in the Annual Report for issue to shareholders.

We find ourselves in a scarcely credible era of uncertainty and without strong political, economic or social leadership. Domestic politics, geopolitical tensions and war, inflation, labour shortages, recession, strikes, energy shortages; all these factors have the capacity to heavily affect the outlook for the companies in which we invest. Every one of them is impossible to predict with confidence at the moment. So what is the outlook? In truth, we can't be sure.

All the issues are fixable but not without strong leadership. That's the most concerning thing this time around. After similar issues in the 1970s, the 1980s saw Margaret Thatcher, Ronald Reagan, Mikhail Gorbachev and, perhaps most importantly, Paul Volcker (chairman of the US Federal Reserve from 1979 to 1987) provide very strong leadership and guide their countries to recovery. I'm a naturally optimistic person so I scour the TV news and politics programmes for the world's new generation of strong leaders which will take us towards recovery. I'm still looking. Full recovery may take a long time.

What will happen to the companies in our portfolio while we wait? Based on trailing earnings, the PER (price to earnings ratio, the most popular stock valuation measure) of our current portfolio is 13x. That is down from 16x six months ago and is the lowest I have seen it in the eight years I have been a Director. It has been as high as 20x. To me that means that a lot of the bad news is priced in. If you think about the headlines we've been reading these past six months, it is possible to make a case that much of the bad news is behind us. But note that this is a valuation measure based on the previous 12 months of earnings. If corporate earnings are about to tumble, then stock markets could move down in parallel and still give the same valuation. That's the real danger, so not surprisingly our Investment Manager is analysing our holdings' earnings prospects with extra vigilance. One of the main reasons behind our Investment Manager's quality philosophy is that the companies selected should be sufficiently robust and well managed to withstand turbulent times like these. We have great faith in our Investment Manager's long-term investment approach.

In theory, it should be a good moment for quality. In reality, we will have to wait and see.

Neil RoganChairman21 September 2022

Investment Manager's Review

Background

For the UK equity market, the year ended 30 June 2022 (the "Year") started with continued good progress aided by robust earnings delivery and supportive oil prices. This was despite concerns around Covid-19 (in particular the Delta variant in July 2021 and the Omicron variant from November 2021). While the stockmarket recognised rising prospects for inflation and higher interest rates, these were not yet seen as a risk. As the Year progressed these two factors were increasingly in focus and have largely driven stockmarket direction in the second half of the Year. Early in 2022, the rising stockmarket stalled, as higher interest rates led to a sharp market rotation away from growth stocks and towards more value sectors. This rotation was exacerbated as tensions escalated in eastern Europe with the sharpest fall on 24 February 2022 when Russian troops invaded and launched attacks on airports and military sites in Ukraine. The impact of the Russian invasion on commodity prices increased inflationary pressures globally. Markets recovered somewhat soon after but ongoing fears of higher inflation and the risk of a global recession fuelled a fresh wave of selling in June 2022.

Domestic economic data published across the Year reflected the circuitous return to more normal economic conditions. Growth was initially aided by the lifting of the remaining legal restrictions to control Covid-19 in late February 2022. However, the rebound in activity levels combined with tight supply in many areas and higher commodity prices meant that levels of inflation have repeatedly been higher than expected. The last reading of 9.9% in August (as measured by the Consumer Prices Index) marked another 40-year high, down slightly from 10.1% for July. Energy prices, as well as clothing, food and second-hand car prices, have been major factors, compounded by ongoing global supply chain issues.

The Bank of England ("BoE") raised interest rates to 0.25% at its December meeting, which was the first movement for over three years, before an additional four increases resulted in a rate of 1.25% by 30 June 2022. In early August 2022, the BoE revised its forecasts for peak inflation of 13% in late 2022, driven by higher household energy prices. A predicted contraction in GDP for up to five quarters signalled that the UK would enter a recession. At the same time the BoE announced a further 0.5% increase in interest rates, to 1.75%, the largest single rise in 27 years.

Overseas, the global economy is expected to slow in 2022 as remaining outbreaks of Covid-19 variants, supply bottlenecks and the Russian invasion of Ukraine all weigh on activity. At each of their June 2022 and July 2022 meetings, the US Federal Reserve raised rates by 0.75% as it sought to control inflation. China continues to operate a zero-Covid-19 policy which has led to renewed lockdowns and weak GDP data. Oil and other commodity prices have increased over the Year driven by the Russian invasion of Ukraine and concerns over supply disruptions. Risks of sustained higher prices are greater due to a period of under investment compounded by supply disruption. The International Monetary Fund expects the global economy to grow by only 3.6% in each of 2022 and 2023, as compared to growth of 6.1% in 2021.

Equities were stable over the Year, although that masks the underlying volatility experienced by markets. The Benchmark ended the Year 1.6% higher on a total return basis (that is, with dividends reinvested), but that came as a result of a 6.5% rise in the second half of calendar 2021, followed by a 4.6% fall in the first six months of 2022. The energy sector performed exceptionally strongly in the Year as oil and gas prices spiked. On the other hand the weakest performance was seen in the technology sector where valuations of long-dated cash flows were impacted by the significant rise in base rates. In a broad reversal of the prior year's performance, the more defensive areas of the market such as healthcare, utilities and telecommunications performed well while more cyclical, economically-sensitive areas of the market such as consumer discretionary and industrials underperformed.

From a size perspective, reversing the pattern of the previous year, the FTSE 100 Index significantly outperformed both the Mid 250 and Small Cap Index, with the divergence in performance most prevalent in the first half of 2022.

Performance

The Company generated a negative net asset value per share total return of 4.0% for the Year which compares to a strong 20.6% rise in the prior year. The benchmark FTSE All-Share Index increased by 1.6% over the Year. The portfolio modestly outperformed in the first and second quarters of the Year but underperformed during the third and final quarters. This relative underperformance since the start of 2022 reflects a market style rotation from growth and quality to value, initially benefitting the energy and financial sectors, with the outperformance of energy sustained following the Russian invasion of Ukraine. Interest rate increases, as central banks look to control rising inflation, have meant growth companies with long-dated cash flows underperformed. Given the portfolio's focus on high quality companies, underweight position in energy and tobacco stocks, and its above Benchmark exposure to mid-cap companies, it is unsurprising that the portfolio underperformed in these circumstances.

Long term returns remain positive compared to the Benchmark and it is also important to consider risk-adjusted returns or, in other words, how much performance is being generated for each unit of risk. One measure of this is the 'information ratio' and it was pleasing that the Company, for the second consecutive year, was awarded the Citywire UK Equity Income Investment Trust of the Year for a three year information ratio considerably ahead of all of its peers.

On a total return basis, the Company's share price decreased by 0.7% which reflected a narrowing of the discount to Net Asset Value at which the shares traded from 6.8% to 3.8%.

In absolute terms, taking account of the £60m of senior secured fixed rate notes 2029, £40m of senior secured fixed rate notes 2027, as well as £6.5m drawn down from an unsecured multi-currency revolving credit loan facility agreement with The Bank of Nova Scotia Limited, debt was £106.5m at the end of the Year. The net gearing was 9.4% at the end of the Year as compared to 10.3% at the end of the prior year.

Looking specifically at the Company's portfolio, asset allocation and stock selection both held back performance over the Year with asset allocation being a more significant contributor to underperformance than stock selection where the impact was more modest. Negative asset allocation in the Year primarily reflected the portfolio's lower exposure to the energy sector and higher exposure to the industrials and financials sectors.

Turning to the individual holdings, there were numerous companies that demonstrated strong share price increases. The share prices of Novo Nordisk, Drax, and Total Energies all increased by over 40% during the Year. However, the two poorest share price performances were from Countryside Partnerships and Ashmore whose share prices both fell by 52%. Countryside Partnerships underperformed as the company announced the CEO would be stepping down following poor execution and a failure to meet build targets. In our view the issues the company faced are fixable and partnership housing remains an attractive segment of the market given structural demand growth and high returns. The shares of Ashmore have been weak as emerging market debt has been out of favour leading to fund outflows. The holdings in Coca Cola Hellenic, Inchcape and Mondi also contributed negatively to performance, with each of these companies having exposure to Russia and/or Ukraine.

Performance Attribution for the year ended 30 June 2022

Portfolio Activity and Structure

Turnover of approximately 18% was lower than in the prior year. The pattern of trades reflects reduced exposure to several of the largest companies in the market and a willingness to increase the active share of the portfolio (being its similarity to the constituents of the Benchmark), which is now approximately 70%, while further both improving the quality of the portfolio and maintaining the focus on capital and dividend growth.

Eleven new holdings, of which three were large cap companies, were added to the portfolio. The first of these was Experian, the global information services company, which has high margins and strong pricing power, meaning this winning business should prove resilient to higher inflationary pressures. We also started a position in London Stock Exchange Group, the global financial markets infrastructure and data provider, where there are long-term structural drivers and signs of good operational progress as it integrates the Refinitiv business. The sale of Rio Tinto (see below) allowed the purchase of Anglo American given its strong ESG characteristics and greater exposure to future-facing commodities.

There were five mid-cap company introductions. The first was Drax, the renewable energy company working with waste wood products, where we see upside potential from BECCS (bioenergy with carbon capture and storage) which now has robust political backing, support from higher UK power prices and an attractive dividend yield. The second mid-cap new entrant was insurer Hiscox where we believe the strength of the retail business is underappreciated and the company should benefit from a stronger rate environment. We participated in the IPO of private equity firm Bridgepoint, which has an experienced management team and good client relationships. The fourth purchase was HomeServe, the home emergency and repair services provider, where we saw the valuation as attractive given the good growth potential in the US as well as a generous dividend yield. The final mid-cap new entrant was a position in the high quality, high end scientific instruments business, Oxford Instruments. The business is exposed to high growth markets and the management team have a good track record. The valuation became particularly attractive in light of the withdrawal of the bid from Spectris.

Two overseas holdings were added to the portfolio. The first was Nordea which we view as a higher returning bank operating in the Nordic region with an attractive dividend yield. The return of positive interest rates will have a material positive impact on bank profitability, and with a strong capital position this should translate into appealing shareholder distributions. We also started a new position in Singapore-listed Oversea-Chinese Banking Corp which provides attractive exposure to Asian banking, wealth management and insurance markets and should be a beneficiary of rising rates. Also, one small cap company was introduced, Watkin Jones, a developer with amarket-leading position which provides exposure to the attractive build to rent and purpose built student accommodation markets

In addition, we increased exposure to a number of our existing holdings which we believe have high quality characteristics with attractive long term growth prospects including: Aveva, RS Group, BP, Intermediate Capital, Moonpig, Rentokil, Sage, and Unilever.

We sold fourteen holdings during the Year. Firstly, LondonMetric, as we believed that after a period of strong performance, the valuation and dividend yield of the company was no longer compelling. Secondly, the small holding in Telecom Plus was exited given the uncertain industry backdrop. Thirdly, the very small holding in Jackson Financial shares that were received when the business was demerged from Prudential were sold. In the first half of the Year both John Laing and Sanne were sold at a pleasing profit following bids. The position in beverage company Fever-Tree was exited as persistent earnings downgrades weakened our conviction while the stock was also still valued at a premium rating. The holding of mining company Rio Tinto was sold with the proceeds used to purchase a holding in Anglo American. Similarly, later in the Year, the position in private equity firm Bridgepoint was sold with proceeds reinvested into Intermediate Capital. Following the firm offer from Brookfield the position in HomeServe was sold, providing an excellent return over a relatively short timeframe. Four holdings with some cyclical exposure, which had become smaller positions in the portfolio after profit taking during the Year, were sold, namely Bodycote, DS Smith, Prudential and Sirius Real Estate. Finally, the small position in Woodside Energy that was received through the BHP spin-off was sold.

In addition, we took profits in a number of holdings that had performed strongly and where the valuation had started to look less attractive including AstraZeneca, Dechra Pharmaceuticals, VAT Group and National Grid.

We continued our measured option-writing programme which is based on our fundamental analysis of the holdings in the portfolio. We believe that the option-writing strategy has been of benefit to the Company by diversifying and increasing the level of income generated. It also provides headroom to invest in companies with lower starting yields but better dividend and capital growth prospects. Income from writing options of £2.8m represented 5.5% of total income earned in the Year.

With our longer term investment horizon, we continue to put significant effort into engagement with the companies in the portfolio to ensure that they are run in shareholders' best interests. Examples of the subjects of our engagement during the Year have included issues such as board composition, capital allocation and M&A activity, and risk management (including issues such as labour management, diversity & inclusion, climate change and environmental issues). These issues have been pursued through meetings with the executive management of the companies as well as the non-executives, particularly the chairs of the board and remuneration committees. The portfolio continues to be independently rated as 'AAA' (the highest level) by MSCI for its ESG characteristics.

Our aspiration in terms of portfolio construction is simple: to invest in good quality companies with attractive growth prospects through a sensibly diversified portfolio with appealing dividend characteristics. The ability to invest up to 20% of gross assets overseas is helpful in achieving these aims and, at the year end, the portfolio comprised 61 holdings with the overseas exposure representing 14.2% of gross assets.

Income

For the Year, the Company witnessed a significant increase in the level of income due to the addition of new dividend-paying holdings, growth in the dividends of existing portfolio companies and a number of special dividends. Six special dividends (from Kone, Rio Tinto, Mowi, Fever-Tree, Anglo American and VAT Group) were included in income from investments and were treated as revenue items. We believe that this recognition is appropriate given that, in each case, the return of cash was from a build-up of profits generated by ongoing operations rather than from a sale of assets.

According to Link Group's most recent UK Dividend Monitor report, UK plc dividends are expected to rise by 2.4% for calendar 2022 (following the 12.5% increase for calendar 2021), with a record pay-out in the second quarter, signalling a swifter recovery from the difficult times experienced during Covid-19. The Company's earnings per share increased by 20.2% from 33.7p to 40.5p. Helped by bumper dividends from mining holdings Rio Tinto and BHP, earnings per share for the Company surpassed pre-pandemic levels in the Year. We remain confident about the long term income growth potential of the portfolio but income for the year ended 30 June 2023 is unlikely to match the exceptional income for the Year.

Outlook

Looking forward, the outlook is becoming more difficult with a tightening policy backdrop and inflationary challenges coupled with the implications of the Russian invasion of Ukraine, all leading to slower global growth. Despite that there are reasons to be confident in the outlook for the Company. Our focus on quality companies provides protection through a downturn: those companies with pricing power, high margins and strong balance sheets are better placed to navigate a more challenging economic environment and emerge in a strong position. Furthermore, these quality characteristics are helpful in underpinning the portfolio's income generation.

The valuations of UK-listed companies remain attractive on a relative and absolute basis. Moreover, the dividend yield of the UK market remains at an appealing premium both to other regional equity markets and to other asset classes. Indeed, we believe that in many cases the attractiveness of our holdings is not reflected in their share prices, particularly given the underlying strengths of the businesses. This view is reflected in the bids for holdings including HomeServe and Euromoney. We think a fair proportion of the portfolio may be vulnerable to corporate activity and it is noteworthy that private equity purchasers often look for attractive quality characteristics in potential acquisitions that dovetail with our investment criteria. Furthermore, international investors remain underweight the UK; this provides an additional underpin.

In summary, we feel comfortable maintaining our long term focus on investments in high quality companies with robust competitive positions and strong balance sheets, which are led by experienced management teams and are capable of delivering sustainable earnings and dividend growth.

Charles Luke and Iain PyleInvestment Manager21 September 2022

Investment Case Studies

London Stock Exchange Group

With a market capitalisation of approximately £46bn, London Stock Exchange Group was purchased for the portfolio during the year. With the acquisition of Refinitiv in 2021 the company has continued its transformation from a traditional exchange towards being a global financial markets infrastructure and data provider. Approximately 70% of revenues now come from providing Data & Analytics services, exposing the group to the structural growth in demand for financial data. A similar portion of group revenues are recurring, subscription-based in nature which provides resilience. We see some areas of the business, for example the clearing house LCH, as having very high barriers to entry. The cash generative nature of the group means that the balance sheet has strengthened quickly following the Refinitiv acquisition. We think that accelerating revenue growth and delivery of revenue and cost synergies will lead to the company being valued as a leading information services company with clear quality characteristics.

Oxford Instruments

Oxford Instruments, the provider of high technology instrumentation products and services to industrial and scientific research communities, was added to the portfolio in the year. The company has an approximate market capitalisation of £1.1bn. Oxford Instruments is a technological leader in the products it provides and strong commercial leadership has ensured strong customer relationships and high barriers to entry. The company is well diversified by end market, customer type and geographically which helps mitigate volatility and we think its strong pricing power will be helpful in the current environment. The financials of the company are on an improving trajectory with revenue growth aligned to the long-term growth in research and development budgets and expanding margins. The company has a net cash balance sheet and high returns. We added the stock to the portfolio following the withdrawal of a bid for the company from Spectris which created a particularly attractive entry point for the valuation of a company with strong fundamentals and good prospects over the medium to long term.

Performance

Performance (total return, including reinvested dividends)

Ten Year Financial Record

Financial Highlights and Dividends

Dividends

Overview of Strategy

Business Model

Murray Income Trust PLC (the "Company") is an investment trust whose Ordinary shares are listed on the premium segment of the London Stock Exchange.

The Company is governed by a Board of Directors (the "Board"), all of whom are non-executive, and has no employees. The Board is responsible for determining the Company's investment objective and investment policy. Like other investment companies, the day-to-day investment management and administration of the Company is outsourced by the Board to an investment management group, abrdn, and other third party providers. The Company has appointed abrdn Fund Managers Limited as its alternative investment fund manager, which has in turn delegated certain responsibilities, including investment management, to the Investment Manager.

The Company complies with Section 1158 of the Corporation Tax Act 2010 which permits the Company to operate as an investment trust.

Investment Objective

The Company aims for a high and growing income combined with capital growth through investment in a portfolio principally of UK equities.

Investment Policy

In pursuit of the Company's investment objective, the Company's investment policy is to invest in the shares of companies that have potential for real earnings and dividend growth, while at the same time providing an above-average portfolio yield. The emphasis is on the management of risk and on the absolute return and yield from the portfolio as a whole rather than the individual companies which the Company invests in, which is achieved by ensuring an appropriate diversification of stocks and sectors within the portfolio, with a high proportion of assets in strong, well-researched companies. The Company makes use of borrowing facilities to enhance shareholder returns when appropriate.

Delivering the Investment Policy

The Company maintains a diversified portfolio of the equity securities of UK and overseas companies with an emphasis on investing in quality companies with good management, strong cash flow, a sound balance sheet and which are generating a reliable earnings stream.

The Investment Manager follows a bottom-up investment process based on a disciplined evaluation of companies through direct visits by its fund managers. Stock selection is the major source of added value, concentrating on quality first, then price. Top-down investment factors are secondary in the Investment Manager's portfolio construction with diversification rather than formal controls guiding stock and sector weights.

Board Investment Limits

The Board sets additional investment guidelines within which the Investment Manager must operate :

· the portfolio typically comprises between 50 and 70 holdings (but without restricting the Company from holding a more or less concentrated portfolio from time to time);

· the Company may invest up to 100% of its gross assets in UK-listed equities and other securities and is permitted to invest up to 20% of its gross assets in other overseas-listed equities and securities;

· the Investment Manager may invest in any market sector, however, the top five holdings may not exceed 40% of the total value of the portfolio and the top three sectors represented in the portfolio may not exceed 50%; and

· the Company may invest no more than 15% of its gross assets in other listed investment companies (including investment trusts).

The Company may use derivatives for the purpose of enhancing portfolio returns and for hedging purposes in a manner consistent with the Company's broader investment policy. The Investment Manager is permitted to invest in options and in structured products, provided that any structured product issued in the form of a note or bond has a minimum credit rating of "A".

Gearing

The Board is responsible for setting the gearing policy of the Company and for the limits on gearing. The Manager is responsible for gearing within the limits set by the Board. The Board has set its gearing limit at a maximum of 25% of NAV at the time of draw down. Gearing - borrowing money - is used selectively to leverage the Company's portfolio in order to enhance returns where this is considered appropriate. Particular care is taken to ensure that any financial covenants permit maximum flexibility of investment policy. Significant changes to gearing levels are communicated to shareholders.

Key Performance Indicators

At each Board meeting, the Directors consider a number of Key Performance Indicators ("KPIs") to assess the Company's success in achieving its objectives, and these are described below, with those also categorised as Alternative Performance Measures marked with an asterisk:

Principal Risks and Uncertainties

There are a number of risks and uncertainties which, if realised, could have a material adverse effect on the Company's business model, future performance and solvency. The Board, through the Audit Committee, has put in place a robust process to identify, assess and monitor these by means of a risk assessment and internal controls system. This system was reviewed during the year and enhanced, as explained in the Audit Committee Report in the Annual Report. As noted therein, the committee has a risk register and uses a post-mitigation heat risk map to identify principal, and emerging, risks.

Macroeconomic uncertainty has been a significant risk with the second half of the Year particularly affected by the geopolitical uncertainty caused by the Russian invasion of Ukraine. By contrast, the economic and market instability due to Covid-19 gradually receded during the Year although secondary impacts are ongoing. Other than these changes, the Audit Committee does not consider that the principal risks and uncertainties identified have changed during the Year, although impacts and probabilities thereof have changed.

In addition the Board has identified, as an emerging risk which it considers is likely to become more relevant for the Company in the future, the implications for the Company's investment portfolio of climate change; further details may be found under 'Market Risk'.

The following table sets out the Company's principal risks and the Company's mitigating actions and comments if the post-mitigation risk assessment has changed, together with the reason why.

The following are other risks identified by the Board which could have a major impact on the Company, but due to mitigation are not deemed to be principal risks:

The principal risks associated with an investment in the Company's shares can be found in the pre-investment disclosure document ("PIDD") published by the Manager, which is available from the Company's website: murray-income.co.uk. 

Promotional Activities

The Board recognises the importance of promoting the Company to existing and prospective investors both for improving liquidity and enhancing the rating of the Company's shares. The Board believes one effective way to achieve this is through subscription to, and participation in, the promotional programme run by the Manager on behalf of a number of investment trusts under its management. The Company also supports the Manager's investor relations programme which involves regional roadshows, promotional and public relations campaigns. The Manager's promotional and investor relations teams report to the Board on a quarterly basis giving analysis of their activities as well as updates on the shareholder register and any changes in the make-up of that register.

Communicating the long-term attractions of the Company is key. The promotional programme includes commissioning independent paid for research on the Company, most recently from Edison Investment Research Limited; a copy may be found on the Company's website.

The UK Stewardship Code and Proxy Voting

The Company supports the UK Stewardship Code 2020, and seeks to play its role in supporting good stewardship of the companies in which it invests. Responsibility for actively monitoring the activities of portfolio companies has been delegated by the Board to the Manager which has sub-delegated that authority to the Investment Manager.

abrdn is a tier 1 signatory of the UK Stewardship Code 2020 which aims to enhance the quality of engagement by investors with investee companies in order to improve their socially responsible performance and the long term investment return to shareholders. While delivery of stewardship activities has been delegated to the Manager, the Board acknowledges its role in setting the tone for the effective delivery of stewardship on the Company's behalf.

The Board has also given discretionary powers to the Manager to exercise voting rights on resolutions proposed by the investee companies within the Company's portfolio. The Manager reports to the Board on a six monthly basis on stewardship (including voting) issues.

Global Greenhouse Gas Emissions and Streamlined Energy and Carbon Reporting ("SECR")

All of the Company's activities are outsourced to third parties. The Company therefore has no greenhouse gas emissions to report from the operations of its business, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013. For the same reason as set out above, the Company considers itself to be a low energy user under the SECR regulations and therefore is not required to disclose energy and carbon information.

Viability Statement

The Company does not have a fixed period strategic plan but the Board does formally consider risks and strategy on at least an annual basis. The Board regards the Company, with no fixed life, as a long term investment vehicle but for the purposes of this viability statement has decided that a period of five years (the "Review Period") is an appropriate timeframe over which to report. The Board considers that this Review Period reflects a balance between looking out over a long term horizon and the inherent uncertainties of looking out further than five years.

In assessing the viability of the Company over theReview Period the Directors have focused upon the following factors:

·  the Company's principal risks and uncertainties as set out in the Strategic Report;

·  the relevance of the Company's investment objective;

·  the demand for the Company's shares as indicated by the level of premium and/or discount;

·  the level of income generated by the Company's portfolio as compared to its expenses;

·  the overall liquidity of the Company's investment portfolio;

·  the likelihood of the Company being able to continue to meet the covenants under its current borrowing arrangements, and the covenants attaching to any replacement borrowing arrangements, over the next five years;

·  the £40m senior loan notes and £60m senior loan notes, which are repayable in 2027 and in 2029, respectively ; and

·  any requirement for the Company to repay or refinance the drawn-down element of its three year £50 million bank loan facility prior to, or at, its maturity in October 2024.

In making this assessment, the Board has considered in particular a large economic shock, such as a further global pandemic, a period of increased stock market volatility and/or markets at depressed levels, a significant reduction in the liquidity of the portfolio, or persistent inflationary pressures, or changes in investor sentiment or regulation, and how these factors might affect the Company's prospects and viability in the future. The Board undertook scenario analysis, incorporating income forecasting, in reaching its conclusions, but recognising that the Company's expenses are significantly lower than its total income.

Taking into account the Company's current position and the potential impact of its principal risks and uncertainties, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due for a period of five years from the date of this Report.

Performance, Financial Position and Outlook

A review of the Company's activities and performance during the Year, including future developments, is set out in the Chairman's Statement and in the Investment Manager's Review. These cover market background, investment activity, portfolio strategy, dividend policy, gearing and investment outlook. A comprehensive analysis of the portfolio is provided above while the full portfolio of investments is published monthly on the Company's website. The Company's Statement of Financial Position shows the assets and liabilities at the year end. Borrowing facilities at the year end comprised a mix of fixed and floating debt: a three year £50 million bank loan, the £40 million of senior loan notes due for repayment in 2027 and £60 million of senior loan notes due for repayment in 2029. Details of these are shown in notes 13 and 14 respectively.

The future strategic direction and development of the Company is regularly discussed as part of Board meeting agendas. The Board also considers the Manager's promotional strategy for the Company, including effective communications with shareholders. The Board intends to maintain, for the year ending 30 June 2023, the strategy set out in the Strategic Report as it believes that this is in the best interests of shareholders.

Environmental, Community, Social and Human Rights Issues

The Company has no employees and, accordingly, there are no disclosures to be made in respect of employees. In relation to the investment portfolio, the Board has delegated assessment of these issues to the Investment Manager.

Modern Slavery Act

Due to the nature of its business, being a company that does not offer goods and services to customers, the Board considers that the Company is not within the scope of the Modern Slavery Act 2015 because it has no turnover. The Company is therefore not required to make a slavery and human trafficking statement. The Board considers the Company's supply chains, dealing predominantly with professional advisers and service providers in the financial services industry, to be low risk in relation to this matter.

Board diversity

At 30 June 2022, there were three male Directors and three female Directors (2021 - four male Directors and three female Directors). Further information on Board diversity may be found in the Directors' Report.

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

Neil RoganChairman21 September 2022

Promoting the Success of the Company

The Board is required to report how it has discharged its duties and responsibilities under section 172 of the Companies Act 2006 during the Year. Under this requirement, the Directors have a duty to promote the success of the Company for the benefit of its members (shareholders) as a whole, taking into account the likely long term consequences of decisions, the need to foster relationships with the Company's stakeholders, and the impact of the Company's operations on the environment. In addition the Directors must act fairly between shareholders and be cognisant of maintaining the reputation of the Company.

The Purpose of the Company and Roleof the Board

The Company has been established as an investment vehicle for the purpose of delivering its investment objective which is set out on the inside front cover of this Report. Investment trusts, such as the Company, are long-term investment vehicles that are typically externally-managed, have no employees, and are overseen by an independent non-executive board of directors.

The Board is responsible for all decisions relating to the Company's investment objective and policy, gearing, corporate governance and strategy, and for monitoring the performance of the Company's third party service providers, including the Manager. 

The Board's philosophy is that the Company should foster a culture where all parties are treated with respect. The Directors provide mutual support combined with constructive challenge. Integrity, openness and diligence are defining characteristics of the Board's culture. The Company has a number of policies and procedures in place to aid a culture of good governance, such as those relating to Director's conflicts of interests and dealings in the Company's shares, annual evaluation of Directors, anti-bribery and anti-tax evasion. At its regular meetings, the Board engages with the Manager to understand its culture and receives regular reporting and feedback from the other key service providers.

The Company's primary stakeholders have been identified as its shareholders, the Manager, other key third party service providers, lenders and investee companies and the following table sets out details of the Company's engagement.

Specific Examples of Stakeholder Consideration During the Year

While the importance of giving due consideration to the Company's stakeholders is not a new requirement, and is considered as part of every Board decision, the Directors were particularly mindful of stakeholder considerations during the following decisions reached during the Year.

Dividends Paid to Shareholders

The level, frequency and timing of dividends paid are key considerations for the Board, taking into account net earnings for the year and the Company's objective of providing shareholders with a high and growing income, combined with the Company's Dividend Hero status. 

The total dividend per share of 36.0p in respect of the Year, representing an increase of 4.3% on the prior year, and the Company's dividend policy to make four equally-spaced payments to shareholders throughout the Year, reflects this.

Share Buy Backs

During the Year the Company bought back 356,015 Ordinary shares to be held in treasury, providing a small accretion to the NAV and a degree of liquidity to the market at times when the discount to the NAV per share had widened during normal market conditions. It is the view of the Board that this policy remains in the best interests of all shareholders.

Renewal of the Bank Loan

The Company's one year £20 million multi-currency unsecured revolving bank credit facility with Scotiabank Europe expired in November 2021.

The Directors considered that it would be beneficial for the Company to be able to access a larger short term borrowing facility following the substantial increase in its size. Accordingly, the Company entered into a new three year £50 million multi-currency unsecured revolving bank credit facility with Bank of Nova Scotia Limited. Alongside the Company's 2027 and 2029 Senior Loan Notes, the Directors consider that this provides the Company with flexible gearing, in the form of shorter and longer term facilities, to enhance long-term total returns to shareholders, where appropriate.

Board Composition

In accordance with the succession plan of the Company for the orderly refreshment of the Board, the Company engaged a search consultant during the Year, which resulted in the appointment of Nandita Sahgal Tully. Further information about the search process and Board diversity may be found in the Directors' Report.

PORTFOLIO

Ten Largest Investments

As at 30 June 2022

Directors' Report

The Directors present their report and the audited financial statements for the Year.

Results and Dividend Policy

The financial statements for the Year indicate a total loss attributable to equity shareholders for the year of £41,0101,000 (2021 - gain of £161,217,000) and an explanation for the Company's financial performance may be found in the Chairman's Statement.

At the AGM on 2 November 2021, shareholders approved a dividend policy to pay four quarterly interim dividends per year. On 4 November 2021, the Company announced a first interim dividend of 8.25p per share to be paid on 22 December 2021, a second interim dividend of 8.25p per share to be paid on 17 March 2022 and a third interim dividend of 8.25p per share to be paid on 16 June 2022.

The Company announced, on 2 August 2022, the payment to shareholders on 15 September 2022 of a fourth interim dividend for the year of 11.25p per share (2021 - 9.75p) with an ex-dividend date of 18 August 2022 and a record date of 19 August 2022. This resulted in total dividends of 36.0 per share for the year ended 30 June 2022, an increase of 4.3% on the 34.5p paid for the prior year, which represented the 49th year of consecutive growth in the Company's annual dividend.

The Board is proposing to maintain the dividend policy of paying four interim dividends each year. In line with good corporate governance, the Board therefore proposes to put the Company's dividend policy to Shareholders for approval at the AGM as resolution 3.

Principal Activity and Status

The Company, which was incorporated in 1923, is registered as a public limited company in Scotland under company number SC012725 and is an investment company within the meaning of Section 833 of the Companies Act 2006.

The Company has been accepted by HM Revenue & Customs as an investment trust subject to the Company continuing to meet the relevant eligibility conditions of Section 1158 of the Corporation Tax Act 2010 and the ongoing requirements of Part 2 Chapter 3 Statutory Instrument 2011/2999 for all financial years commencing on or after 1 July 2012. The Directors are of the opinion that the Company has conducted its affairs during the Year so as to enable it to comply with the ongoing requirements for investment trust status.

The Company has conducted its affairs so as to satisfy the requirements as a qualifying security for Individual Savings Accounts. The Directors intend that the Company will continue to conduct its affairs in this manner.

Capital Structure and Voting Rights

At 30 June 2022, the Company had 116,690,472 (2021 - 117,046,487) fully paid Ordinary shares of 25p each with voting rights in issue and an additional 2,839,060 (2021 - 2,483,045) shares in Treasury. During the Year, 356,015 Ordinary shares were bought back into Treasury (2021 - nil).

Since the year end, the Company has bought back a further 230,000 Ordinary shares into treasury. Accordingly, as at the date of this Report, the Company's issued share capital consisted of 116,460,472 Ordinary shares of 25 pence each and 3,069,060 Ordinary shares held in treasury.

Ordinary shareholders are entitled to vote on all resolutions which are proposed at general meetings of the Company. The Ordinary shares, excluding shares in Treasury, carry a right to receive dividends. On a winding up, after meeting the liabilities of the Company, the surplus assets will be paid to Ordinary shareholders in proportion to their shareholdings. There are no restrictions on the transfer of Ordinary shares in the Company other than certain restrictions which may be applied from time to time by law (for example, laws prohibiting insider trading).

Manager and Company Secretary

The Manager has been appointed by the Company, under a management agreement, to provide investment management, risk management, administration and company secretarial services as well as promotional activities. The Company's portfolio is managed by the Investment Manager by way of a group delegation in place with the Manager. In addition, the Manager has sub-delegated promotional activities to the Investment Manager and administrative and secretarial services to Aberdeen Asset Management PLC.

Under the management agreement, the Manager is entitled to a monthly fee of one-twelfth of: 0.55% pa on the first £350 million of net assets, 0.45% pa on net assets between £350 million and £450 million and 0.25% pa on any net assets in excess of £450 million.

The value of any investments in unit trusts, open ended and closed ended investment companies and investment trusts of which the Manager, or another company within abrdn, is the operator, manager or investment adviser, is deducted from net assets when calculating the fee.

The management agreement is terminable on not less than three months' notice. In the event of termination by the Company on less than the agreed notice period, compensation is payable to the Manager in lieu of the unexpired notice period.

An annual secretarial fee of £75,000 (plus applicable VAT) is payable to Aberdeen Asset Management PLC, which is chargeable 100% to revenue. An annual fee equivalent to up to 0.05% of gross assets (calculated at 30 September each year) is paid to the Investment Manager to cover promotional activities undertaken on behalf of the Company.

The finance costs and investment management fees are charged 70% to capital and 30% to revenue in line with the Board's expectation of the split of future investment returns.

The management, secretarial and promotional activity fees paid to subsidiaries of abrdn during the Year are shown in notes 4 and 5 to the financial statements.

External Agencies

The Board has contractually delegated to external agencies, including the Manager and other service providers, certain services including: the management of the investment portfolio, the day-to-day accounting and company secretarial requirements, the depositary services (which include cash monitoring, the custody and safeguarding of the Company's financial instruments and monitoring the Company's compliance with investment limits and leverage requirements) and the share registration services. Each of these contracts was entered into after full and proper consideration by the Board of the quality and cost of services offered in so far as they relate to the affairs of the Company. In addition, ad hoc reports and information are supplied to the Board as requested.

Directors

As at the date of this Report, the Board consisted of a non-executive Chairman and five non-executive Directors.

Neil Rogan, Stephanie Eastment, Peter Tait, Merryn Somerset Webb and Alan Giles were Directors throughout the Year. Nandita Sahgal Tully was appointed a Director on 3 November 2021. Jean Park and Donald Cameron retired as Directors on 2 November 2021.

Jean Park was Senior Independent Director, and Chairman of the Remuneration Committee until her retirement, following which Peter Tait was appointed as her successor. Stephanie Eastment is Chairman of the Audit Committee.

Board Diversity

The Board recognises the importance of having a range of skilled, experienced individuals with the right knowledge represented on the Board in order to allow it to fulfil its obligations. The Board also recognises the benefits and is supportive of, and will give due regard to, the principle of diversity in its recruitment of new Board members. The Board will not display any bias for age, gender, race, sexual orientation, socio-economic background, religion, ethnic or national origins or disability in considering the appointment of Directors. The Board will continue to ensure that all appointments are made on the basis of merit against the specification prepared for each appointment. The Board will take account of the targets set out in the FCA's Listing Rules, which are set out below.

The Board voluntarily discloses the following information in relation to its diversity.

As an externally managed investment company, the Board employs no executive staff, and therefore does not have a chief executive officer (CEO) or a chief financial officer (CFO)- both of which are deemed senior board positions by the FCA. However, the Board considers the Chair of the Audit Committee to be a senior board position and the following disclosure is made on this basis. Other senior board positions recognised by the FCA are chair of the board and senior independent director (SID). In addition, the Board has resolved that the Company's year end date be the most appropriate date for disclosure purposes ( the "Reference Date").

As at the Reference Date, and as at the date of approval of the Annual Report, the Company met the targets that at least 40% of its Directors are women; that at least one Director is from a minority ethnic background; and that at least one senior position on the Board is held by a woman. The following information has been provided by each Director. There have been no changes since 30 June 2022.

Board as at 30 June 2022

The Role of the Chairman and Senior Independent Director ("SID")

The Chairman is responsible for providing effective leadership to the Board, by setting the tone of the Company, demonstrating objective judgement and promoting a culture of openness and debate. The Chairman facilitates the effective contribution of, and encourages active engagement by, each Director. In conjunction with the Company Secretary, the Chairman ensures that Directors receive accurate, timely and clear information to assist them with effective decision-making. The Chairman acts upon the results of the Board evaluation process by recognising strengths and addressing any weaknesses and also ensures that the Board engages with major shareholders and that all Directors understand shareholder views.

The SID acts as a sounding board for the Chairman and acts as an intermediary for other directors, when necessary. The SID takes responsibility for an orderly succession process for the Chairman and leads the annual appraisal of the Chairman's performance. The SID is also available to shareholders to discuss any concerns they may have.

Management of Conflicts of Interest, Anti-Bribery Policy and Tax Evasion Policy

The Board has a procedure in place to deal with a situation where a Director has a conflict of interest. As part of this process, the Directors prepare a list of other positions held and all other conflict situations that may need to be authorised either in relation to the Director

concerned or his/her connected persons. The Board considers each Director's situation and decides whether to approve any conflict, taking into consideration what is in the best interests of the Company and whether the Director's ability to act in accordance with his/her wider duties is affected. Each Director is required to notify the Company Secretaries of any potential, or actual, conflict situations which will need authorising by the Board. Authorisations given by the Board are reviewed at each Board meeting.

The Board takes a zero-tolerance approach to bribery and has adopted appropriate procedures designed to prevent bribery. abrdn also takes a zero-tolerance approach and has its own detailed policy and procedures in place to prevent bribery and corruption.

It is the Company's policy to conduct all of its business in an honest and ethical manner. The Company takes a zero-tolerance approach to facilitation of tax evasion, whether under UK law or under the law of any foreign country and its full policy on tax evasion may be found on its website.

Directors' Insurance and Indemnities

The Company's Articles of Association indemnify each of the Directors out of the assets of the Company against any liabilities incurred by them as a Director of the Company in defending proceedings, or in connection with any application to the Court in which relief is granted. In addition, the Directors have been granted qualifying indemnity provisions by the Company which are currently in force. Directors' and Officers' liability insurance cover has been maintained throughout the Year at the expense of the Company.

Corporate Governance

The Company is committed to high standards of corporate governance and its Statement of Corporate Governance included in the Annual Report.

Matters Reserved for the Board

The Board sets the Company's objectives and ensures that its obligations to its shareholders are met. It has formally adopted a schedule of matters which are required to be brought to it for decision, thus ensuring that it maintains full and effective control over appropriate strategic, financial, operational and compliance issues.

These matters include:

·  the maintenance of clear investment objectives and risk management policies;

·  the monitoring of the business activities of the Company ranging from analysis of investment performance through to review of quarterly management accounts;

·  monitoring requirements such as approval of the Half-Yearly Report and Annual Report and financial statements and approval and recommendation of any dividends;

·  setting the range of gearing in which the Manager may operate;

·  major changes relating to the Company's structure including share buy-backs and share issuance;

·  Board appointments and removals and the related terms;

·  authorisation of Directors' conflicts or possible conflicts of interest;

·  terms of reference and membership of Board Committees;

·  appointment and removal of the Manager and the terms and conditions of the Management Agreement relating thereto; and

·  London Stock Exchange/Financial Conduct Authority - responsibility for approval of all circulars, listing particulars and other releases concerning matters decided by the Board.

Full and timely information is provided to the Board to enable it to function effectively and to allow the Directors to discharge their responsibilities.

Board Committees

The Board has appointed a number of Committees as set out below. Copies of their terms of reference, which define the responsibilities and duties of each Committee, are available on the Company's website.

Audit Committee

The Audit Committee's Report is included in the Annual Report.

Management Engagement Committee

The terms and conditions of the Company's agreement with the Manager, set out in the Directors' Report, are considered by the Management Engagement Committee which comprises the whole Board and is chaired by Neil Rogan. The key responsibilities of the Management Engagement Committee include:

·  monitoring and evaluating the performance of the Manager;

·  reviewing, at least annually, the continued retention of the Manager;

·  reviewing, at least annually, the terms of appointment of the Manager including, but not limited to, the level and methodology of the management fees as well as the notice period of the Manager.

In monitoring the performance of the Manager, the Committee considers the investment record of the Company over the short and long term, taking into account its performance against the Benchmark, peer group investment trusts and open-ended funds, and against its delivery of the investment objective to shareholders. The Committee also reviews the management processes, risk control mechanisms and promotional activities of the Manager.

In support of the work undertaken by the Management Engagement Committee, the Board engaged Lintstock Limited, an independent firm, to facilitate a review of the Manager. This involved the completion of questionnaires by each Director and the subsequent discussion by the Management Engagement Committee of a summary, prepared by Lintstock Limited, of the key findings. The review covered all services provided to the Company by the Manager including investment management, risk management and internal controls, marketing and investor relations, company secretarial and administration services, and also included consideration as to the appropriateness of the management fee arrangements.

In light of the above, the Directors consider the continuing appointment of the Manager, on the current terms, to be in the best interests of shareholders because they believe that the Manager has the investment management, promotional and associated secretarial and administrative skills required for the effective operation of the Company.

Nomination Committee

The Board has established a Nomination Committee, comprising all of the Directors, with Neil Rogan as Chairman. The Committee is responsible for:

· determining the overall size and composition of the Board (including the skills, knowledge, experience and diversity);

· undertaking longer term succession planning, including setting a policy on tenure for Directors;

· undertaking an annual evaluation of the Directors, including establishing that each Director possesses the capacity to commit sufficient time to discharge their responsibilities;

· oversight of appointments to the Board, including open advertising or engagement of independent search consultants, with a view to attracting candidates from a wide range of backgrounds and with different experience, with due regard to the benefits of diversity on the Board;

· assessing, annually, the effectiveness and independence of each Director; and

· making recommendations for the election or re-election of any Director, having evaluated their individual performance, capacity and contribution.

The Committee's overriding priority in appointing new Directors is to identify the candidate with the optimal range of skills and experience to complement the existing Directors. The Board also recognises the benefits, and is supportive, of the principle of diversity in its recruitment of new Directors. Trust Associates, an independent search firm with no connection with the Company, was engaged in the search which resulted in the appointment of Nandita Sahgal Tully as a Director during the Year.

During the Year, through the work of the Nomination Committee, the Board engaged an independent firm, Lintstock Limited, to facilitate a review of the Board, its Committees and the performance of individual Directors. The process involved the completion of questionnaires by each Director and the production of a report to the Board by Lintstock Limited summarising the findings of the review. The results of the process were discussed by the Board following its completion, with appropriate action points agreed.

The review of the Chairman was undertaken by the Senior Independent Director.

Following the evaluation process, Lintstock Limited concluded that the Board operates effectively to promote the success of the Company and that each Director makes a significant contribution to the collective Board.

All six Directors will retire, and each being eligible, will seek election or re-election, as applicable, at the AGM on 1 November 2022.

The Directors attended meetings, including a strategy session during the Year as follows (with their eligibility to attend the relevant meetings in brackets). The Board meets more frequently when business needs require;

Policy on Tenure

The Committee has adopted a policy whereby all Directors will stand for re-election at each AGM. In addition Directors, including the Chairman, will not stand for re-election as a Director of the Company later than the AGM following the ninth anniversary of their appointment to the Board unless in relation to exceptional circumstances.

The ninth anniversary of Neil Rogan's appointment as a Director is 26 November 2022. The other Directors, led by Peter Tait as Senior Independent Director, have determined that it is in the best interests of shareholders that Neil Rogan continue as Chairman in order to oversee the Company's centenary in 2023. Neil Rogan will retire at the conclusion of the Company's AGM in November 2023.

The Board as a whole believes that each Director remains independent of the Manager and free of any relationship which could materially interfere with the exercise of his or her independent judgement on issues of strategy, performance, resources and standards of conduct and confirms that, following formal performance evaluations, the individuals' performance continues to be effective and demonstrates commitment to the role.

The biographies of each of the Directors seeking election or re-election include their experience, length of service and the contribution that each Director makes to the Board. Each Director has the requisite high level and range of business and financial experience which enables the Board to provide clear and effective leadership and proper stewardship of the Company.

Accordingly, Stephanie Eastment, Alan Giles, Merryn Somerset Webb, Peter Tait and Neil Rogan, each being eligible, offer themselves for re-election as Directors of the Company. Nandita Sahgal Tully, being eligible, offers herself for election as a Director of the Company.

Remuneration Committee

The Board has established a Remuneration Committee, comprising all of the Directors, whose Chairman was Jean Park until 2 November 2021 and Peter Tait thereafter. The Directors' Remuneration Report sets out the responsibilities of the Committee and the work undertaken by the Committee during the Year.

Accountability and Audit

The responsibilities of the Directors and the auditor in connection with the financial statements appear in the Annual Report.

The Directors who held office at the date of this Report each confirm that, so far as they are aware, there is no relevant audit information of which the Company's auditor is unaware and that they have taken all the steps that they could reasonably be expected to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company's auditor is aware of that information. Further, there have been no important, additional events since the year end which warrant disclosure.

The Directors confirm that no non-audit services were provided by the auditor during the Year and, after reviewing the auditor's procedures in connection with the provision of any such services, remain satisfied that the auditor's objectivity and independence is being safeguarded.

Going Concern

The Directors have undertaken a rigorous review and consider both that there are no material uncertainties and that the adoption of the going concern basis of accounting is appropriate. This conclusion is consistent with the longer term Viability Statement.

The Company's assets consist primarily of a diverse portfolio of listed equity shares nearly all of which, in most circumstances, are realisable within a short timescale. The Board has set limits for borrowing and regularly reviews the level of any gearing, cash flow projections and compliance with banking and loan note covenants.

The Directors are mindful of the principal risks and uncertainties disclosed above and have reviewed forecasts detailing revenue and liabilities. The Directors are satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future, being at least 12 months from the date of approval of this Annual Report.

Independent Auditor

Shareholders approved the re-appointment of PricewaterhouseCoopers LLP as the Company's auditor at the AGM on 2 November 2021 and resolutions to approve its re-appointment for the Year to 30 June 2023, and to authorise the Directors to determine its remuneration, will be proposed at the forthcoming AGM.

Financial Instruments

The financial risk management objectives and policies arising from financial instruments and the exposure of the Company to risk are disclosed in note 18 to the financial statements.

Relations with suppliers, customers and others

The Directors have regard to the need to foster the Company's business relationships with suppliers, customers and others, and the effect of that regard, including on the principal decisions taken by the Company during the financial year; further information on the Company's responsibilities under Section 172 of Companies Act 2006 may be found above.

Substantial Interests

As at 30 June 2022 and 31 August 2022 the following interests over 3% in the issued Ordinary share capital of the Company (excluding treasury shares) had been disclosed in accordance with the requirements of the FCA's Guidance and Transparency Disclosure Rules:

The above interests, as at 31 August 2022, were unchanged as at the date of approval of this Report.

Relations with Shareholders

The Directors place great importance on communication with shareholders. The Company's shareholder register is retail-dominated and the Manager, together with the Company's broker, regularly meets with current and prospective shareholders to discuss performance. The Board receives investor relations updates from the Manager on at least a quarterly basis. Any changes in the shareholder register as well as shareholder feedback is discussed by the Directors at each Board meeting.

Regular updates are provided to shareholders through the Annual Report, Half Yearly Report, monthly factsheets, company announcements, including daily net asset value announcements, all of which are available through the Company's website at: murray-income.co.uk. The Annual Report is also widely distributed to other parties who have an interest in the Company's performance. Shareholders and investors may obtain up-to-date information on the Company through its website or via abrdn's Customer Services Department.

The Board's policy is to communicate directly with shareholders and their representative bodies without the involvement of the management group (either the Company Secretary or abrdn) in situations where direct communication is required and representatives from the Board offer to meet with major shareholders on an annual basis in order to gauge their views. The Company Secretary acts on behalf of the Board, not the Manager, and there is no filtering of communication. At each Board meeting the Board receives full details of any communication from shareholders to which the Chairman responds, as appropriate, on behalf of the Board.

In addition, in relation to institutional shareholders, members of the Board may be either accompanied by the Manager or conduct meetings in the absence of the Manager.

The Company's Annual General Meeting ordinarily provides a forum, both formal and informal, for shareholders to meet and discuss issues with the Directors and Investment Manager. The Notice of AGM included within the Annual Report is normally sent out at least 20 working days in advance of the meeting.

The Company will also hold an online presentation for existing and potential shareholders on 2 November 2022. Further information on how to register may be found in the Chairman's Statement.

Future Developments of the Company

Disclosures relating to the future developments of the Company may be found in the Chairman's Statement.

Disclosures Required by FCA Listing Rule 9.8.4

This rule requires listed companies to report certain information in a single identifiable section of their annual financial reports. None of the prescribed information is applicable to the Company in the Year.

Annual General Meeting ("AGM")

Among the special business being put at the AGM of the Company to be held on 1 November 2022, the following resolutions will be proposed:

Authority to allot shares and disapply pre-emption rights (Resolutions 12 and 13)

Ordinary resolution No. 12 will renew the authority to allot the unissued share capital up to an aggregate nominal amount of £1.5m (equivalent to approximately 5.8m Ordinary shares, or, if less, 5% of the Company's existing issued share capital (excluding treasury shares) on the date of passing of this resolution). Such authority will expire on the date of the AGM in 2023 or on 31 December 2023, whichever is earlier. This means that the authority will require to be renewed at the next AGM.

When shares are to be allotted for cash, Section 561 of the Companies Act 2006 (the "Act") provides that existing shareholders have pre-emption rights and that the new shares to be issued, or sold from treasury, must be offered first to such shareholders in proportion to their existing holding of shares. However, shareholders can, by special resolution, authorise the Directors to allot shares or sell from treasury otherwise than by a pro rata issue to existing shareholders. Special resolution No. 13 will, if passed, give the Directors power to allot for cash or sell from treasury equity securities up to an aggregate nominal amount of £2.9m (equivalent to approximately 11.7m Ordinary shares, or, if less, 10% of the Company's existing issued share capital (excluding treasury shares) on the date of passing of this resolution, as if Section 561 of the Act does not apply). This authority will also expire on the date of the AGM in 2023 or on 31 December 2023, whichever is earlier. This authority will not be used in connection with a rights issue by the Company.

The Directors intend to use the authorities given by resolutions 12 and 13 to allot shares or sell shares from treasury and disapply pre-emption rights only in circumstances where this will be clearly beneficial to shareholders as a whole. The issue proceeds would be available for investment in line with the Company's investment policy. No issue of shares will be made which would effectively alter the control of the Company without the prior approval of shareholders in general meeting. It is the intention of the Board that any issue of shares or any re-sale of treasury shares would only take place at a price not less than 0.5% above the NAV per share prevailing at the date of sale. It is also the intention of the Board that sales from treasury would only take place when the Board believes that to do so would assist in the provision of liquidity to the market.

Purchase of the Company's own Ordinary shares (Resolution 14)

At the AGM held on 2 November 2021, shareholders approved the renewal of the authority permitting the Company to repurchase its Ordinary shares. The Directors wish to renew the authority given by shareholders at the previous AGM. A share buy-back facility enhances shareholder value by acquiring shares at a discount to NAV as and when the Directors consider this to be appropriate. The purchase of shares, when they are trading at a discount to NAV per share, should result in an increase in the NAV per share for the remaining shareholders. This authority, if conferred, will only be exercised if to do so would result in an increase in the NAV per share for the remaining shareholders and if it is in the best interests of shareholders generally. Any purchase of shares will be made within guidelines established from time to time by the Board. It is proposed to seek shareholder authority to renew this facility for another year at the AGM.

Under the FCA's Listing Rules, the maximum price that may be paid on the exercise of this authority must not exceed the higher of (i) 105% of the average of the middle market quotations for the shares over the five business days immediately preceding the date of purchase and (ii) the higher of the last independent trade and the highest current independent bid on the trading venue where the purchase is carried out. The minimum price which may be paid is 25p per share. Shares which are purchased under this authority will either be cancelled or held as treasury shares. Special resolution No. 14 will renew the authority to purchase in the market a maximum of 14.99% of shares in issue at the date of passing of the resolution (amounting to approximately 17.5m Ordinary shares). Such authority will expire on the date of the AGM in 2023, or on 31 December 2023, whichever is earlier. This means in effect that the authority will have to be renewed at the next AGM, or earlier, if the authority has been exhausted. No dividends may be paid on any shares held in treasury and no voting rights will attach to such shares. The benefit of the ability to hold treasury shares is that such shares may be sold at short notice. This should give the Company greater flexibility in managing its share capital, and improve liquidity in its shares.

Recommendation

The Directors believe that the resolutions to be proposed at the AGM are in the best interests of the Company and its shareholders as a whole, and recommend that shareholders vote in favour of the resolutions, as the Directors intend to do in respect of their own beneficial shareholdings, amounting to 51,166 Ordinary shares, representing 0.04% of the Company's issued share capital (excluding treasury shares) at 30 June 2022.

On behalf of the BoardNeil RoganChairman21 September 2022

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

In preparing these financial statements, the Directors are required to:

·  select suitable accounting policies and then applythem consistently;

·  make judgments and accounting estimates that are reasonable and prudent;

·  state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

·  adopt a going concern basis of accounting for the financial statements unless it is inappropriate to assume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report, Directors' Remuneration Report, Strategic Report and Statement of Corporate Governance that comply with that law and those regulations.

The financial statements are published on murray-income.co.uk which is a website maintained by the Company's Manager. The work carried out by the auditor does not involve consideration of the maintenance and integrity of the website and, accordingly, the auditor accepts no responsibility for any changes that have occurred to the financial statements since being initially presented on the website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the Directors confirms to the best of his or her knowledge that:

·  the financial statements, prepared in accordance with the applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of the Company;

·  the Annual 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 the Company faces;

·  in the opinion of the Board, the Annual Report and financial statements taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy; and

·  the financial statements are prepared on an ongoing concern basis.

For and on behalf of the Board of MurrayIncome Trust PLCNeil Rogan Chairman21 September 2022

Statement of Comprehensive Income

Statement of Financial Position

Statement of Changes in Equity

Statement of Cash Flows

Notes to the Financial Statements

For the year ended 30 June 2022