Annual Financial Report

CAPITAL GEARING TRUST P.L.C

12 June 2009

REPORT AND ACCOUNTS FOR THE YEAR ENDED 5 APRIL 2009

In accordance with Listing Rule 9.6.1, two copies of the Report and
Accounts for the year ended 5 April 2009, Notice of the 2009 Annual
General Meeting and the related Form of Proxy have been submitted to
the UK Listing Authority and are available for inspection at the UK
Listing Authority's Document Viewing Facility which is situated at:

Financial Services Authority
25 The North Colonnade
Canary Wharf
London, E14 5HS

The Report and Accounts for the year ended 5 April 2009 have also
been posted to shareholders and are available to view at
www.capitalgearingtrust.co.uk.

Explanatory Note and Warning

On 27 May 2009, the Company made its Preliminary Results
announcement, which included a condensed set of financial statements,
management reports, a summary of the principal risks and
uncertainties faced, a responsibility statement and details of
related party transactions.

The primary purpose of this announcement is to inform the market
about the publication of the Company's Report and Accounts for the
year ended 5 April 2009 (the "2009 Annual Report").

The information below, which is extracted from the 2009 Annual
Report, is included solely for the purpose of complying with
Disclosure and Transparency Rule (DTR) 6.3.5 and the requirements it
imposes on issuers as to how to make public annual financial reports.
It should be read in conjunction with the Company's Preliminary
Results announcement issued on 27 May 2009. Together these constitute
the material required by DTR 6.3.5 to be communicated to the media in
unedited full text through a Regulatory Information Service. This
material is not a substitute for reading the 2009 Annual Report. Page
numbers, note references and other cross-references in the extracted
information below refer to page numbers, notes and cross-references
in the 2009 Annual Report.

ADDITIONAL INFORMATION REQUIRED BY DISCLOSURE AND TRANSPARENCY RULE
6.3.5

In compliance with DTR 6.3.5, further details of the principal risks
and uncertainties faced, extracted from note 20 to the 2009 Annual
Report, are set out below.

Details of the principal risks and uncertainties faced

In addition to the summary of principal risks, which can be found on
page 8 of the 2009 Annual Report and was included in the Company's
Preliminary Results announcement issued on 27 May 2009, the 2009
Annual Report also contains within note 20 to the financial
statements on pages 31 to 34, details of the risks associated with
the Company's financial instruments as follows:

The main risks arising from the Company's financial instruments are
market price risk, interest rate risk, credit risk and currency risk.
The Board regularly reviews and agrees policies for managing each of
these risks and they are summarized below.

Other debtors and creditors do not carry any interest and are short
term in nature and accordingly are stated at their nominal value as
reduced by appropriate allowances for estimated irrecoverable
amounts.

Market price risks
Market price 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 Board'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
in order to consider investment strategy.  A list of the main
investments held by the Company is shown on pages 5 and 6. All
investments are stated at bid value, which in the Directors' opinion
is equal to fair value.

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 bond 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
different price to its purchase level and a profit or loss may be
incurred.

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 movement in order to
mitigate this risk.

Liquidity risk

Liquidity risk is not considered to be significant as the Company has
no bank loans or other borrowings. All liabilities are payable within
one year.

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.  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 prospective investments.

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.

TMF Nominees Limited
Company Secretary
01582 439276

12 June 2009
                                          cement was originally distributed by Hugin. The issuer is 
solely responsible for the content of this announcement.