Finsbury
Growth
& Income
Trust PLC
Annual Report for the year
ended 30 September 2024
FINSBURY GROWTH & INCOME TRUST PLC Annual Report for the year ended 30 September 2024
FINANCIAL CALENDAR
FINANCIAL YEAR END
30 September
FINAL RESULTS ANNOUNCED
December
ANNUAL GENERAL MEETING
Tuesday, 28 January 2025
HALF YEAR END
31 March
HALF YEAR RESULTS ANNOUNCED
May
INTERIM DIVIDENDS PAYABLE
May and November
CONTENTS
STRATEGIC REPORT
1 Company Summary
2 Company Performance
4 Key Performance Indicators (“KPIs”)
6 Chairman’s Statement
8 Investment Portfolio
10 Portfolio Manager’s Review
16 Business Review
GOVERNANCE
38 Board of Directors
40 Report of the Directors
45 Corporate Governance
52 Statement of Directors’ Responsibilities
53 Directors’ Remuneration Policy
55 Directors’ Remuneration Report
59 Audit Committee Report
INDEPENDENT AUDITORS’ REPORT
64 Independent Auditors’ Report
FINANCIAL STATEMENTS
72 Income Statement
73 Statement of Changes in Equity
74 Statement of Financial Position
75 Statement of Cash Flows
76 Notes to the Financial Statements
FURTHER INFORMATION
92 Glossary of Terms and Alternative
Performance Measures
97 Company Information
Please note that the Notice of Annual General
Meeting is set out in a separate document.
The Company’s shares are traded on the London
Stock Exchange and can be purchased through
a stock broker or other financial intermediary.
The shares are available through savings plans
(including investment dealing accounts, ISAs,
Junior ISAs and SIPPs) which facilitate both regular
monthly investments and lump sum investments
in the Company’s shares. There are a number of
investment platforms that offer these facilities.
For more information about Finsbury Growth
& Income Trust PLC visit the website
WWW.FINSBURYGT.COM
FURTHER
INFORMATION
INDEPENDENT
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FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCE
STRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
Company Summary
OBJECTIVES AND PERFORMANCE
MEASUREMENT
The Company aims to achieve capital and
income growth and to provide Shareholders
with a total return in excess of that of the FTSE
All-Share Index (the Company’s benchmark).
Further details of the Company’s investment
policy are set out on pages 17 and 18.
The net asset value per share increased
by 8.2% during the financial year to
30September 2024 on a total return basis
(2023: 7.2%). The detail of this movement
can be found on page 73.
DIVIDENDS
During the year the Company paid two interim
dividends totalling 19.6p (2023: 19.0p) which
was an increase of 3.2%.
The Company’s Dividend Policy can be found
on page 18.
Finsbury Growth & Income Trust PLC is a listed
investment company and a constituent of the
FTSE 250. The Company is a member of the
Association of Investment Companies (“AIC”).
1 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
STRATEGIC REPORT
Company Performance
* Source – Morningstar
^ Alternative Performance Measure (see glossary on pages 92 to 96)
† UK GAAP Measure
KEY FACTS
943.4p
Net asset value per share
2023: 891.2p (+5.8%)
57.7p
Return per share
†
2023: 61.4p (-6.0%)
8.2%
Net asset value per share total
return
*, ^
2023: 7.2%
3.4%
Share price total return
*, ^
2023: 7.5%
861.0p
Share price
2023: 852.0p (+1.1%)
84.1%
Active Share
*^
2023: 85.3%
£1.582bn
Shareholders’ funds
†
2023: £1.823bn (-13.2%)
167,717,668
Number of shares in issue
(excluding 57,273,635 shares held
in Treasury)
2023: 204,519,434 (-18.0%)
(Treasury shares 2023: 20,471,869)
8.7%
Discount of share price to
net asset value per share
^
2023: 4.4%
19.6p
Total dividends per share
for the year
†
2023: 19.0p (+3.2%)
0.61%
Ongoing charges
^
2023: 0.61%
0.7%
Gearing^
2023: 0.8%
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCE
STRATEGIC REPORT
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INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
FIVE YEARS SUMMARY
AS AT 30 SEPTEMBER 2020 2021 2022 2023
2024
Share price 840.0p 876.0p 800.0p 852.0p
861.0p
Net asset value per share 846.2p 917.7p 848.4p 891.2p 943.4p
Discount of Share price to net asset value per share 0.7% 4.5% 5.7% 4.4% 8.7%
YEAR ENDED 30 SEPTEMBER
2020 2021 2022 2023
2024
Share price total return
* ^
(9.0)% +6.3% (5.6)% +7.5%
+3.4%
Net asset value per share total return
* ^
(7.7)% +10.6% (5.8)% +7.2% +8.2%
FTSE All-Share Index total return
** #
(16.6)% +27.9% (4.0)% +13.8% +13.4%
Total (loss)/return per share
†
(67.1)p 88.0p (53.4)p 61.4p 57.7p
Dividends per share
†
16.6p 17.1p 18.1p 19.0p 19.6p
* Source: Morningstar
** Source: FTSE International Limited (“FTSE”) © FTSE, 2024
# See glossary of terms and alternative performance measures on pages 92 to 96)
^ Alternative Performance Measure (“APM”) (see glossary on pages 92 to 96)
† UK GAAP Measure
The Company was incorporated in Scotland on 15 January 1926. Lindsell Train Limited (“Lindsell Train”) was appointed as Portfolio
Manager in December 2000. The total return of the Company’s share price over the ten years to 30 September 2024 has
been 108.4%, equivalent to a compound annual return of 7.6%. This compares with a total return of 83.6%* from the Company’s
benchmark, equivalent to a compound annual return of 6.3%*.
* Source: Morningstar, FTSE International Limited (“FTSE”) © FTSE2024
PERFORMANCE SINCE THE DATE OF APPOINTMENT OF LINDSELL TRAIN AS PORTFOLIO MANAGER
TO 30 SEPTEMBER 2024
SHARE PRICE
+714.9%
FTSE ALL-SHARE
INDEX
+246.6%
Source: Morningstar
Rebased to 100 as at 1 January 2001
Jan
01
Sep
01
Sep
02
Sep
03
Sep
04
Sep
05
Sep
06
Sep
07
Sep
08
Sep
09
Sep
10
Sep
11
Sep
12
Sep
13
Sep
14
Sep
15
Sep
16
Sep
17
Sep
18
Sep
20
Sep
21
0
200
400
600
800
1000
Sep
22
Sep
24
Sep
23
Sep
19
4
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
STRATEGIC REPORT
Key Performance Indicators
(“KPIs”)
^ Alternative Performance Measure (see glossary on
pages 92 to 96)
† UK GAAP Measure
* Source: Morningstar
The Board uses
certain financial and
non-financial KPIs to
monitor and assess
the performance of the
Company in achieving
its strategic aims.
The Board reviews the performance
of the portfolio in detail and hears the
views of the Portfolio Manager at each
meeting.
Information on the Company's
performance is provided in the
Chairman's Statement (beginning on
page 6) and the Portfolio Manager's
Review (beginning on page 10).
This performance is assessed against
the following KPIs which are unchanged
from last year.
Alternative Performance
Measures ("APM")
The Board believes that each of the
APMs, which are typically used within
the investment company sector,
provides additional useful information
to Shareholders in order to assess the
Company’s performance between
reporting periods and against its peer
group. The APMs used for the year under
review are unchanged from last year.
Further information on each of the APMs
can be found in the glossary beginning
on page 92.
8.2%
Net asset value total
return
^*
This reflects the change in the
Company’s net asset value
including the impact of reinvested
dividends.
During the year under review the
Company’s net asset value per
share total return was 8.2%
(2023: 7.2%).
57.7p
Return pershare
†
The total return per share for the
year was 57.7pence per share
(2023: return of 61.4pence per share).
Over five years, the Company earned
a total of 86.6 pence per share.
See the chart below for the five year
history:
Dividends per share
†
The total dividend declared for
the year was 19.6 pence per share
(2023: 19.0 pence per share), an
increase of 3.2%.
19.6p
Share price total return
^*
This reflects the change in the
value of the Company’s share price
including the impact of reinvested
dividends.
During the year under review the
Company’s share price total return
was 3.4% (2023: 7.5%).
3.4%
%
-10
-5
0
5
10
15
20
2020 2021 2022 2023 2024
pence per share
0
5
10
15
20
2020 2021 2022 2023 2024
%
-10
-5
0
5
10
15
20
2020 2021 2022 2023 2024
pence per share
-100
-50
0
50
100
150
2020 2021 2022 2023 2024
5
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
^ Alternative Performance Measure
(see glossary on pages 92 to 96)
* Source: Morningstar
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCE
STRATEGIC REPORT
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INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
Share price discount/
premium to net asset value
per share
^
The Board reviews the level of
discount/premium to net asset
value per share at every Board
meeting and consideration is given
to ways in which the share price
performance may be enhanced,
including the effectiveness of
marketing, share issuance and
buy-backs, where appropriate.
Details of how the Company’s share
buy-back and issuance policy
works can be found in the Statutory
Documentation section on the
Company’swebsite.
At 30September 2024 the
Company’s share price stood at
an 8.7% discount to the Company’s
net asset value per share
(2023: 4.4%discount).
During the year, the Company
bought back 36,801,766 shares into
Treasury (2023: 11,218,558) at an
average price of 844.5 pence and an
average discount of 7.4%.
Since the year end to 2 December
2024 the Company has purchased a
further 9,913,457 shares to be held in
Treasury. As at 2 December 2024 the
Company’s discount was 8.5%.
8.7%
%
-9
-8
-7
-6
-5
-4
-3
-2
-1
0
1
2020 2021 2022 2023 2024
Relative underperformance
to benchmark
Under the Company’s Business
Model, a Portfolio Manager is
appointed with the capability
and resources to manage the
Company’s assets through asset
allocation, stock selection, gearing
and risk management. The
Company’s portfolio is constructed
and managed without reference
to a stock market index with
the Portfolio Manager selecting
investments based on their
assessment of their long-term value.
The performance of the Company
relative to its benchmark and its
peers is a KPI measured by the
Board on an ongoing basis.
The Company’s benchmark is the
FTSE All-Share Index (total return)
which delivered a return of 13.4%
(2023: 13.8%) over the year. This
compares with the Company’s
share price totalreturn of 3.4%
(2023: 7.5%) resulting in a 10.0%
underperformance against the
benchmark.
The Board also monitors the
Company’s share price return*
against its AIC peer group
^
. As at
30 September 2024 the Company's
ranking against its peer group of UK
Equity income sector was:
Rank out of 23
Period 2024 2023
1 yr
21
14
3 yr
19
22
5 yr
21
9
10 yr
4
2
(10.0)%pt
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
STRATEGIC REPORT
PERFORMANCE
As we approach Finsbury’s 100th anniversary and after almost
ten years on your Board I am very aware of how essential it
is that investment managers have a long-term perspective.
However, managing funds over such time horizons is inevitably
difficult and I am disappointed to report another year of
underperformance by your Company when measured
against the performance of the benchmark, the FTSE All-Share
Index. While the Company’s long-term track record remains
impressive, this will provide little solace to more recent
investors for whom returns will be substantially below what
they may have hoped for.
The Company’s net asset value (“NAV”) per share delivered a total
return of 8.2% over the financial year compared with a benchmark
total return of 13.4%. The share price return over the same period
was 3.4%, reflecting a widening of the discount to NAV.
In the face of this ongoing period of challenging performance
your Board has continued to provide constructive challenge
to the Portfolio Manager, regularly reviewing the investment
process, portfolio themes and individual holdings throughout
the year. The Board has also undertaken a series of meetings
with institutional Shareholders (representing approximately a
third of the Company’s share capital), to ascertain their views
of the Company and the extent of their continued support for
the investment approach. While no one wants to experience
a prolonged period of underperformance, it is clear that there
remains significant support from investors for the Company’s
concentrated investment portfolio. No Shareholder has
expressed to us any appetite for a material change in approach.
We are grateful for this continued support but do not take it for
granted. With that in mind, and as part of broader shareholder
engagement, your Board will hold a continuation vote after
the current financial year ends in September 2025 (expected
to be held at the Company’s AGM in January 2026). This will
offer all Shareholders, in particular our retail shareholders who
represent a significant proportion of our register, an opportunity
to express their support, or otherwise, for the continuation of the
Company with its current investment strategy.
Chairman’s Statement
Simon Hayes, Chairman
In the meantime, your Board remains committed to buying
back shares, as described in more detail below, aware of the
value of the additional liquidity an active buy-back strategy
offers and of the enhancement in net asset value that
buy-backs provide. In the past financial year, the Company
has bought back over £310 million worth of its own shares
which is more then three times the value bought back in 2023.
As it is always important to point out, a highly concentrated
portfolio means higher risk, particularly in the short term. At
30September 2024, the Company’s Active Share – a measure
of how much it varies from the FTSE All-Share Index benchmark
- was 84.1% (2023: 85.3%). Such an uncorrelated portfolio will
inevitably perform very differently from the wider market,
whether positively or negatively.
I urge you to read Nick Train’s very helpful review where he
discusses the reasons for the relative underperformance and
explains why he holds the top ten holdings of the portfolio and
why he is optimistic for better future returns.
SHARE BUY-BACKS
As at 30 September 2024 the discount to NAV was 8.7%
(2023:4.4%). During the year under review the Company
bought back a total of 36,801,766 shares (18.0% of the shares in
issue) at a cost of over £310 million (2023: £97.7 million) and at
an average discount of 7.4%. This resulted in the NAV per share
being 14p higher than it would otherwise have been.
As at the close of the UK market on 2 December 2024, the
discount was 8.5%. Since the year end, a further 9,913,457
shares have been bought back at a cost of £85.3 million. As at
2December 2024, the Company had 157,804,211 shares in issue
(excluding 67,187,092 shares held in Treasury).
While share buy-backs will not necessarily prevent a discount
from widening further, particularly in times of market volatility,
they may, to a limited extent, mitigate a widening trend. In
addition, buy-backs enhance the NAV per share for remaining
Shareholders, provide some additional liquidity and help to
dampen discount volatility which can damage Shareholder
returns.
Discounts are affected by many factors outside the Company’s
control, including investor sentiment towards the Company, the
sector and towards equity markets in general, but where it is in
Shareholders’ interests (taking account of market conditions),
the Company remains committed to buying back shares at a
discount to NAV, as demonstrated over the past year.
Reflecting the Company’s commitment to buying back shares,
the Company held a General Meeting in August 2024 to renew
Shareholder authority to buy-back shares when it became
clear that the Shareholder authority to buy-back 14.99% of the
Company’s share capital granted at the AGM in January 2024
would be exhausted before the expected date of the 2025
AGM. The Company’s share buy-back authority will as usual
be proposed for renewal at the Company’s Annual General
Meeting to be held in January 2025.
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
RETURN AND DIVIDEND
The Income Statement shows a total return of 57.7p per share
(2023: 61.4p) consisting of a revenue return per share of 20.8p
(2023: 20.0p) and a capital return per share of 36.9p (2023: 41.4p).
Your Board has declared two interim dividends for the year
totalling 19.6p per share (2023: 19.0p), an increase of 3.2%. In order
to facilitate dividend payments on a timely and cost-effective
basis, your Board continues to elect to distribute the Company’s
income to Shareholders by means of two interim dividends
rather than wait several months to secure Shareholder approval
to pay a final dividend at the Annual General Meeting. This
dividend policy will again be proposed for approval at the
forthcoming Annual General Meeting.
CANCELLATION OF SHARE PREMIUM ACCOUNT
On 7 August 2024, the Company’s share premium account
of £1.1 billion was cancelled pursuant to a Court Order dated
12 July 2024, in order to provide the Company with additional
distributable reserves, which can be used in the future for
all permitted purposes, including, if required, to fund share
buy-backs or other returns of capital in accordance with
applicable law. This provides the Company with more flexibility
in how capital may be returned in the future.
THE BOARD
As reported earlier this year, after nine years as a Director of
the Company, I will be standing down at the conclusion of the
Company’s forthcoming Annual General Meeting in January
2025. I am delighted that Pars Purewal, who joined the Board in
November 2022, has been chosen by my Board colleagues to
succeed me as Chairman.
I have thoroughly enjoyed my time with the Company. This
is principally down to the hard work and professionalism of
colleagues at Lindsell Train and Frostrow and the exemplary
levels of commitment and engagement of my fellow Directors.
I would like to thank them all for making my job easier and
wish Pars and the team every success for the future.
CHANGE OF AUDITOR
During the year the Audit Committee led a competitive audit
tender process, which resulted in the recommendation that
Deloitte LLP be appointed as the Company’s new auditor.
Further information concerning the audit tender process can
be found on pages 62 and 63.
ARTICLES OF ASSOCIATION
It is proposed that new Articles of Association (the “New
Articles”) be adopted with effect from the conclusion of the
Annual General Meeting, principally in order to increase the
Company’s flexibility in respect of how the Company can
manage untraced Shareholders, unclaimed dividends and
the payment of dividends. The new Articles are being updated
to reflect developments in the market since the Existing
Articles were adopted in 2022, with a view to balancing the
Company’s administrative burden with the need to safeguard
Shareholder rights.
A summary of the principal changes to the Existing Articles is
included within the Explanatory Notes to the Notice of Meeting.
ANNUAL GENERAL MEETING
The Annual General Meeting of the Company this year will again
be held at Guildhall, City of London EC2V 7HH (please use the
Basinghall Street Entrance) on Tuesday, 28 January 2025 at
12 noon, and we hope as many Shareholders as possible will
attend. This will be an opportunity to meet the Board and to
receive a presentation from our Portfolio Manager.
The Board strongly encourages all Shareholders to exercise
their votes in respect of the meeting in advance. Details of how
Shareholders can vote, whether holding their shares directly
or on retail platforms, are set out in the Notice of Meeting. Any
Shareholder who requires a hard copy form of proxy may
request one from the Registrar, Link Group.
OUTLOOK
During this period of disappointing performance it is worth
remembering that the interests of Shareholders, your Board
and your Portfolio Manager are closely aligned. First, significant
buy-backs at a discount increase the NAV per share for those
Shareholders who maintain their holding. Secondly, fees are
levied on the market capitalisation of the Company and not
the NAV, meaning that fees payable decline commensurately
with the size of any discount. Finally, our Portfolio Manager has
continued to buy shares in the Company. Over the last year,
Nick Train has acquired 222,800 shares and currently speaks
for 3.5% of the equity of the Company (December 2023: 2.6%).
Your Board continues to fully support the Portfolio Manager’s
disciplined strategy of investing for the long term in high
quality companies that own both durable and cash generative
franchises. As an investment trust, our portfolio is permitted to
be concentrated on the highest conviction ideas. When those
ideas pay off, the impact on performance will be significant.
We believe that it is only a matter of time before the Company
resumes its excellent long-term record.
It has been a privilege to serve the Company and its
Shareholders and I wish you all the very best for the future.
Simon Hayes
Chairman
3 December 2024
STRATEGIC REPORT
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Investment Portfolio
United Kingdom
United States of America
France
Netherlands
84.2%
7.3%
4.8%
3.7%
97.1%
1.4%
1.2%
0.3%
2023
2024
Source: Frostrow Capital LLP
GEOGRAPHICAL ALLOCATION
†
†
The Company’s Investment Policy restricts the Company from owning
more than 20% of the portfolio in overseas companies.
†
The Company’s investment policy classifies geographical location
based on where companies are listed or otherwise incorporated,
domiciled or having significant business operations.
Consumer Staples (”CS”)
Financials (”F”)
Consumer Discretionary (”CD”)
Industrials (”I”)
Technology (”T”)
38.0%
22.3%
23.4%
7.9%
8.4%
28.7%
25.2%
22.4%
13.5%
10.2%
2023
2024
Source: Frostrow Capital LLP
PORTFOLIO SECTOR WEIGHTINGS
+
+
FTSE Industrial Classification Benchmark (“ICB”) sectors.
Diageo
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
SECTOR INVESTMENTS
FAIR VALUE
1 OCTOBER
2023
£'000
NET
INVESTMENTS
£'000
CAPITAL
APPRECIATION/
(DEPRECIATION)
£'000
FAIR VALUE
30 SEPTEMBER
2024
£’000
% OF
INVESTMENTS
TOTAL
RETURN
£000
CONTRIBUTION
PER SHARE
(PENCE)
l I
Experian
144,803 (3,437) 73,954 215,320 13.5 76,694 40.9
l F London Stock Exchange 212,962 (52,923) 47,018 207,057 13.0 49,702 26.5
l CD RELX 227,828 (84,855) 52,741 195,714 12.3 56,410 30.1
l CS Unilever 163,699 (7,507) 29,563 185,755 11.7 35,308 18.8
l CS Diageo 182,495 18,059 (26,270) 174,284 10.9 (21,048) (11.2)
l T Sage Group 154,066 2,634 5,281 161,981 10.2 8,370 4.5
l F Hargreaves Lansdown 58,334 4,906 26,771 90,011 4.8 29,905 15.9
l CD Rightmove 4,821 71,853 8,219 84,893 5.6 9,377 5.0
l F Schroders 101,313 (11,776) (13,546) 75,991 5.3 (8,618) (4.6)
l CD Burberry Group 147,145 (5,261) (91,349) 50,535 3.2 (86,720) (46.2)
Top 10 Investments
1,441,541 90.5
l CS Fever-Tree 40,908 1,006 (13,200) 28,714 1.8 (12,606) (6.7)
l CS
Mondelez International#
133,956 (108,031) (3,848) 22,077 1.4 (2,499) (1.3)
l CS A.G. Barr 21,702 (4,337) 4,658 22,023 1.4 5,262 2.8
l CS Remy Cointreau
^
68,168 (28,672) (20,302) 19,194 1.2 (19,690) (10.5)
l CD Manchester United# 37,334 (19,132) (945) 17,257 1.1 (945) (0.5)
l F Rathbone Brothers 23,298 (6,418) 132 17,012 1.1 693 0.3
l F The Lindsell Train Investment Trust plc 8,760 – (1,120) 7,640 0.5 (605) (0.3)
l CD Celtic* 4,331 – 1,397 5,728 0.3 1,404 0.7
l CS Heineken† 88,569 (83,487) 265 5,347 0.3 871 0.4
l CD Young & Co's Brewery (non-voting) 7,108 (2,707) (941) 3,460 0.2 (756) (0.4)
l F Frostrow Capital LLP∆** 3,725 – (500) 3,225 0.2 (14) 0.0
l CD Cazoo# 79 (12) (67) – 0.0 (67) 0.0
l CD Fuller Smith & Turner 1,256 (1,351) 95 – 0.0 102 0.1
Total Investments 1,836,660 (321,448) 78,006 1,593,218
100.0 120,530 64.3
Bank interest
407 0.2
Total Contributions to Total Return
120,937 64.5
Expenses, Currency Translation and Finance Charges
(12,759) (6.8)
Return on Ordinary Activities after Taxation
108,178 57.7p
* Includes Celtic 6% cumulative convertible preference shares, fair value £363,000 (2023: £267,000)
** Includes Frostrow Capital LLP AIFM Investment, fair value £125,000 (2023: £125,000)
# Listed in the United States
^
Listed in France
† Listed in Netherlands
∆ Unquoted
INVESTMENTS AS AT 30 SEPTEMBER 2024
10
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Portfolio Manager’s Review
Nick Train, Lindsell Train Limited, Portfolio Manager
Periods of lacklustre performance are inevitable for all
investors. When you are in the midst of such a period,
as we are, it is important to keep your nerve and stick to
your investment principles. However, it is also important to
consider, and answer honestly, searching questions about
the underperformance. Our clients excel at asking searching
questions. And three in particular have been put to us that
I propose to address in this report.
Do we understand why we have underperformed
and have we taken measures to mitigate the risk
of future underperformance?
Has the period of underperformance created
a buying opportunity?
Finally, is our continuing company research
generating attractive new investment ideas?
The first question; what has been our problem? Candidly,
the portfolio has been a victim of its previous success. The
peak of our relative performance was in 2020. What drove
the strong performance for much of the preceding decade
were the strong returns from our investments in consumer
branded goods owners, such as Burberry, Diageo and
Unilever, amongst others. As a result of that success the
combined weight of the holdings in consumer brands was
50% of the whole portfolio as at year-end September 2020.
In hindsight, this was too high. Covid-19 and its inflationary
aftermath have been unhelpful for many consumer
companies and their share prices have fallen or stagnated,
hurting our overall investment performance. Between year
ended September 2020 and 2024, for instance, Burberry’s
share price has fallen 55%, Diageo is down 2% and Unilever
up only 1%. How have we responded?
Well, the headline is that exposure to consumer brands is now
c.32% of the portfolio, a marked reduction. We still like the
consumer brand companies we retain exposure to, but there
are other investment themes available in the UK stock market
that we believe offer even better prospects and since 2020 we
have tilted the portfolio in their direction.
Moving on to the second question – is this a buying opportunity
for your portfolio? I would say, unequivocally, yes. And I have
put my money where my mouth is by buying more shares.
There are two aspects to my optimism. First, I want to reiterate the
attraction of investing in owners of world-class consumer brands;
particularly when you can access their shares at low prices, as is
arguably the case today. Diageo and Unilever are examples of
such world-class businesses, we believe, and we have maintained
and even increased exposure to both during their recent share
price weakness. To understand the nature of the opportunity, I’d
ask Shareholders to consider the accompanying graph on page11
which shows the share price total returns of Diageo and Unilever
since the start of the century, compared with the returns on
various stock market indices, all in Sterling. You may be surprised
to see that not only have Diageo and Unilever handsomely
outperformed the UK stock market over the last nearly quarter
of a century, they have also outperformed the S&P500 and even
the NASDAQ Composite. This is the case even after Diageo and
Unilever’s disappointing performance of the last four years. Now,
of course, you can prove almost anything by cherry-picking a
favourable start-date and, no doubt, the NASDAQ Composite was
at a temporary peak at the start of 2000, while Diageo and Unilever
were out of favour (interestingly, you could argue that both those
conditions pertain today). Nonetheless, it is impressive, I contend,
that both should have performed so competitively since 2000 and
their performance is consistent with the proposition that global
brands as resonant and still relevant as Guinness and Johnnie
Walker or Dove and Hellmann’s can help you get rich, albeit slowly.
STRATEGIC REPORT
EXPOSURE TO CONSUMER COMPANIES & DIGITAL
WINNERS
0
10
20
30
40
50
60
September
2020
Consumer Digital Winners
50%
60%
32%
35%
September
2024
September
2020
September
2024
According to Lindsell Train’s definition of Consumer and Digital Winners. Consumer
companies included in the calculation: A.G. Barr, Burberry, Diageo, Fever-Tree, Fuller
Smith & Turner, Heineken, Mondelez, PZ Cussons, Remy Cointreau, Unilever and
Young & Co.’s Brewery. “Digital Winners” included in the calculation: Experian, LSEG,
Hargreaves Lansdown, RELX, Rightmove and Sage.
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11
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
The 23% total return from Unilever shares over the last 12months
is a welcome reminder that well-run (or in Unilever’s case,
better-run) consumer companies can still reward investors.
The second reason for my optimism; I mentioned above that
we have tilted the portfolio toward investment ideas that we
expect offer even better prospects than those of consumer
brand-owners. Today by far the biggest thematic exposure,
60% of the portfolio at the year-end, is to London-listed data,
software and technology platform companies. We own six
businesses – Experian, Hargreaves Lansdown, London Stock
Exchange Group (“LSEG”), RELX, Rightmove and Sage – and I
have three observations to make about the sextet.
First, even though several of them have been strong performers
over the last couple of years, particularly RELX and Sage, it is
not difficult to demonstrate the valuations they are accorded
are lower than is the case for comparable companies listed on
other markets. That presents an opportunity, we believe.
Next, that apparent undervaluation of the group has been
confirmed by the fact that two of them have received
takeover bids during 2024, namely Hargreaves Lansdown
and Rightmove. It looks as though the offer for the former
will succeed, at a price 43% above where the shares traded
at the end of September 2023. Meanwhile, Rightmove has
successfully rebuffed a bid that was also c.43% above its
share price of a year ago.
I invite Shareholders to review the table below. It illustrates why
we remain so optimistic about the prospect for future gains from
this part of the portfolio. The table draws on research done by
Bank of America in 2023, that sought to identify the criteria likely
to help companies become beneficiaries of, rather than losers
from, developments in Artificial Intelligence. To be clear, Bank
of America provided the framework, but the company analysis
is ours. The top criteria for AI success, according to Bank of
America, is ownership of large amounts of proprietary data. If a
company owns or generates data that others cannot, then that
DIAGEO & UNILEVER VS. S&P & NASDAQ COMPOSITE
Nasdaq Total Return
S&P 500 Total Return
Unilever Total Return
Diageo Total Return
2000 2002 2004 2007 2009 2011 2014 2016 2019 2021 2024
-100%
100%
300%
500%
700%
900%
1100%
1300%
1500%
1700%
Source: Lindsell Train & Bank of America 2023. Stocks represent those within the WS Lindsell Train UK Equity Fund as of end August 2024.
This is not intended as a buy or sell investment recommendation. Past performance is not a guide to future performance.
CREDENTIALS FOR AI SUCCESS
Market Leading Data Set
Industry Leader
Global
Targeted R&D
Workflows not Transactions
B2B not B2C
12
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
STRATEGIC REPORT
PORTFOLIO MANAGER’S REVIEW – CONTINUED
company has the opportunity to derive unique insights from that
data and create new commercial opportunities. It is said in the 21st
century that “data is the new oil”. The proprietary data curated by,
in particular, Experian, LSEG, RELX and Rightmove has already made
these businesses world-class in their respective fields. We hope new
tools, for instance Sage’s AI-powered accounting tool Copilot, will
accelerate all these companies’ growth as we get deeper into the
21
st
century.
I have no doubt that the increase to our Digital Winners has
improved the quality of the portfolio. At 30 September 2024 and
based on figures from Bloomberg, we calculate an average Return
on Equity (ROE) of 30% for the portfolio, the highest level it has been
for a number of years, and notably higher than for the average of
the UK stock market, of 9%. In the long run, ROE is a good measure
of the quality of a company, the higher the better. Over time we
must believe the superior business returns earned by our portfolio
companies will lead to superior share price returns too. The question
then is whether we are overpaying for such quality. We don’t think so.
The portfolio’s 12 month forward Price-to- Earnings (P/E) ratio of 22x is
higher than the Index at 12x, though by a lesser degree than the ROE.
And whilst the ROE of the portfolio has increased, the P/E premium
compared to the market has fallen more recently. This is of course
no guarantee of future performance, but it does gives us confidence
that we own high quality companies at what to us appear to be
reasonable valuations.
Finally, the third question, are we unearthing new investment ideas?
The answer is “yes”, even if it is relatively rare for us to initiate new
holdings. I have always worked on the Warren Buffet principle that
often the best thing to do with investible funds is to buy more of
what you already own (assuming what you own is of high quality).
Nonetheless, when we do have compelling new ideas we back
them with conviction. There have been three initiations since 2020 –
Experian, Fever-Tree and, more recently, Rightmove. We are currently
having to be patient with Fever-Tree, as investors wait to see whether
the brand can replicate its domestic success internationally (we
believe it can). Meanwhile, Experian has become one of the top-3
holdings in the portfolio and is, we believe, a relatively rare thing – a
world-class data business listed on the London stock market. The
accompanying chart shows the long-term investment success
of Experian, since it listed in 2006; but note the sideways period
for its shares between 2021 and 2024, a period that allowed us to
accumulate the holding. Subsequently Experian’s share price has hit
new highs and we are hoping for much more.
So far as Rightmove is concerned, we believe the company was
right to resist being taken over. Certainly we did not buy it in the
expectation of a quick bounce, but rather hope to benefit from years
of profitable growth as the company innovates new services for
home buyers and agents.
Experian
Over 180 million individuals around the world now
voluntarily provide Experian with their personal financial
data, in return for credit scores and other services. This
is a unique asset for Experian, which makes its data
services increasingly valuable to its banking customers.
We purchased Experian in 2020 and as you can see
from the chart below, concerns over interest rates and
the credit cycle have allowed us to build the position at
a lower price over the past four years. The shares have
been much stronger in 2024 though we are hopeful
there’s much more to come from the company.
2006 20242015 2017 2019 20212011 20132008
-100%
100%
300%
500%
700%
900%
1100%
Experian total return
FTSE All-Share total return
EXPERIAN VS FTSE ALL-SHARE*
LSEG
According to LSEG it can now offer a wider range of crucial
services to global financial institutions than any of its
competitors. This means its customers can derive cost
savings and business efficiencies when they subscribe
to more of its services. New products derived from LSEG’s
joint venture with Microsoft (and soon to be released)
are likely to make its services even more crucial to its
customers. LSEG’s shares hit a high in February 2021 of
£98, then spent three years trading sideways to down. It
wasn’t until August 2024 that they pushed through that
level and are now trading well above £100. The shares are
up 24x since LSEG listed back in 2001 and while a repeat
of that return over the next couple of decades seems far-
fetched today, there is no doubt LSEG has a big growth
opportunity and is highly profitable. That combination
can lead to outsize investment returns.
2001 2003 2005 2007 2009 2011 2014 2016 2018 2020 2022 2024
-100%
800%
1700%
2600%
3500%
4400%
LSEG total return
FTSE All-Share total return
LSEG VS FTSE ALL-SHARE*
* The start date for the top-10 holdings charts is 31 December 1999, or the listing date for
those companies that have a shorter trading history. All data to 30 September 2024.
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Diageo
Diageo is contending with a variety of headwinds
that have hurt its share price in 2024. To us these are
predominantly cyclical not structural. We prefer to focus
on the company’s structural advantages. Specifically
that Scotch, Irish Stout and Tequila are Diageo’s three
biggest categories, where the company has world-
class brands and, as a result, a growth opportunity
not available to its competitors. We also believe the
long-term propensity for individuals to drink less alcohol,
but to drink higher quality alcohol is likely to continue
and is advantageous for Diageo, as the world’s biggest
premium alcoholic beverage company.
Schroders
We support Schroders’ strategy of shifting its business
toward higher profit margin investment services, such
as Private Equity and Private Wealth and believe the
company has made more progress with this strategy
than its current depressed share price suggests.
Sage
In 2017 Sage acquired a US cloud-computing business
called Intacct. This was transformative for the company.
Intacct’s subsequent success has helped return Sage’s
overall business to double digit revenue growth and
there remains a big opportunity for Intacct in its home
market and internationally.
RELX
Scientists, lawyers and risk consultants around the world
are increasingly reliant on RELX’s data and software.
The company is a trusted and credible provider of
AI-enhanced services to those communities and this
offers it the prospect of accelerating revenue growth. It
is noteworthy that RELX’s market capitalisation is now
higher than BP’s, making it the fifth biggest company on
the London market. Perhaps data really is the new oil.
1999 20242012 2016 202020082004
-100%
100%
300%
500%
700%
900%
1100%
1300%
1500%
RELX total return
FTSE All-Share total return
RELX VS FTSE ALL-SHARE*
1999 20242004 2009 2014
-100%
0%
100%
200%
300%
400%
500%
Schroders total return
FTSE All-Share total return
2019
SCHRODERS VS FTSE ALL-SHARE*
1999 20242014 20192009
-100%
100%
300%
500%
700%
900%
1100%
1300%
1500%
Diageo total return
FTSE All-Share total return
2004
DIAGEO VS FTSE ALL-SHARE*
1999 20242012 2016 202020082004
-100%
-50%
0%
50%
100%
150%
200%
250%
Sage total return
FTSE All-Share total return
SAGE VS FTSE ALL-SHARE*
14
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
STRATEGIC REPORT
PORTFOLIO MANAGER’S REVIEW – CONTINUED
Rightmove
Burberry
All Burberry Shareholders, including us, were shocked
by the fall in its share price and the severity of the
profit decline now forecast for 2024. After extensive
engagement with the company, discussions with
industry experts and a detailed review of the investment
case we find ourselves in agreement with the opinion of
Burberry’s new CEO. In his view, Burberry should be one
of the top four or five most valuable luxury brands in the
world, based on its heritage and purpose-led products
(outerwear). If he is right, Burberry’s current market
value is far too low and we have retained the holding.
The investment appeal of Rightmove’s business was recently
confirmed by the bids the company received from Australian
peer REA. We believe that, like us, REA was attracted by
Rightmove’s dominant market position in property classified
advertising and by the growth opportunities presented
to Rightmove from selling additional services to property
agents and home buyers themselves. We were relieved
in the end the bids did not eventuate, because we believe
Rightmove is at the early stages of a multi-year period of
growth and losing that potential would have been a shame
for Shareholders (and, indeed, for the UK stock market).
Hargreaves Lansdown
It is likely we will lose this investment to takeover in early
2025 and it is likely we will replace it with new holdings
with similar business characteristics. Specifically, we are
interested in companies that are technology-driven and
own or create unique data sets.
Unilever
The energy and improved execution of a new
management team has reminded investors of Unilever’s
formidable strengths. Its existing global brands are
already very valuable, but there is a further opportunity
to use its innovation and distribution capabilities and
marketing expertise to create or acquire new brands
and give them global scale. Unilever’s fast-growing
Health, Wellbeing and Premium Beauty brands are
pertinent examples.
1999 20242016 20202008 20122004
-100%
100%
300%
500%
700%
900%
1100%
Unilever total return
FTSE All-Share total return
UNILEVER VS FTSE ALL-SHARE*
20242013 2015 2018 202020092007
-100%
400%
900%
1400%
1900%
2400%
Hargreaves Lansdown total return
FTSE All-Share total return
2016
2011
2022
HARGREAVES LANSDOWN VS FTSE ALL-SHARE*
2006 20242015 2017 2019 20212011 20132008
-100%
400%
900%
1400%
1900%
2400%
2900%
Rightmove total return
FTSE All-Share total return
RIGHTMOVE VS FTSE ALL-SHARE*
2002 20242018 20222010 20142004
-100%
100%
300%
500%
700%
900%
1100%
1300%
1500%
1700%
Burberry total return
FTSE All-Share total return
2006
2008 2012
2016
2020
BURBERRY VS FTSE ALL-SHARE*
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15 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Since the year end we have added two new positions to the portfolio,
though, we are not yet ready to reveal their identity at this stage
given we are still building them from low levels. All I will say is that,
as you might expect, the long period of disappointing returns from
the UK stock market has thrown up interesting opportunities, with
world-class companies languishing at attractive valuations. That
proposition is confirmed by the decision we have taken to reduce
the non-UK holdings in the portfolio. The Company’s weighting to
UK-listed companies has increased from 81% to 97% in the five years
to year-end September 2024. The UK and, in particular, the key UK
holdings in this portfolio offer world-beating value, in our opinion.
TOP TEN HOLDINGS
The portfolio is concentrated, with the top ten holdings
accounting for c.90% of portfolio value at the year end. Given
that concentration it is appropriate to provide an account of
the opportunity we see for each of the ten. I ask Shareholders to
note how many of these are global businesses, with big global
growth opportunities. The London stock market boasts more truly
impressive global companies than its reputation implies. Also
note the wide range of geographic markets and industries these
companies serve. This means the portfolio is more diverse than
the tight number of individual holdings suggests.
Nick Train
Director, Lindsell Train Limited
Portfolio Manager
3 December 2024
CONCLUSION
I share in your Board’s disappointment with recent
performance and acknowledge this has been a frustrating
period for Shareholders. But I remain convinced that the best
way we can get the NAV and share price moving up again is
to implement the same investment approach that generated
good returns for Shareholders in the 20 years prior to 2021. That
is, to run a concentrated portfolio, built around the shares of
exceptional UK companies.
It remains a great privilege to me to be responsible for the
management of the Company’s portfolio, and thereby the
precious savings of many investors, including my own. I
told you last year that skin in the game is no guarantee of
superior investment performance, and the last 12 months
have unfortunately proven that correct. But I continue to
increase my personal holding in the Company. Why? It is true
that I believe an alignment of interest between investment
manager and investor is important, but to be candid that is
not my main motivation. When I look at the portfolio today, I
am more enthused about its prospects – and by association
the UK stock market – than at any time this century. I have
increased my holding because LSEG, Experian, Diageo, Sage
and RELX (and I could go on), not only happen to be listed on
the London market, but are genuine world class companies
with substantive growth opportunities in front of them. Finsbury
Growth & Income Trust PLC holds those businesses in big
quantities, and if our analysis of them is right, the impact on
returns in the coming years will be very significant indeed.
16
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Business Review
STRATEGIC REPORT
^ Please see Glossary of Terms and Alternative Performance Measures on pages 92 to 96.
PORTFOLIO STRUCTURE AS AT 30 SEPTEMBER 2024
97.1%
2023: 84.2%
Invested in UK
domiciled companies
90.5%
2023: 84.7%
Top ten holdings
2.9%
2023: 15.8%
Invested globally
0.7%
2023: 0.8%
^
Gearing
^
93.4%
2023: 91.9%
FTSE 100 companies
(and comparable overseas
companies)
84.1%
2023: 85.3%
^
Active Share
^
The Strategic Report, set out on
pages 1 to 37 provides a review
of the Company’s policies and
business model, together with
an analysis of its performance
during the financial year and its
future developments.
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
The Strategic Report has been prepared for Shareholders
to assess how the Directors have carried out their duty to
promote the success of the Company. It also considers the
principal risks and uncertainties facing the Company.
Information on how the Directors have discharged their duty
under Section 172 of the Companies Act 2006 can be found on
pages 25 to 28.
The Strategic Report contains certain forward-looking
statements. These statements are made by the Directors in
good faith based on the information available to them up to
the date of this report and such statements should be treated
with caution due to the inherent uncertainties, including both
economic and business risk factors, underlying any such
forward-looking information.
As an externally managed investment company there are
no executive directors, employees or internal operations. The
Company delegates its day-to-day management to third
parties. The principal service providers to the Company are
Frostrow Capital LLP ("Frostrow") which acts as AIFM, company
secretary and administrator; and Lindsell Train Limited
("Lindsell Train") which acts as Portfolio Manager. The Bank
of New York Mellon (International) Limited is the Company’s
Depositary.
The Board is responsible for all aspects of the Company’s
affairs, including the setting of parameters for and the
monitoring of the investment strategy as well as the review of
investment performance and policy. It also has responsibility
for all strategic issues, the dividend policy, the share issuance
and buy-back policy, gearing, share price and discount/
premium monitoring as well as corporate governance matters.
STRATEGY FOR THE YEAR ENDED
30 SEPTEMBER 2024
Throughout the year under review, the Company continued
to operate as an approved investment company, following its
investment objective to achieve capital and income growth
and to provide Shareholders with a total return in excess of
that of the FTSE All-Share Index. The Company’s performance
is discussed in the Chairman’s Statement beginning on page6
and the Portfolio Manager’s Review beginning on page 10.
During the year, the Board, AIFM and the Portfolio Manager
undertook all ESG, strategic and administrative activities.
The Portfolio Manager engages with all the companies in
the portfolio to understand their ESG approach and has
developed its own methodology to assess the carbon impact
of the portfolio. Lindsell Train became a signatory of the Net
Zero Asset Managers initiative (“NZAM”) in December 2021. This
reflects Lindsell Train’s enhanced efforts as a firm to support
the goal of net zero greenhouse gas emissions by 2050.
Further details of the Portfolio Manager’s approach to ESG
matters can be found on pages 29 to 35.
INVESTMENT POLICY
The Company’s investment policy is to invest principally
in the securities of companies either listed in the UK or
otherwise incorporated, domiciled or having significant
business operations within the UK. Up to a maximum of 20%
of the Company’s portfolio, at the time of acquisition, can be
invested in companies not meeting these criteria.
The portfolio will normally comprise up to 30 investments. This
level of concentration is likely to lead to an investment return
which is materially different from the Company’s benchmark*
index and is likely to be more volatile and carry more risk.
Unless driven by market movements, securities in FTSE
100 companies and comparable companies listed on an
overseas stock exchange will normally represent between 50%
and 100% of the portfolio; securities in FTSE 350 companies
and comparable companies listed on overseas stock
exchanges will normally represent at least 70% of the portfolio.
The Company will not invest more than 15% of the Company’s
net assets, at the time of acquisition, in the securities of any
single issuer. For the purposes of this limit only, net assets shall
exclude the value of the Company’s investment in Frostrow
Capital LLP.
The Company does not and will not invest more than 15%, in
aggregate, of the value of the gross assets of the Company
in other listed closed ended investment companies. Further,
the Company does not and will not invest more than 10%,
in aggregate, of the value of its gross assets in other listed
closed ended investment companies except where the
investment companies themselves have stated investment
policies to invest no more than 15% of their gross assets in
other listed closed ended investment companies.
The Company has the ability to invest up to 25% of its
gross assets in preference shares, bonds and other debt
instruments, although no more than 10% of any one issue may
be held.
In addition, a maximum of 10% of the Company’s gross assets
can be held in cash, where the Portfolio Manager believes
market or economic conditions make equity investment
unattractive or while seeking appropriate investment
opportunities or to maintain liquidity.
* The Company publishes its Active Share scores in its monthly fact sheet for investors and in both the annual and half-yearly reports to highlight how different the portfolio
is from the Company’s benchmark index.
18
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
STRATEGIC REPORT
BUSINESS REVIEW – CONTINUED
The Company’s gearing policy is that gearing will not exceed
25% of the Company’s net assets.
No investment will be made in any fund or investment
company managed by Lindsell Train Limited without the prior
approval of the Board.
In accordance with the UK Listing Rules of the Financial
Conduct Authority (“FCA”), the Company can only make a
material change to its investment policy with the approval of
its Shareholders and HMRC.
DIVIDEND POLICY
The Company’s aim is to increase or at least maintain the
total dividend each year. A first interim dividend is typically
paid in May and a second interim in November in lieu of a final
dividend.
The level of dividend growth is dependent upon the growth
and performance of the companies within the investment
portfolio. The decision as to the level of dividend paid takes into
account the income forecasts maintained by the Company’s
AIFM and Portfolio Manager as well as the level of revenue
reserves. These forecasts consider dividends earned from
the portfolio together with predicted future earnings and are
regularly reviewed by the Board.
All dividends have been distributed from current year income
and revenue reserves.
PERFORMANCE
Whilst the Board is disappointed that the Company has
underperformed in the short term, the Portfolio Manager’s
report explains why he believes that the Company’s portfolio
remains appropriate. The Board remains supportive of the
Portfolio Manager’s view. Please refer to the Chairman’s
Statement beginning on page 6 for further information.
Whilst performance is measured against the FTSE All-Share
Index, the Company’s portfolio is constructed and managed
without reference to a stock market index with the Portfolio
Manager selecting investments based on their assessment of
their long-term value.
PROSPECTS
The Board continues to support the Portfolio Manager’s
strategy of investing in high quality companies that own both
durable and cash generative brands. The Board firmly believes
that this strategy will continue to deliver strong investment
returns over the long term.
This is supported by the Company’s performance over the
last ten years with a net asset value per share total return^
of 128.2% compared with a total return from the Company’s
benchmark index of 83.6%.
^
Alternative Performance Measure (see glossary on pages 92 to 96.)
0
5
10
15
2017 2018 2019 2020 2021 20232022 20242015 2016
Source: Frostrow Capital LLP
First Interim Dividend Second Interim Dividend
20
TEN YEAR DIVIDEND RECORD
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FINANCIAL
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19 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
NAV PER SHARE RECONCILIATION
The chart below shows the contribution (in pence per share) attributable to the various components of investment
performance and costs, which together explain the increase from the starting NAV for the year of 891.2 pence to the
year-end NAV of 943.4pence, after the payment of dividends to Shareholders.
Dividends
Costs
Portfolio
NAV per share
848.4
30 Sept
2022
Portfolio
gains
Finance
costs
Dividends
paid
Expenses
(inc tax)
Portfolio
income
30 Sept
2023
22.5
45.9
(6.3)
(1.0)
(18.3)
891.2
Pence per share
600
650
700
750
800
850
900
950
0
891.2
30 Sept
2023
Portfolio
gains
Portfolio
income
Finance
costs
Dividends
paid
Expenses
(inc tax)
Uplift from
share buy-backs
30 Sept
2024
14.0
22.9
(5.7)
(1.2)
(19.3)
943.441.5
Pence per share
600
0
650
700
750
800
850
900
950
Dividends
Costs
Portfolio
NAV per share
20
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
STRATEGIC REPORT
BUSINESS REVIEW – CONTINUED
The Board is responsible for managing the risks faced by the Company. Through delegation to the Audit Committee, the Board has
established procedures to manage risk, to review the Company’s internal control framework and to establish the level and nature of
the principal risks the Company is prepared to accept in order to achieve its long-term strategic objective. At least once a year the
Audit Committee carries out a robust detailed assessment of the principal and emerging risks.
A risk management process has been established to identify and assess risks, their likelihood and the possible severity of impact.
Further information is provided in the Audit Committee Report beginning on page 59.
These principal risks and the ways they are managed or mitigated are set out on the following pages.
For each risk identified, during the year the Audit Committee considers both the likelihood and impact of the risk and then assigns an inherent
risk score. The scoring of the risk is then reconsidered once the respective key mitigations are applied and a residual risk score is assigned.
The Board’s policy on risk management has not materially changed during the course of the reporting period and up to the year end.
During the year, the Audit Committee conducted an exercise to identify and assess any new or emerging risks affecting the
Company and to take any necessary actions to mitigate their impact. Further information can be found in the report of the Audit
Committee on pages 60 and 61.
THE COMPANY'S APPROACH TO RISK MANAGEMENT
Change in inherent risk assessment over the last financial year:
No change
Decreased
Increased New risk included during the year
Principal Risks and Uncertainties Change Key Mitigations
Corporate Strategy
The Company’s investment
objective or the UK Equity Income
sector becomes unattractive to
Shareholders.
At each meeting the Board reviews movements in the Company’s shareholder
register. There are regular interactions and engagement with Shareholders
(including at the AGM). Regular feedback from Shareholders is received from
the Company’s broker. Frostrow meets regularly with major Shareholders on the
Company’s behalf.
In addition, the Chairman, the incoming Chairman and the Senior Independent
Director meet with key Shareholders to ascertain views.
The Company publishes its Active Share score in its monthly fact sheet for
investors and in both the annual and half-yearly reports to highlight how different
the portfolio is from the Company’s benchmark index.
The Company’s share price total
return may differ materially from
the NAV per share total return.
The Board operates a share buy-back policy which is intended to offer some
protection against the share price widening beyond a 5% discount to NAV per
share. There is also a share issuance programme which acts as a premium control
mechanism. Further details of the Company’s share buy-back policy and premium
control mechanism can be found on the Company’s website.
During the year the majority of the shares available under the buy-back authority
granted at the 2024 AGM were bought back and the Company held a General
Meeting on 23 August 2024 where shareholder authority was obtained to buy back a
further 25,779,973 shares on the same basis.
The Board continues to keep this matter under close review and receives
feedback from the Company’s broker and major Shareholders.
Principal Risks, Emerging Risks
and Risk Management
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21
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Principal Risks and Uncertainties Change Key Mitigations
Investment Strategy and Activity
The departure of a key individual
at the Portfolio Manager
may affect the Company’s
performance.
The Board keeps the portfolio management arrangements under continual review.
In turn, the Portfolio Manager reports on developments at Lindsell Train, including
succession and business continuity plans. The Board meets regularly with other
members of the wider team employed by the Portfolio Manager.
Prolonged underperformance
against the Benchmark.
The Board challenges the Portfolio Manager on the structure of the portfolio,
including asset allocation and portfolio concentration.
The Board reviews the performance of the portfolio against the benchmark and
the Company’s peer group at every meeting.
The Company publishes various measures and statistics in the monthly fact
sheet and in both the annual and half-yearly reports, to highlight to investors
the effects of the investment approach and to show how different the portfolio
is from the Company’s benchmark index. These measures include number of
holdings, Active Share and portfolio turnover.
A major geopolitical or natural
event such as war, terrorism,
natural disaster or pandemic, and
the financial, monetary and/or
political responses to such events
may have an adverse impact on
the revenues and operations of
portfolio companies to the extent
that they may no longer promise
returns sufficient to meet the
Company’s investment objective.
Portfolio companies experience
a reduction in share price and
dividends.
The Board reviews the performance of the portfolio against the benchmark and
the Company’s peer group at every meeting.
The Board holds frequent portfolio update meetings with the Portfolio Manager in
addition to Board meetings.
The Portfolio Manager regularly engages with the portfolio companies to discuss
any matters of concern that may effect operational resilience.
The investment approach is
not aligned with shareholder
expectations in relation to ESG
matters.
The Board conducts an annual review of the Portfolio Manager’s ESG policy to
ensure that it is consistent with that expected by the Board. In addition the Board
reviews the ESG activities of Lindsell Train to ensure progress is being made by
portfolio companies. The Board also conducts an annual review of other service
providers’ policies in relation to internal controls and governance matters, notably
modern slavery, GDPR, cyber security and whistleblowing policies.
The Portfolio Manager has developed a propriety system to assess the inherent
and emerging ESG risks for the investment portfolio which the Portfolio Manager
uses when engaging with the portfolio companies. This informs the decision to
invest, retain or divest any portfolio investment.
22
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
STRATEGIC REPORT
BUSINESS REVIEW – CONTINUED
Principal Risks and Uncertainties Change Key Mitigations
Investment Strategy and Activity - continued
The adverse impact of climate
change on the portfolio
companies’ operational
performance.
The Board receives quarterly ESG updates, which include an update on any
climate change related engagement, from the Portfolio Manager together with
monthly portfolio updates. The Board challenges the Portfolio Manager on ESG
matters to ensure that the portfolio companies are acting in accordance with
the Board’s ESG approach.
The Portfolio Manager is a signatory to the UK Stewardship Code and actively
engages with portfolio companies on ESG matters including climate change.
Lindsell Train developed its own methodology to assess the carbon impact
of the portfolio. Lindsell Train became a signatory of the NZAM initiative in
December 2021. This reflects Lindsell Train’s enhanced efforts as a firm to
support the goal of net zero greenhouse gas emissions by 2050. Further
information on how Lindsell Train addresses the risks associated with climate
change can be found on pages 31 and 32.
Details of the Company’s and Portfolio Manager’s ESG policies together with the
weighted average carbon intensity of the portfolio companies are set out on
pages 29 to 35.
Operational
Service providers to the Company
deliver poor performance or fail to
meet their contractual obligations
to the Company, include errors
or irregularities in information
published on behalf of the
Company.
The Board reviews all information supplied to Shareholders and the AIFM’s
marketing activity at each meeting. The AIFM’s daily controls ensure accurate
publication of information.
The Board receives regular updates from the AIFM of press references to the
Company and its major service providers, as well as regular news on sector
developments from the Company’s broker and the AIC. The Board has the ability to
replace any service provider which may be the source of reputational concerns.
The Audit Committee receives assurance from all service providers that they
have adequate business continuity plans and internal controls in place. These
controls are reviewed by the AIFM who also meets with the Company’s principal
service providers during the year.
Financial
Fraud (including unauthorised
payments and cyber crime)
occurs leading to a loss.
Risk of increased cyber crime on
the portfolio companies which
could lead to the potential loss
of confidential data and impact
the confidentiality, integrity or
availability of data and systems,
potentially resulting in financial
losses.
The AIFM and Portfolio Manager have in place robust compliance monitoring
programmes.
The Board receives monthly compliance reviews and a quarterly expenses analysis.
An annual statement is obtained by the Audit Committee from all service providers
giving assurances that there have been no instances of fraud or bribery.
The Board reviews the cyber security policies of all service providers.
THE COMPANY'S APPROACH TO RISK MANAGEMENT – CONTINUED
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23
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Principal Risks and Uncertainties Change Key Mitigations
Financial
The Company is exposed to
market price risk (i.e. performance
of investee companies’ shares).
The Directors acknowledge that market risk is inherent in the investment process.
The Portfolio Manager maintains a diversified portfolio which is concentrated in a
few key sectors. The Board has imposed guidelines within its investment policy to
limit exposure to individual holdings and limits the level of gearing.
The AIFM reports to the Board with respect to compliance with investment
guidelines on a monthly basis. The Portfolio Manager provides the Board with
regular updates on market movements. No investment is made in derivative
instruments and no currency hedging is undertaken.
Further information on financial instruments and risk can be found in note 17 to
the Financial Statements beginning on page86.
Accounting, Legal and Regulatory
The Company and/or the
Directors fail to comply with their
legal and regulatory obligations.
The Board monitors regulatory change with the assistance of its AIFM, Portfolio
Manager and external professional advisers to ensure compliance with
applicable laws and regulations.
The Board reviews compliance reports and internal control reports provided by
its service providers, as well as the Company’s Financial Statements and revenue
forecasts.
The Depositary reports twice yearly to the Audit Committee, confirming that
the Company, acting through the AIFM, has been managed in accordance
with the AIFMD, the Investment Funds Sourcebook, the Articles (in relation to the
calculation of the NAV per share) and with investment restrictions and leverage
limits. The Depositary Report can be found in the Shareholder information section
of the Company’s website.
The AIFM presents a quarterly report on changes in the regulatory environment,
including AIC updates, and how changes have been addressed.
Poor adherence to corporate
governance best practice or
errors or irregularities in published
information could lead to censure
and/or result in reputational
damage to the Company.
The Board reviews all information supplied to Shareholders and the AIFM’s marketing
activity at each meeting. Details of the Company’s compliance with corporate
governance best practice, including information on relationships with Shareholders, are
set out in the Corporate Governance Report on pages 45 to 51.
EMERGING RISKS
During the year, the Audit Committee conducted an exercise
to identify and assess any new or emerging risks affecting the
Company and to take any necessary actions to mitigate their
impact.
The Audit Committee regularly reviews the risk register. The
scoring of each risk and any emerging risks are discussed
in detail as part of this process to ensure that emerging as
well as known risks are identified and, so far as practicable,
mitigated.
The experience and knowledge of the Directors is useful in
these discussions, as are update papers and advice received
from the Board’s key service providers such as the Portfolio
Manager, the AIFM and the Company’s broker. In addition,
the Company is a member of the AIC, which provides regular
technical updates as well as drawing members’ attention to
forthcoming industry and/or regulatory issues and advising on
compliance obligations.
24
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
STRATEGIC REPORT
BUSINESS REVIEW – CONTINUED
As well as offering investment opportunities, the Board
believes the development and exploration of technological
breakthroughs, such as artificial intelligence, may damage the
revenue and operations of portfolio companies to the extent
that they no longer offer the promise of returns consistent with
the Company’s investment objective.
During the year, the Board identified the global standing of
the London Stock Exchange as an emerging risk. International
competition for new listings and a significant number of market
departures could mean it is harder for a UK equity strategy to
capture exposure to important global growth themes.
To mitigate these risks the Board holds monthly portfolio
update meetings with the Portfolio Manager, who continues to
monitor the situation closely.
The Committee will continue to review newly emerging risks
that arise from time to time to ensure that the implications for
the Company are properly assessed and mitigating controls
introduced where necessary.
FUTURE DEVELOPMENTS
The Board’s primary focus is on the Portfolio Manager’s
investment approach and performance. The subject is
thoroughly discussed at every Board meeting.
In addition, the AIFM updates the Board on Company
communications, promotions and investor feedback, as well
as wider investment company issues.
An outline of performance, investment activity and strategy,
and market background during the year, as well as the
outlook, is provided in the Chairman’s Statement beginning
on page 6 and the Portfolio Manager’s Review beginning on
page10.
It is expected that the Company’s strategy will remain
unchanged in the coming year.
LONG-TERM VIABILITY STATEMENT
The Directors have carefully assessed the Company’s financial
position and prospects as well as the principal risks facing
the Company and have formed a reasonable expectation
that the Company will be able to continue in operation and
meet its liabilities as they fall due over the next five financial
years. The Board has chosen a five year horizon in view of the
long-term outlook adopted by the Portfolio Manager when
making investment decisions.
To make this assessment and in reaching this conclusion, the
Audit Committee has considered the Company’s financial
position and its ability to liquidate its portfolio and meet its
liabilities as they fall due and notes the following:
• The portfolio is principally comprised of investments
traded on major international stock exchanges. Based
on current trading volumes, 98.1% of the current portfolio
could be liquidated within 30 trading days, with 79.6% in
seven days, and there is no expectation that the nature of
the investments held within the portfolio will be materially
different in future;
• With an ongoing charges ratio of 0.61%, the expenses of
the Company are predictable and modest in comparison
with the assets and there are no capital commitments
foreseen which would alter that position;
• Expenses of the Company are covered more than four
times by investment income;
• The closed-ended nature of the Company means that,
unlike an open-ended fund, it does not need to realise
investments when Shareholders wish to sell their shares;
• The founder directors of Lindsell Train Limited have given
their verbal assurance that they remain committed to
Lindsell Train Limited for at least seven years on a rolling
basis; and
• The Company has no employees, only its Non-Executive
Directors. Consequently it does not have redundancy or
other employment-related liabilities or responsibilities.
The Audit Committee has considered the potential impact
of its principal risks on pages 20 to 23 and various severe
but plausible downside scenarios as well as stress testing
and reverse stress testing. It has also made the following
assumptions in considering the Company’s longer-term
viability:
• There will continue to be demand for investment
companies;
• The Board and the Portfolio Manager will continue to
adopt a long-term view when making investments, and
anticipated holding periods will be at least five years;
• The Company invests principally in the securities of UK
listed companies to which investors will continue to wish to
have exposure;
• The Company will maintain its bank loan facility;
• Regulation will not increase to a level that makes running
the Company uneconomical; and
• The performance of the Company will be satisfactory.
The Board’s long-term view of viability will, of course, be
updated each year in the Company’s Annual Report.
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25
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
ENGAGING WITH THE COMPANY'S STAKEHOLDERS
The following ‘Section 172’ disclosure, required by the Companies Act 2006 and the AIC Code, as explained on pages 25 to 28,
describes how the Directors have had regard to the views of the Company’s stakeholders in their decision-making.
Stakeholder
group
The benefits of engagement with the
Company's stakeholders
How the board, the AIFM and the Portfolio Manager
have engaged with the Company's stakeholders
Investors Clear communication of the Company’s
strategy and the performance against the
Company's objective can help the share price
trade closer to its NAV per share which benefits
Shareholders.
New shares may be issued to meet demand
without net asset value per share dilution to
existing Shareholders. Increasing the size of
the Company can benefit liquidity as well as
spread costs.
Under the share buy-back policy, the
Company will normally buy in shares being
offered on the stock market whenever the
discount approaches a level of 5% and then
either hold those shares in Treasury or cancel
them. Any shares held in Treasury can later be
sold back to the market if conditions permit.
The AIFM and the Portfolio Manager, on behalf of the Board,
complete a programme of investor relations throughout theyear.
An analysis of the Company’s shareholder register is provided
to the Directors at each Board meeting along with marketing
reports from Frostrow. The Board reviews and considers the
marketing plans on a regular basis. Reports from the Company’s
broker are submitted to the Board on investor sentiment and
industry issues.
Key mechanisms of engagement include:
• The Annual General Meeting
• The Chairman, the incoming Chairman and the Senior
Independent Director make themselves available to engage
with Shareholders
• The Chairman writes to major Shareholders each year
offering them the opportunity to meet with himself and the
Senior Independent Director.
• The Company’s website hosts reports, video interviews with
the Portfolio Manager and monthly fact sheets
• One-on-one investor meetings facilitated by Frostrow
who actively engage with professional investors, typically
discretionary wealth managers, some institutions and a range
of execution-only platforms. Regular engagement helps to
attract new investors and retain existing Shareholders, and
over time results in a stable share register made up of diverse,
long-term holders
• The Board will explain in its announcement of the results of
the AGM the actions it intends to take to consult Shareholders
in order to understand the reasons behind any significant
(defined for this purpose as 20% or more) votes against
resolutions. Following the consultation, an update will be
published no later than six months after the AGM and the
Annual Report will detail the impact the Shareholder feedback
has had on any decisions the Board has taken and any
actions or resolutions proposed
At each meeting the Board reviews movements in the
Company’s shareholder register. There are regular interactions
and engagement with Shareholders (including at the AGM).
Regular feedback from Shareholders is received from the
Company’s broker.
26
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
STRATEGIC REPORT
BUSINESS REVIEW – CONTINUED
Stakeholder
group
The benefits of engagement with the
Company's stakeholders
How the board, the AIFM and the Portfolio Manager
have engaged with the Company's stakeholders
Portfolio
Manager
Engagement with the Company's Portfolio
Manager is necessary to:
• evaluate their performance against
the Company's stated strategy and to
understand any risks or opportunities this
may present.
• better understand the internal controls in
place at Lindsell Train.
The Board ensures that the Portfolio Manager's
ESG approach meets standards set by
theBoard.
The Board meets regularly with representatives of the Portfolio
Manager throughout the year, with quarterly presentations
and also monthly performance and compliance reporting.
This provides the opportunity for both the Board and Portfolio
Manager to explore and understand how the portfolio has
performed and what may be expected in the future.
The Board receives regular updates from the Portfolio Manager
concerning engagement on ESG matters with the companies
within the portfolio.
The Audit Committee also meets with members of the risk
management and investment compliance teams at Lindsell
Train to better understand the Portfolio Manager’s internal
controls. The Audit Committee reviews Lindsell Train’s control
reports annually. During the year the Board discussed its
approach to ESG matters with the Lindsell Train team providing
more detail of their specific approach to responsible ownership
which is further explained on pages 29 to 35.
The Board considers its approach to ESG as well as that of the
companies in which the Company invests, and has developed
its own policy which can be found on page29. The Board
encourages the Company’s Portfolio Manager to engage with
companies and in doing so expects ESG issues to be a key
consideration.
The Board receives an update on Lindsell Train’s engagement
activities within a dedicated quarterly ESG report.
A member of Lindsell Train’s investment team attends each
Board meeting to provide an update on ESG issues and
engagement activities since the last Board meeting.
The Board holds at least one meeting at the offices of Lindsell
Train each year, where Directors meet with members of the
Lindsell Train team.
Other Service
Providers
The Company contracts with third parties
for other services including: depositary,
investment accounting & administration as
well as company secretarial and registrars.
The Company ensures that the third parties
to whom the services have been outsourced
complete their roles in line with their service
level agreements and are able to continue
to provide these services, thereby supporting
the Company in its success and ensuring
compliance with its obligations.
The Board and Frostrow engage regularly with other service
providers both in one-to-one meetings and via regular written
reporting. This regular interaction provides an environment
where topics, issues and business development needs can be
dealt with efficiently and collegiately.
The Audit Committee reviews Frostrow’s AAF controls report
annually and no issues have been identified.
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27
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Stakeholder
group
The benefits of engagement with the
Company's stakeholders
How the board, the AIFM and the Portfolio Manager
have engaged with the Company's stakeholders
The Company's
Lender
Investment companies have the ability to
borrow with a view to enhancing long-term
returns to Shareholders. Engagement with
the Company’s lender ensures that it fully
understands the nature of the Company’s
business, the strategy adopted by the
Portfolio Manager and the extent to which the
Company complies with its loan covenants.
Regular reporting to the lender with respect to adherence with
loan covenants and ad hoc meetings with the AIFM.
Key areas of engagement Main decisions and actions taken
Investors
The impact of market volatility caused by certain geopolitical
events on the portfolio.
Shareholders are provided with performance updates via the
Company’s website as well as the annual and half-year financial
reports and monthly factsheets.
Ongoing dialogue with Shareholders concerning the strategy of
the Company, performance and the portfolio.
The Portfolio Manager and Frostrow meet regularly with
Shareholders and potential investors to discuss the Company’s
strategy, performance and portfolio. Both the Portfolio Manager
and Frostrow also engage with the Press on the Company’s
behalf.
Information on how to vote your investment company shares on
a selection of major platforms can be found on pages 11 to 14 of
the Notice ofMeeting.
The Chairman, the incoming Chairman and Senior Independent
Director, accompanied by members of the Frostrow team,
met with representatives from major Shareholders to discuss,
amongst other things, shareholder engagement.
Further details concerning ongoing discussions with major
Shareholders can be found on page 6 of the Chairman’s
Statement.
Share price performance The Board reviews the Company’s share price discount/premium
on a daily basis and has a share buy-back policy, which during
the year resulted in 36,801,766 shares being bought back. Details
of the Company’s share issuance and buy-back policy can be
found on the Company’s website.
28
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
STRATEGIC REPORT
BUSINESS REVIEW – CONTINUED
Key areas of engagement Main decisions and actions taken
Portfolio Manager
Portfolio composition, performance, ESG matters, outlook, and
business updates.
The Portfolio Manager has set ESG targets and engages regularly
with investee companies’ executive management. The Board
receives quarterly ESG updates from the Portfolio Manager.
During the year the Board engaged with the Portfolio Manager
concerning the outcome of the potential sale of Hargreaves
Lansdown.
The impact of market volatility upon their business and how
some companies in the portfolio have sought to take advantage
of the increase of digitisation and AI.
The integration of ESG into the Portfolio Manager’s investment
processes.
The Board has received regular updates from the Portfolio
Manager throughout the recent period of market volatility,
including its impact on investment decision making.
The Portfolio Manager reports regularly any ESG issues in the
portfolio companies to the Board.
Climate Change During the year the Audit Committee considered the Portfolio
Manager’s assessment of the risks associated with climate
change on the portfolio and how the transition to a low-carbon
economy will affect all businesses, irrespective of their size,
sector or geographic location.
Other service providers
As an externally managed investment company, the Company
does not have employees. Its main stakeholders therefore
comprise its Shareholders and a small number of service
providers.
The Board has delegated a wide range of activities to external
agents, in addition to the Portfolio Manager.
These services include AIFM, investment administration,
management and financial accounting, Company Secretarial
and certain other administrative requirements and registration
services. Each of these contracts was entered into after full and
proper consideration by the Board of the quality and cost of the
services offered, including the control systems in operation in so
far as they relate to the affairs of the Company.
The Directors have frequent engagement with the Company’s
other service providers through the annual cycle of reporting
and due diligence meetings or site visits by Frostrow. This
engagement is completed with the aim of maintaining an
effective working relationship and oversight of the services
provided.
The Board met regularly with Frostrow (the AIFM),
representatives of which attend every Board meeting
to provide updates on risk management, accounting,
administration and corporate governance matters.
Reviews of the Company’s service providers have been positive
and the Directors believe their continued appointment is in the
best interests of the Company. The Company has invested in
Frostrow and The Lindsell Train Investment Trust plc. Further
details can be found on the Company’s website.
Auditor During the year the Audit Committee led a competitive audit
tender process, which resulted in the recommendation that
Deloitte LLP be appointed as the Company’s new auditor. Further
information concerning the audit tender process can be found
on pages 62 and 63.
The Audit Committee met with Deloitte LLP to review the audit
plan for the year, agree their remuneration, review the outcome
of the annual audit and to assess the quality and effectiveness
of the audit process. Please refer to the Audit Committee
Report beginning on page59 for further information.
The Company’s Lender
Continued compliance with covenants set out within the loan
agreement between the Company and the lender.
The Board ensures compliance with loan covenants throughout
the year.
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29
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
GOVERNANCESTRATEGIC REPORT GOVERNANCE
STRATEGIC REPORT
RESPONSIBLE INVESTMENT
Our Policy
The Board recognises that the most material way for the Company to have an impact on Environmental, Social
and Governance (“ESG”) issues is through the responsible ownership of its investments.
It has delegated authority to its Portfolio Manager to engage actively with the management of investee
companies and encourage that high standards of ESG practice are adopted.
The Company seeks to generate long-term, sustainable returns on capital. The investee companies which
consistently deliver superior returns over the long term are typically established, well-run companies whose
managers recognise their impact on the world around them.
In its Responsible Engagement & Investment Policy, the Portfolio Manager states that its evaluation of ESG factors
is an inherent part of the investment process.
The Board has delegated authority to the Portfolio Manager to vote the shares owned by the Company that are
held on its behalf by its Custodian. The Board has instructed that the Portfolio Manager submit votes for such
shares wherever possible and practicable. The Portfolio Manager may refer to the Board on any matters of a
contentious nature.
The Portfolio Manager is a signatory of the 2021 UK Stewardship Code and became a signatory of Net Zero Asset
Managers initiative in December 2021.
LINDSELL TRAIN’S POLICY
ESG integration
Sustainability Key To Long-Term Investing
At the heart of the investment approach at Lindsell Train
Limited (“Lindsell Train”) is a conviction that inefficiencies
exist in the valuation of ‘exceptional’ companies. Specifically,
Lindsell Train believes that durable, cash generative franchises
are not only rare but also appear to be undervalued by other
investors for most of the time. Nick Train and the investment
team invest in such ‘exceptional’ companies with the
expectation of holding them for the very long term. It is the
resultant long-term partnerships that they build with portfolio
companies that form the cornerstone of their approach to ESG
and Responsible Investing.
The truly strategic time horizon (note that the long-term
turnover of the Company is under 5%, which implies an
average holding period of 20 years) means the investment
team at Lindsell Train must be continually alert to all relevant
long-term issues, with the objective of pre-empting risk and
enhancing returns. Hence the consideration of all ESG factors
which might affect holdings and potential holdings has always
been central to the investment approach. Historically, Lindsell
Train has typically found that ‘exceptional’ companies tend
to exhibit characteristics associated with good corporate
governance and responsible business practices.
Furthermore, Lindsell Train argues that companies which
observe such standards, and that are serious in their intention
of addressing environmental and social factors, will not only
become more durable, but will likely prove to be superior
investments over time.
Lindsell Train’s initial analysis and ongoing company
engagement strategy seeks to incorporate all sustainability
factors that they believe will affect the company’s ability to
deliver long-term value to Shareholders. Such factors may
include but are not limited to: environmental (including
climate change), social and employee matters (including
turnover and culture) and governance factors (including
remuneration and capital allocation), cyber resilience,
responsible data utilisation, respect for human rights, anti-
corruption and anti-bribery, and any other risks or issues
facing the business and its reputation. This work is catalogued
in a proprietary database (Sentinel) of risk factors in order to
centralise and codify the team’s views, as well as to prioritize
Lindsell Train’s ongoing research and engagement work and is
cross-referenced with the SASB Materiality Map ©.
If, as a result of this assessment, Lindsell Train believes that an
ESG factor is likely to materially impact a company’s long-term
business prospects (either positively or negatively) then this
will be reflected in the long-term growth rate that is applied
in the investment team’s valuation of that company, which
alongside the team’s more qualitative research will influence
any final portfolio decisions (for example, whether Lindsell Train
starts a new position or sell out of an existing holding).
The average age of
holdings currently held
in the Company is over
146 years*
* excluding Frostrow Capital LLP and
The Lindsell Train Investment Trust plc
In Lindsell Train’s
experience, companies
with poor corporate
governance do not
tend to have such
longevity.
30
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
STRATEGIC REPORT
BUSINESS REVIEW – CONTINUED
Positive / Negative Screening
The characteristics that Lindsell Train seeks in its investee
companies means that it typically invests in a fairly narrow
set of sectors and industries, and avoids others altogether. For
example, Lindsell Train has typically avoided:
• capital intensive industries (energy, commodities or
mining) or any companies involved in the extraction and
production of coal, oil or natural gas. The Company’s
exposure to the Energy sector is 0%.
• industries that Lindsell Train judges to be sufficiently
detrimental to society that they may be exposed to
burdensome regulation or litigation that could impinge
on financial returns. The Company’s exposure to Tobacco,
Gambling and Arms Manufacturers is 0%.
Similarly, Lindsell Train’s investment approach has steered Nick
Train (who is also Chairman of Lindsell Train’s ESG Committee)
and the investment team to invest in a number of companies
that play an important positive social or environmental role, for
example through providing access to educational information
(RELX), encouraging saving for the future (Schroders,
Hargreaves Lansdown) or encouraging environmental
progress and developing best practice (e.g., Diageo,
Mondelez). Lindsell Train believes that such positive benefits
for society should be consistent with its aim to generate
competitive long-term returns, thus helping it meet its clients’
investment objectives. Furthermore, through its engagement
strategy, Lindsell Train increasingly seeks to encourage and
support its companies to meet their own ESG commitments
with the aim of improving standards and enhancing returns.
Thus Lindsell Train’s evaluation of ESG factors is a natural part
of its investment process and the exercise of its stewardship
responsibilities is integral to the research process.
ESG EVALUATION FOR INVESTMENT
BUY CASE
Lindsell Train’s long-term investment approach means
that it seldom buys and sells new holdings. Indeed, over
the past five years, Portfolio Manager Nick Train has
only added three new companies to the Company’s
portfolio. The most recent of these was Rightmove,
which was first bought in Q4 2023. Consideration of
ESG risk and opportunity is integrated into the pre-
investment work that Lindsell Train does on all holdings,
and indeed Rightmove has been monitored on Sentinel
– Lindsell Train’s ESG risk and opportunity database –
for a number of years, as it has long been considered a
serious potential investment.
As with existing holdings, any ESG risk that Lindsell Train
deems to be materially significant requires careful
assessment to ensure that the investment team is
comfortable that it does not pose an existential threat
to the business. In the case of Rightmove, the UK’s
largest online property portal, Lindsell Train identified no
ESG risks that the team deemed materially significant.
Perhaps the key risk – common to all data owners –
is the potential for leakage of sensitive information
(Rightmove’s customers are estate agents, who
ultimately deal with details of individuals’ houses),
necessitating the robust cyber security measures the
company has in place. But having this unique view into
the housing market also brings opportunity, as political
changes drive more demand for data on properties
– for example the mandatory displaying of Energy
Performance Certificate (“EPC”) ratings on all houses
put on the market – and Rightmove has more data
than anybody in the UK.
As a capital-light, primarily digital company with low
carbon emissions, Rightmove’s inclusion marginally
decreases the weighted carbon footprint of the
Portfolio. Additionally, from a net zero alignment
perspective, Rightmove is currently “Aligning”, which
suggests that the company is moving in the right
direction; however we will engage with management
to encourage further progress.
CASE STUDY
Consumer Staples (”CS”)
Financials (”F”)
Consumer Discretionary (”CD”)
Industrials (”I”)
Technology (”T”)
38.0%
23.4%
22.3%
8.4%
7.9%
28.7%
25.2%
22.4%
13.5%
10.2%
2023
2024
Source: Frostrow Capital LLP
Consumer Staples (”CS”)
Financials (”F”)
Consumer Discretionary (”CD”)
Industrials (”I”)
Technology (”T”)
38.0%
23.4%
22.3%
8.4%
7.9%
28.7%
25.2%
22.4%
13.5%
10.2%
2023
2024
Source: Frostrow C apital LL P
COMPANY SECTOR/INDUSTRY EXPOSURE
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31
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
As a relatively small company with a single office location and
fewer than 30 employees, Lindsell Train’s climate exposure
comes predominantly from the investment portfolios that
it manages on behalf of its clients. Lindsell Train recognises
the systemic risk posed by climate change and the potential
financial impacts associated with a transition to a low-
carbon economy. To help address this, Lindsell Train became
a signatory of the Net Zero Asset Managers (“NZAM”) initiative
in December 2021, which affirms its commitment to support
the goal of net zero greenhouse gas emissions by 2050 or
sooner. In line with this ambition, Lindsell Train published a 2030
interim target in Q4 2022 which has since been approved by
The Institutional Investors Group on Climate Change (“IIGCC”).
Lindsell Train selected to use the Paris Aligned Investment
Initiative Net Zero Investment Framework (“NZIF”) target
setting approach. Of the four specific targets recommended
by NZIF, Lindsell Train believed it most appropriate to adopt
a portfolio coverage target, given the strategic nature of its
approach and the well below average carbon footprints of
its investee companies. Lindsell Train has targeted 55% of its
asset-weighted committed
1
assets to be considered Aligned
2
by 2030, as set out by the PAII Net Zero Investment Framework.
This represents a c.50% improvement from its baseline of 36%
of assets being Aligned as of 2022, consistent with a fair share
of the 50% global reduction in CO2 identified as a requirement
in the Intergovernmental Panel on Climate Change (“IPCC”)
special report on global warming of 1.5°C.
As outlined in the latest TCFD Entity Report for Lindsell Train,
the chart on page 32 shows the alignment of each of the
representative accounts for Lindsell Train strategies, and the
Company when combined, on an asset-weighted basis as at
August 2022 and 2023.
Climate Change
The risks associated with climate change and the transition to
a low-carbon economy will affect all businesses, irrespective
of their size, sector or geographic location. Therefore, no
company’s revenues are immune and the assessment of
such risks must be considered within any effective investment
approach, particularly one like Lindsell Train’s that seeks to
protect its clients’ capital for decades to come. That said,
evidently the transition to a low-carbon economy will affect
some sectors more than others and typically Lindsell Train
avoids those sectors that are most notably capital-intensive
industries and companies involved in the extraction and
production of coal, oil or natural gas. As a result, we are
pleased to note that the Trust continues to have a significantly
lower than average weighted average carbon intensity than
its comparable benchmarks.
Lindsell Train supports the recommendations of the Task Force
on Climate-Related Financial Disclosures (“TCFD”) and its
efforts to encourage companies to report their climate related
disclosures and data in a uniform and consistent way. During
2024, Lindsell Train published TCFD Product Reports ahead of
the FCA’s deadline, including for the Company. The report can
be found on the Company’s website, and includes analysis on
the Trust’s Scope 1, 2 & 3 emissions relative to the benchmark.
WEIGHTED AVERAGE CARBON INTENSITY
(WACI) [tCO2e/£M Sales]
The Company
Benchmark
0
100
200
300
400
500
600
700
800
Scope 1 & 2
793
16
72
Scope 1, 2 & 3
332
The Company
Benchmark
0
200
400
600
800
1,000
1,200
Scope 1 & 2
1,025
5
84
Scope 1, 2 & 3
115
Source: Portfolio company Reports and Bloomberg for holdings data.
Morningstar Direct for Benchmark data. Emissions for Lindsell Train Limited
sourced from Acclaro Advisory and excludes category 15 Scope 3 emissions.
* Enterprise Value Including Cash
CARBON FOOTPRINT BY EVIC*
(tCO2e/£M invested)
32
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
STRATEGIC REPORT
BUSINESS REVIEW – CONTINUED
With regards to the current status of Lindsell Train portfolios,
Lindsell Train has not yet formally published its progress as at
2024; however Lindsell Train has committed to do so in early
2025 once it has had a chance to digest the revised Net Zero
Investment Framework “NZIF 2.0”, which was released in June
this year.
Whilst Lindsell Train has not formally published a figure for 2024
at a portfolio level, it has been encouraged by the progress of
a number of companies over the past year, including some
that are held in the Trust. Our engagement work this year has
shown that the introduction of mandatory TCFD reporting
has had the desired effect of driving progress and supporting
consistency of reporting. Where action is not mandated, there
is a risk that certain companies or geographies fail to prepare
appropriately for the costs and business risks brought about
by the climate emergency’s physical and transition risks.
Two years on from having measured our baseline and set
our interim target, we are pleased with the progress that
has been made by the companies within the portfolio. The
chart below shows the progress made by all strategies
at Lindsell Train, including the UK Equity Strategy of which
the Company forms a part. The proportion of companies
aligned, aligning, committed to aligning and not aligned
remained broadly unchanged over the two years, though
we have identified examples where companies have made
progress. For example, Young & Co Brewery has advanced
from “Committed to Aligning” to the “Aligning” stage. If there
are cases of companies not making adequate progress, we
will continue to remind management of our expectations and
point them to similar companies where we have identified
improvements, to encourage collaboration, as well as
supplying details of potentially useful ‘gold standard’ resources
such as the Science Based Targets Initiative.
Lindsell Train’s clients have urged it to set realistic targets and
the investment team feel strongly that targets should be set
in line with industry expectation, which they truly believe are
achievable and will therefore strive to meet or better. The 55%
target figure is above the IIGCC’s recommendation that 50%
of portfolio companies should be “Aligned” by 2030 and is also
philosophically in line with the requirement to deliver a fair
share of the 50% global reduction in CO2 emissions by 2030,
identified as a requirement in the IPCC special report on global
warming of 1.5°C.
Further information on Lindsell Train’s TCFD related disclosures
can be found in its 2023 TCFD Report, which can be found on
Lindsell Train’s website.
1
Committed assets are currently 94% of LTL’s total AUM. The assets that were excluded relate to segregated clients that either declined to have their assets included at this
time or did not respond by the required deadline. There is scope to increase the level of committed assets over time.
2
Aligned status, as set out by the PAII Net Zero Framework, has prescribed requirements of the portfolio companies, including; 1) Setting short and medium term emission
reduction targets, 2) Monitoring emission intensity performance relative to those targets, and 3) Disclosure of scope 1, 2 and 3 emissions. For higher impact sectors, further
criteria are required to be categorised as Aligned.
2022 2023
0%
20%
40%
60%
80%
100%
LT Combined
Strategies
Global
Equities
Japan
Equities
UK
Equities
North
American
Equities
Not Aligned Committed to Aligning Aligning Aligned
0%
20%
40%
60%
80%
100%
LT Combined
Strategies
Global
Equities
Japan
Equities
UK
Equities
North
American
Equities
Not Aligned Committed to Aligning Aligning Aligned
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33
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Engagement
Where Lindsell Train has specific concerns with management’s
strategy, company performance (financial and non-financial),
or risk profile, or where it deems it necessary to protect its
clients’ interests, the investment team will proactively engage
with management. Lindsell Train will consider the individual
circumstances of the company and the issue at hand, in order
to determine realistic objectives and define the scope of our
engagement, ensuring that:
• The objective is suitably focused on long-term value
preservation and creation
• The objective is specific and there is clarity around delivery
• The objective is realistic and achievable
In most circumstances Lindsell Train arranges a meeting with
senior management, board members, or if appropriate with
the company chairperson or the senior non-executive director.
The feedback from these meetings is then discussed amongst
the Investment Team. In some instances, the matter on
which it is engaging is swiftly resolved, and in other cases, the
response may be a multistage, multi-year process. As long as
the dialogue is constructive and ongoing, and management
clearly outline a proposed course of action, Lindsell Train is
typically comfortable with a longer timeline to resolution.
Where this is not the case, it will consider escalating our
engagement.
The long-term approach generally leads Lindsell Train to
be supportive of company management; however, where
required and if in the best interests of our clients, Lindsell
Train will try to influence management on specific matters
or policies. Lindsell Train’s intention is to have open and
constructive dialogue with management and board members,
in order to broaden its knowledge of the company’s strategy
and operations and to ensure any concerns it might have are
assuaged. Given Lindsell Train often builds up large, long-term,
stakes in the businesses in which it invests, Lindsell Train finds
that management are open to (and very often encourage)
engaging with the Investment Team. As mentioned above,
constructive dialogue has more often than not resulted in
satisfactory outcomes, thus limiting the need for escalation.
During the year, Lindsell Train engaged with 13 companies
held within the Company’s portfolio on a wide range of
environmental, social and governance issues as detailed in
the chart below. There were 25 engagements in total.
ENGAGEMENT BY TOPIC
Source: Lindsell Train. 1 October 2023 – 30 September 2024. 12 topics raised
with 13 companies.
Governance Structure & Policies 42%
Capital Allocation & Strategy 40%
Remuneration 6%
Human Rights 3%
Other Social
(e.g. supply chain, health & nutrition) 9%
34
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
STRATEGIC REPORT
BUSINESS REVIEW – CONTINUED
Proxy Voting
The primary voting policy of Lindsell Train is to protect or
enhance the economic value of its investments on behalf of
its clients. Lindsell Train has appointed Glass Lewis to aid the
administration of proxy voting and provide additional support
in this area. However, the Investment Team maintains decision
making responsibility based on its detailed knowledge of the
investee companies. It is Lindsell Train’s policy to exercise all
voting rights which have been delegated to Lindsell Train by
its clients.
Voting record for companies held in Finsbury Growth
& Income Trust PLC:
Management Shareholder Total
Proposals Proposals Proposals
With Management 382 3 385
Against Management 0 0 0
Abstain 0 1 1
Totals 382 4 386
Source: Glass Lewis. 1 October 2023 – 30 September 2024.
Votes against management and abstentions have typically
been in the low single-digit range. As mentioned above,
the main reason for this is that our long-term approach to
investment generally leads us to be supportive of company
management. Furthermore, it is Lindsell Train’s aim to be
invested in ‘exceptional’ companies with strong corporate
governance and hence it ought to be rare that Lindsell Train
finds itself in a position where it is voting against management.
During Q2 2024, Lindsell Train abstained on a shareholder
proposal for Mondelez, proposing an independent chair.
In general, Lindsell Train has a preference for chairs to be
independent, though we sympathise with management’s view
that the existing set-up is appropriate for the business. As a
result, we decided to abstain on this resolution rather than
vote against.
ENGAGEMENT CASE STUDY
Company name: Unilever
Year Founded: 1929
Year FGT first invested: 2000
Sector: Consumer Staples
Engagement topics: Capital Allocation & Strategy and
Reputation
Date of engagements: July 2024
Engagement format: Call
Reason for Engagement: Ongoing engagement regarding
Unilever’s capital allocation and strategy.
During the second half of 2023, the Lindsell Train
investment team engaged with Unilever on its decision
to retain its presence in Russia, and changes to capital
allocation & strategy. On Russia, it sought justification for
this decision and, whilst the team recognises that there
was no easy choice, Lindsell Train conveyed its expectation
that management would keep the situation under active
review with the hope of finding the ‘least worst’ outcome.
As we are long-term holders of Unilever in both our UK and
Global strategy, we have continued to engage regularly
with management over our holding period. During 2024,
we closely monitored Unilever’s position in Russia and
were pleased to receive confirmation that the company
had completed the sale of the Russian subsidiary during
October this year.
Separately, during Q3 2024, following news that Unilever
will spin off its ice cream business, we reignited our
engagement with CFO, Fernando Fernandes, to review
capital allocation and strategic priorities. We were
particularly interested to understand why Unilever
continues to maintain substantial debt on its balance
sheet. Fernandes reconfirmed Unilever’s capital allocation
policy, which remains unchanged, noting that the business
priority remains focused on increasing volume growth to
2+%, up from 1% at present. From a strategic perspective,
the CFO is acutely alert to the need to be in premium
segments with global scalability and so future capital
allocation will be fundamentally concentrated in the US
and India where the largest opportunities exist. Similarly,
prestige beauty represents one third of growth in Health
& Wellbeing and will be c.8% of revenue once ice cream
is gone. This is a strong business which has grown for 14
consecutive quarters, but management is aiming for it to
be a £10bn business and so ensuring adequate capital
allocation to priority segments such as this is important.
Next steps: The engagement regarding Unilever’s capital
allocation and strategy has been productive and insightful.
But as with all our companies we will continue to monitor
progress closely and engage with management on
aspects of their corporate strategy on an ongoing basis.
CASE STUDY
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2024 – ESG HIGHLIGHTS AT LINDSELL TRAIN
• Improved United Nations Principles for Responsible Investment
scorecard (“PRI”) – Lindsell Train received the PRI’s updated 2023
scorecard in Q1 2024, which shows that Lindsell Train has scored
4/5 in all three relevant categories. This improved scorecard
reflects on its enhanced efforts as a company to continue
to integrate stewardship and responsible investment into its
investment decision making, reporting and governance activities.
• Enhanced ESG Training – Lindsell Train recognises the
importance of ongoing training for all employees and importantly
the Investment Team and ESG Committee. In October 2023 and
July 2024 Lindsell Train hosted workshops for all staff and were
extremely grateful to have been supported by two portfolio
companies, Burberry and Heineken.
• Strengthened commitment to the abolishment of Modern
Slavery – Lindsell Train updated its Responsible Investment and
Engagement Policy to specifically reflect on this commitment and
have strengthened its partnership with CCLA and other members
of Find It, Fix It, Prevent it.
• Formalised its Engagement Framework including the
Engagement Policy – this was finalised in Q2 2024.
• Additional TCFD reporting – Lindsell Train’s TCFD Entity and
Product reports were published on its website ahead of the FCA
deadline in Q2 2024.
• Added dedicated ESG resource – Lindsell Train welcomed Azjin
Ali to the team as Responsible Investment Lead in Q3 2024. Prior
to joining Lindsell Train, Azjin worked at Aon as an Associate
Investment Consultant and Head of Biodiversity. Madeline Wright
continues in her role as Head of Investment ESG, coordinating the
investment team’s work on ESG.
• Continued partnership with UpReach – culminated with Lindsell
Train’s hosting of its annual intern day in August 2024, which
had 11 UpReach associates attended. The session included
presentations from all departments at Lindsell Train, helping
those in attendance to learn about asset management and how
Lindsell Train approaches the investment challenge.
35 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
36
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
STRATEGIC REPORT
BUSINESS REVIEW – CONTINUED
INTEGRITY AND BUSINESS ETHICS
The Company is committed to carrying out business in an
honest and fair manner. The Board has adopted a zero-
tolerance approach to instances of bribery and corruption.
Accordingly, it expressly prohibits any Director or associated
persons when acting on behalf of the Company from
accepting, soliciting, paying, offering or promising to pay
or authorise any payment, public or private, in the United
Kingdom or abroad to secure any improper benefit from
themselves or for the Company.
The Board applies the same standards to its service providers
in their activities for the Company.
A copy of the Company’s Anti Bribery and Corruption
Policy can be found in the Board and Policies section of the
Company’s website. The policy is reviewed annually by the
Audit Committee.
In response to the implementation of the Criminal Finances
Act 2017, the Board adopted a zero-tolerance approach to the
criminal facilitation of tax evasion. A copy of the Company’s
policy on preventing the facilitation of tax evasion can be
found in the Board and Policies section of the Company’s
website. The policy is reviewed annually by the Audit
Committee.
In carrying out its activities, the Company aims to conduct
itself responsibly, ethically and fairly, including in relation to
social and human rights issues. As an investment company
with limited internal resource, the Company has little
impact on the environment. The Company believes that
high standards of ESG make good business sense and have
the potential to protect and enhance investment returns.
Consequently, the Portfolio Manager’s investment criteria
ensure that ESG and ethical issues are taken into account
and best practice is encouraged. The Board’s expectations
are that its principal service providers have appropriate
governance policies in place.
COMPANY PROMOTION
The Company has appointed Frostrow to promote the
Company’s shares to professional investors in the UK and
Ireland. As investment company specialists, the Frostrow team
provides a continuous, proactive marketing and investor
relations service that aims to promote the Company by
encouraging demand for the shares.
MANAGEMENT ARRANGEMENTS
Alternative Investment Fund Manager (“AIFM”)
Under the terms of its AIFM agreement with the Company,
Frostrow provides, inter alia, the following services:
• oversight of the portfolio management function delegated
to Lindsell Train;
• promotion of the Company;
• investment portfolio administration and valuation;
• risk management services;
• share price discount and premium management;
• administrative and company secretarial services;
• advice and guidance in respect of corporate governance
requirements;
• maintenance of the Company’s accounting records;
• maintenance of the Company’s website;
• preparation and publication of annual reports, half year
reports and monthly fact sheets; and
• ensuring compliance with applicable legal and regulatory
requirements.
The AIFM Agreement may be terminated by either party on
giving notice of not less than 12 months.
Portfolio Manager
Lindsell Train, as delegate of the AIFM, is responsible for the
management of the Company’s portfolio of investments under
an agreement between it, the Company and Frostrow (the
“Portfolio Management Agreement”).
Under the terms of its Portfolio Management Agreement,
Lindsell Train provides, inter alia, the following services:
• seeking out and evaluating investment opportunities;
• recommending the manner by which monies should be
invested, realised or retained;
• advising on how rights conferred by the investments
should be exercised;
• analysing the performance of investments made; and
• advising the Company in relation to trends, market
movements and other matters which may affect the
investment objective and policy of the Company.
The Portfolio Management Agreement may be terminated by
either party on giving notice of not less than 12 months.
Annual Fees
FEES ON THAT PART OF MARKET CAP AIFM
PORTFOLIO
MANAGER
≤ £1 bn 0.15% 0.45%
Between £1 bn - £2 bn 0.135% 0.405%
£2 bn + 0.12% 0.36%
Performance Fees
The Company does not pay performance fees.
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
AIFM AND PORTFOLIO MANAGER EVALUATION
AND RE-APPOINTMENT
The performance of Frostrow as AIFM and Lindsell Train as
Portfolio Manager is continuously monitored by the Board with
a formal evaluation being undertaken each year. As part of
this process the Board monitors the services provided by the
AIFM and the Portfolio Manager as well as receiving regular
reports and views from them. The Board has also considered
the assessment carried out by the AIFM as required by the
FCA’s Consumer Duty obligations, that the Company’s Shares
provide fair value. It also receives comprehensive long-term
performance measurement reports to enable it to determine
whether or not the performance objective set by the Board
has been met.
Following a review at the Board meeting in September 2024,
the Board considers that the continuing appointment of
Frostrow and Lindsell Train, under the terms described above,
is in the best interests of the Company’s Shareholders. In
coming to this decision, it took into consideration the following
additional reasons:
• the quality and depth of experience of the company
secretarial, administrative and marketing team that the
AIFM brought to the management of the Company; and
• the quality and depth of experience that the Portfolio
Manager brought to the management of the portfolio, the
clarity and rigour of the investment process, consideration
of ESG targets, the high degree of engagement with
portfolio companies on ESG matters, the level of past
long-term performance of the portfolio in absolute terms
and also by reference to the benchmark index.
Depositary
The Bank of New York Mellon (International) Limited (the
“Depositary”) acts as the Company’s depositary in accordance
with the AIFMD on the terms and subject to the conditions of
the depositary agreement between the Company, Frostrow
and the Depositary (the “Depositary Agreement”). Under the
terms of the Depositary Agreement the Company pays the
Depositary a fee between 0.007% and 0.008% of net assets.
The Depositary provides the following services:
• responsibility for the safe-keeping of custodial assets of
the Company;
• verification and maintenance of a record of all other
assets of the Company;
• the collection of income that arises from those assets;
• taking reasonable care to ensure that the Company is
managed in accordance with the AIFMD, the Investment
Funds Sourcebook and the Company’s instrument of
incorporation, in relation to the calculation of the net asset
value per share and the application of income of the
Company; and
• monitoring the Company’s compliance with investment
restrictions and leverage limits set by the Board and the AIFM.
In accordance with the AIFM Rules the Depositary acts as
global custodian and may delegate safekeeping to one or
more global sub-custodians. The Depositary has delegated
safekeeping of the assets of the Company to The Bank of New
York Mellon SA/NV and/or The Bank of New York Mellon (The
Global Sub-custodians).
As at the date of this report, the applicable active sub-
custodians appointed by the Depositary who might be
relevant for the purposes of holding the Company’s
investments are:
COUNTRY NAME OF SUB-CUSTODIAN REGULATOR
The Netherlands The Bank of New York
Mellon SA/NV
Financial Services
and Markets
Authority, Belgium
United States
of America
The Bank of New York
Mellon, New York
US Securities
and Exchange
Commission
France The Bank of New York
Mellon SA/NV
The Autorité des
Marchés Financiers
Custodian
The Global Sub-Custodians’ safekeeping fees are charged
according to the jurisdiction in which the holdings are based.
The majority of the Company’s assets attract a custody fee
of 0.0033% of their market value. Variable transaction fees are
also chargeable.
The Depositary Agreement may be terminated by either party
on giving notice of not less than 90 days.
On behalf of the Board
Simon Hayes
Chairman
3 December 2024
38
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
GOVERNANCE
JAMES ASHTON
Non-Executive Director
James Ashton has served on the
Board since 14 October 2020. James
is Chief Executive of the Quoted
Companies Alliance, a membership
body which represents the interests
of small and mid-sized publicly
traded companies with government,
regulators and the media. He is the
author of several business books and
chairs Oscar’s Book Prize, the annual
search for the UK’s best picture book.
James was City Editor and Executive
Editor of the Evening Standard and
Independent titles and before that
City Editor of the Sunday Times.
SANDRA KELLY, ACA
Chair of the Audit Committee
and Senior Independent Director
Sandra Kelly has served on the Board
since 9 October 2019. A Chartered
Accountant, she was formerly
Finance Director of the Canal & River
Trust. Prior to that she spent eight
years as Finance Director at NHBC
(National House-Building Council).
She is a Trustee of the Land Trust.
She previously held senior finance
positions in the commercial sector,
most notably for BMW GB.
SIMON HAYES
Chairman
Simon Hayes has served on the
Board since 29 June 2015 and was
appointed as Chairman with effect
from 17 February 2021. Simon was
Chairman of Peel Hunt Limited until
July 2022. He joined Peel Hunt in
1993 and was appointed Head of
Corporate Finance in 2003, Chief
Executive in 2006 and Chairman in
2016.
Board of Directors
Number of shares held* 200,000
Annual Remuneration* £43,000
Shared directorships with
other Directors
None
Number of shares held* 8,096
Annual Remuneration* £35,000
Shared directorships with
other Directors
None
Number of shares held* 1,575
Annual Remuneration* £28,500
Shared directorships with
other Directors
None
The Board of Directors supervises the management of Finsbury Growth &
Income Trust PLC and looks after the interests of Shareholders. The re-election
of Directors is sought annually at the Annual General Meeting.
The Directors of the Company are set out below, all of whom were in office during the year and up to the date of signing the
Financial Statements.
All members of the Board are Non-Executive and serve as members of the Audit Committee.
*Information as at 30 September 2024
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCE
STRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
39
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
KATE CORNISH-BOWDEN
Non-Executive Director
Kate Cornish-Bowden has served
on the Board since 26 October 2017.
Kate was formerly a Fund Manager
for Morgan Stanley where she was
Managing Director and head of the
global core equity team. Kate is a
Non-Executive Director and Chair of
the Audit Committee at CC Japan
Income & Growth Trust plc, the Non-
Executive Chairman of International
Biotechnology Trust plc and a Non-
Executive Director and the Senior
Independent Director of European
Assets Trust PLC. She was formerly
a Non-Executive Director and Senior
Independent Director at Schroder
Oriental Income Fund Limited.
PARS PUREWAL, FCA
Non-Executive Director
Pars Purewal has served on the
Board since 28 November 2022.
Pars has broad investment sector
experience gained over a 38-year
career at PricewaterhouseCoopers
LLP, including 25 years as Partner
across the business’ Audit and
Advisory, People, Sales and UK
Asset Management teams. Pars is a
Fellow of the Institute of Chartered
Accountants in England and Wales,
the Chair of Royal London Asset
Management Limited, aNon-
Executive Director on the boards of
The Royal London Mutual Insurance
Society Limited and The Law
Debenture Corporation plc. He was
formerly on the boards of Brewin
Dolphin Holdings PLC, Federated
Hermes Limited and Beyond Food
Foundation.
LORNA TILBIAN
Non-Executive Director
Lorna Tilbian has served on the
Board since 26 October 2017. Lorna
is a Non-Executive Director and
Senior Independent Director of
Premier Foods plc, ProVen VCT plc
and a Non-Executive Director of
Rightmove plc where she chairs the
Remuneration Committee. Lorna
is also Chair of Dowgate Capital
Ltd. She was formerly an Executive
Director of Deutsche Numis, a Non-
Executive director of Euromoney
Institutional Investor PLC, Jupiter
UK Growth Investment Trust PLC
and M&C Saatchi PLC, a Director
of Dowgate Wealth Ltd, WestLB
Panmure Limited and S G Warburg
Securities.
Number of shares held* 10,200
Annual Remuneration* £28,500
Shared directorships with
other Directors
None
Number of shares held* 17,802
Annual Remuneration* £28,500
Shared directorships with
other Directors
None
Number of shares held* 11,500
Annual Remuneration* £28,500
Shared directorships with
other Directors
None
All members of the Board are Non-Executive and serve as members of the Audit Committee.
*Information as at 30 September 2024
40
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
GOVERNANCE
Report of the Directors
The Directors present this Annual Report on the affairs of the
Company, together with the audited Financial Statements
and the Independent Auditors’ Report for the year ended
30September 2024.
In accordance with the requirement for the Directors to prepare
a Strategic Report and an enhanced Directors’ Remuneration
Report for the year ended 30 September 2024, the following
information is set out in the Strategic Report:
• a review of the Company including details about its
objective, strategy and business model;
• future developments, details of the principal risks and
uncertainties associated with the Company’s activities
(including the Company’s financial risk management
objectives and policies); and
• information regarding community, social, employee, human
rights and environmental issues.
Information about Directors’ interests in the Company’s
ordinary shares is included within the Directors’ Remuneration
Report on page58.
The Corporate Governance Statement beginning on page 45
forms part of this Directors’ Report.
BUSINESS AND STATUS OF THE COMPANY
The Company is registered as a public limited company in
Scotland (Registered Number SC013958) and is an investment
company within the terms of Section 833 of the Companies
Act 2006. The Company is a closed-ended investment
company incorporated as a public limited company and is
an AIF, pursuant to the AIFMD Rules and the EU AIFM Directive,
whose ordinary shares are admitted to the closed-ended
investment funds category of the Official List of the FCA and
traded on the main market of the London Stock Exchange.
The Company carries on its business as an investment trust
within the meaning of Chapter 4 of Part 24 of the Corporation
Tax Act2010. This approval relates to accounting periods
commencing on or after 1 February 2012. The Directors are of the
opinion that the Company has conducted its affairs so as to be
able to retain such approval.
RESULTS AND DIVIDENDS
The Return on Ordinary Shares after taxation is shown on
page72. Details of the Company's dividend record can be
found on pages 3, 4 and 18.
LOAN FACILITY
As at 30 September 2024, the Company was in the second year
of its three-year secured fixed term revolving credit facility (the
“facility”) of £60 million with Bank of Nova Scotia, London Branch
(“Scotiabank”). There is an additional £40 million facility available
if required. As at 30September 2024 a total of £29.2million was
drawn down from this facility (2023: £36.7 million) which equates
to gearing of0.7%.
DIRECTORS
The current Directors of the Company are listed on pages38
and 39, all of whom served as Directors of the Company during
the year and up to the date of signing the Annual Report.
All members of the Board are Non-Executive. None of the
Directors has any other connection with the Portfolio Manager
or is employed by or is an officer of any of the companies
in which the Company holds an investment or any of the
Company’s service providers, with the exception of Lorna
Tilbian who is a Non-Executive director of Rightmove plc.
Directors’ Conflicts of Interest
Directors report on actual or potential conflicts of interest at
each Board meeting. Any Director with a conflict would be
excluded from any related discussion.
Directors’ & Officers’ Liability Insurance Cover
Directors’ and officers’ liability insurance cover was maintained
by the Company during the year. It is intended that this policy
will continue for the year ending 30 September 2025 and
subsequent years.
Directors’ Indemnity
During the year under review and to the date of this report,
indemnities were in force between the Company and each
of its Directors under which the Company has agreed to
indemnify each Director, to the extent permitted by law, in
respect of certain liabilities incurred as a result of carrying out
their role as a Director of the Company. The Directors are also
indemnified against the costs of defending any criminal or
civil proceedings or any claim by the Company or a regulator
as they are incurred. Where the defence is unsuccessful the
Director must repay those defence costs to the Company. The
indemnities are qualifying third party indemnity provisions for
the purposes of the Companies Act 2006.
A copy of each deed of indemnity is available for inspection at
the Company Secretary’s offices during normal business hours
and will be available at the Annual General Meeting.
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCE
STRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
41
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Directors’ Fees
Reports on Directors’ Remuneration and also the Directors’
Remuneration Policy are set out on pages 53 and 54.
Appointment and Replacement of Directors
Unless otherwise determined by the Company by ordinary
resolution, the number of Directors shall not be less than three.
Directors’ (and Other Senior Individuals)
Interests
The beneficial interests in the Company of the Directors, of
Nick Train, the individual with responsibility for managing
the Company’s portfolio at Lindsell Train, and of Alastair
Smith, Managing Partner at Frostrow, and of the persons
closely associated with them, are set out on page 58 of this
AnnualReport.
As part of the Company’s commitment to transparency, in
May 2022 the Board took the decision to disclose details of
transactions in the Company’s shares by Nick Train.
CAPITAL STRUCTURE
The Company’s capital structure is composed solely of
Ordinary Shares. Details are given in note 13 to the Financial
Statements on page 85.
Details of the voting rights in the Company’s shares at the
date of this Annual Report are given in note 9 to the Notice of
the Annual General Meeting.
Details of the substantial Shareholders in the Company are
listed on page 42.
The giving of powers to issue or buy-back the Company’s
shares requires the relevant resolution to be passed by
Shareholders. Proposals for the renewal of the Board’s current
powers to issue and buy-back shares are detailed within the
Notice of the Annual General Meeting.
The majority of the shares available under this buy-back
authority were bought back during the year and the Company
held a General Meeting on 23August 2024 where shareholder
authority was obtained to buy-back a further 25,779,973
shares on the same basis.
There are no restrictions concerning the transfer of securities
in the Company; no special rights with regards to control
attached to securities; no restrictions on voting rights; no
agreements between holders of securities regarding their
transfer known to the Company; and no agreements to which
the Company is party that might affect its control following a
successful takeover bid.
Authority To Issue and Purchase Own Shares
On 7 August 2024, the Company’s share premium account
of £1.1 billion was cancelled, in order to provide the Company
with additional distributable reserves, which can be used in the
future for all permitted purposes, including, if required, to fund
share buy-backs or other returns of capital in accordance with
applicable law.
It is intended that a special resolution will be proposed to grant
the Company authority to purchase its own shares, so as to
permit the purchase of up to 23,654,851 of the Company’s
ordinary shares (or such other number of shares as is equal to
14.99% of the total number of ordinary shares in issue at the date
of the passing of the resolution) subject to the constraints set out
in the special resolution. The Directors intend to use this authority
to purchase shares only if this would result in an increase in
net asset value per share and would be in the best interests of
Shareholders generally. Ordinary shares which are purchased
under this authority may be held in Treasury or cancelled.
The Company has adopted a buy-back policy whereby the
Company will buy-back shares as described above when
the share price discount to the net asset value per share
approaches 5%. Treasury shares can be sold back to the
market at a later date at a premium to the cum income net
asset value per share. The Company's share issuance policy
allows the issuance of new shares at a small premium to the net
asset value per share on a regular basis acting as a premium
management tool. A detailed description of this policy can be
found on the Company’s website. During the year 36,801,766
shares were bought back into Treasury (2023: 11,218,558).
Between 1 October 2024 and 2 December 2024, the Company
bought back a further 9,913,457 shares into Treasury.
The benefits to Shareholders of these policies are:
• The volatility of the Company’s share price discount is
minimised;
• The absolute level of the Company’s share price discount
is minimised;
• It is accretive to net asset value per share to the benefit of
existing Shareholders; and
• The Company’s long-term prospects are preserved in that
Shareholders with a longer-term investment horizon are
attracted to the shareholder register.
The Directors believe that granting the Board authority to
purchase shares, as detailed above, is in the best interests
of Shareholders as a whole and therefore recommend that
Shareholders vote in favour of this resolution.
42
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
GOVERNANCE
REPORT OF THE DIRECTORS – CONTINUED
Voting Rights
Subject to any rights or restrictions attached to any shares, on
a show of hands, every member who is present in person has
one vote and every proxy present who has been duly appointed
has one vote. However, if the proxy has been duly appointed
by more than one member entitled to vote on the resolution,
and is instructed by one or more of those members to vote for
the resolution and by one or more others to vote against it, or is
instructed by one or more of those members to vote in one way
and is given discretion as to how to vote by one or more others
(and wishes to use that discretion to vote in the other way) he or
she has one vote for and one vote against the resolution. Every
corporate representative present who has been duly authorised
by a corporation has the same voting rights as the corporation.
On a poll, every member present in person or by duly appointed
proxy or corporate representative has one vote for every share of
which they are the holder or in respect of which their appointment
as proxy or corporate representative has been made.
A member, proxy or corporate representative entitled to
more than one vote need not, if they vote, use all their votes
or cast all the votes they use the same way. In the case
of joint holders, the vote of the senior who tenders a vote
shall be accepted to the exclusion of the votes of the other
joint holders, and seniority shall be determined by the order
in which the names of the holders stand in the register of
members. A member is entitled to appoint another person as
their proxy to exercise all or any of their rights to attend and to
speak and vote at a meeting of the Company.
The appointment of a proxy shall be deemed also to confer
authority to demand or join in demanding a poll. Delivery of
an appointment of a proxy shall not preclude a member from
attending and voting at the meeting or at any adjournment
of it. A proxy need not be a member. A member may appoint
more than one proxy in relation to a meeting, provided that
each proxy is appointed to exercise the rights attached to a
different share or shares held by them.
Share Capital
At the Annual General Meeting held on 23 January 2024,
authority to allot up to 19,600,842 shares on a non pre-emptive
basis at prices not less than the higher of the prevailing cum
or ex income net asset value per share at the time of issuance
was granted.
Further details of the resolutions concerning issuance
authorities can be found in the Notice of Meeting.
No shares were issued by the Company during the year
(2023: Nil).
SUBSTANTIAL SHARE INTERESTS
As at 30 September 2024 the Directors were aware of the
following interests in the voting rights of the Company that
were above 3% of the Company’s share capital:
Holdings above 3% No. of shares % of Capital
Hargreaves Lansdown 18,972,819 11.3
Interactive Investor 16,892,292 10.0
RBC Brewin Dolphin 11,104,164 6.6
Rathbones 8,039,436 4.8
1607 Capital Partners 7,869,528 4.7
Evelyn Partners 7,795,322 4.6
AJ Bell 7,403,910 4.4
Investec Wealth & Investment 5,877,808 3.5
Charles Stanley 5,517,417 3.3
RBC Brewin Dolphin, Ireland 5,441,526 3.2
Nick Train 5,435,043 3.2
At 30 September 2024 the Company had 167,717,668 shares in
issue (excluding 57,273,635 shares held in Treasury).
The shareholder register is principally comprised of private
wealth managers and retail investors owning their shares
through a variety of online platforms. A profile of the
Company’s ownership is shown below.
Wealth Managers & Private Banks 40.0%
Retail Shareholders 37.2%
Institutional Investors 16.3%
Other 6.5%
Sourc e: Equ initi R D:IR
PROFILE OF THE COMPANY’S OWNERSHIP %
OF SHARES HELD AT 30 SEPTEMBER 2024
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCE
STRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
43
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
UK Listing Rule 6.6.6
UK Listing Rule 6.6.6 requires the Company to include
certain information, more applicable for traditional trading
companies, in a single identifiable section of the Annual Report
or a cross reference table indicating where the information is
set out. The Directors confirm that there are no disclosures to
be made in this regard.
Political Donations
The Company does not make political donations.
Global Greenhouse Gas (“GHG”) Emissions for
the Year Ended 30 September 2024
The Company is an investment company, with neither
employees nor premises, nor has it any financial or operational
control of the assets which it owns. Consequently, the
Company consumed less than 40,000 kWh of energy during
the year in respect of which the Directors’ Report is prepared
and therefore is exempt from the disclosures required under
the Streamlined Energy and Carbon Reporting criteria. It has
no GHG emissions to report from its operations nor does
it have responsibility for any other emissions producing
sources under the Companies Act 2006 (Strategic Report and
Directors’ Reports) Regulations 2013, including those within the
Company’s underlying investment portfolio.
Taskforce for Climate Related Financial
Disclosures (“TCFD”)
The Company notes the TCFD recommendations on climate
related financial disclosures. The Company is an investment
company and, as such, it is exempt from the UK Listing Rules
requirement to report against the TCFD framework.
The Company’s TCFD Product Report can be found on the
Company’s website together with a link to Portfolio Manager’s
TCFD Entity Report.
UK Sanctions
The Board has made due diligence enquiries of the service
providers that process the Company’s shareholder data to
ensure the Company’s compliance with the UK sanctions
regime. The relevant service providers have confirmed that
they check the Company’s shareholder data against the UK
sanctions list on a daily basis. At the date of this report, no
sanctioned individuals had been identified on the Company’s
shareholder register. The Board notes that stockbrokers and
execution-only platforms also carry out their own due diligence.
BENEFICIAL OWNERS OF SHARES –
INFORMATION RIGHTS
Beneficial owners of shares, such as those owning their shares
through a retail platform, who have been nominated by the
registered holder of those shares to receive information rights
under Section 146 of the Companies Act 2006 should direct
all communications to the registered holder of their shares
rather than to the Company’s Registrar, Link Group, or to the
Company directly.
AGM
The AGM will be held on Tuesday, 28 January 2025 and full
details of the meeting arrangements and the business to be
transacted will be sent under separate cover to Shareholders.
Further information concerning the AGM can be found in the
Chairman’s Statement beginning on page 6.
The full text of the resolutions to be proposed at the AGM
and an explanation of each resolution are contained in the
separate Notice of Meeting. The Directors recommend that
Shareholders cast their proxy votes in favour of all resolutions
proposed, as they will in respect of their own holdings.
OTHER STATUTORY INFORMATION
The following information is disclosed in accordance with the
Companies Act 2006:
• The rules on the appointment and replacement of
directors are set out in the Company’s Articles. Any
changeto the Articles would be governed by the
Companies Act 2006.
• Subject to the provisions of the Companies Act 2006, to the
Articles, and to any directions given by special resolution,
the business of the Company shall be managed by the
Directors who may exercise all the powers of the Company.
The powers shall not be limited by any special powers
given to the Directors by the Articles and a meeting of the
Directors at which a quorum is present may exercise all the
powers exercisable by the Directors. The Directors’ powers
to issue and buy-back shares, in force at the end of the
year, are recorded in the Directors’ Report.
There are no agreements:
i. to which the Company is a party that might affect its
control following a takeover bid; and/or
ii. between the Company and its Directors concerning
compensation for loss of office.
44
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Independent Auditor
Following an audit tender which commenced in December
2023, a resolution to appoint Deloitte LLP as the Company’s
auditor and authorise the Audit Committee to determine its
remuneration will be proposed at the forthcoming Annual
General Meeting. Further details of the audit tender are included
in the Chairman’s Statement and the Report of the Audit
Committee.
Statement of Disclosure of Information to the
Auditors
So far as the Directors are aware, there is no relevant
information (as defined in the Companies Act 2006) of which
the Company’s Auditors are unaware. The Directors have
taken all steps they ought to have taken to make themselves
aware of any relevant audit information (as defined) and to
establish that the Auditors are aware of such information.
The above confirmation is given and should be interpreted
in accordance with the provisions of Section 418 of the
Companies Act 2006.
GOING CONCERN
The Company’s portfolio, investment activity, the Company’s
cash balances and revenue forecasts, the trends and factors
likely to affect the Company’s performance are reviewed and
discussed at each Board meeting. The Board has considered
a detailed assessment of the Company's ability to meet its
liabilities as they fall due, including stress tests and reverse
stress tests which modelled the effects of substantial falls in
portfolio valuations and liquidity constraints on the Company’s
NAV, cash flows and expenses.
Based on the information available to the Directors at the date
of this report, including the results of these stress tests, the
conclusions drawn in the Viability Statement in the Strategic
Report beginning on page 24, the Company’s cash balances
and access to funding, the Directors are satisfied that the
Company has adequate financial resources to continue in
operation for at least the next 12 months from the date of
approval of this report and that, accordingly, it is appropriate
to continue to adopt the going concern basis in preparing the
Financial Statements.
In reaching these conclusions and those in the Viability
Statement, the stress testing conducted also featured
consideration of the long-term effects of the continuing
uncertainty created by the increase in global inflation and
rising interest rates, together with the consequences of the
wars in Ukraine and the Middle East as well as subsequent
long-term effects on economies and international relations.
Further information is provided in the Audit Committee report
beginning on page 59.
By order of the Board
Frostrow Capital LLP
Company Secretary
3 December 2024
GOVERNANCE
REPORT OF THE DIRECTORS – CONTINUED
FURTHER
INFORMATION
INDEPENDENT
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FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCE
STRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
45
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Corporate Governance
CORPORATE GOVERNANCE STATEMENT
The Board is committed to maintaining and demonstrating
high standards of corporate governance. The Board has
considered the principles and recommendations of the AIC
Code of Corporate Governance (the “AIC Code”). The AIC
Code addresses all the principles set out in the UK Corporate
Governance Code issued by the Financial Reporting Council
(“FRC”) (the “UK Code”), as well as setting out additional
principles and recommendations on issues that are of specific
relevance to investment companies.
The Board considers that reporting against the principles
and recommendations of the AIC Code will provide the best
information to Shareholders and the FRC has confirmed that
by following the AIC Code, boards of investment companies
will meet their obligations in relation to the UK Corporate
Governance Code and associated disclosure requirements
under paragraph 6.6.6 of the UK Listing Rules. The Corporate
Governance Code can be viewed at www.frc.org.uk. The AIC
Code is available on the AIC website (www.theaic.co.uk).
Itincludes an explanation of how the AIC Code adapts the
Principles and Provisions set out in the Corporate Governance
Code to make them relevant for investment companies.
In January 2024 the FRC published a revised UK Corporate
Governance Code which will apply to financial years beginning
on or after 1 January 2025. The 2018 UK Code remains in place
until this time. The Board will consider the updated provisions
concerning internal control of both the new UK Code and the
revised AIC Code in due course.
STATEMENT OF COMPLIANCE
The Company has complied with the recommendations of the
AIC Code and the relevant provisions of the UK Code, except in
relation to certain provisions relating to:
• the role of the chief executive;
• executive directors’ remuneration; and
• the need for an internal audit function.
For the reasons set out in the AIC Code, and as explained in the
UK Code, the Board considers these provisions are not relevant
to the position of the Company as it is an externally managed
investment company. In particular, all of the Company’s day-to-
day management and administrative functions are outsourced
to third parties. As a result, the Company has no executive
directors, employees or internal operations. Therefore, the
Company has not reported further in respect of these provisions.
COMPANY
Company’s Purpose, Values and Strategy
The Board assesses the basis on which the Company
generates and preserves value over the long term. The
Strategic Report describes how opportunities and risks to
the future success of the business have been considered
and addressed, the sustainability of the Company’s business
model and how its governance contributes to the delivery
of its strategy. The Company’s investment objective and
investment policy are set out on pages 1 and 17. The Board’s
key responsibilities are to set the Company's strategy, values
and standards; to provide leadership within a controls
framework which enables risks to be assessed and managed;
to challenge constructively and scrutinise performance of all
outsourced activities; and to review regularly the contracts,
performance and remuneration of the Company’s principal
service providers and, in particular, the Portfolio Manager.
Board Committees
The Directors have decided that, given the size of the Board,
it is unnecessary to form separate Remuneration and
Nomination Committees; the duties that would ordinarily fall to
those Committees are carried out by the Board as a whole.
The Audit Committee
The Audit Committee’s key responsibilities are to monitor
the integrity of the Annual Report and Financial Statements;
to oversee the risk and control environment and financial
reporting; and to review the performance of the Company’s
external auditor.
All Independent non-executive Directors are members of
the Committee. Although Simon Hayes is Chairman of the
Board, in light of his continued independence and his valued
contributions in Committee meetings, the Audit Committee
considers it appropriate that he continues to be a member.
Copies of the full terms of reference, which clearly define the
responsibilities of the Audit Committee, can be obtained from
the Company Secretary. They will be available for inspection at
the Annual General Meeting or at the offices of the Company
Secretary and can be found in the Corporate Information
section on the Company’s website.
Board Meetings
Representatives of the Portfolio Manager, AIFM and Company
Secretary are expected to be present at all meetings. The
primary focus at Board meetings is a review of investment
performance and associated matters. The Chairman
encourages open debate within the Board and a supportive
and co-operative relationship with the Company’s AIFM,
Portfolio Manager, advisers and other service providers. The
table overleaf sets out the number of formal Board and
Committee meetings held during the year ended 30September
2024 and the number of meetings attended by each Director.
In addition to the scheduled Board and Committee meetings,
Directors attend ad hoc meetings to consider matters such
as the approval of regulatory announcements, management
accounts and interimdividends.
The Directors receive monthly portfolio update briefings from
representatives of the Portfolio Manager and AIFM.
46
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
GOVERNANCE
CORPORATE GOVERNANCE – CONTINUED
Board Audit committee
Total number of meetings 5 4
Simon Hayes 5 4
James Ashton 5 4
Kate Cornish-Bowden 5 4
Sandra Kelly 5 4
Pars Purewal 5 4
Lorna Tilbian 5 4
All of the Directors attended the Annual General Meeting in January2024.
BOARD
Role of The Board
The role of the Board is to promote the long-term sustainable
success of the Company, generating value for Shareholders
and contributing to wider society.
Board Leadership and Purpose
Responsibility for effective governance and for the overall
management of the Company’s affairs lies with the Board. The
governance framework of the Company reflects the fact that
as an investment company it outsources company secretarial,
administration, marketing, portfolio and risk management
services to Frostrow. Portfolio management is then delegated
to Lindsell Train by Frostrow.
Culture
The Board seeks to establish and maintain a corporate culture
characterised by fairness in its treatment of the Company’s
service providers, whose efforts are collectively directed
towards delivering returns to Shareholders in line with the
Company’s purpose and objectives. It is the Board’s belief
that this contributes to the greater success of the Company,
as well as being an appropriate way to conduct relations
between parties engaged in a common purpose.
Matters Reserved For Decision By The Board
The Board has adopted a schedule of matters reserved for its
decision. This includes, inter alia, the following:
• Requirements under the Companies Act 2006, including
approval of the half yearly and annual financial
statements, recommendation of any dividend, the
appointment or removal of the Company Secretary, and
determining the policy on share issuance and buy-backs.
• Matters relating to certain Stock Exchange requirements
and announcements, the Company’s internal controls, and
the Company’s corporate governance structure, policy
and procedures.
• Decisions relating to the strategic objectives and overall
management of the Company, including the appointment
or removal of the AIFM , Portfolio Manager and other
service providers, and review of the Investment Policy.
• Matters relating to the Board and Board committees,
including the terms of reference and membership of the
committees, the appointment of Directors (including the
Chairman) and the determination of Directors’ remuneration.
Day-to-day operational and portfolio management is
delegated to Frostrow and Lindsell Train respectively.
The Board takes responsibility for the content of communications
regarding major corporate issues, even if Frostrow or Lindsell
Train acts as spokesperson. The Board is kept informed of
relevant promotional material that is issued by Frostrow.
Composition, Succession and Evaluation
The Board seeks to ensure that it is well-balanced and
refreshed regularly by the appointment of new directors with
the skills and experience necessary, in particular, to replace
those lost by directors’ retirements. The Board further ensures
that it is comprised of members who collectively:
i. display the necessary balance of professional skills,
experience, length of service and industry/Company
knowledge; and
ii. are fit and proper to direct the Company’s business with
prudence and integrity; and provide policy guidance on
the structure, size and composition of the Board (and its
Committee) and the identification and selection of suitable
candidates for appointment to the Board (and its Committee).
The composition and skills of the Board are reviewed annually
and at such other times as circumstances may require.
Board Evaluation
During September and October 2024 an external independent
review of the Board, its committee and individual Directors was
carried out by an independent third party, Lintstock.
The Board reviewed the report from Lintstock in November
2024 and the Chairman is leading on implementation of
minimal changes recommended by the report that the Board
considered should be made.
The review concluded that the Board worked in a collegiate,
efficient and effective manner and did not identify any
material weaknesses or concerns. The Chairman is satisfied
that the structure and operation of the Board continues to
be effective and relevant and that there is a satisfactory mix
of skills, experience, length of service and knowledge of the
Company.
The Board has considered the position of all of the Directors as
part of the evaluation process and believes that it would be in
the Company’s best interests to propose them for re-election.
Lintstock has no other connection with the Company or the
individual Directors.
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCE
STRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
47
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Diversity Policy
The Board supports the principle of boardroom diversity and
therefore the Company’s Diversity Policy applies to both the
Board and Audit Committee.
The Company’s policy is that the Board should be comprised
of directors who collectively display the necessary balance of
professional skills, experience, length of service and industry
knowledge and that appointments to the Board should be
made on merit, against objective criteria, including diversity
in its broadest sense. The objective of the policy is to have a
broad range of approaches, backgrounds, skills, knowledge
and experience represented on the Board. The Board believes
that this will make the Board more effective at promoting
the long-term sustainable success of the Company and
generating value for all Shareholders by ensuring there is
a breadth of perspectives among the Directors and the
challenge needed to support good decision-making.
To this end achieving a diversity of perspectives and
backgrounds on the Board during the year has been, and
will continue to be, a key consideration in any Director
search process. The gender balance of three men and three
women, as at the date of the Annual Report, exceeds the
requirements of the UK Listing Rules. The Board is aware that
gender representation objectives have been set for FTSE 350
companies and that targets concerning ethnic diversity have
been recommended. The Parker Review set a target for each
FTSE 100 Board to have at least one director of colour by 2021
and for each FTSE 250 Board to have the same by 2024.
The Board will not display any bias in respect of age, gender,
race, sexual orientation, religion, ethnic or national origins,
disability, or educational, professional or socio-economic
background in considering the appointment of its Directors.
Board Diversity
The Board is supportive of the FCA’s UK Listing Rules
(UKLR6.6.6(9)) to encourage greater diversity on listed
company boards and has implemented the FCA’s disclosure
requirements.
The Board has chosen to align its diversity reporting reference
date with the Company’s financial year end and proposes to
maintain this alignment for future reporting periods.
The Company met the three targets on board diversity as at
its chosen reference date, 30 September 2024:
(i) at least 40% of the individuals on its board of directors are
women;
(ii) at least one of the following senior positions on its board of
directors is held by a woman*:
(A) the chair;
(B) the chief executive;
(C) the senior independent director; or
(D) the chief financial officer; and
(iii) at least one individual on its board of directors is from a
minority ethnic background.
The relatively small size of the Company’s Board, and therefore
more infrequent vacancies and opportunities for recruitment,
make achieving diversity on the Board a more challenging
process. As succession planning of the Board progresses
over future years, the Company will continue to strive for
increased diversity on its Board of which gender and ethnicity
are two important aspects. Further details on the Company’s
appointment process can be found under Appointments
to the Board on the following page. This includes engaging
recruitment agencies that sign up to recognised codes of
conduct, which include principles on diversity with the aim
of increasing board diversity integrated through their search
processes.
48
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
In order to collect the data required to fulfil the disclosures in
the tables above, the Board agreed that self-reporting by the
individuals concerned was the most appropriate method.
Thedata was collected anonymously by the Company
Secretary using a web-based survey where the following two
questions were posed, and individuals were reminded that ‘Not
specified / prefer not to say’ could be recorded in response:
1. For the purposes of the UK Listing Rules disclosures, how
should you be categorised; and
2. Please advise your ethnicity.
There have been no changes in Board composition that have
occurred between the reference date and the date on which
the Annual Report was approved.
Policy on Director Tenure
The tenure of each non-executive Director, including the
Chairman, is not ordinarily expected to exceed nine years.
However, the Board has agreed that the tenure of the
Chairman may be extended for an agreed time provided
such an extension is conducive to the Board’s overall orderly
succession. The Board believes that this more flexible
approach to the tenure of the Chairman is appropriate in
the context of the regulatory rules that apply to investment
companies, which ensure that the Chairman remains
independent after appointment, while being consistent with
the need for regular refreshment and diversity.
Appointments to the Board
The rules governing the appointment and replacement of
Directors are set out in the Company’s Articles of Association
and the aforementioned succession planning policy. Where
the Board appoints a new Director during the year or after the
year end and before the notice of annual general meeting is
published, that Director will stand for election by Shareholders
at the next Annual General Meeting.
When considering new appointments, the Board endeavours to
ensure that it has the capabilities required to be effective and
oversee the Company’s strategic priorities. This will include an
appropriate range, balance and diversity of skills, experience
and knowledge. The Company is committed to ensuring that
any vacancies arising are filled by the best qualified candidates.
Subject to there being no conflict of interest, all Directors are
entitled to vote on candidates for the appointment of new
Directors and to recommend to Shareholders the re-election
of Directors at the Annual General Meeting. The Chairman
will not chair the meeting when the Board is dealing with the
appointment of his successor.
Induction/Development
New appointments to the Board are provided with a full
induction programme. The programme covers the Company’s
investment strategy, policies and practices. New Directors are
also given key information on the Company’s regulatory and
statutory requirements as they arise including information
GOVERNANCE
CORPORATE GOVERNANCE – CONTINUED
Number of
Board members
Percentage
of the Board
Number of senior positions on the board
(Chair and SID)*
Men 3 50% 1
Women 3 50% 1
Not specified/prefer not to say – – –
* As an externally managed investment company, the Company has no executive directors, employees or internal operations. The Board has therefore excluded the columns
relating to executive management from the tables above. In addition, the senior positions on the Company’s Board of (B)the chief executive and (D) the chief financial officer
are not applicable to the Company. In the absence of the aforementioned roles, the Board considers the Chair of the Audit Committee to also be a senior position on the Board.
Sandra Kelly currently serves as both Senior Independent Director and Chair of the Audit Committee.
Number of
Board members
Percentage
of the Board
Number of senior positions on the board
(Chair and SID)*
White British or other White (including minority-white groups) 5 83% 2
Mixed/Multiple Ethnic Groups – – –
Asian/Asian British 1 17% –
Black/African/Caribbean/Black British – – –
Other ethnic group, including Arab – – –
Not specified/prefer not to say – – –
As required under LR 9.8.6R(10), further detail in respect of the three targets outlined above as at 30 September 2024 is disclosed in
the tables below.
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCE
STRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
49
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
on the role of the Board, matters reserved for its decision, the
terms of reference for the Board committee, the Company’s
corporate governance practices and procedures and the latest
financial information. Following their appointment, Directors are
encouraged to participate in training courses where appropriate.
Division of Responsibilities
Responsibilities of the Chairman
The Chairman’s primary role is to provide leadership to the
Board, assuming responsibility for its overall effectiveness in
directing the company. The Chairman is responsible for:
• ensuring that the Board is effective in its task of setting
and implementing the Company’s direction and strategy,
taking the chair at general meetings and Board meetings,
conducting meetings effectively and ensuring all Directors
are involved in discussions and decision-making;
• setting the agenda for Board meetings and ensuring the
Directors receive accurate, timely and clear information
for decision-making;
• taking a leading role in determining the Board’s
composition and structure, overseeing the induction of
new Directors and the development of the Board as a
whole, leading the annual board evaluation process and
assessing the contribution of individual Directors;
• supporting and also challenging the AIFM and the Portfolio
Manager (and other suppliers where necessary) ensuring
effective communications with Shareholders and, where
appropriate, other stakeholders; and
• engaging with Shareholders to ensure that the Board has a
clear understanding of shareholder views.
Responsibilities of the Senior Independent Director (“SID”)
The SID serves as a sounding board for the Chairman and
acts as an intermediary for the other Directors and the
Shareholders. The SID is responsible for:
• working closely with the Chairman and providing support;
• leading the annual assessment of the performance of the
Chairman;
• holding meetings with the other non-executive Directors
without the Chairman being present, on such occasions as
necessary;
• carrying out succession planning for the Chairman’s role;
• working with the Chairman, other Directors and
Shareholders to resolve major issues; and
• being available to Shareholders and other Directors to address
any concerns or issues they feel have not been adequately
dealt with through the usual channels of communication (i.e.
through the Chairman or the Portfolio Manager).
Company Secretary
The Directors have access to the advice and services of a specialist
company secretary, who is responsible for advising the Board on all
governance matters. The Company Secretary ensures governance
procedures are followed and that the Company complies with
applicable statutory and regulatory requirements.
Directors’ Interests
The beneficial interests of the Directors in the Company are set
out on page 58.
Directors’ Independence
As at the date of the Annual Report, the Board consists of
sixnon-executive Directors, each of whom is independent of
Frostrow and Lindsell Train. No member of the Board has been
an employee of the Company, Frostrow, Lindsell Train or any of
its service providers. Accordingly, the Board considers that all
the Directors are independent and there are no relationships
or circumstances which are likely to affect or could appear to
affect their judgement.
The Chairman is entitled to a seat on the board of the
Company’s AIFM by virtue of the Company’s minority
partnership interest in Frostrow. It is a non-executive
position and therefore the Board does not believe that this
compromises his independence from the Company. At this
time the Board has decided the Chairman will not take a seat
on the board of Frostrow, but continues to receive updates on
the business as part of the review of Frostrow's valuation.
Directors' Other Commitments
Each of the Directors assessed the overall time commitment
of their external appointments and it was concluded that they
have sufficient time to discharge their duties. When appointing
new Directors, the Board takes into account other demands on
the Directors’ time. Any additional external appointments are
not undertaken without prior approval of the Board.
Independent Professional Advice
The Board has formalised arrangements under which
the Directors, in the furtherance of their duties, may seek
independent professional advice at the Company’s expense.
RISK AND INTERNAL CONTROL
The Statement of Directors’ Responsibilities on page 52
describes the Directors’ responsibility for preparing this report.
The Audit Committee Report, beginning on page 59,
explains the work undertaken to allow the Directors to make
this statement and to apply the going concern basis of
accounting. It also sets out the main roles and responsibilities
as well as the work of the Audit Committee and describes
the Directors’ review of the Company’s risk management and
internal control systems.
A description of the principal risks facing the Company and an
explanation of how they are being managed is provided in the
Strategic Report on pages 20 to 24.
An overview of the Internal Controls structure of the Company
and its service providers is shown overleaf.
50
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Principal third party service providers
The Directors
l receive regular reporting at meetings;
l review the assurance report produced by each
organisation;
l receive additional reporting on the control
environment from each of the principal third
party service providers; and
l formally evaluate their performance on an
annual basis.
Secondary third party service providers
The Directors
l receive ad hoc reporting on their activities at
meetings.
Lindsell Train Limited
(Portfolio Management)
Reporting
l Investment performance update at each meeting
l ESG update at each meeting
l Internal Control Report
l Compliance Report (semi-annually)
l Effectiveness of control environment (annually)
Link Group
(Registrar)
l Effectiveness of control environment
(annually)
Winterflood Securities Limited
(Corporate Broker)
l Effectiveness of control environment
(annually)
Bank of New York Mellon
(Depositary and Global Custodian)
Reporting
l Depositary’s Report (semi-annually)
l Effectiveness of control environment (annually)
l Presentation from the Depositary and Custodian (annually)
The Board has responsibility for establishing and assessing internal controls to ensure the Company operates effectively, efficiently and within the
risk appetite set by the Board. As the Company relies on third party service providers for all of its operations, it obtains regular reports from these
counterparties on the nature and effectiveness of controls within these organisations.
The Company’s principal service providers are the Portfolio Manager, Lindsell Train Limited, the AIFM, Company Secretary and Administrator, Frostrow
Capital LLP, and its depositary and custodian, Bank of New York Mellon. The Board receives regular reporting on compliance with the control
environment and assesses the effectiveness of the internal controls through review of the assurance reports from each of these organisations.
In addition, the Company retains a number of secondary providers who report to the Board. These include the registrar, broker and financial adviser.
The services provided by these firms are not integral to the Company’s operating model and internal controls and so the reporting they provide to
the Board on their operations is less extensive.
The Audit Committee formally evaluates the performance and service delivery of all third party service providers at least annually and the
performance of the Company’s external auditor annually, following the completion of the annual audit process.
INTERNAL CONTROLS STRUCTURE
Board of Directors
Non-executive
Sub-committee:
l Audit Committee
Frostrow Capital LLP
(AIFM, Company Secretary and Administrator)
Reporting
l Statement of Financial
Position
l Liquidity
l Income forecasts
l Portfolio valuation
l Portfolio transactions
l Investment limits and
restrictions (monthly)
l Compliance with investment policy and guidelines
(monthly)
l Compliance report (quarterly)
l Effectiveness of control environment
(semi-annually)
l Advice on regulatory changes
GOVERNANCE
CORPORATE GOVERNANCE – CONTINUED
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCE
STRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
STAKEHOLDERS
Reporting on Engagement with Stakeholders
The AIC Code requires directors to explain their statutory duties
as stated in Sections 171–177 of the Companies Act 2006. Under
Section 172, directors have a duty to promote the success of
the Company for the benefit of its members as a whole and in
doing so have regard to the consequences of any decisions
in the long term, as well as having regard to the Company’s
stakeholders amongst other considerations.
The Board’s report on its compliance with Section 172 of the
Companies Act 2006 is contained within the Strategic Report
on pages 25 to 28.
Nominee Share Code
Where shares in the Company are held via a nominee
company, the Company undertakes:
• to provide the nominee company with multiple copies of
shareholder communications, so long as an indication of
quantities has been provided in advance; and
• to allow investors holding shares through a nominee
company to attend general meetings.
Nominee companies are encouraged to provide the necessary
authority to underlying Shareholders to attend the Company’s
Annual General Meeting and vote via proxy.
ANNUAL GENERAL MEETING
The Annual General Meeting will be held at 12 noon on
Tuesday, 28 January 2025. The formal notice of the Annual
General Meeting is set out in the accompanying circular to
Shareholders, together with explanations of the resolutions and
arrangements for the meeting.
By order of the Board
Frostrow Capital LLP
Company Secretary
3 December 2024
52
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
GOVERNANCE
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 prepared the Company's Financial Statements
in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards,
comprising FRS 102 “The Financial Reporting Standard applicable
in the UK and Republic of Ireland”, and applicable law).
Under company law the Directors must not approve the
Financial Statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Company and of
the profit or loss of the Company for that period. In preparing
the Financial Statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• state whether applicable United Kingdom Accounting
Standards, comprising FRS 102 have been followed, subject
to any material departures disclosed and explained in the
Financial Statements;
• make judgements and accounting estimates that are
reasonable and prudent; and
• prepare the Financial Statements on the going concern
basis unless it is inappropriate to presume that the
Company will continue in business.
The Directors are also responsible for safeguarding the assets
of the Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company's transactions and disclose with reasonable
accuracy at any time the financial position of the Company
and enable them to ensure that the Financial Statements
and the Directors’ Remuneration Report comply with the
Companies Act 2006.
WEBSITE PUBLICATION
The Directors are responsible for ensuring the Annual Report
and the financial statements are made available on a
website.
Financial statements are published on the Company’s
website in accordance with legislation in the United Kingdom
governing the preparation and dissemination of financial
statements, which may vary from legislation in other
jurisdictions. The maintenance and integrity of the Company’s
website is the responsibility of the Directors.
The Directors’ responsibility also extends to the ongoing
integrity of the financial statements contained therein.
RESPONSIBILITY STATEMENT
The Directors consider that the Annual Report and
Financial Statements, taken as a whole, are fair, balanced,
understandable and provide the information necessary for
Shareholders to assess the Company’s position, performance,
business model and strategy.
Each of the Directors, whose names and functions are listed in
the ‘Board of Directors’ section on pages 38 and 39, confirms
that, to the best of their knowledge:
• the Company's Financial Statements, which have been
prepared in accordance with United Kingdom Accounting
Standards give a true and fair view of the assets, liabilities,
financial position and profit of the Company; and
• the Strategic Report includes a fair review of the
development and performance of the business and the
position of the Company, together with a description of
the principal risks and uncertainties that it faces.
Approved by the Board of Directors and signed on its behalf by
Simon Hayes
Chairman
3 December 2024
Note to those who access this document by electronic means:
The Annual Report for the year ended 30 September 2024 has been approved
by the Board of Finsbury Growth & Income Trust PLC. Copies of the Annual Report
are circulated to Shareholders and, where possible to potential investors. It is also
made available in electronic format for the convenience of readers. Printed copies
are available from the Company Secretary's office in London.
FURTHER
INFORMATION
INDEPENDENT
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FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCE
STRATEGIC REPORT
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Directors’ Remuneration Policy
The Company follows the recommendations of the AIC Code that Directors’ remuneration should reflect their duties,
responsibilities and the value of their time spent. The Board’s policy is that the remuneration of the Directors should reflect
the experience of the Board as a whole, and is determined with reference to comparable organisations and appointments.
There are no performance conditions attaching to the remuneration of the Directors as the Board does not believe that this is
appropriate for non-executive Directors. This policy is reviewed annually and it is intended that it will continue for the year ending
30 September 2025 and for subsequent financial years.
Shareholder approval of the Directors’ Remuneration Policy was last sought at the AGM held in January 2023. The result in respect
of the resolution was as follows:
Remuneration policy VOTES CAST FOR VOTES CAST AGAINST VOTES WITHHELD*
Votes cast 86,434,157 149,590 79,223
% of votes cast 99.83% 0.17% –
* Votes withheld are not votes by law and are therefore not counted in the calculation of votes for or against a resolution
The fees for the Directors are determined within the limits set out in the Company’s Articles of Association, the maximum
aggregate limit currently being £300,000 per annum, and Directors are not eligible for bonuses, pension benefits, share options,
long-term incentive schemes or other benefits.
Directors are entitled to claim reasonable expenses from the Company in relation to the performance of their duties. The current
and projected Directors’ fees for 2025 are shown in the following table. The Company does not have any employees.
DATE OF
APPOINTMENT
TO THE BOARD
PROJECTED FEES
YEAR ENDING
30 SEPTEMBER
2025
CURRENT FEES
YEAR ENDED
30 SEPTEMBER
2024
Simon Hayes (Chairman)* 29 June 2015 £14,548 £43,000
James Ashton 14 October 2020 £30,000 £28,500
Kate Cornish-Bowden 26 October 2017 £30,000 £28,500
Sandra Kelly (Chair of the Audit Committee and SID) 9 October 2019 £36,500 £35,000
Pars Purewal** 28 November 2022 £40,044 £28,500
Lorna Tilbian 26 October 2017 £30,000 £28,500
£181,092 £192,000
* Simon Hayes will retire from the Board at the conclusion of the AGM to be held on 28 January 2025
** Pars Purewal will be appointed as Chairman at the conclusion of the AGM to be held on 28 January 2025
The current level of Directors’ fees will not be reviewed until at least September 2025. Any new Director being appointed to the
Board who has not been appointed as either Chairman of the Board or as the Chair of the Audit Committee will, under the current
level of fees, receive £30,000 per annum.
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
GOVERNANCE
DIRECTORS’ REMUNERATION POLICY – CONTINUED
DIRECTORS’ REMUNERATION YEAR ENDED
30 SEPTEMBER 2024
None of the Directors has a service contract. The terms of
their appointment provide that Directors shall retire and be
subject to election at the first Annual General Meeting after
their appointment and to re-election annually thereafter. The
terms also provide that a Director may be removed without
notice and that compensation will not be due on leaving office.
Theterms and conditions of the Directors’ appointments are
set out in formal letters of appointment which are available
forreview on request from the Company Secretary at
cosec@frostrow.com and will be available for 15 minutes
before, and during, the forthcoming AGM.
CONSIDERATION OF SHAREHOLDERS’ VIEWS
In accordance with best practice recommendations the Board
will put the Remuneration Policy to Shareholders at the Annual
General Meeting at least once every three years. Approval of
this policy was last granted by Shareholders at the Annual
General Meeting held in January 2023 and approval will be
sought accordingly at the Annual General Meeting to be held
in 2026.
Any feedback received from Shareholders is considered as
part of the Board’s annual review of remuneration. In respect
of the year under review no feedback has been received from
Shareholders in relation to remuneration.
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCE
STRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
55
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Directors’ Remuneration Report
STATEMENT BY THE CHAIRMAN OF THE BOARD
On behalf of the Board, I am pleased to present the Directors’
Remuneration Report to Shareholders.
This report has been prepared in accordance with the
requirements of Section 421 of the Companies Act 2006 and
the Enterprise and Regulatory Reform Act 2013. An Ordinary
Resolution for the approval of this report will be put to
Shareholders at the Company’s forthcoming Annual General
Meeting. The Directors’ Remuneration Policy, which is separate
to this report, can be found on pages 53 and 54.
The law requires the Company’s Auditors to audit certain
disclosures within this report. Where disclosures have been
audited they are indicated as such and the Auditors’ opinion is
included in their report to members on pages 64 to 71.
Due to the Company’s size and to avoid the need to establish
a separate Remuneration Committee, the Company’s
remuneration function is carried out by the full Board under
my Chairmanship. The Board considers the framework for the
remuneration of the Directors on an annual basis. It reviews
the ongoing appropriateness of the Company’s remuneration
policy and the individual remuneration of Directors by
reference to the activities of the Company and comparison
with other companies of a similar structure and size. This is in
line with the AIC Code.
The Directors exercise independent judgement and discretion
when authorising remuneration outcomes, taking into
account the Company’s performance together with wider
circumstances.
The Board considers the level of Directors’ fees annually. At the
most recent review held in September 2024, it was agreed that
the Directors’ fees with effect from 1 October 2024 would be as
follows:
The Chairman - £44,500 (2023: £43,000)
The Chair of the Audit Committee - £36,500 (2023: £35,000)
Other Directors - £30,000 (2023: £28,500).
No advice from remuneration consultants was received
during the year although a review of remuneration of the
Company’s peer group of investment companies was
undertaken by the Board.
The following table shows the remuneration components for each Board Role.
COMPONENT
2024
ANNUAL RATE (£)
2023
ANNUAL RATE (£)* PURPOSE AND OPERATION
Basic Annual Fee:
Each Director
£30,000 £28,500 In recognition of the time and commitment required by Directors
of public companies as well as the responsibilities of the role. The
basic fee is reviewed against fees paid by peer companies to
ensure that it reflects fair and adequate compensation for the
role.
Additional Fee:
Chairman of the Board
£14,500 £14,500 For the additional time, commitment and responsibility required
on the Company’s business issues; and providing leadership as
Chairman of theBoard.
Additional Fee:
Chair of the Audit Committee
£6,500 £6,500 For the greater time required on the financial and reporting affairs
of theCompany.
Additional Fee:
Each Director
Variable Variable In the event that the Company undertakes a complex or large
project, such additional fee as will fairly compensate for the
additional time and commitment required by a Director.
Expenses:
Each Director
Variable Variable Reimbursement of expenses properly incurred by Directors in
attending meetings and/or otherwise in the performance of their
duties to theCompany.
* The 2023 remuneration components were approved with effect from 1 October 2023.
Directors’ Fees
The Directors are remunerated exclusively by fixed fees and do
not receive bonus payments, pension contributions or other
benefits from the Company. Directors are not offered options
to acquire shares in the Company.
All Directors are entitled to the reimbursement of reasonable
out of pocket expenses incurred by them in order to perform
their duties as directors of the Company.
As noted in the Strategic Report, all of the Directors are
non-executive and therefore there is no Chief Executive Officer
(“CEO”). The Company does not have any employees. There is
therefore no CEO or employee information to disclose.
No payments were made to former Directors of the Company.
56
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
GOVERNANCE
DIRECTORS’ REMUNERATION REPORT – CONTINUED
At the last AGM held in January 2024 the result in respect of the resolution to approve the Directors’ Remuneration Report was as
follows:
Remuneration report VOTES CAST FOR VOTES CAST AGAINST VOTES WITHHELD*
Votes cast 80,902,238 184,178 169,856
% of votes cast 99.77% 0.23% –
* A vote Withheld is not a vote in law and is not counted in the calculation of the proportion of votes “For” and “Against” a resolution.
Shareholder approval of the Directors’ Remuneration Report will be sought again at the AGM to be held in January 2025.
Directors’ remuneration for the year ended 30 September 2024 (audited)
DATE OF
APPOINTMENT
FEES
2024
TAXABLE
†
BENEFITS
2024
TOTAL
FEES
2024
FEES
2023
TAXABLE
†
BENEFITS
2023
TOTAL FEES
2023
Simon Hayes 29 June 2015 £43,000 - £43,000 £41,000 – £41,000
James Ashton 14 October 2020 £28,500 - £28,500 £27,000 – £27,000
Kate Cornish-Bowden 26 October 2017 £28,500 - £28,500 £27,000 – £27,000
Sandra Kelly 9 October 2019 £35,000 - £35,000 £33,000 – £33,000
Pars Purewal 28 November 2022 £28,500 - £28,500 £22,812 – £22,812
Lorna Tilbian 26 October 2017 £28,500 - £28,500 £27,000 – £27,000
£192,000 - £192,000 £177,812 – £177,812
†
Taxable expenses primarily comprise travel and associated expenses incurred by the Directors in attending Board and Committee meetings in
London
Fees have been pro-rated where a change of appointment/role takes place during a financial year.
No fees were paid to third parties in respect of services provided.
The table below contains the annual percentage change in remuneration over the five financial years prior to the current year in
respect of the various director roles.
Fee Rates:
YEAR TO
30 SEPT 2020
YEAR TO
30 SEPT 2021
YEAR TO
30 SEPT 2022
YEAR TO
30 SEPT 2023
YEAR TO
30 SEPT 2024
Chairman £37,500
0.0%
£40,000
+6.7%
£40,000
0.0%
£41,000
+2.5%
£43,000
+4.7%
Chair of the Audit Committee £30,000
0.0%
£32,000
+6.7%
£32,000
0.0%
£33,000
+3.1%
£35,000
+5.8%
Directors’ fees £24,500
0.0%
£26,000
+6.1%
£26,000
0.0%
£27,000
+3.8%
£28,500
+5.4%
Additional fees – – – – -
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCE
STRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
57
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Loss of office
Directors do not have service contracts with the Company but are engaged under letters of appointment. These specifically exclude
any entitlement to compensation upon leaving office for whatever reason.
Share Price Return
The chart below illustrates the shareholder return for the ten years to 30 September 2024 for a holding in the Company’s shares
compared with the FTSE All-Share Index, which the Board has adopted as the measure for both the Company’s performance and
that of the Portfolio Manager.
TEN YEARS TOTAL SHAREHOLDER RETURN TO 30 SEPTEMBER 2024
+118.9%
FINSBURY GROWTH &
INCOME TRUST SHARE
PRICE (TOTAL RETURN)
FTSE ALL SHARE INDEX
(TOTAL RETURN) (THE
COMPANY’S STATED
BENCHMARK)
200
250
Sep 14 Sep 15 Sep 16 Sep 17 Sep 18 Sep 19 Sep 21
Sep 22
Sep 20
Source: Morningstar
Rebased to 100 at 30 September 2014
Sep 23 Sep 24
+108.4%
+83.6%
FINSBURY GROWTH &
INCOME TRUST SHARE
PRICE (TOTAL RETURN)
FTSE ALL-SHARE INDEX
(TOTAL RETURN) (THE
COMPANY’S STATED
BENCHMARK)
80
100
120
140
160
180
200
220
RELATIVE COST OF DIRECTORS’ REMUNERATION
The bar chart below shows the comparative cost of Directors’ fees compared with the level of dividend distribution and
buy-backs in respect of the financial years ending 30 September 2023 and 2024.
Directors’
Fees
DividendsDirectors’
Fees
Repurchase of
the Company's
shares
Dividends
£m
£●m £0.2m
£●m
0
20
40
60
80
100
£●m
2024 2023
Repurchase of
the Company's
shares
£39.1m
£97.7m
Directors’
Fees
DividendsDirectors’
Fees
Repurchase of
the Company's
shares
Dividends
£m
£0.2m £0.2m
£34.1m
£310.8m
2024 2023
Repurchase of
the Company's
shares
£39.1m
£97.7m
0
50
100
150
200
250
300
350
Source: Frostrow Capital LLP
58
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Directors’ Interests in Ordinary Shares
The Directors’ interests in the share capital of the Company are shown in the table below:
NUMBER OF ORDINARY SHARES OF 25p HELD
(AUDITED)
30 SEPTEMBER 2024
NUMBER OF SHARES
HELD
VALUATION*
30 SEPTEMBER 2024
£'000
(AUDITED)
30 SEPTEMBER 2023
NUMBER OF SHARES
HELD
VALUATION*
30 SEPTEMBER 2023
£’000
Simon Hayes (Chairman) 200,000 1,722 175,000 1,491
James Ashton 1,575 14 1,047 9
Kate Cornish-Bowden 10,200 88 9,061 77
Sandra Kelly 8,096 70 8,096 69
Pars Purewal 17,802 153 – –
Lorna Tilbian 11,500 99 11,500 98
Total 249,173 2,146 204,704 1,744
* The Company’s share price as at 30 September 2024 was 861.0p (2023: 852.0p)
None of the Directors was granted or exercised rights over shares during the year. None of the Directors has any contract
(including service contracts) with the Company.
There are no provisions included within the Company’s Articles of Association which require Directors to hold shares in the Company.
Other Interests in Ordinary Shares
Interests in the share capital of the Company are shown in the table below:
NUMBER OF ORDINARY SHARES OF 25p HELD
30 SEPTEMBER 2024
NUMBER OF SHARES
HELD
VALUATION*
30 SEPTEMBER 2024
£’000
30 SEPTEMBER 2023
NUMBER OF SHARES
HELD
VALUATION*
30 SEPTEMBER 2023
£’000
Alastair Smith (Managing Partner of Frostrow) 62,410 537 61,935 528
Nick Train (Portfolio Manager) 5,460,043 47,011 5,237,243 44,621
* The Company’s share price as at 30 September 2024 was 861.0p (2023: 852.0p)
Between 1 October 2024 and 2 December 2024, being the latest practicable date before the publication of the Annual Report,
James Ashton acquired a further 19 Ordinary Shares, Simon Hayes acquired a further 2,517 Ordinary Shares and Pars Purewal
acquired a further 223 Ordinary Shares as part of respective dividend reinvestment plans.
No Director held any interests in the issued stock or shares of the Company other than as stated above.
Annual Statement
On behalf of the Board I confirm that the Remuneration Policy, set out on pages 53 and 54, and this Remuneration Report
summarise, as applicable, for the year ended 30 September 2024:
(a) the major decisions on Directors’ remuneration;
(b) any substantial changes relating to Directors’ remuneration made during the year; and
(c) the context in which the changes occurred and decisions were taken.
Simon Hayes
Chairman
3 December 2024
GOVERNANCE
DIRECTORS’ REMUNERATION REPORT – CONTINUED
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCE
STRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
59
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Audit Committee Report
On behalf of the Board, I am pleased to present the Audit
Committee’s Report for the year ended 30 September 2024.
ROLE AND COMPOSITION
The Audit Committee (the "Committee") comprises all the
Directors of the Company.
The role of the Committee is to ensure that shareholder
interests are properly protected in relation to the application
of financial reporting and internal control principles, risk
management and to assess the effectiveness of the audit.
The Committee’s role and responsibilities are set out in full in
its terms of reference which are available in the Corporate
Information section of the Company’s website.
The Committee as a whole has competence relevant to
the investment company sector with Committee members
having a range of financial and investment experience. The
requirement for at least one member of the Committee to
have recent and relevant experience is satisfied by myself and
Pars Purewal being chartered accountants.
RESPONSIBILITIES
As Chair of the Committee I can confirm that the Committee’s
main responsibilities during the year and how it fulfilled them is
set out below:
1. To review the Company’s half year and annual financial
statements together with announcements and other
filings relating to the financial performance of the
Company. In particular, the Committee considered
whether the Financial Statements were fair, balanced
and understandable, allowing Shareholders to assess the
Company’s strategy, investment policy, business model,
financial performance and financial position at each
period end.
2. To review the risk management and internal control
processes of the Company and its key service providers.
As part of this review the Committee reviewed the
appropriateness of the Company’s anti-bribery and
corruption policy. During the year the Committee also
reviewed the internal controls in place at the Company’s
AIFM, its Portfolio Manager, its Registrar and its Depositary
and undertook a full review of the Company's risk register.
Further details can be found on pages 60 and 61.
3. To ensure compliance with Section 1158 of the
Corporation Tax Act 2010. The Committee obtained
confirmation from Frostrow that the Company continues to
meet the regulatory requirements.
4. To agree the scope of the Auditors’ work and their
remuneration. The Committee review their independence
and the effectiveness of the audit process.
5. To consider any non-audit work to be carried out by the
Auditors. The Committee reviews the need for non-audit
services in accordance with the Company’s non-audit
services policy.
6. To consider the need for putting the audit out to tender.
The Company is required to carry out a tender every
tenyears. Please refer to pages 62 and 63 for further
information on the recent Audit Tender which commenced
at the beginning of 2024.
MEETINGS
The Committee held four meetings during the financial
year and meeting attendance is shown on page 46.
Representatives of Frostrow acting as AIFM attended each
of the Committee’s meetings and reported on the proper
conduct of business in accordance with the regulatory
environment in which the Company and the AIFM operate.
The Committee also met the Auditors twice during the
year and once, following completion of the audit, without
representatives of the AIFM being present.
60
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
GOVERNANCE
AUDIT COMMITTEE REPORT – CONTINUED
Internal Controls and Risk Management
The Directors have identified(StrategicReportpages 20 to
23)
sixmain areas of risk and have identified the actions to
evaluate and manage the specific risks in those six areas:
• Corporate Strategy;
• Investment Strategy and Activity;
• Shareholder Relations and Corporate Governance;
• Operational;
• Financial; and
• Accounting, Legal and Regulatory.
The Committee reviews the various actions taken and satisfies
itself that they are sufficient: in particular the Committee
reviews the Company’s schedule of key risks at each meeting
and agrees amendments to both risks and mitigating actions
if necessary.
In preparation for the Audit Committee meeting held in
September 2024, each Director, Lindsell Train Limited as
Portfolio Manager and Frostrow Capital LLP as AIFM were each
asked to independently list what they considered to be the
greatest five risks that could impact the sustainable success of
the Company, without reference to the Company’s existing risk
register. During the Audit Committee meeting the Committee
were invited to consider the risks identified by the individuals
and whether these should be added to the Company’s risk
register, and if so, consider the appropriate scoring to be
applied. The purpose of the exercise was to reassess the
principal risks and identify any new, emerging risks and to take
any necessary action to mitigate their potential impact.
SIGNIFICANT MATTERS CONSIDERED BY THE AUDIT COMMITTEE AND THE BOARD DURING THE YEAR
SIGNIFICANT REPORTING MATTER HOW THE ISSUE WAS ADDRESSED
Risk assessment of Fraudulent
Activity
The Committee once again reviewed the impact of the risk of fraudulent activity. Following an
assessment and identification of types of fraud that the Company could be exposed to, it was
agreed that the Company’s key service providers had adequate, robust controls in place to mitigate
the event of any fraudulent activity.
Risk assessment of Climate
Change
The Committee reviewed an assessment of the impact of climate change and the weighted
average carbon intensity of the portfolio companies. The Committee noted the key topics of
engagement undertaken by Lindsell Train with each of the portfolio companies and that the
assessment identified that the Company has a significantly lower weighted average carbon
intensity than its comparable benchmark. Please refer to page 31 for further information.
Audit Regulation The Committee has not had to consider any new audit regulations in the past year. It has, however,
taken note of reporting guidance and thematic reviews published by the FRC and determined how
to apply any relevant best practice to the Company’s reporting.
The Committee has noted, in particular, the publication by the FRC of the Minimum Standard for Audit
Committees and the revised UK Corporate Governance Code and AIC Corporate Governance Code.
The Minimum Standard will apply to the Company on a comply or explain basis as it is included by
reference in the new UK Corporate Governance Code. The Committee will seek to comply with the
Standard as far as it is appropriate for an externally-managed investment company to do so.
During the year the Committee received an update from Deloitte on corporate governance
developments to assist the Company in its development of its response to the new internal control
requirements effective from 1January 2026.
The Company’s Audit Tender The Committee led the audit tender and the recommendation of the appointment of Deloitte LLP as
Auditor.
UK Corporate Governance Code
2018, Provision 25: necessity of an
Internal Audit function
In light of the relative simplicity of the operations and the use of independent external consultants,
who report directly to the Committee, to advise on regulatory compliance and adherence to
internal procedures, it was concluded that no internal audit function was required.
Cancellation of Share Premium
Account
The Committee reviewed the Share Premium Account noting that the Company had built up a
substantial share premium account owing to historic high levels of share issuance.
As this account was non-distributable, the Company considered and agreed to cancel the share
premium account and converting the amount cancelled to a distributable reserve following
approval by Shareholders and confirmation of the Scottish Court of Session.
Converting the share premium account to a distributable reserve provided a significant pool of
reserves which can be used in the future, if required, to fund share buy-backs or other returns of
capital in accordance with applicable law. The cancellation provided the Company with more
flexibility in how capital may be returned in the future.
These matters were discussed by the Committee; any recommendations were fully considered and recommendations were
then made to the Board.
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCE
STRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
61
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
As a result of this exercise the Company’s existing risks were
broadened to include the new emerging risk factors that were
identified by the Committee: further information can be found
in the Strategic Report on pages 23 and 24.
The Board has overall responsibility for the Company’s risk
management and systems of internal controls and for
reviewing their effectiveness. In common with the majority of
investment companies, investment management, accounting,
company secretarial and custodial services have been
delegated to third parties. The effectiveness of the internal
controls is assessed on a continuing basis by the AIFM, the
Portfolio Manager and the Depositary. Each maintains its own
systems and prepares independently audited internal control
reports. The Committee reviews these audited reports and
additionally receives regular reports from these third parties.
The Committee is satisfied that appropriate systems have
been in place for the year under review.
ANNUAL REPORT AND FINANCIAL
STATEMENTS
The Annual Report and the Financial Statements as a whole
are the responsibility of the Board. The Directors’ Responsibility
Statement is contained on page 52. The Board looks to
the Committee to advise them in relation to the Financial
Statements both as regards their form and content, and on
any specific areas requiring judgement.
Although the Committee did not identify any significant
issues as part of its review of the Annual Report and Financial
Statements, it paid particular attention to:
Accounting Policies
The accounting policies, as set out on pages 76 to 79, have
been applied throughout the year. In light of there being
no unusual transactions during the year or other possible
reasons, the Committee found no cause to change any of
thepolicies.
Existence of investments
During the year the Committee met with representatives of
the Depositary who provided reassurance concerning the
safekeeping of the Company’s investments.
Going Concern
The Audit Committee, at the request of the Board, considered
the ability of the Company to adopt the going concern
basis for the preparation of the Financial Statements. Having
reviewed the Company’s financial position, the Committee
is satisfied that it is appropriate for the Board to prepare
the Financial Statements for the year ended 30 September
2024 on a going concern basis. The Committee’s review of
the Company’s financial position included consideration of
the cash and cash equivalents position of the Company, the
diversification of the portfolio, and the analysis of portfolio
liquidity, which estimated a liquidation of c.79.6% of the
portfolio within seven trading days (based on current market
volumes). Stress testing and reverse stress testing were
completed to determine the appropriateness of preparing the
Financial Statements on a going concern basis.
Interest in unquoted investment
The Committee reviewed the valuation methodology of the
Company’s partnership interest in Frostrow Capital LLP. The
valuation, based upon a multiple of earnings, was accepted.
Internal audit
Since the Company delegates its day to day operations to
third parties and has no employees, the Committee again
determined that there is no requirement for an internal audit
function.
Internal Controls
The Committee is responsible for ensuring that suitable
controls are in place to prevent and detect fraud, error and
misstatement of financial information. As the Company
outsources all of its functions to third parties, neither the
Committee nor the Company has any internal control structure
in place but instead requires its third party service providers to
report on their internal controls. These reports are received at
least annually, including reports which have been independently
verified by the relevant service provider’s independent Auditor.
Long-Term Viability
The Committee considered, on behalf of the Board, the
longer-term viability of the Company in connection with the
Board’s statement (see page 24). The Committee reviewed
the Company’s financial position (including its cash flows and
liquidity position), the principal risks and uncertainties and the
results of stress tests. The stress tests considered the impact
of one or more of the key risks crystallising and then modelled
the impact on the portfolio. The results demonstrated the
impact on the Company’s NAV, its expenses and its ability to
meet its liabilities.
In even the most stressed scenario, the Company was
shown to have sufficient cash, or to be able to liquidate a
sufficient portion of its listed holdings, in order to be able to
meet its liabilities as they fall due. Based on these results the
Committee concluded it was reasonable for the Board to
expect that the Company will be able to continue in operation
and meet its liabilities as they fall due over the next five
financial years.
62
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
GOVERNANCE
AUDIT COMMITTEE REPORT – CONTINUED
Recognition of Income from Investments
The Committee received assurance that all dividends
receivable, including special dividends, had been accounted
for appropriately.
Review of Disclosure and Communication
The Committee reviews whether it is following best practice in
its disclosure and whether it is communicating clearly. In order
to do this, the Committee receives reports on current and
future changes to regulatory and accounting reporting from
the Company Secretary and Auditors.
During the year the Committee reviewed the Annual Report in
order to refresh the format and content to ensure it continues
to be informative to readers.
Valuation of Investments
The Committee reviewed the robustness of the AIFM’s
processes in place for recording investment transactions as
well as ensuring the valuation of investments is in accordance
with the adopted accounting policies as detailed within
Frostrow’s independent controls report.
EXTERNAL AUDITORS
Meetings
The nature and scope of the 2024 audit, together with Deloitte
audit plan, were reviewed by the Committee on 20 May 2024.
I met with the Engagement Leader, Michael Caullay, and the
Audit Manager on 11 November 2024 to discuss the audit and
the draft 2024 Annual Report and Financial Statements. The
Committee then met them on 25 November 2024 to review
the outcome of the audit.
Details of the fees paid to the Auditors for audit services are
set out in note 4 to the Financial Statements on page 80.
Independence and Effectiveness
In order to fulfil the Committee’s responsibility regarding the
independence of the Auditors, the Committee reviewed:
• the senior audit personnel in the audit plan,
• the Auditors’ arrangements concerning potential conflicts
of interest,
• the statement by the Auditors that they remain
independent within the meaning of the regulations and
their professional standards,
• the extent of any non-audit services to ensure this was in
line with the Company’s policy.
In order to consider the effectiveness of the audit process, the
Committee reviewed:
• the Auditors’ fulfilment of the agreed audit plan,
• the report arising from the audit itself, and
• feedback from the AIFM on the conduct of the audit.
The Committee satisfied itself concerning the Auditors’
independence and the effectiveness of the audit process,
together with the degree of diligence and professional
scepticism brought to bear.
The Committee monitors the level of non-audit work carried
out by the Auditors and seeks assurances from the Auditors
that they maintain suitable policies and processes ensuring
independence, and monitor compliance with the relevant
regulatory requirements on an annual basis. No non-audit
work was carried out by the Auditors during the year.
The Company does not allow any non-audit services
permitted under the 70% fee cap set out in the FRC’s 2019
ethical standard.
Audit Process and Tender
During the year, in accordance with the Company’s audit
tender guidelines, the Audit Committee led a competitive
audit tender process. A selection of audit firms was invited
to participate, including members of the ‘big four’ firms and
mid-tier firms; four firms submitted proposals and three were
interviewed by the Audit Committee.
Each firm that participated in the process was given extensive
access to documentation, met with the Committee Chair and
was requested to submit a written proposal to the Committee.
The firms then gave presentations to the Committee and were
judged against a number of objective criteria determined in
advance of the process.
The Committee submitted two audit firm candidates to the
Board for consideration together with a justified preference for
one of them.
The Committee concluded that Deloitte LLP was the preferred
firm to conduct the audit engagement judged against the
selection criteria and the quality of the proposed team and firm
(including industry experience) and the approach to managing
the audit. The Board agreed with the recommendation and the
Company will seek shareholder approval of the appointment of
Deloitte LLP at the forthcoming Annual General Meeting.
Accordingly, PricewaterhouseCoopers LLP resigned as the
Company’s auditor and provided a statement explaining the
reasons for its resignation which was posted to Shareholders
in accordance with the Companies Act 2006. The statement is
available on the Company’s website.
The Directors wish to thank PricewaterhouseCoopers LLP for its
service as auditor.
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCE
STRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
63
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Mr Michael Caullay was the audit partner for the financial year
under review and he has confirmed Deloitte LLP’s willingness to
continue to act as Auditor to the Company for the forthcoming
financial year. Deloitte LLP’s appointment is subject to
shareholder approval at the next Annual General Meeting to
be held in January 2025. Details can be found in the Notice of
Annual General Meeting.
As a public company listed on the London Stock Exchange,
the Company is subject to mandatory auditor rotation
requirements. Based on these requirements, another tender
process will be required in 2032. The Committee will, however,
continue to consider annually the need to go to tender for
audit quality, remuneration or independence reasons.
The Auditor is required to change the Partner responsible for
the audit affairs of the Company at least every five years. In
accordance with this legislation, Mr Caullay will be replaced at
the conclusion of the 2028 audit.
Independent Auditors’ Remuneration
The Committee approved a fee of £60,000 (excluding VAT) for
the audit of the year ended 30 September 2024 (2023: £57,780
(excluding VAT)).
The Committee believes that the fee is in line with audit fees
payable for the investment company sector and is reflective
of the level of work required to carry out a robust audit.
Committee Effectiveness
As part of the evaluation process, Lintstock Limited undertook
an evaluation of the Audit Committee’s effectiveness during
October and November 2024 which was reported to the
Board. The Board confirmed that the Audit Committee had
conducted its affairs in accordance with its terms of reference.
The Board considers that the Audit Committee’s approach is
comprehensive and appropriate, that it focuses on the right
issues and is managed well.
Sandra Kelly, ACA
Chair of the Audit Committee
3 December 2024
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
INDEPENDENT AUDITORS’ REPORT
Independent Auditors’ Report
To the Members of Finsbury Growth & Income Trust Plc
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
OPINION
In our opinion the Financial Statements of Finsbury Growth & Income Trust Plc (the ‘Company’):
• give a true and fair view of the state of the Company’s affairs as at 30 September 2024 and of its return for the year
thenended;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial
Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” and the Statement of
Recommended Practice issued by the Association of Investment Companies in July 2022 “Financial Statements of Investment
Trust Companies and Venture Capital Trusts”; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the Financial Statements which comprise:
• the income statement;
• the statement of changes in equity;
• the statement of financial position;
• the statement of cash flows; and
• the related notes 1 to 20.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting
Standards, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic
of Ireland” (United Kingdom Generally Accepted Accounting Practice) and the Statement of Recommended Practice issued
by the Association of Investment Companies in July 2022 “Financial Statements of Investment Trust Companies and Venture
CapitalTrusts”.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial
statements section of our report.
We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public interest
entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We confirm that we have
not provided any non-audit services prohibited by the FRC’s Ethical Standard to the Company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCESTRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
SUMMARY OF OUR AUDIT APPROACH
Key audit matters
The key audit matter that we identified in the current year was:
• Valuation and existence of listed investments.
Within this report, key audit matters are identified as follows:
Newly identified
Increased level of risk
Similar level of risk
Decreased level of risk
Materiality
The materiality that we used in the current year was £15.82m which was determined on the basis
of 1% of net assets.
Scoping
We performed our audit scoping based upon quantitative and qualitative risk assessment
factors for each account balance recorded as at 30 September 2024.
Significant changes in our approach
Last year, the previous auditor’s report included Income from Investments as a key audit matter
which is not included in our report this year as a key audit matter as these transactions are not
complex with limited elements of estimation.
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Company’s ability to continue to adopt the going concern basis of
accountingincluded:
• Considering as part of our risk assessment the nature of the Company, its business model and related risks, the requirements
of the applicable financial reporting framework and the system of internal control;
• Assessed the underlying data and key assumptions used to make the assessment, and evaluating the Directors’ plans for
future actions in relation to their going concern assessment;
• Assessing the liquidity and ability of the Investment Manager to trade in the investment portfolio to cover operational
expenditure as appropriate; and
• Assessing the appropriateness of the going concern disclosure in note 1 to the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period of at
least twelve months from when the Financial Statements are authorised for issue.
In relation to the reporting on how the Company has applied the UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to the Directors’ statement in the Financial Statements about whether the Directors considered
it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of
this report.
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF FINSBURY GROWTH & INCOME TRUST PLC – CONTINUED
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Valuation and existence of listed investments
Key audit matter description The listed investments of the Company of £1,590m (2023: £1,833m) make up 98.43% of total
assets of the Company at 30 September 2024 (2023: 98.32%).
There is a risk that the listed investments may not be valued correctly or may not represent the
assets of the Company. Given the nature and size of the balance and its importance to the
Company, we have considered that there is a potential risk of fraud in this area.
See the accounting policy in note 1(b) of the Financial Statements and note 9 of the Financial
Statements.
How the scope of our audit responded
to the key audit matter
We performed the following procedures to address the key audit matter identified:
• inspected the internal controls report over the administrator to obtain an understanding of
relevant controls;
• tested the relevant controls relating to valuation and existence of listed investments for the
period of 6 months between the date of the internal controls report and the Company’s
year end;
• agreed 100% of the Company’s listed investment portfolio at the year end to confirmations
received directly from the depositary; and
• agreed 100% of the bid prices of listed investments on the investment ledger at year end to
closing bid prices published by an independent pricing source.
Key observations
Based on the work performed, we concluded that the valuation and existence of listed
investments are appropriate.
OUR APPLICATION OF MATERIALITY
Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope
of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Materiality £15.82m (2023 previous auditor: £18.23m)
Basis for determining materiality
1% of net assets (In 2023 the previous auditor set materiality on the basis of 1% of net assets)
Rationale for the benchmark applied
We have used net assets as our materiality benchmark as we consider it to be the most relevant
indicator of the Company’s performance for the users of the financial statements, as well as
being a key driver of Shareholder value.
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCESTRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and
undetected misstatements exceed the materiality for the financial statements as a whole. Performance materiality was set at 70%
of materiality for the 2024 audit (In 2023 the previous auditor set performance materiality at 75% of materiality). In determining
performance materiality, we considered the following factors:
a. The Company’s structure and operating model;
b. The continuity in place within the business from the previous year (with both management and the administrator);
c. The lack of changes to accounting policies during the current period which would require significant judgement;
d. The fact that there has not been a history of uncorrected misstatements or controls deficiencies as noted by the previous
auditor; and
e. The quality of the control environment and whether we were able to rely on controls over the valuation and existence of
listedinvestments.
Error reporting threshold
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £0.79m (2023
previous auditor: £0.91m), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.
We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the
financial statements.
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
Scoping
Our audit scope was determined by obtaining an understanding of the Company and its environment, including internal controls,
and assessing the risks of material misstatement. Audit work to respond to the risks of material misstatement was performed
directly by the audit engagement team.
Our consideration of the control environment
In assessing the Company’s control environment, we considered controls in place at the Company’s service organisation which acts
as administrator. As part of this, we reviewed the System and Organisation Controls (SOC 1) Report of the service organisation and
have taken a controls reliance approach in respect of the controls relating to valuation and existence of listed investments. For the
period of 6 months between the date of the SOC1 report and the Company’s year end, we tested the controls relating to valuation
and existence of listed investments. We also reviewed the SOC1 report in respect of general IT controls. Further, we obtained an
understanding of relevant business processes and controls that address the risk of material misstatement in financial reporting.
Net assets
£1,593m
Materiality
£15.82m
Audit Committee reporting threshold
£0.79m
Materiality
Net assets
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Our consideration of climate-related risks
In planning our audit, we have considered the potential impact of climate change on the business and its financial statements.
The Company continues to develop its model for assessing and assigning an ESG score on existing and potential investments
based on assessment of the potential impacts of environmental, social and governance (“ESG”) related risks, including climate
change, as outlined on pages 25 and 26 in the annual report. As a part of our audit, we held discussions with management to
understand the process of identifying climate-related risks and the impact on the Company’s financial statements. We have
read the climate related disclosures in the annual report to consider whether they are materially consistent with the financial
statements and our knowledge obtained in the audit.
OTHER INFORMATION
The other information comprises the information included in the annual report, other than the financial statements and our
auditor’s report thereon. The Directors are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be
materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives
rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue as a going
concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financialstatements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
EXTENT TO WHICH THE AUDIT WAS CONSIDERED CAPABLE OF DETECTING IRREGULARITIES,
INCLUDING FRAUD
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud is detailed below.
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF FINSBURY GROWTH & INCOME TRUST PLC – CONTINUED
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCESTRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with
laws and regulations, we considered the following:
• the nature of the industry and sector, control environment and business performance including the design of the Company’s
remuneration policies, key drivers for Directors’ remuneration, bonus levels and performance targets;
• results of our enquiries of Directors, management and the Audit Committee about their own identification and assessment of
the risks of irregularities, including those that are specific to the Company’s sector;
• any matters we identified having obtained and reviewed the Company’s documentation of their policies and procedures
relating to:
o identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of
non-compliance;
o detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged
fraud; and
o the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations.
• the matters discussed among the audit engagement team and relevant internal specialists, including IT and financial
instrument specialists, regarding how and where fraud might occur in the financial statements and any potential indicators
offraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud
and identified the greatest potential for fraud in the valuation and existence of listed investments. In common with all audits under
ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions
of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial
statements. The key laws and regulations we considered in this context included the UK Companies Act, UK Listing Rules and
Investment Trust Tax Regulations.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements
but compliance with which may be fundamental to the Company’s ability to operate or to avoid a material penalty.
Audit response to risks identified
As a result of performing the above, we identified the valuation and existence of listed investments as a key audit matter related
to the potential risk of fraud. The key audit matters section of our report explains the matter in more detail and also describes the
specific procedures we performed in response to that key audit matter.
In addition to the above, our procedures to respond to risks identified included the following:
• reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions
of relevant laws and regulations described as having a direct effect on the financial statements;
• enquiring of management and the Audit Committee concerning actual and potential litigation and claims;
• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud;
• reading minutes of meetings of those charged with governance; and
• in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and
other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential
bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course
ofbusiness.
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members,
including internal specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations
throughout the audit.
Report on other legal and regulatory requirements
OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the Directors’ report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
• the strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have
not identified any material misstatements in the strategic report or the Directors’ report.
CORPORATE GOVERNANCE STATEMENT
The UK Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part of
the Corporate Governance Statement relating to the Company’s compliance with the provisions of the UK Corporate Governance
Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements and our knowledge obtained during the audit:
• the Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any
material uncertainties identified set out on page 44;
• the Directors’ explanation as to its assessment of the Company’s prospects, the period this assessment covers and why the
period is appropriate set out on page 24;
• the Directors’ statement is fair, balanced and understandable as set out on page 52;
• the Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on pages 20 to 24;
• the section of the annual report that describes the review of effectiveness of risk management and internal control systems
set out on pages 23 and 24; and
• the section describing the work of the Audit Committee set out on page 59.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not received all the information and explanations we require for our audit; or
• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches
not visited by us; or
• the financial statements are not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF FINSBURY GROWTH & INCOME TRUST PLC – CONTINUED
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCESTRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of Directors’ remuneration have
not been made or the part of the Directors’ remuneration report to be audited is not in agreement with the accounting records
and returns.
We have nothing to report in respect of these matters.
OTHER MATTERS WHICH WE ARE REQUIRED TO ADDRESS
Auditor tenure
Following the recommendation of the Audit Committee, we were appointed by the Board of Directors on 1 May 2024 to audit the
financial statements for the year ended 30 September 2024.
Consistency of the audit report with the additional report to the Audit Committee
Our audit opinion is consistent with the additional report to the Audit Committee we are required to provide in accordance with
ISAs (UK).
USE OF OUR REPORT
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for
the opinions we have formed.
Michael Caullay (Senior Statutory Auditor)
for and on behalf of Deloitte LLP
Statutory Auditor
Glasgow, United Kingdom
3 December 2024
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
Income Statement
for the year ended 30 September 2024
YEAR ENDED 30 SEPTEMBER 2024 YEAR ENDED 30 SEPTEMBER 2023
NOTE
REVENUE
£’000
CAPITAL
£’000
TOTAL
£’000
REVENUE
£’000
CAPITAL
£’000
TOTAL
£’000
Gains on investments at fair value
through profit or loss 9 – 78,006 78,006 – 96,387 96,387
Currency translations – (185) (185) – (65) (65)
Income 2 43,160 – 43,160 47,391 – 47,391
AIFM and portfolio management fees 3 (2,260) (6,781) (9,041) (2,609) (7,828) (10,437)
Other expenses 4 (1,184) (126) (1,310) (1,150) (17) (1,167)
Return on ordinary activities before
finance charges and taxation 39,716 70,914 110,630 43,632 88,477 132,109
Finance charges 5 (556) (1,667) (2,223) (517) (1,548) (2,065)
Return on ordinary activities before
taxation 39,160 69,247 108,407 43,115 86,929 130,044
Taxation on ordinary activities 6 (229) – (229) (1,186) – (1,186)
Return on ordinary activities after
taxation 38,931 69,247 108,178 41,929 86,929 128,858
Return per share – basic and diluted 7 20.8p 36.9p 57.7p 20.0p 41.4p 61.4p
The “Total” column of this statement represents the Company’s income statement.
The “Revenue” and “Capital“ columns are supplementary to this and are prepared under guidance published by the Association
of Investment Companies (“AIC“).
All items in the above statement derive from continuing operations.
The Company had no recognised gains or losses other than those declared in the Income Statement; therefore no separate
Statement of Comprehensive Income has been presented.
The notes on pages 76 to 91 form part of these Financial Statements.
FURTHER
INFORMATION
INDEPENDENT
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FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCESTRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Statement of Changes in Equity
for the year ended 30 September 2024
NOTE
CALLED UP
SHARE
CAPITAL
£’000
SHARE
PREMIUM
ACCOUNT
£’000
SPECIAL
DISTRIBUTABLE
RESERVE
£’000
CAPITAL
REDEMPTION
RESERVE
£’000
CAPITAL
RESERVE
£’000
REVENUE
RESERVE
£’000
TOTAL
SHAREHOLDERS’
FUNDS
£’000
At 1 October 2023 56,248 1,099,847 – 3,453 604,212 58,969 1,822,729
Net return from ordinary
activities – – – – 69,247 38,931 108,178
Second interim dividend
(10.5p per share)
for the year ended
30September 2023 8 – – – – – (21,454) (21,454)
First interim dividend
(8.8pper share)
for the year ended
30September 2024 8 – – – – – (16,477) (16,477)
Transfer to special reserve
account – (1,099,847) – – – – (1,099,847)
Transfer from share
premium account – – 1,099,847 – – – 1,099,847
Repurchase of shares into
Treasury 13 – – (49,839) – (260,969) – (310,808)
At 30 September 2024 56,248 – 1,050,008 3,453 412,490 59,969 1,582,168
On 7 August 2024 the Company’s Share Premium Account was cancelled and a new Special Distributable Reserve was created. See
Note 1(J) on page 78 for further details.
NOTE
CALLED UP
SHARE
CAPITAL
£’000
SHARE
PREMIUM
ACCOUNT
£’000
SPECIAL
DISTRIBUTABLE
RESERVE
£’000
CAPITAL
REDEMPTION
RESERVE
£’000
CAPITAL
RESERVE
£’000
REVENUE
RESERVE
£’000
TOTAL
SHAREHOLDERS’
FUNDS
£’000
At 1 October 2022 56,248 1,099,847 – 3,453 614,947 55,889 1,830,384
Net return from ordinary
activities – – – – 86,929 41,929 128,858
Second interim dividend
(9.8p per share)
for the year ended
30September 2022 8 – – – – – (21,182) (21,182)
First interim dividend
(8.5pper share)
for the year ended
30September 2023 8 – – – – – (17,667) (17,667)
Repurchase of shares into
Treasury 13 – – – – (97,664) – (97,664)
At 30 September 2023 56,248 1,099,847 – 3,453 604,212 58,969 1,822,729
The notes on pages 76 to 91 form part of these Financial Statements.
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
NOTE
2024
£’000
2023
£’000
Fixed assets
Investments held at fair value through profit or loss 9 1,593,218 1,836,660
Current assets
Debtors 10 7,509 10,209
Cash and cash equivalents 14,639 17,426
22,148 27,635
Current liabilities
Creditors: amounts falling due within one year 11 (3,998) (4,866)
(3,998) (4,866)
Net current assets 18,150 22,769
Total assets less current liabilities 1,611,368 1,859,429
Creditors: amount falling due after more than one year
Bank loan 12 (29,200) (36,700)
Net assets 1,582,168 1,822,729
Capital and reserves
Called up share capital 13 56,248 56,248
Share premium account – 1,099,847
Special distributable reserve 1,050,008 –
Capital redemption reserve 3,453 3,453
Capital reserve 14 412,490 604,212
Revenue reserve 59,969 58,969
Total Shareholders’ funds 1,582,168 1,822,729
Net asset value per share 15 943.4p 891.2p
The Financial Statements on pages 72 to 91 were approved by the Board of Directors on 3 December 2024 and were signed on its
behalf by:
Simon Hayes
Chairman
The notes on pages 76 to 91 form part of these Financial Statements.
Company Registration Number SC013958 (Registered in Scotland)
Statement of Financial Position
as at 30 September 2024
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCESTRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
NOTE
2024
£’000
2023
£’000
Net cash inflow from operating activities 18 33,805 36,895
Investing activities
Purchase of investments (123,825) (41,840)
Sale of investments 445,464 154,301
Net cash inflow from investing activities 321,639 112,461
Financing activities
Dividends paid (37,931) (38,849)
Repurchase of shares into Treasury (310,392) (98,792)
Interest paid (2,223) (2,059)
Repayment of loans (7,500) –
Net cash outflow from financing activities (358,046) (139,700)
(Decrease)/increase in cash and cash equivalents (2,602) 9,656
Currency transactions (185) (65)
Cash and cash equivalents at the beginning of the financial year* 17,426 7,835
Cash and cash equivalents at the end of the financial year* 14,639 17,426
Reconciliation of net debt
2024
£’000
2023
£’000
Cash and cash equivalents* 14,639 17,426
Borrowings (29,200) (36,700)
Net debt (14,561) (19,274)
* Comprises solely cash held at bank.
Statement of Cash Flows
for the year ended 30 September 2024
The notes on pages 76 to 91 form part of these Financial Statements.
76
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
1. Accounting Policies
The Company is a public limited company (PLC) incorporated in the United Kingdom, with registered office at 50 Lothian Road,
Festival Square, Edinburgh EH3 9WJ.
The principal accounting policies, all of which have been applied consistently throughout the year in the preparation of these
Financial Statements, are set out below:
(A) BASIS OF PREPARATION
The Financial Statements have been prepared in accordance with UK Generally Accepted Accounting Practice (GAAP) under
UK and Republic of Ireland Company Law, FRS 102 ‘The Financial Reporting Standard applicable in the UK, the Statement of
Recommended Practice (SORP) for “Financial Statements of Investment Trust Companies and Venture Capital Trusts” issued
by the Association of Investment Companies in July 2022 and the Companies Act 2006 under the historical cost convention as
modified by the valuation of investments at fair value through profit or loss.
The Financial Statements have been prepared on a going concern basis. The disclosure on going concern on page 52 in the
Statement of Directors' Responsibilities forms part of these Financial Statements.
Presentation of the Income Statement
In order to reflect better the activities of an investment trust company and in accordance with the SORP, supplementary
information which analyses the Income Statement between items of a revenue and capital nature has been presented alongside
the Income Statement. The net revenue return is the measure the Directors believe appropriate in assessing the Company’s
compliance with certain requirements set out in Sections 1158 and 1159 of the Corporation Tax Act 2010.
Significant Judgements and Critical Sources of Estimation Uncertainties
There were no significant judgements or critical estimates reported during the financial year ended 30 September 2024
(2023:none).
(B) INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS
Investments are measured under FRS 102, sections 11 and 12 and are measured initially, and at subsequent reporting dates, at fair
value.
Changes in the fair value of investments and gains and losses on disposal are recognised in the Income Statement as a capital
item. The Company manages and evaluates the performance of these investments on a fair value basis in accordance with its
investment strategy, and information about the investments is provided internally on this basis to the Board. Fair value for quoted
investments is deemed to be bid market prices, or last traded price, depending on the convention of the stock exchange on which
they are quoted.
In estimating the fair value of unquoted investments, the AIFM and Board apply valuation techniques which are appropriate in
light of the nature, facts and circumstances of the investment and use judgement and assumptions and apply these consistently.
All purchases and sales of investments are accounted for on a trade date basis.
The Company’s policy is to expense transaction costs on acquisition/disposal through the gains on investment at fair value
through profit or loss. The total of such expenses, showing the total amounts included in disposals and acquisitions, is disclosed in
note 9 on page 84.
(C) INCOME
Dividends receivable from equity shares are recognised in Revenue on an ex-dividend basis except where, in the opinion of
the Board, the dividend is capital in nature, in which case it is included in Capital. Overseas dividends are stated gross of any
withholding tax.
When the Company has elected to receive scrip dividends in the form of additional shares rather than cash, the amount of cash
dividend foregone is recognised in Revenue.
Fixed returns on non-equity shares are recognised on a time apportionment basis.
Notes to the Financial Statements
for the year ended 30 September 2024
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCESTRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
77
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Special dividends: In deciding whether a dividend should be regarded as a Capital or Revenue receipt, the Company reviews all
relevant information as to the reasons for and sources of the dividend on a case by case basis depending upon the nature of
the receipt. Special dividends of a revenue nature are recognised through the Revenue column of the Income Statement. Special
Dividends of a capital nature are recognised through the Capital column of the Income Statement.
The limited liability partnership (LLP) profit share is recognised in the financial statements when the entitlement to the income
is established, following the conclusion of the partnership's annual audit. Deposit interest receivable is taken to Revenue on an
accruals basis.
(D) DIVIDENDS PAYABLE
Dividends paid by the Company are recognised in the Financial Statements and are shown in the Statement of Changes in Equity
in the period in which they became legally binding, which in the case of an interim dividend is the point at which it is paid and for
a final dividend when it is approved by Shareholders in line with the ICAEW Tech Release 02/17BL.
(E) EXPENDITURE AND FINANCE CHARGES
All the expense and finance costs are accounted for on an accruals basis. Expenses are charged through the Revenue column of
the Income Statement except as follows:
(1) expenses which are incidental to the acquisition or disposal of an investment are treated as part of the cost or deducted from
proceeds of that investment (as explained in 1(B) above);
(2) expenses are taken to the Capital reserve via the Capital column of the Income Statement, where a connection with the
maintenance or enhancement of the value of the investments can be demonstrated. In line with the Board's expected
long-term split of returns, 75% of the portfolio management fee, AIFM fee and finance costs are taken to the Capital reserve
and the balance to the Revenue reserve.
(F) TAXATION
Dividend income received by the Company may be subject to withholding tax imposed in the country of origin. The tax charges
shown in the Income Statement relates to overseas withholding tax on dividend income.
Current tax is provided at the amounts expected to be paid or recovered.
Deferred taxation is provided on all timing differences that have originated but not been reversed by the Statement of Financial
Position date other than those differences regarded as permanent. This is subject to deferred tax assets only being recognised if it
is considered more likely than not that there will be suitable profits from which the reversal of timing differences can be deducted.
Any liability to deferred tax is provided for at the rate of tax enacted or substantially enacted.
(G) FOREIGN CURRENCY
Transactions recorded in overseas currencies during the year are translated into sterling at the exchange rates ruling at the
date of the transaction. Assets and liabilities denominated in overseas currencies at the Statement of Financial Position date are
translated into sterling at the exchange rate ruling at that date. Profits or losses on the translation of foreign currency balances,
whether realised or unrealised are credited or debited to the Revenue or Capital column of the Income Statement depending on
whether the gain or loss is of a revenue or capital nature.
(H) CASH AND CASH EQUIVALENTS
Cash and cash equivalents and demand deposits readily convertible to known amounts of cash and subject to insignificant risk
of changes in value are defined as cash.
(I) BANK LOAN
Bank loans are initially recognised at fair value, net of transaction costs incurred. Bank loans are subsequently measured at
amortised cost. The loan amounts falling due for repayment within one year are included under current liabilities in the Statement
of Financial Position and the loan amounts falling due after one year are included under “Creditors: amounts falling due after
more than one year” in the Statement of Financial Position.
78
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
(J) REPURCHASE OF SHARES FOR CANCELLATION OR TO HOLD IN TREASURY
The cost of repurchasing ordinary shares (for cancellation or to hold in Treasury) including the related stamp duty and
transaction cost is charged to the ‘Capital Reserve’ and the newly created Special Distributable Reserve account, and dealt with in
the Statement of Changes in Equity. Share repurchase transactions are accounted for on a trade date basis.
With effect from 7 August 2024, the date in which the Company’s Share Premium account was cancelled, all shares bought back
to be held in Treasury have been charged to the Special Distributable Reserve. Prior to this date all Shares cancelled were charged
to the Capital Reserve account.
Where shares are cancelled (or are subsequently cancelled having previously been held in Treasury), the nominal value of those
shares is transferred out of ‘Called up share capital’ and into the ‘Capital redemption reserve’.
Should shares held in Treasury be reissued, the sales proceeds will be treated as a realised capital profit up to the amount of the
purchase price of those shares and will be transferred to capital reserves. The excess of the sales proceeds over the purchase
price will be transferred to ‘Share premium’.
(K) OPERATING SEGMENTS
The Company defines operating segments and segment performance in the financial statements based on information used by
the Board of Directors which is considered the Chief Operating Decision Maker
^
. The Directors are of the opinion that the Company
is engaged in a single segment of business, being the investments business. The results published in this Annual Report therefore
correspond to this sole operating segment.
(L) NATURE AND PURPOSE OF RESERVES
Capital Redemption Reserve
This reserve arose when ordinary shares were bought by the Company and subsequently cancelled, at which point the amount equal
to the par value of the ordinary share capital was transferred from the ordinary share capital to the Capital Redemption reserve.
Capital Reserve
This reserve reflects any:
• gains or losses on the disposal of investments;
• exchange differences of a capital nature;
• increases and decreases in the fair value of investments which have been recognised in the capital column of the Income
Statement;
• expenses which are capital in nature as disclosed in note 1(E); and
• excess of the purchase price over the nominal value of shares which have been bought back by the Company for
cancellation or to be held in Treasury. See note 1(J) above for further details.
Following amendments to the Company’s Articles of Association in 2015, this reserve can be used to distribute certain capital
profits by way of dividend.
Special Distributable Reserve
This reserve was created upon the cancellation of the Share Premium Account on 7 August 2024; it is distributable and is used to
fund any repurchases of the Company’s own shares.
Revenue Reserve
This reserve reflects all income and expenditure which are recognised in the revenue column of the Income Statement and may
be distributable by way of dividend.
^ See glossary of terms on page pages 92 to 96.
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCESTRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
79
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
When making a distribution to Shareholders, the Directors determine profits available for distribution by reference to ‘Guidance
on realised and distributable profits under the Companies Act 2006’ issued by the Institute of Chartered Accountants in England
and Wales and the Institute of Chartered Accountants of Scotland in April 2017. The availability of distributable reserves in the
Company is dependent on those distributions meeting the definition of qualifying consideration within that guidance and on
available cash resources of the Company and other accessible sources of funds. The distributable reserves are therefore subject
to these restrictions or limitations at the time such distribution is made.
2. Income
2024
£’000
2023
£’000
Income from investments
UK listed dividends 39,474 39,247
Overseas dividends* 2,793 7,496
Limited liability partnership – profit-share 486 443
Other operating income – bank interest 407 205
Total income 43,160 47,391
* Include special dividends which have been credited to the revenue account totalling £nil (2023: £591,000):
3. AIFM and portfolio management fees
2024 2023
REVENUE
£’000
CAPITAL
£’000
TOTAL
£’000
REVENUE
£’000
CAPITAL
£’000
TOTAL
£’000
AIFM fee 565 1,695 2,260 652 1,957 2,609
Portfolio Management fee 1,695 5,086 6,781 1,957 5,871 7,828
Total fees 2,260 6,781 9,041 2,609 7,828 10,437
75% of the Portfolio management and AIFM fees are taken to the Capital reserve and 25% is taken to the Revenue reserve. See
note1(E) on page 77 for further details.
80
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
4. Other Expenses
2024 2023
REVENUE
£’000
CAPITAL
£’000
TOTAL
£’000
REVENUE
£’000
CAPITAL
£’000
TOTAL
£’000
Directors’ fees 192 – 192 178 – 178
Auditors’ fees – statutory annual audit 72 – 72 69 – 69
Depositary’s fees 160 – 160 175 – 175
Stock listing and FCA fees 173 – 173 152 – 152
Custody fees 130 – 130 119 – 119
Index costs 85 – 85 85 – 85
Registrar’s fees 79 – 79 64 – 64
Promotional costs 55 – 55 55 – 55
Legal fees 12 126 138 6 17 23
Other expenses 226 – 226 247 – 247
Total expenses 1,184 126 1,310 1,150 17 1,167
Further details of the amounts paid to Directors are included in the Directors’ Remuneration Report on pages 55 to 58.
During the year ended 30 September 2024 there were no non-audit services provided by the Company's Auditor (2023: nil).
All of the above expenses include VAT where applicable. The Auditor’s fees for the statutory annual audit were £60,000
excludingVAT (2023: £57,780).
During the year the Company incurred legal expenses amounting to £126,000 in relation to the cancellation of the share
premiumaccount; these expenses have been charged 100% to the capital account.
5. Finance Charges
2024 2023
REVENUE
£’000
CAPITAL
£’000
TOTAL
£’000
REVENUE
£’000
CAPITAL
£’000
TOTAL
£’000
Interest payable on bank loan 528 1,584 2,112 483 1,445 1,928
Loan facility commitment fees 28 83 111 23 69 92
Arrangement fee – – – 11 34 45
556 1,667 2,223 517 1,548 2,065
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCESTRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
81
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
6. Taxation on Ordinary Activities
(A) ANALYSIS OF CHARGE IN THE YEAR
2024 2023
REVENUE
£’000
CAPITAL
£’000
TOTAL
£’000
REVENUE
£’000
CAPITAL
£’000
TOTAL
£’000
UK Corporation tax at 25% (2023: 22%) – – – – – –
Overseas withholding tax 476 – 476 1,308 – 1,308
Recoverable overseas withholding tax (247) – (247) (122) – (122)
229 – 229 1,186 – 1,186
(B) FACTORS AFFECTING TOTAL TAX CHARGE FOR YEAR
The tax assessed for the year is lower (2023: lower) than the standard rate of UK corporation tax of 25% (2023: 22%).
The differences are explained below:
2024 2023
REVENUE
£’000
CAPITAL
£’000
TOTAL
£’000
REVENUE
£’000
CAPITAL
£’000
TOTAL
£’000
Total return on ordinary activities
before taxation 39,160 69,247 108,407 43,115 86,929 130,044
Return on ordinary activities multiplied by
UK corporation tax of 25% (2023: 22%) 9,790 17,312 27,102 9,485 19,124 28,609
Effects of:
Overseas taxation 229 – 229 1,186 – 1,186
Franked investment income not subject to
corporation tax – UK dividend income (9,869) – (9,869) (8,634) – (8,634)
Overseas dividends not taxable (698) – (698) (1,649) – (1,649)
Non allowable capital expenses
in relation to the cancellation of the Share
premium account
- 32 32 – – –
Excess management expenses 777 2,112 2,889 798 2,067 2,865
Non-taxable (return) on investments* – (19,502) (19,502) – (21,205) (21,205)
Currency translations – 46 46 – 14 14
Total tax charge for the year (note 6(A)) 229 – 229 1,186 – 1,186
* Returns on investments are not subject to corporation tax within an investment company.
82
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
6. Taxation on Ordinary Activities – Continued
(C) DEFERRED TAXATION
As at 30 September 2024, the Company had unused management expenses and other reliefs for taxation purposes of
£146,618,000 (2023:£135,063,000). It is unlikely that the Company will generate sufficient taxable income in excess of the available
deductible expenses and therefore the Company has not recognised a deferred tax asset of £36,655,000 (2023: £33,766,000)
based on the prospective corporation tax rate of 25% (2023: 25%).
Given the Company’s status as an investment company and the intention to continue to meet the conditions required to
maintain such status in the foreseeable future, the Company has not provided for a deferred tax asset.
7. Return per share – Basic and Diluted
2024
£’000
2023
£’000
The return per share is based on the following figures:
Revenue return 38,931 41,929
Capital return 69,247 86,929
Total return 108,178 128,858
Weighted average number of shares in issue during the year 187,520,280 209,802,492
Revenue return per share 20.8p 20.0p
Capital return per share 36.9p 41.4p
Total return per share 57.7p 61.4p
The calculation of the total, revenue and capital returns per ordinary share is carried out in accordance with IAS 33, "Earnings per
Share (as adopted in the UK)".
As at 30 September 2024 and 2023 there were no dilutive instruments in issue, therefore the basic and diluted return per share are
the same.
* Excludes shares held in Treasury.
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCESTRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
83
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
8. Dividends
In accordance with FRS 102 dividends are included in the Financial Statements in the period in which they are paid or approved
by Shareholders.
Amounts recognised as distributable to Shareholders for the year ended 30 September 2024 were as follows:
EX-DIVIDEND
DATE
PAYMENT
DATE
2024
£’000
2023
£’000
Second interim dividend paid for the year ended
30 September 2023 of 10.5p per share 5 October 2023
10 November
2023 21,454 –
First interim dividend paid for the year ended
30 September 2024 of 8.8p per share 4 April 2024 17 May 2024 16,477 –
Second interim dividend paid for the year ended
30 September 2022 of 9.8p per share
29 September
2022
4 November
2022 - 21,182
First interim dividend paid for the year ended
30 September 2023 of 8.5p per share 6 April 2023 19 May 2023 - 17,667
37,931 38,849
* Second interim dividend of 10.8p per share for the
year ended 30 September 2024 (2023: 10.5p) 3 October 2024
8 November
2024 18,097 21,454
* The second interim dividend of 10.8p per share (2023: 10.5p) has not been included as a liability in these Financial Statements as
it is only recognised in the financial year in which it is paid.
The maximum retention permitted under Section 1158 of the Corporation Tax Act 2010 is c.£6.5 million (2023: c.7.0 million).
The total dividends payable in respect of the financial year which forms the basis of the retention test are set out below:
2024
£’000
2023
£’000
Revenue available for distribution by way of dividend for the year 38,931 41,929
2024 First interim dividend of 8.8p per share (2023: 8.5p) paid on 17 May 2024 (16,477) (17,667)
2024 Second interim dividend of 10.8p per share (2023: 10.5) paid on 8 November 2024 (18,097) (21,454)
Net additions to revenue reserves 4,357 2,808
The Company’s dividend policy is set out on page 18.
84
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
9. Investments held at Fair Value Through Profit or Loss
ANALYSIS OF PORTFOLIO MOVEMENTS
2024
£’000
2023
£’000
Opening book cost 1,244,868 1,293,409
Opening investment holding gains 591,792 558,669
Valuation at 1 October 1,836,660 1,852,078
Movements in the year:
Purchases at cost 122,156 42,619
Sales proceeds (443,604) (154,424)
Gains on investments 78,006 96,387
Valuation at 30 September 1,593,218 1,836,660
Closing book cost 1,100,447 1,244,868
Investment holding gains at 30 September 492,771 591,792
Valuation at 30 September 1,593,218 1,836,660
The Company received £443,604,000 (2023: £154,424,000) from investments sold in the year. The realised gains of these
investments were £177,027,000 (2023: £63,263,000) and the book cost of these investments when they were purchased was
£266,577,000 (2023: £91,161,000). These investments have been revalued over time and until they were sold any unrealised
gains/losses were included in the fair value of the investments.
Purchase transaction costs for the year to 30 September 2024 were £516,000 (2023: £50,000). These comprise stamp duty costs
of £471,000 (2023: £33,000) and commission of £45,000 (2023: £17,000). Sales transaction costs for the year to 30 September 2024
were £127,000 (2023:£55,000) and comprise commission.
10. Debtors
2024
£’000
2023
£’000
Amounts due from brokers in respect of portfolio trading – disposals 2,261 4,121
Accrued income and prepayments 5,248 6,088
7,509 10,209
11. Creditors: Amounts Falling Due Within One Year
2024
£’000
2023
£’000
Amounts due to brokers in respect of portfolio trading – purchases – 1,669
Amounts due to brokers in respect of shares repurchased by the Company 2,550 2,134
Other creditors and accruals 1,448 1,063
3,998 4,866
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCESTRATEGIC REPORT
FURTHER
INFORMATION
INDEPENDENT
AUDITORS’ REPORT
FINANCIAL
STATEMENTS
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
12. Bank Loan
2024
£’000
2023
£’000
Bank loan 29,200 36,700
Bank of Nova Scotia, London Branch, the provider of the Company’s loan facility, has a fixed and floating charge over the assets of
the Company as security against any funds drawn down under the loan facility. As at 30 September 2024 the Company was in the
second year of its three year secured fixed term multi-currency revolving loan facility of £60million (with an additional £40 million
available if required).
The three year facility will expire in early October 2025.
The main covenant under the loan facility required that, at each month end, total borrowings should not exceed £100 million
(2023:£100 million), Net Asset Value must not fall below £750 million (2023: £750 million) and the ratio of Adjusted Total Net Assets
to Debt is not to be less than 4:1 (2023: 4:1). There were no breaches of the covenants during the year.
The Board has set a gearing limit which must not exceed 25% of the Company’s net asset value. See the Strategic Report on
page18 and the Report of the Directors on page 40 for further details.
13. Called Up Share Capital
2024
£’000
2023
£’000
Allotted, issued and fully paid:
167,717,668 (2023: 204,519,434) ordinary shares of 25p each 41,930 51,130
57,273,635 (2023: 20,471,869) ordinary shares of 25p held in Treasury 14,318 5,118
224,991,303 (2023: 224,991,303) total ordinary shares of 25p each 56,248 56,248
No shares were issued by the Company during the year (2023: Nil).
During the year, the Company bought back 36,801,766 shares to be held in Treasury at a cost of £310,808,000 (2023: 11,218,558
shares were bought back at a cost of £97,664,000).
Between 1 October 2024 and 2 December 2024, the Company bought back a further 9,913,457 shares into Treasury at a cost of
£85,300,000.
14. Capital Reserve
CAPITAL
RESERVE
REALISED
£'000
CAPITAL
RESERVE
INVESTMENT
HOLDING GAINS
UNREALISED
£'000
2024
TOTAL
£'000
CAPITAL
RESERVE
REALISED
£'000
CAPITAL
RESERVE
INVESTMENT
HOLDING GAINS
UNREALISED
£'000
2023
TOTAL
£'000
At 1 October 2023 12,420 591,792 604,212 56,279 558,668 614,947
Net gains/(losses) on investments 177,027 (99,021) 78,006 63,263 33,124 96,387
Repurchase of shares into Treasury (260,969) – (260,969) (97,664) – (97,664)
Expenses charged to capital (6,907) – (6,907) (7,845) – (7,845)
Finance costs charged to capital (1,667) – (1,667) (1,548) – (1,548)
Currency translations (185) – (185) (65) – (65)
At 30 September 2024 (80,281) 492,771 412,490 12,420 591,792 604,212
The amount of the capital reserve that is distributable is complex to determine and is not necessarily the full amount of the
reserve as disclosed within these Financial Statements of £412,490,000 as at 30 September 2024 (2023: £604,212,000) as this is
subject to fair value movements and may not be readily realisable at short notice.
86
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
15. Net Asset Value Per Share
2024 2023
Net assets (£'000) 1,582,168 1,822,729
Number of shares in issue (excluding shares held in Treasury) 167,717,668 204,519,434
Net asset value per share 943.4p 891.2p
As at 30 September 2024 and 2023 there were no dilutive instruments held, therefore the basic and diluted net asset value per
share are the same.
At 30 September 2024 57,273,635 shares were held in Treasury (2023: 20,471,869).
16. Transactions with the AIFM, the Portfolio Manager and Related Parties
Details of the relationship between the Company, Frostrow and Lindsell Train are disclosed in the Report of the Directors on
pages36 and 37 and also on the Company’s website.
As at 30 September 2024, the Company had an investment in Frostrow with a book cost of £200,000 (2023: £200,000) and a
fair value of £3,225,000 (2023: £3,725,000) (including the AIFM capital contribution of £125,000 (2023: £125,000)). During the year
Frostrow earned a total of £2,260,000 (2023: £2,609,000) in respect of AIFM fees, of which £171,000 was outstanding at 30September
2024 (2023: £209,000).
The Company has an investment in The Lindsell Train Investment Trust plc, which is managed by Lindsell Train, with a book cost
of £1,000,000 (2023: £1,000,000) and a fair value of £7,640,000 as at 30 September 2024 (2023: £9,720,000). During the year Lindsell
Train earned a total of £6,781,000 (2023: £7,828,000) in respect of Portfolio Management fees of which £512,000 was outstanding at
30September 2024 (2023: £626,000).
Further details can be found in the Corporate Information section of the Company's website.
Details of the income received from the AIFM are disclosed in note 2 on page 79 and details of the remuneration payable to the
AIFM and the Portfolio Manager are disclosed in note 3 also on page 79.
Details of the fees of all Directors can be found on pages 53 to 58 and in note 4 on page 80. Directors’ interests in the capital of the
Company can be found on page 58. There were no other material transactions during the year with the Directors of the Company.
17. Risk Management
As an investment company the Company invests in equities and other investments for the long term so as to secure its
investment objective as stated on page 1. In pursuit of its investment objective, the Company is exposed to a variety of risks that
could result in either a reduction in the Company’s net assets or a reduction in the revenue returns available for distribution.
The Company’s financial instruments comprise mainly equity investments, cash balances, borrowings, debtors and creditors that
arise directly from its operations.
The principal risks inherent in managing financial instruments are market risk, liquidity risk and credit risk.
The principal and emerging risks of the Company and the Directors’ approach to the management of those where the Directors
consider there to be a high inherent risk are set out in the Strategic Report on pages 20 to 24.
MARKET RISK
Market risk comprises three types of risk: market price risk, interest rate risk and currency risk.
Market Price Risk
As an investment company, performance is dependent on the performance of the underlying companies and securities in which
it invests. The market price of investee companies’ shares is subject to their performance, supply and demand for the shares and
investor sentiment regarding the company or the industry sector in which it operates. Consequently, market price risk is one of the
most significant risks to which the Company is exposed.
FURTHER
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FINANCIAL
STATEMENTSGOVERNANCESTRATEGIC REPORT
GOVERNANCESTRATEGIC REPORT
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87
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
At 30 September 2024, the fair value of the Company’s assets exposed to market price risk was £1,593,218,000 (2023: £1,836,660,000 see
page9). If the fair value of the Company’s investments at the Statement of Financial Position date increased or decreased by10%, while
all other variables remained constant, the capital return and net assets attributable to Shareholders for the year ended 30September
2024 would have increased or decreased by £159,322,000 or 94.99p per share (2023: £183,666,000 or 89.80pper share).
See page 21 for details on the concentration risk suffered by the Company.
No derivatives or hedging instruments are currently utilised to manage market price risk.
Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market interest rates.
Interest rate movement may affect:
• the interest payable on the Company’s variable rate borrowings
• the level of income receivable from variable interest securities and cash deposits
• the fair value of investments of fixed rate securities
The Company’s main exposure to interest rate risk during the year ended 30 September 2024 was through its three year £60 million
(2023: £60 million) secured multi-currency committed revolving credit facility (with an additional £40 million facility available if
required (2023: £40 million)) with Bank of Nova Scotia, London Branch.
Borrowings at the year end amounted to £29,200,000 (2023: £36,700,000) at an interest rate of 6.5% (5.2% SONIA plus 1.30% margin)
(2023: 6.5% (5.2% SONIA plus 1.30% margin and fees)).
If the above level of borrowing was maintained for a year, a 10% increase or decrease in SONIA would decrease or increase the
revenue return by £38,000, (2023: £48,000), decrease or increase the capital return in that year by £114,000 (2023: £142,000) and
decrease or increase the net assets by £152,000 (2023: £190,000).
The weighted average interest rate, during the year, on borrowings under the above mentioned revolving credit facility was 6.49%
(2023: 5.15%). At 30 September 2024, the Company’s financial assets and liabilities exposed to interest rate risk were as follows:
2024 2023
WITHIN
ONE YEAR
£'000
MORE THAN
ONE YEAR
£'000
WITHIN
ONE YEAR
£'000
MORE THAN
ONE YEAR
£'000
Exposure to floating rates:
Assets
Cash and cash equivalents 14,639 – 17,426 –
Liabilities
Creditors: amount falling due after more than one year
– borrowings under the loan facility – (29,200) – (36,700)
Exposure to fixed rates:
Assets
Investments at fair value through profit or loss
#
488 – 392 –
Liabilities – – – –
#
Celtic 6% cumulative convertible preference shares and Frostrow Capital LLP AIFM Capital Contribution.
Currency Risk
The Financial Statements are presented in sterling, which is the functional and presentational currency of the Company.
At30September 2024, the Company’s investments, with the exception of five, were priced in sterling. The five exceptions were:
Heineken, listed in the Netherlands, Remy Cointreau listed in France, Manchester United, Cazoo and Mondelez, all of which are
listed in the United States. The aggregate of these represents 4.0% of the portfolio.
88
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
17. Risk Management – Continued
The AIFM and the Portfolio Manager monitor the Company’s exposure to foreign currencies on a continuous basis and regularly
report to the Board. The Company does not hedge against foreign currency movements, but the Portfolio Manager takes account
of the risk when making investment decisions.
Income denominated in foreign currencies is converted into sterling on receipt. The Company does not use financial instruments to
mitigate the currency exposure in the period between its receipt and the time that the income is included in the Financial Statements.
Foreign Currency Exposure
At 30 September 2024 the Company held £39,334,000 (2023: £171,369,000) of investments denominated in U.S. dollars and
£24,541,000 (2023: £156,737,000) in euros.
Currency Sensitivity
The following table details the sensitivity of the Company’s return after taxation for the year to a 10% increase or decrease in the
value of sterling compared with the U.S. dollar and euro (2023: 10% increase and decrease).
The analysis is based on the Company’s foreign currency financial instruments held at each Statement of Financial Position date.
In addition to the foreign currency exposure on investments held at 30 September 2024, the Company also held £385,000
(2023:£1,125,000) in debtors denominated in U.S. dollars and £1,230,000 (2023: £2,117,000) denominated in Euros.
This level of sensitivity is considered to be reasonably possible based on observation of current market conditions and
historicaltrends.
If sterling had weakened against the U.S. dollar and euro, as stated above, assuming all other variables remain constant, this
would have had the following effect:
2024
£’000
2023
£’000
Impact on revenue return 106 259
Impact on capital return 7,170 36,568
Total return after tax/increase in Shareholders’ funds 7,276 36,827
If sterling had strengthened against the foreign currencies as stated above, assuming all other variables remain constant, this
would have had the following effect:
2024
£’000
2023
£’000
Impact on revenue return (87) (212)
Impact on capital return (5,866) (29,918)
Total return after tax/decrease in Shareholders’ funds (5,953) (30,130)
Credit Risk
Credit risk is the risk that the counterparty to a transaction fails to discharge its obligations under that transaction, which could
result in the Company suffering a loss. Credit risk is managed as follows:
• Investment transactions are carried out only with brokers which are considered to have a high credit rating.
• Transactions are undertaken on a delivery versus payment basis whereby the Company’s custodian bank ensures that the
counterparty to any transactions entered into by the Company has delivered its obligation before any transfer of cash or
securities away from the Company is completed.
• Any failing trades in the market are closely monitored by both the AIFM and the Portfolio Manager.
• Cash is only held at banks that have been identified by the Board as reputable and of high credit quality.
• Bank of New York Mellon has a credit rating of Aa2 (Moody's) and AA- (Fitch).
FURTHER
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89
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
As at 30 September 2024, the exposure to credit risk was £17,263,000 (2023: £21,814,000), comprising:
2024
£’000
2023
£’000
Fixed assets:
Non-equity investments (preference shares) 363 267
Current assets:
Other receivables (amounts due from brokers) 2,261 4,121
Cash and cash equivalents 14,639 17,426
Total exposure to credit risk 17,263 21,814
Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.
Liquidity risk is not considered significant as the majority of the Company’s assets are investments in quoted equities.
Asat30September 2024 it is estimated that 98.1% of the investment portfolio could be realised within 30 days with 79.6%
insevendays, based on current trading volumes.
Liquidity risk exposure
FINANCIAL LIABILITIES COMPRISE:
30 SEPTEMBER
2024
£'000
30 SEPTEMBER
2023
£'000
Due within one month:
Balances due to brokers in respect of portfolio trading - purchases – 1,669
Amounts due to brokers in respect of shares repurchased by the Company 2,550 2,134
Accruals 1,448 1,063
Due after three months and after one year:
Bank loan 29,200 36,700
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Financial assets and financial liabilities are either carried in the Statement of Financial Position at their fair value or at a
reasonable approximation of fair value.
VALUATION OF FINANCIAL INSTRUMENTS
The Company measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in
making the measurements. Categorisation within the hierarchy has been determined on the basis of the lowest level input that is
significant to the fair value measurement of the asset, noting that most of the Company's investments are quoted assets, which
have been categorised as level 1 investments:
• Level 1 – quoted prices in active markets.
• Level 2 – prices of recent transactions for identical instruments.
• Level 3 – valuation techniques using observable and unobservable market data.
90
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
17. Risk Management – Continued
The financial assets and liabilities measured at fair value in the Statement of Financial Position are grouped into the fair value
hierarchy at the reporting date as follows:
AS AT 30 SEPTEMBER 2024
LEVEL 1
£'000
LEVEL 2
£'000
LEVEL 3
£'000
TOTAL
£'000
Equity investments 1,584,265 5,365 – 1,589,630
Limited liability partnership interest (Frostrow) – – 3,100 3,100
Frostrow - AIFM capital contribution – – 125 125
Preference share investments – 363 – 363
1,584,265 5,728 3,225 1,593,218
During the year the investment in Celtic was moved to level 2 due to low trading volumes.
AS AT 30 SEPTEMBER 2023
LEVEL 1
£'000
LEVEL 2
£'000
LEVEL 3
£'000
TOTAL
£'000
Equity investments
1,832,668 – – 1,832,668
Limited liability partnership interest (Frostrow)
– – 3,600 3,600
Frostrow - AIFM capital contribution
– – 125 125
Preference share investments
267 – – 267
1,832,935 – 3,725 1,836,660
The unquoted investment in Frostrow is valued by taking the EBITDA and applying a multiple; it has been re-valued by the Directors
during the year, using two unobservable market data sources, being Frostrow’s earnings and an agreed appropriate comparator
multiple. This was the same methodology adopted to value Frostrow as at 30September 2023.
There have been no transfers during the year between Levels 1 and 2. A reconciliation of fair value measurements in Level 3 is set
out below.
Level 3 Reconciliation of financial assets at fair value through profit or loss at 30 September
2024
£’000
2023
£’000
Opening fair value 3,725 4,725
Total losses included in gains on investments in the Income Statement (500) (1,000)
Closing fair value 3,225 3,725
If the earnings used in the valuation were to increase or decrease by 10% while all the other variables remained constant, the
return and net costs attributable to Shareholders for the year ended 30 September 2024 would have increased/decreased by
£310,000 (2023: £360,000, applying the same assumptions).
CAPITAL MANAGEMENT OBJECTIVES, POLICIES AND PROCEDURES
The structure of the Company’s capital is described in note 13 on page 85 and details of the Company’s reserves are shown in the
Statement of Changes in Equity on page 73.
The Company’s capital management objectives are:
• to ensure that it is able to continue as a going concern; and
• to achieve capital and income growth and to provide Shareholders with a total return in excess of that of the FTSE All-Share
Index through an appropriate balance of equity and debt.
FURTHER
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91
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
The Board, with the assistance of the AIFM and the Portfolio Manager, regularly monitors and reviews the broad structure of the
Company’s capital. These reviews include:
• the level of gearing, set at a limit in normal market conditions, is not to exceed 25% of the Company's net assets, which takes
account of the Company’s position and the views of the Board, the AIFM and the Portfolio Manager on the market;
• the extent to which revenue reserves should be retained or utilised; and
• ensuring the Company’s ability to continue as a going concern.
The Company’s objectives, policies and procedures for managing capital are unchanged from last year.
There were no breaches by the Company during the year of the financial covenants put in place by Bank of Nova Scotia,
LondonBranch in respect of the committed revolving credit facility provided to the Company.
The covenants are unchanged since last year and the Company has complied with them at all times.
18. Net Cash Inflow from Operating Activities
2024
£’000
2023
£’000
Total return before finance charges and taxation 110,630 132,109
Deduct capital gain before finance charges and taxation (70,914) (88,477)
Net revenue before finance charges and taxation 39,716 43,632
Decrease in accrued income and prepayments 1,406 2,235
Increase/(decrease) in creditors 385 (18)
Taxation – overseas withholding tax paid (795) (1,109)
AIFM, portfolio management fees and other expenses charged to capital (6,907) (7,845)
Net cash inflow from operating activities 33,805 36,895
19. Substantial Interests
At 30 September 2024 the Company held interests in 3% or more of any class of capital in the following entities:
COMPANY OR LIMITED LIABILITY PARTNERSHIP
NUMBER OF
SHARES
HELD
2024
FAIR VALUE
£'000
% OF ISSUED
SHARE CAPITAL OR
LIMITED LIABILITY
PARTNERSHIP
INTEREST
A. G. Barr 3,535,000 22,023 3.2
Frostrow Capital LLP (unquoted)
†
– 3,225 9.7
The Lindsell Train Investment Trust plc* 10,000 7,640 5.0
†
Includes Frostrow Capital LLP's AIFM Capital Contribution, fair value £125,000.
* Also managed by Lindsell Train Limited which receives a portfolio management fee based on the Company’s market
capitalisation. The details of the fee arrangements with the Company can be found on page 36.
20. Post Balance Sheet Events
During the period from 1 October 2024 to 2 December 2024, a further 9,913,457 shares were bought back and held in Treasury at a
cost of£85,300,000.
92
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
FURTHER INFORMATION
GLOSSARY OF TERMS AND ALTERNATIVE PERFORMANCE MEASURES
ACTIVE SHARE (APM)
Active Share is expressed as a percentage and shows the extent to which a fund’s holdings and their weightings differ from
those of the fund’s benchmark index. A fund that closely tracks its index might have a low Active Share of less than 20% and
be considered passive, while a fund with an Active Share of 60% or higher is generally considered to be actively managed. The
Company has a distinctive strategy: a concentrated portfolio of holdings invested across a small number of sectors and themes.
Active Share helps quantify the extent to which the portfolio differs from the benchmark index.
The Active Share data is sourced from Morningstar.
AIC
Association of Investment Companies. The AIC represents a broad range of investment companies, investment trusts, VCTs and
other closed-ended funds.
ALTERNATIVE INVESTMENT FUND MANAGERS DIRECTIVE (AIFMD)
Agreed by the European Parliament and the Council of the European Union and transposed into UK legislation, the AIFMD classifies
certain investment vehicles, including investment companies, as Alternative Investment Funds (AIFs) and requires them to appoint
an Alternative Investment Fund Manager (AIFM) and depositary to manage and oversee the operations of the investment vehicle.
The Board of the Company retains responsibility for strategy, operations and compliance and the Directors retain a fiduciary duty
to Shareholders.
ALTERNATIVE PERFORMANCE MEASURE ("APM")
An Alternative Performance Measure (APM) is a numerical measure of the Company’s current, historical or future financial
performance, financial position or cash flows other than a financial measure defined or specified in the applicable financial
framework. In selecting these Alternative Performance Measures, the Directors consider the key objectives and expectations
of typical investors and believe that each APM gives the reader useful and relevant information in judging the Company's
performance and in comparing other investment companies.
BENCHMARK RETURN
Total return on the benchmark, assuming that all dividends received were re-invested, without transaction costs, into the shares of
the underlying companies at the time the shares were quoted ex-dividend.
CHIEF OPERATING DECISION MAKER
The Chief Operating Decision Maker of the Company is considered to be the Board of Directors. It is a Generally Accepted
Accounting Principal (GAAP) requirement to disclose who the chief operating decision maker is.
DISCOUNT OR PREMIUM (APM)
A description of the difference between the share price and the net asset value per share. The size of the discount or premium
is calculated by subtracting the share price from the net asset value per share and is expressed as a percentage (%) of the
net asset value per share. If the share price is higher than the net asset value per share the result is a premium. If the share
price is lower than the net asset value per share, the shares are trading at a discount. The Board regularly reviews the level of
the discount/premium of the Company’s share price to the net asset value per share and considers ways in which share price
performance may be enhanced, including the effectiveness of share buy-backs, where appropriate.
DISCOUNT OR PREMIUM (APM) PAGE
30 SEPTEMBER
2024
30 SEPTEMBER
2023
Share price (p) 2 and 3 861.0 852.0
Net asset value per share (p) 2 and 3 943.4 891.2
Discount 2 and 3 8.7% 4.4%
Glossary of Terms and
Alternative Performance Measures –
Unaudited
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93
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
ENTERPRISE VALUE INCLUDING CASH (“EVIC”)
EVIC is the denominator used to measure carbon emissions. EVIC means the sum of the market capitalisation of ordinary
shares, the market capitalisation of preferred shares, and the book value of total debt and non-controlling interests, without the
deduction of cash or cash equivalents.
FTSE DISCLAIMER
“FTSE©” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence.
All rights in the FTSE indices and/or FTSE ratings vest in FTSE and or its licensors. Neither FTSE nor its licensors accept any liability for
any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distributions of FTSE Data is permitted
without FTSE’s express written consent.
GEARING (APM)
Gearing represents prior charges, adjusted for net current assets, expressed as a percentage of net assets (AIC methodology).
The Directors believe that it is appropriate to show net gearing in relation to Shareholders’ funds as it represents the amount of
debt funding on the investment portfolio. The gearing policy is that borrowing will not exceed 25% of the Company's net assets.
Prior charges includes all loans and bank overdrafts for investment purposes.
PAGE
30 SEPTEMBER
2024
£’000
30 SEPTEMBER
2023
£’000
Bank loan (prior charges) 74 (29,200) (36,700)
Net current assets 74 18,150 22,769
Bank loan adjusted for net current assets (11,050) (13,931)
Net assets 74 1,582,168 1,822,729
Gearing 2 0.7% 0.8%
THE INSTITUTIONAL INVESTORS GROUP ON CLIMATE CHANGE (“IIGCC”)
IIGCC membership enables organisations to ensure that they are part of the solution to climate change.
THE INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE (“IPCC”)
The IPCC is the United Nations body for assessing the science related to climate change.
NET ZERO ASSET MANAGERS INITIATIVE (“NZAM”)
The Net Zero Asset Managers initiative is an international group of asset managers committed to supporting the goal of net zero
greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and to supporting
investing aligned with net zero emissions by 2050 or sooner.
NET ASSET VALUE (“NAV”)
The value of the Company’s assets, principally investments made in other companies and cash being held, less any liabilities. The
NAV is also described as “Shareholders’ funds”. The NAV is often expressed in pence per share after being divided by the number
of shares that have been issued. The NAV per share is unlikely to be the same as the share price which is the price at which the
Company’s shares can be bought or sold by an investor. The share price is determined by the relationship between the demand
and supply of the shares.
94
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
FURTHER INFORMATION
GLOSSARY OF TERMS AND ALTERNATIVE PERFORMANCE MEASURES - CONTINUED
NET ASSET VALUE TOTAL RETURN PER SHARE (APM)
The theoretical total return on an investment over a specified period assuming dividends paid to Shareholders were reinvested at
net asset value per share at the time the shares were quoted ex-dividend. This is a way of measuring investment management
performance of investment companies which is not affected by movements in discounts or premiums. The Directors regard the
Company’s net asset value total return per share as being the overall measure of value delivered to Shareholders over the
long term. The Board considers the principal comparator to be its benchmark, the FTSE All-Share Index.
NAV TOTAL RETURN PAGE
30 SEPTEMBER
2024
30 SEPTEMBER
2023
Opening NAV per share (p) 2 891.2 848.4
Increase in NAV per share (p) 52.2 42.8
Closing NAV per share (p) 2 943.4 891.2
Increase in NAV per share 5.8% 5.0%
Impact of dividends re-invested* +2.4% +2.2%
NAV per share total return 2, 3 and 4 8.2% 7.2%
* The NAV total return is calculated on the assumption that the total dividends of 19.3p (2023: 18.3p) paid by the Company during
the year were reinvested into assets of the Company at the NAV per share at the ex-dividend date. The Treasury shares held by
the Company have been excluded from this calculation.
The source of this data is Morningstar who have calculated the return on an industry comparative basis.
ONGOING CHARGES FIGURE (APM)
Ongoing charges are calculated by taking the Company’s annualised operating expenses expressed as a proportion of the
average daily net asset value of the Company over the year. The costs of buying and selling investments are excluded, as are
interest costs, taxation, cost of buying back or issuing ordinary shares and other non-recurring costs. Ongoing charges represent
the costs that Shareholders can reasonably expect to pay from one year to the next, under normal circumstances.
PAGE
30 SEPTEMBER
2024
£'000
30 SEPTEMBER
2023
£'000
AIFM and portfolio management fees 79 9,041 10,437
Operating expenses 80 1,310 1,167
Total expenses 10,351 11,604
Average net assets during the year 1,697,345 1,907,121
Ongoing charges figure 2 0.61% 0.61%
THE PARIS AGREEMENT
The Paris Agreement’s central aim is to strengthen the global response to the threat of climate change by keeping a global
temperature rise this century well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the
temperature increase even further to 1.5 degrees Celsius.
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
THE PARIS ALIGNED INVESTMENT INITIATIVE (“PAII”)
The PAII was launched by the Institutional Investors Group on Climate Change (“IIGCC”) in Europe in May 2019, to explore how
investors can align their portfolios with the goals of the Paris Agreement.
PEER GROUP
Finsbury Growth & Income Trust PLC is part of the AIC’s UK Equity Income sector. The trusts in this universe are defined as trusts
whose investment objective is to achieve a total return for Shareholders through both capital and dividendgrowth.
REVERSE STRESS TEST
Reverse stress tests are stress tests that identify scenarios and circumstances which would make a business unworkable and
identify potential business vulnerabilities.
SASB
The Sustainability Accounting Standards Board (“SASB”) aims to establish industry-specific disclosure standards across ESG
topics that facilitate communication between companies and investors about financially material, information that is useful for
decision-making.
SHARE PRICE TOTAL RETURN (APM)
The change in capital value of a company’s shares over a given period, plus dividends paid to Shareholders, expressed as a
percentage of the opening value. The assumption is that dividends paid to Shareholders are re-invested in the shares at the
time the shares are quoted ex-dividend. The Directors regard the Company’s share price total return to be a key indicator of
performance. This reflects share price growth of the Company which the Board recognises is important to investors.
SHARE PRICE TOTAL RETURN PAGE
30 SEPTEMBER
2024
30 SEPTEMBER
2023
Opening share price share (p) 2 852.0 800.0
Increase in share price (p) 9.0 52.0
Closing share price (p) 2 861.0 852.0
Increase in share price 1.1% 6.5%
Impact of dividends re-invested* +2.3% +1.0%
Share price total return 2, 3 and 4 3.4% 7.5%
* The share price total return is calculated on the assumption that the total dividends of 19.3p (2023: 18.3p) paid during the year
were reinvested into shares of the Company at the share price at the ex-dividend date.
The source is Morningstar who have calculated the return on an industry comparative basis.
STERLING OVERNIGHT INDEX AVERAGE ("SONIA")
SONIA is an interest rate published by the Bank of England. SONIA can be seen as the average interest rate at which a selection of
financial institutions lend to one another in British pound sterling (GBP) with a maturity of 1 day (overnight).
STRESS TESTING
Stress testing Is a forward-looking analysis technique that considers the impact of a variety of extreme but plausible economic
scenarios on the financial position of the Company.
96
FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
FURTHER INFORMATION
GLOSSARY OF TERMS AND ALTERNATIVE PERFORMANCE MEASURES - CONTINUED
TCFD
The Financial Stability Board created the Task Force on Climate-related Financial Disclosures (”TCFD”) to improve and increase
reporting of climate-related financial information.
TREASURY SHARES
Shares previously issued by a company that have been bought back from Shareholders to be held by the company for potential
sale or cancellation at a later date. Such shares are not capable of being voted and carry no rights to dividends.
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FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024
Share Prices
The Company’s ordinary shares are listed on the London Stock
Exchange under ‘Investment Companies’.
Daily Net Asset Value per share
The daily net asset value per share of the Company’s sharescan
be obtained on the Company’s website www.finsburygt.com
and is published daily via the London Stock Exchange.
Registered Office
50 Lothian Road
Festival Square
Edinburgh EH3 9WJ
Incorporated in Scotland with company no. SC013958 and
registered as an investment company under Section 833 of the
Companies Act 2006.
AIFM, Company Secretary and Administrator
Frostrow Capital LLP
25 Southampton Buildings
London WC2A 1AL
Telephone: 020 3008 4910
Email: info@frostrow.com
Website: www.frostrow.com
Authorised and regulated by the Financial Conduct Authority.
Portfolio Manager
Lindsell Train Limited
3rd Floor
66 Buckingham Gate
London SW1E 6AU
Telephone: 020 7808 1225
Website: www.lindselltrain.com
Authorised and regulated by the Financial Conduct Authority.
Independent Auditors
Deloitte LLP
1 New Street Square
London EC4A 3HQ
Depositary
The Bank of New York Mellon (International) Limited
160 Queen Victoria Street
London EC4V 4LA
Global Custodian
Bank of New York Mellon
160 Queen Victoria Street
London EC4V 4LA
ISA Status
The Company’s shares are eligible for Individual Savings Accounts
("ISAs") and for Junior ISAs.
Registrars
If you have any queries in relation to your shareholding please
contact:
Link Group
Central Square
29 Wellington Street
Leeds LS1 4DL
Email: shareholderenquiries@linkgroup.co.uk
Telephone +44 (0)371 664 0300
Website: www.linkgroup.eu
Calls are charged at the standard geographic rate and will vary by
provider. Calls outside the United Kingdom will be charged at the
applicable international rate. Lines are open between 09:00 and 17:30,
Monday to Friday excluding public holidays in England and Wales.
Shareholder Portal
If you hold your shares directly you can register online to view your
holdings using the Share Portal, a service offered by Link Group
www.signalshares.com.
The Share Portal is an online service enabling you to quickly and
easily access and maintain your shareholding online – reducing
the need for paperwork and providing 24 hour access to your
shareholding details.
Corporate Broker
Winterflood Securities Limited
Riverbank House
2 Swan Lane
London
EC4R 3GA
Identification Codes
Shares: SEDOL: 0781606
ISIN: GB0007816068
BLOOMBERG: FGT LN
EPIC: FGT
Legal Entity Identifier (LEI)
213800NN4ZKX2LGIGQ40
Global Intermediary Identification Number (GIIN)
QH4BH0.99999.SL.826
Disability Act
You can contact the Company or the Company’s registrar,
LinkGroup, using Relay UK, a service that helps people with hearing
and speech difficulties communicate with anyone over the phone
using the national relay service. You can download their app or call
0800731 1888 to access this service.
Company Information
Perivan 256419
Mobius Investment Trust Plc
25 Southampton Buildings, London WC2A 1AL
www.mobiusinvestmenttrust.com
This report is printed on Revive 100% White Silk a totally recycled paper
produced using 100% recycled waste at a mill that has been awarded the
ISO 14001 certificate for environmental management.
The pulp is bleached using a totally chlorine free (TCF) process.
This report has been produced using vegetable based inks.
Avoid investment fraud
1 Reject cold calls
If you’ve received unsolicited contact about
an investment opportunity, chances are
it’s a high risk investment or a scam. You
should treat the call with extreme caution.
The safest thing to do is to hang up.
2 Check the FCA Warning List
The FCA Warning List is a list of firms and
individuals we know are operating without
our authorisation.
3 Get impartial advice
Think about getting impartial financial
advice before you hand over any money.
Seek advice from someone unconnected to
the firm that has approached you.
Report a Scam
If you suspect that you have been
approached by fraudsters please tell the
FCA using the reporting form at
www.fca.org.uk/consumers/report-
scam-unauthorised-firm. You can also call
the FCA Consumer Helpline on
0800 111 6768
If you have lost money to investment fraud,
you should report it to Action Fraud on
0300 123 2040 or online at
www.actionfraud.police.uk
Find out more at
www.fca.org.uk/scamsmart
Investment scams are
designed to look like
genuine investments
Spot the warning signs
Have you been:
• contacted out of the blue
• promised tempting returns
and told the investment is safe
• called repeatedly, or
• told the offer is only available
for a limited time?
If so, you might have been
contacted by fraudsters.
Remember: if it sounds too
good to be true, it probably is!
Be ScamSmart
This report is printed on Revive 100% White Silk a totally recycled
paper produced using 100% recycled waste at a mill that has been
awarded the ISO 14001 certificate for environmental management.
The pulp is bleached using a totally chlorine free (“TCF”) process.
This report has been produced using vegetable based inks.
WARNING TO SHAREHOLDERS:
Many companies have become aware that their Shareholders
have received unsolicited phone calls or correspondence
concerning investment matters. These are typically from overseas
based ‘brokers’ who target UK Shareholders offering to sell them
what often turn out to be worthless or high-risk shares in US
or UK investments. They can be very persistent and extremely
persuasive. Shareholders are therefore advised to be very wary
of any unsolicited advice, offers to buy shares or offers of free
company reports.
Please note that it is very unlikely that either the Company or
the Company’s Registrar, Link Group, would make unsolicited
telephone calls to Shareholders. Such calls would relate only to
official documentation already circulated to Shareholders and
never in respect of investment ‘advice’.
Shareholders who suspect they may have been approached by
fraudsters should advise the Financial Conduct Authority (“FCA”)
using the share fraud report form at www.fca.org.uk/scams or call
the FCA Customer Helpline on 0800 111 6768. You may also wish to
call either the Company Secretary or the Registrar whose contact
details can be found on page 97.
A member of the Association of Investment Companies