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 ## CONTENTS FINANCIAL CALENDAR STRATEGIC REPORT FINANCIAL YEAR END 30 September 1 Company Summary FINAL RESULTS ANNOUNCED 2 Company Performance December 4 Key Performance Indicators (“KPIs”) 6 Chairman’s Statement ANNUAL GENERAL MEETING Tuesday, 28 January 2025 8 Investment Portfolio 10 Portfolio Manager’s Review HALF YEAR END 16 Business Review 31 March HALF YEAR RESULTS ANNOUNCED GOVERNANCE May 38 Board of Directors INTERIM DIVIDENDS PAYABLE 40 Report of the Directors May and November 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 FINANCIAL INDEPENDENT FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION ## Company Summary ## 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”). ### OBJECTIVES AND PERFORMANCE DIVIDENDS ### MEASUREMENT | The Company aims to achieve capital and | During the year the Company paid two interim | | --- | --- | | income growth and to provide Shareholders | dividends totalling 19.6p (2023: 19.0p) which | | with a total return in excess of that of the FTSE | was an increase of 3.2%. | All-Share Index (the Company’s benchmark). The Company’s Dividend Policy can be found Further details of the Company’s investment on page 18. policy are set out on pages 17 and 18. The net asset value per share increased by 8.2% during the financial year to 30September 2024 on a total return basis (2023: 7.2%). The detail of this movement can be found on page 73. 1 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 ### STRATEGIC REPORT ## Company Performance ### KEY FACTS ## 943.4p 861.0p 8.7% Net asset value per share Share price Discount of share price to ^ net asset value per share 2023: 891.2p (+5.8%) 2023: 852.0p (+1.1%) 2023: 4.4% | 57.7p | | 84.1% | | 19.6p | | --- | --- | --- | --- | --- | | | † | | *^ | | | Return per share | | Active Share | | Total dividends per share | † for the year 2023: 61.4p (-6.0%) 2023: 85.3% 2023: 19.0p (+3.2%) | 8.2% | £1.582bn | | 0.61% | | | --- | --- | --- | --- | --- | | | | † | | ^ | | Net asset value per share total | Shareholders’ funds | | Ongoing charges | | *, ^ return 2023: £1.823bn (-13.2%) 2023: 0.61% 2023: 7.2% ## 3.4% 0.7% 167,717,668 *, ^ Share price total return Gearing^ Number of shares in issue (excluding 57,273,635 shares held 2023: 7.5% 2023: 0.8% in Treasury) 2023: 204,519,434 (-18.0%) (Treasury shares 2023: 20,471,869) * Source – Morningstar ^ Alternative Performance Measure (see glossary on pages 92 to 96) † UK GAAP Measure 2 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 STRATEGIC REPORT GOVERNANCE INDEPENDENT STATEMENT REPORT FINANCIAL STATEMENTS REPORT FURTHER INFORMATION ## 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 ![img-0.jpeg](img-0.jpeg) FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 3 ### STRATEGIC REPORT ## Key Performance Indicators ## (“KPIs”) ## The Board uses ## certain financial and 57.7p ## 8.2% ## non-financial KPIs to † ## monitor and assess Net asset value total Return pershare ^* ### return The total return per share for the ## the performance of the year was 57.7pence per share This reflects the change in the ## Company in achieving (2023: return of 61.4pence per share). Company’s net asset value including the impact of reinvested Over five years, the Company earned ## its strategic aims. dividends. a total of 86.6 pence per share. The Board reviews the performance During the year under review the See the chart below for the five year of the portfolio in detail and hears the Company’s net asset value per history: views of the Portfolio Manager at each share total return was 8.2% meeting. (2023: 7.2%). Information on the Company's performance is provided in the 20 150 Chairman's Statement (beginning on 15 100 page 6) and the Portfolio Manager's 10 50 Review (beginning on page 10). 5 0 0 This performance is assessed against -5 -50 the following KPIs which are unchanged -10 -100 from last year. 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 ### 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 19.6p 3.4% to Shareholders in order to assess the Company’s performance between reporting periods and against its peer † ^* ### Dividends per share Share price total return group. The APMs used for the year under The total dividend declared for This reflects the change in the review are unchanged from last year. the year was 19.6 pence per share value of the Company’s share price Further information on each of the APMs (2023: 19.0 pence per share), an including the impact of reinvested can be found in the glossary beginning increase of 3.2%. dividends. on page 92. During the year under review the Company’s share price total return was 3.4% (2023: 7.5%). pence per share 20 20 15 15 10 | | 10 | 5 | | --- | --- | --- | | pence per share | | 0 | | % % | | | 5 -5 ^ Alternative Performance Measure (see glossary on 0 -10 pages 92 to 96) 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 † UK GAAP Measure * Source: Morningstar 4 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 FINANCIAL INDEPENDENT FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION ## 8.7% (10.0)%pt ### Share price discount/ Relative underperformance ### premium to net asset value to benchmark ^ ### per share Under the Company’s Business Model, a Portfolio Manager is 1 appointed with the capability 0 -1 and resources to manage the -2 Company’s assets through asset -3 -4 allocation, stock selection, gearing -5 -6 and risk management. The -7 Company’s portfolio is constructed -8 -9 and managed without reference 2020 2021 2022 2023 2024 to a stock market index with the Portfolio Manager selecting The Board reviews the level of investments based on their discount/premium to net asset assessment of their long-term value. value per share at every Board meeting and consideration is given The performance of the Company to ways in which the share price relative to its benchmark and its performance may be enhanced, peers is a KPI measured by the including the effectiveness of Board on an ongoing basis. marketing, share issuance and The Company’s benchmark is the buy-backs, where appropriate. FTSE All-Share Index (total return) Details of how the Company’s share which delivered a return of 13.4% buy-back and issuance policy (2023: 13.8%) over the year. This works can be found in the Statutory compares with the Company’s Documentation section on the share price totalreturn of 3.4% Company’swebsite. (2023: 7.5%) resulting in a 10.0% At 30September 2024 the underperformance against the Company’s share price stood at benchmark. an 8.7% discount to the Company’s The Board also monitors the net asset value per share Company’s share price return* | (2023: 4.4%discount). | | ^ | | --- | --- | --- | | | against its AIC peer group | . As at | | During the year, the Company | 30 September 2024 the Company's | | | bought back 36,801,766 shares into | ranking against its peer group of UK | | | Treasury (2023: 11,218,558) at an | Equity income sector was: | | average price of 844.5 pence and an Rank out of 23 average discount of 7.4%. Period 2024 2023 Since the year end to 2 December 2024 the Company has purchased a 1 yr 21 14 further 9,913,457 shares to be held in 3 yr 19 22 Treasury. As at 2 December 2024 the 5 yr 21 9 Company’s discount was 8.5%. 10 yr 4 2 % ^ Alternative Performance Measure (see glossary on pages 92 to 96) * Source: Morningstar FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 5 STRATEGIC REPORT # Chairman's Statement Simon Hayes, Chairman ![img-1.jpeg](img-1.jpeg) # 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. 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 than 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 30 September 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 2 December 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. 6 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 STRATEGIC REPORT GOVERNANCE INDEPENDENT STATEMENT REPORT FINANCIAL STATEMENTS FURTHER INFORMATION ## 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 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 7 ### STRATEGIC REPORT ## Investment Portfolio + ### PORTFOLIO SECTOR WEIGHTINGS ## Diageo | | | 2024 | 2023 | | --- | --- | --- | --- | | | Consumer Staples (”CS”) | 28.7% | 38.0% | | | Financials (”F”) | 25.2% | 22.3% | | | Consumer Discretionary (”CD”) | 22.4% | 23.4% | | | Industrials (”I”) | 13.5% | 7.9% | | | Technology (”T”) | 10.2% | 8.4% | | + FTSE Industrial Classification Benchmark (“ICB”) sectors. | | | | † ### GEOGRAPHICAL ALLOCATION 2024 | | United Kingdom | 97.1% | | --- | --- | --- | | | United States of America | 1.4% | | | France | 1.2% | | | Netherlands | 0.3% | | † The Company’s investment policy classifies geographical location | | | based on where companies are listed or otherwise incorporated, domiciled or having significant business operations. † The Company’s Investment Policy restricts the Company from owning more than 20% of the portfolio in overseas companies. 2023 84.2% 7.3% 4.8% 8 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 3.7% Source: Frostrow Capital LLP Source: Frostrow Capital LLP FINANCIAL INDEPENDENT FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION ### INVESTMENTS AS AT 30 SEPTEMBER 2024 FAIR VALUE CAPITAL FAIR VALUE 1 OCTOBER NET APPRECIATION/ TOTAL CONTRIBUTION 30 SEPTEMBER | | | | 2023 | INVESTMENTS | | (DEPRECIATION) | | | | | RETURN | PER SHARE | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | | 2024 | | % OF | | | | | SECTOR INVESTMENTS | | | £'000 | | £'000 | | £'000 | | | | £000 | | (PENCE) | | | | | | | | | | £’000 | INVESTMENTS | | | | | | 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 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 9 ### STRATEGIC REPORT ## Portfolio Manager’s Review ## Nick Train, Lindsell Train Limited, Portfolio Manager 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. EXPOSURE TO CONSUMER COMPANIES & DIGITAL WINNERS 60 60% 50 50% 40 Periods of lacklustre performance are inevitable for all | | 30 | | 35% | | --- | --- | --- | --- | | investors. When you are in the midst of such a period, | | 32% | | | as we are, it is important to keep your nerve and stick to | 20 | | | your investment principles. However, it is also important to 10 consider, and answer honestly, searching questions about 0 the underperformance. Our clients excel at asking searching September September September September questions. And three in particular have been put to us that I propose to address in this report. 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 Do we understand why we have underperformed Young & Co.’s Brewery. “Digital Winners” included in the calculation: Experian, LSEG, Hargreaves Lansdown, RELX, Rightmove and Sage. and have we taken measures to mitigate the risk of future underperformance? Moving on to the second question – is this a buying opportunity for your portfolio? I would say, unequivocally, yes. And I have Has the period of underperformance created put my money where my mouth is by buying more shares. a buying opportunity? There are two aspects to my optimism. First, I want to reiterate the Finally, is our continuing company research attraction of investing in owners of world-class consumer brands; generating attractive new investment ideas? 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 The first question; what has been our problem? Candidly, and even increased exposure to both during their recent share the portfolio has been a victim of its previous success. The price weakness. To understand the nature of the opportunity, I’d peak of our relative performance was in 2020. What drove ask Shareholders to consider the accompanying graph on page11 the strong performance for much of the preceding decade which shows the share price total returns of Diageo and Unilever were the strong returns from our investments in consumer since the start of the century, compared with the returns on branded goods owners, such as Burberry, Diageo and various stock market indices, all in Sterling. You may be surprised Unilever, amongst others. As a result of that success the to see that not only have Diageo and Unilever handsomely outperformed the UK stock market over the last nearly quarter combined weight of the holdings in consumer brands was of a century, they have also outperformed the S&P500 and even 50% of the whole portfolio as at year-end September 2020. the NASDAQ Composite. This is the case even after Diageo and In hindsight, this was too high. Covid-19 and its inflationary Unilever’s disappointing performance of the last four years. Now, aftermath have been unhelpful for many consumer Consumer Digital Winners of course, you can prove almost anything by cherry-picking a companies and their share prices have fallen or stagnated, favourable start-date and, no doubt, the NASDAQ Composite was hurting our overall investment performance. Between year at a temporary peak at the start of 2000, while Diageo and Unilever ended September 2020 and 2024, for instance, Burberry’s were out of favour (interestingly, you could argue that both those share price has fallen 55%, Diageo is down 2% and Unilever conditions pertain today). Nonetheless, it is impressive, I contend, up only 1%. How have we responded? 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. 10 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 2020 2024 2020 2024 STRATEGIC REPORT GOVERNANCE INDEPENDENT STATEMENT REPORT FINANCIAL STATEMENTS FURTHER INFORMATION DIAGEO & UNILEVER VS. S&P & NASDAQ COMPOSITE ![img-2.jpeg](img-2.jpeg) The 23% total return from Unilever shares over the last 12 months 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 CREDENTIALS FOR AI SUCCESS RELX LSEG Experian Sage HARGREAVES LANSDOWN rightmove Market Leading Data Set Industry Leader Global Targeted R&D Workflows not Transactions B2B not B2C 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 11 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 21st 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. ### EXPERIAN VS FTSE ALL-SHARE* ![img-3.jpeg](img-3.jpeg) ## 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. ### LSEG VS FTSE ALL-SHARE* ![img-4.jpeg](img-4.jpeg) * 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. 12 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 FINANCIAL INDEPENDENT FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION ### RELX Diageo Scientists, lawyers and risk consultants around the world Diageo is contending with a variety of headwinds are increasingly reliant on RELX’s data and software. that have hurt its share price in 2024. To us these are The company is a trusted and credible provider of predominantly cyclical not structural. We prefer to focus AI-enhanced services to those communities and this on the company’s structural advantages. Specifically offers it the prospect of accelerating revenue growth. It that Scotch, Irish Stout and Tequila are Diageo’s three is noteworthy that RELX’s market capitalisation is now biggest categories, where the company has world- higher than BP’s, making it the fifth biggest company on class brands and, as a result, a growth opportunity the London market. Perhaps data really is the new oil. 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. | RELX VS FTSE ALL-SHARE* | | | | DIAGEO VS FTSE ALL-SHARE* | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | 1500% | | | | 1500% | | | | | 1300% | | | | 1300% | | | | | 1100% | | | | 1100% | | | | | 900% | | | | 900% | | | | | 700% | | | | 700% | | | | | 500% | | | | 500% | | | | | 300% | | | | 300% | | | | | 100% | | | | 100% | | | | | -100% | | | | -100% | | | | | | 1999 20242012 2016 202020082004 | | | | 1999 20242014 20192009 | 2004 | | | | | RELX total return | FTSE All-Share total return | | Diageo total return | | FTSE All-Share total return | ### Schroders ### Sage We support Schroders’ strategy of shifting its business In 2017 Sage acquired a US cloud-computing business toward higher profit margin investment services, such called Intacct. This was transformative for the company. as Private Equity and Private Wealth and believe the Intacct’s subsequent success has helped return Sage’s company has made more progress with this strategy overall business to double digit revenue growth and than its current depressed share price suggests. there remains a big opportunity for Intacct in its home market and internationally. | SCHRODERS VS FTSE ALL-SHARE* | SAGE VS FTSE ALL-SHARE* | | --- | --- | | 500% | 250% | | 400% | 200% | 150% 300% 100% 200% 50% 100% 0% | 0% | | | | -50% | | | | --- | --- | --- | --- | --- | --- | --- | | -100% | | | | -100% | | | | | 1999 20242004 2009 2014 | | 2019 | | 1999 20242012 2016 202020082004 | | | | Schroders total return | FTSE All-Share total return | | | Sage total return | FTSE All-Share total return | FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 13 ### STRATEGIC REPORT PORTFOLIO MANAGER’S REVIEW – CONTINUED ### Unilever ### Rightmove The energy and improved execution of a new The investment appeal of Rightmove’s business was recently management team has reminded investors of Unilever’s confirmed by the bids the company received from Australian formidable strengths. Its existing global brands are peer REA. We believe that, like us, REA was attracted by already very valuable, but there is a further opportunity Rightmove’s dominant market position in property classified to use its innovation and distribution capabilities and advertising and by the growth opportunities presented marketing expertise to create or acquire new brands to Rightmove from selling additional services to property and give them global scale. Unilever’s fast-growing agents and home buyers themselves. We were relieved Health, Wellbeing and Premium Beauty brands are in the end the bids did not eventuate, because we believe pertinent examples. 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). | UNILEVER VS FTSE ALL-SHARE* | | | | RIGHTMOVE VS FTSE ALL-SHARE* | | | | --- | --- | --- | --- | --- | --- | --- | | 1100% | | | | 2900% | | | | 900% | | | | 2400% | | | | 700% | | | | 1900% | | | | 500% | | | | 1400% | | | | 300% | | | | 900% | | | | 100% | | | | 400% | | | | -100% | | | | -100% | | | | | 1999 20242016 20202008 20122004 | | | | 2006 20242015 2017 2019 20212011 20132008 | | | | | Unilever total return | FTSE All-Share total return | | Rightmove total return | FTSE All-Share total return | ### Hargreaves Lansdown Burberry It is likely we will lose this investment to takeover in early All Burberry Shareholders, including us, were shocked 2025 and it is likely we will replace it with new holdings by the fall in its share price and the severity of the with similar business characteristics. Specifically, we are profit decline now forecast for 2024. After extensive interested in companies that are technology-driven and engagement with the company, discussions with own or create unique data sets. 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. HARGREAVES LANSDOWN VS FTSE ALL-SHARE* BURBERRY VS FTSE ALL-SHARE* 2400% 1700% 1500% 1900% 1300% 1100% 1400% 900% 900% 700% 500% 400% 300% 100% -100% | | 2011 | 2016 | | 2022 | 20242013 2015 2018 202020092007 | -100% | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | 2002 20242018 20222010 20142004 | 2006 | 2008 2012 | | 2016 | 2020 | | Hargreaves Lansdown total return | | | FTSE All-Share total return | | | | | | | | | | | | | | | | | | Burberry total return | | | FTSE All-Share total return | | | 14 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 FINANCIAL INDEPENDENT FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION Since the year end we have added two new positions to the portfolio, ### CONCLUSION though, we are not yet ready to reveal their identity at this stage I share in your Board’s disappointment with recent given we are still building them from low levels. All I will say is that, performance and acknowledge this has been a frustrating as you might expect, the long period of disappointing returns from period for Shareholders. But I remain convinced that the best the UK stock market has thrown up interesting opportunities, with way we can get the NAV and share price moving up again is world-class companies languishing at attractive valuations. That to implement the same investment approach that generated proposition is confirmed by the decision we have taken to reduce good returns for Shareholders in the 20 years prior to 2021. That the non-UK holdings in the portfolio. The Company’s weighting to is, to run a concentrated portfolio, built around the shares of UK-listed companies has increased from 81% to 97% in the five years exceptional UK companies. to year-end September 2024. The UK and, in particular, the key UK holdings in this portfolio offer world-beating value, in our opinion. It remains a great privilege to me to be responsible for the ### TOP TEN HOLDINGS management of the Company’s portfolio, and thereby the precious savings of many investors, including my own. I The portfolio is concentrated, with the top ten holdings told you last year that skin in the game is no guarantee of accounting for c.90% of portfolio value at the year end. Given superior investment performance, and the last 12 months that concentration it is appropriate to provide an account of have unfortunately proven that correct. But I continue to the opportunity we see for each of the ten. I ask Shareholders to increase my personal holding in the Company. Why? It is true note how many of these are global businesses, with big global that I believe an alignment of interest between investment growth opportunities. The London stock market boasts more truly manager and investor is important, but to be candid that is impressive global companies than its reputation implies. Also not my main motivation. When I look at the portfolio today, I note the wide range of geographic markets and industries these companies serve. This means the portfolio is more diverse than am more enthused about its prospects – and by association the tight number of individual holdings suggests. 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. Nick Train Director, Lindsell Train Limited Portfolio Manager 3 December 2024 15 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 ### STRATEGIC REPORT ## Business Review ## 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. ### PORTFOLIO STRUCTURE AS AT 30 SEPTEMBER 2024 | 97.1% | 2.9% | 93.4% | | --- | --- | --- | | 2023: 84.2% | 2023: 15.8% | 2023: 91.9% | | Invested in UK | Invested globally | FTSE 100 companies | | domiciled companies | | (and comparable overseas | companies) | 90.5% | 0.7% | | | 84.1% | | | --- | --- | --- | --- | --- | --- | | | | | ^ | | ^ | | 2023: 84.7% | 2023: 0.8% | | | 2023: 85.3% | | | | | ^ | | | ^ | | Top ten holdings | Gearing | | | Active Share | | ^ Please see Glossary of Terms and Alternative Performance Measures on pages 92 to 96. 16 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 STRATEGIC REPORT GOVERNANCE INDEPENDENT^{}[] STATEMENT REPORT FINANCIAL^{}[] STATEMENTS REPORT FURTHER^{}[] INFORMATION 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 Depository. 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 page 6 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 17 ## 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) ### TEN YEAR DIVIDEND RECORD ![img-5.jpeg](img-5.jpeg) Source: Frostrow Capital LLP 18 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 FINANCIAL INDEPENDENT FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION ### 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 943.4pence, after the payment of dividends to Shareholders. 943.441.5 950 22.9 900 891.2 (19.3) 14.0 (5.7) (1.2) 850 800 750 700 650 600 0 | 30 Sept | Dividends | Expenses | | Finance | | Uplift from | Portfolio | Portfolio | 30 Sept | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 2023 | paid | (inc tax) | | costs | share buy-backs | | income | gains | 2024 | | NAV per share | Dividends | Costs | Portfolio | | | | | | | Pence per share 19 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 950 | 900 | | | | 45.9 | 891.2 | | --- | --- | --- | --- | --- | --- | | | 848.4 | (18.3) | | | | | 850 | | | 22.5 | | | (6.3) (1.0) 800 750 Pence per share 700 650 600 0 | | 30 Sept | Dividends | | Expenses | | Finance | Portfolio | Portfolio | 30 Sept | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | 2022 | paid | | (inc tax) | | costs | income | gains | 2023 | | NAV per share | | Dividends | Costs | | Portfolio | | | | | ### STRATEGIC REPORT BUSINESS REVIEW – CONTINUED ## Principal Risks, Emerging Risks ## and Risk Management 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 At each meeting the Board reviews movements in the Company’s shareholder objective or the UK Equity Income register. There are regular interactions and engagement with Shareholders sector becomes unattractive to (including at the AGM). Regular feedback from Shareholders is received from Shareholders. 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 The Board operates a share buy-back policy which is intended to offer some return may differ materially from protection against the share price widening beyond a 5% discount to NAV per the NAV per share total return. 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. 20 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 FINANCIAL INDEPENDENT FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION Principal Risks and Uncertainties Change Key Mitigations Investment Strategy and Activity The departure of a key individual The Board keeps the portfolio management arrangements under continual review. at the Portfolio Manager In turn, the Portfolio Manager reports on developments at Lindsell Train, including may affect the Company’s succession and business continuity plans. The Board meets regularly with other performance. members of the wider team employed by the Portfolio Manager. Prolonged underperformance The Board challenges the Portfolio Manager on the structure of the portfolio, against the Benchmark. 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 The Board reviews the performance of the portfolio against the benchmark and event such as war, terrorism, the Company’s peer group at every meeting. natural disaster or pandemic, and The Board holds frequent portfolio update meetings with the Portfolio Manager in the financial, monetary and/or addition to Board meetings. political responses to such events may have an adverse impact on The Portfolio Manager regularly engages with the portfolio companies to discuss the revenues and operations of any matters of concern that may effect operational resilience. 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 investment approach is The Board conducts an annual review of the Portfolio Manager’s ESG policy to not aligned with shareholder ensure that it is consistent with that expected by the Board. In addition the Board expectations in relation to ESG reviews the ESG activities of Lindsell Train to ensure progress is being made by matters. 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 21 ### STRATEGIC REPORT BUSINESS REVIEW – CONTINUED ### THE COMPANY'S APPROACH TO RISK MANAGEMENT – CONTINUED Principal Risks and Uncertainties Change Key Mitigations Investment Strategy and Activity - continued The adverse impact of climate The Board receives quarterly ESG updates, which include an update on any change on the portfolio climate change related engagement, from the Portfolio Manager together with companies’ operational monthly portfolio updates. The Board challenges the Portfolio Manager on ESG performance. 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 The Board reviews all information supplied to Shareholders and the AIFM’s deliver poor performance or fail to marketing activity at each meeting. The AIFM’s daily controls ensure accurate meet their contractual obligations publication of information. to the Company, include errors The Board receives regular updates from the AIFM of press references to the or irregularities in information Company and its major service providers, as well as regular news on sector published on behalf of the developments from the Company’s broker and the AIC. The Board has the ability to Company. 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 The AIFM and Portfolio Manager have in place robust compliance monitoring payments and cyber crime) programmes. occurs leading to a loss. The Board receives monthly compliance reviews and a quarterly expenses analysis. Risk of increased cyber crime on An annual statement is obtained by the Audit Committee from all service providers the portfolio companies which giving assurances that there have been no instances of fraud or bribery. could lead to the potential loss of confidential data and impact The Board reviews the cyber security policies of all service providers. the confidentiality, integrity or availability of data and systems, potentially resulting in financial losses. 22 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 FINANCIAL INDEPENDENT FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION Principal Risks and Uncertainties Change Key Mitigations Financial The Company is exposed to The Directors acknowledge that market risk is inherent in the investment process. market price risk (i.e. performance The Portfolio Manager maintains a diversified portfolio which is concentrated in a of investee companies’ shares). 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 page86. Accounting, Legal and Regulatory The Company and/or the The Board monitors regulatory change with the assistance of its AIFM, Portfolio Directors fail to comply with their Manager and external professional advisers to ensure compliance with legal and regulatory obligations. 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 The Board reviews all information supplied to Shareholders and the AIFM’s marketing governance best practice or activity at each meeting. Details of the Company’s compliance with corporate errors or irregularities in published governance best practice, including information on relationships with Shareholders, are information could lead to censure set out in the Corporate Governance Report on pages 45 to 51. and/or result in reputational damage to the Company. ### EMERGING RISKS During the year, the Audit Committee conducted an exercise The experience and knowledge of the Directors is useful in to identify and assess any new or emerging risks affecting the these discussions, as are update papers and advice received Company and to take any necessary actions to mitigate their from the Board’s key service providers such as the Portfolio impact. Manager, the AIFM and the Company’s broker. In addition, the Company is a member of the AIC, which provides regular The Audit Committee regularly reviews the risk register. The technical updates as well as drawing members’ attention to scoring of each risk and any emerging risks are discussed forthcoming industry and/or regulatory issues and advising on in detail as part of this process to ensure that emerging as compliance obligations. well as known risks are identified and, so far as practicable, mitigated. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 23 ### STRATEGIC REPORT BUSINESS REVIEW – CONTINUED As well as offering investment opportunities, the Board • With an ongoing charges ratio of 0.61%, the expenses of believes the development and exploration of technological the Company are predictable and modest in comparison breakthroughs, such as artificial intelligence, may damage the with the assets and there are no capital commitments revenue and operations of portfolio companies to the extent foreseen which would alter that position; that they no longer offer the promise of returns consistent with • Expenses of the Company are covered more than four the Company’s investment objective. times by investment income; During the year, the Board identified the global standing of • The closed-ended nature of the Company means that, the London Stock Exchange as an emerging risk. International unlike an open-ended fund, it does not need to realise competition for new listings and a significant number of market investments when Shareholders wish to sell their shares; departures could mean it is harder for a UK equity strategy to capture exposure to important global growth themes. • The founder directors of Lindsell Train Limited have given their verbal assurance that they remain committed to To mitigate these risks the Board holds monthly portfolio Lindsell Train Limited for at least seven years on a rolling update meetings with the Portfolio Manager, who continues to basis; and monitor the situation closely. • The Company has no employees, only its Non-Executive The Committee will continue to review newly emerging risks Directors. Consequently it does not have redundancy or that arise from time to time to ensure that the implications for other employment-related liabilities or responsibilities. the Company are properly assessed and mitigating controls introduced where necessary. The Audit Committee has considered the potential impact of its principal risks on pages 20 to 23 and various severe ### FUTURE DEVELOPMENTS but plausible downside scenarios as well as stress testing and reverse stress testing. It has also made the following The Board’s primary focus is on the Portfolio Manager’s assumptions in considering the Company’s longer-term investment approach and performance. The subject is viability: thoroughly discussed at every Board meeting. • There will continue to be demand for investment In addition, the AIFM updates the Board on Company companies; communications, promotions and investor feedback, as well as wider investment company issues. • The Board and the Portfolio Manager will continue to adopt a long-term view when making investments, and An outline of performance, investment activity and strategy, anticipated holding periods will be at least five years; and market background during the year, as well as the outlook, is provided in the Chairman’s Statement beginning • The Company invests principally in the securities of UK on page 6 and the Portfolio Manager’s Review beginning on listed companies to which investors will continue to wish to page10. have exposure; It is expected that the Company’s strategy will remain • The Company will maintain its bank loan facility; unchanged in the coming year. • Regulation will not increase to a level that makes running the Company uneconomical; and ### LONG-TERM VIABILITY STATEMENT The Directors have carefully assessed the Company’s financial • The performance of the Company will be satisfactory. position and prospects as well as the principal risks facing The Board’s long-term view of viability will, of course, be the Company and have formed a reasonable expectation updated each year in the Company’s Annual Report. 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; 24 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 FINANCIAL INDEPENDENT FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION ### 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 The benefits of engagement with the How the board, the AIFM and the Portfolio Manager group Company's stakeholders have engaged with the Company's stakeholders Investors Clear communication of the Company’s The AIFM and the Portfolio Manager, on behalf of the Board, strategy and the performance against the complete a programme of investor relations throughout theyear. Company's objective can help the share price An analysis of the Company’s shareholder register is provided trade closer to its NAV per share which benefits to the Directors at each Board meeting along with marketing Shareholders. reports from Frostrow. The Board reviews and considers the New shares may be issued to meet demand marketing plans on a regular basis. Reports from the Company’s without net asset value per share dilution to broker are submitted to the Board on investor sentiment and existing Shareholders. Increasing the size of industry issues. the Company can benefit liquidity as well as Key mechanisms of engagement include: spread costs. • The Annual General Meeting Under the share buy-back policy, the | Company will normally buy in shares being | • The Chairman, the incoming Chairman and the Senior | | | --- | --- | --- | | offered on the stock market whenever the | | Independent Director make themselves available to engage | | discount approaches a level of 5% and then | | with Shareholders | either hold those shares in Treasury or cancel • The Chairman writes to major Shareholders each year them. Any shares held in Treasury can later be offering them the opportunity to meet with himself and the sold back to the market if conditions permit. 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 25 ### STRATEGIC REPORT BUSINESS REVIEW – CONTINUED Stakeholder The benefits of engagement with the How the board, the AIFM and the Portfolio Manager group Company's stakeholders have engaged with the Company's stakeholders Portfolio Engagement with the Company's Portfolio The Board meets regularly with representatives of the Portfolio Manager Manager is necessary to: Manager throughout the year, with quarterly presentations and also monthly performance and compliance reporting. • evaluate their performance against This provides the opportunity for both the Board and Portfolio the Company's stated strategy and to Manager to explore and understand how the portfolio has understand any risks or opportunities this performed and what may be expected in the future. may present. The Board receives regular updates from the Portfolio Manager • better understand the internal controls in concerning engagement on ESG matters with the companies place at Lindsell Train. within the portfolio. The Board ensures that the Portfolio Manager's The Audit Committee also meets with members of the risk ESG approach meets standards set by management and investment compliance teams at Lindsell theBoard. 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 page29. 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 The Company contracts with third parties The Board and Frostrow engage regularly with other service Providers for other services including: depositary, providers both in one-to-one meetings and via regular written investment accounting & administration as reporting. This regular interaction provides an environment well as company secretarial and registrars. where topics, issues and business development needs can be The Company ensures that the third parties dealt with efficiently and collegiately. to whom the services have been outsourced The Audit Committee reviews Frostrow’s AAF controls report complete their roles in line with their service annually and no issues have been identified. level agreements and are able to continue to provide these services, thereby supporting the Company in its success and ensuring compliance with its obligations. 26 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 FINANCIAL INDEPENDENT FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION Stakeholder The benefits of engagement with the How the board, the AIFM and the Portfolio Manager group Company's stakeholders have engaged with the Company's stakeholders The Company's Investment companies have the ability to Regular reporting to the lender with respect to adherence with Lender borrow with a view to enhancing long-term loan covenants and ad hoc meetings with the AIFM. 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. Key areas of engagement Main decisions and actions taken Investors The impact of market volatility caused by certain geopolitical Shareholders are provided with performance updates via the events on the portfolio. 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 Portfolio Manager and Frostrow meet regularly with the Company, performance and the portfolio. 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 ofMeeting. 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 27 ### STRATEGIC REPORT BUSINESS REVIEW – CONTINUED Key areas of engagement Main decisions and actions taken Portfolio Manager Portfolio composition, performance, ESG matters, outlook, and The Portfolio Manager has set ESG targets and engages regularly business updates. 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 The Board has received regular updates from the Portfolio some companies in the portfolio have sought to take advantage Manager throughout the recent period of market volatility, of the increase of digitisation and AI. including its impact on investment decision making. The integration of ESG into the Portfolio Manager’s investment The Portfolio Manager reports regularly any ESG issues in the processes. 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 The Board met regularly with Frostrow (the AIFM), does not have employees. Its main stakeholders therefore representatives of which attend every Board meeting comprise its Shareholders and a small number of service to provide updates on risk management, accounting, providers. administration and corporate governance matters. The Board has delegated a wide range of activities to external Reviews of the Company’s service providers have been positive agents, in addition to the Portfolio Manager. and the Directors believe their continued appointment is in the best interests of the Company. The Company has invested in These services include AIFM, investment administration, Frostrow and The Lindsell Train Investment Trust plc. Further management and financial accounting, Company Secretarial details can be found on the Company’s website. 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. 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 page59 for further information. The Company’s Lender Continued compliance with covenants set out within the loan The Board ensures compliance with loan covenants throughout agreement between the Company and the lender. the year. 28 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 FINANCIAL INDEPENDENT FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCESTRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTS AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION ### 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 Furthermore, Lindsell Train argues that companies which observe such standards, and that are serious in their intention At the heart of the investment approach at Lindsell Train of addressing environmental and social factors, will not only Limited (“Lindsell Train”) is a conviction that inefficiencies become more durable, but will likely prove to be superior exist in the valuation of ‘exceptional’ companies. Specifically, investments over time. Lindsell Train believes that durable, cash generative franchises are not only rare but also appear to be undervalued by other Lindsell Train’s initial analysis and ongoing company investors for most of the time. Nick Train and the investment engagement strategy seeks to incorporate all sustainability team invest in such ‘exceptional’ companies with the factors that they believe will affect the company’s ability to expectation of holding them for the very long term. It is the deliver long-term value to Shareholders. Such factors may resultant long-term partnerships that they build with portfolio include but are not limited to: environmental (including companies that form the cornerstone of their approach to ESG climate change), social and employee matters (including and Responsible Investing. turnover and culture) and governance factors (including remuneration and capital allocation), cyber resilience, The truly strategic time horizon (note that the long-term responsible data utilisation, respect for human rights, anti- turnover of the Company is under 5%, which implies an corruption and anti-bribery, and any other risks or issues average holding period of 20 years) means the investment facing the business and its reputation. This work is catalogued team at Lindsell Train must be continually alert to all relevant in a proprietary database (Sentinel) of risk factors in order to long-term issues, with the objective of pre-empting risk and centralise and codify the team’s views, as well as to prioritize enhancing returns. Hence the consideration of all ESG factors Lindsell Train’s ongoing research and engagement work and is which might affect holdings and potential holdings has always cross-referenced with the SASB Materiality Map ©. been central to the investment approach. Historically, Lindsell Train has typically found that ‘exceptional’ companies tend If, as a result of this assessment, Lindsell Train believes that an to exhibit characteristics associated with good corporate ESG factor is likely to materially impact a company’s long-term governance and responsible business practices. 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 The average age of alongside the team’s more qualitative research will influence holdings currently held any final portfolio decisions (for example, whether Lindsell Train in the Company is over starts a new position or sell out of an existing holding). In Lindsell Train’s experience, companies with poor corporate ## 146 years* governance do not * excluding Frostrow Capital LLP and tend to have such The Lindsell Train Investment Trust plc longevity. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 29 ### STRATEGIC REPORT BUSINESS REVIEW – CONTINUED CASE STUDY ### ESG EVALUATION FOR INVESTMENT Positive / Negative Screening ### BUY CASE The characteristics that Lindsell Train seeks in its investee Lindsell Train’s long-term investment approach means companies means that it typically invests in a fairly narrow that it seldom buys and sells new holdings. Indeed, over set of sectors and industries, and avoids others altogether. For the past five years, Portfolio Manager Nick Train has example, Lindsell Train has typically avoided: only added three new companies to the Company’s • capital intensive industries (energy, commodities or portfolio. The most recent of these was Rightmove, mining) or any companies involved in the extraction and which was first bought in Q4 2023. Consideration of production of coal, oil or natural gas. The Company’s ESG risk and opportunity is integrated into the pre- exposure to the Energy sector is 0%. investment work that Lindsell Train does on all holdings, and indeed Rightmove has been monitored on Sentinel • industries that Lindsell Train judges to be sufficiently – Lindsell Train’s ESG risk and opportunity database – detrimental to society that they may be exposed to for a number of years, as it has long been considered a burdensome regulation or litigation that could impinge serious potential investment. on financial returns. The Company’s exposure to Tobacco, Gambling and Arms Manufacturers is 0%. 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 COMPANY SECTOR/INDUSTRY EXPOSURE comfortable that it does not pose an existential threat | to the business. In the case of Rightmove, the UK’s | Consumer Staples (”CS”) | 28.7% | | --- | --- | --- | | largest online property portal, Lindsell Train identified no | Financials (”F”) | 25.2% | | ESG risks that the team deemed materially significant. | Consumer Discretionary (”CD”) | 22.4% | | Perhaps the key risk – common to all data owners – | Industrials (”I”) | 13.5% | is the potential for leakage of sensitive information Technology (”T”) 10.2% (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 Similarly, Lindsell Train’s investment approach has steered Nick the housing market also brings opportunity, as political Train (who is also Chairman of Lindsell Train’s ESG Committee) changes drive more demand for data on properties and the investment team to invest in a number of companies – for example the mandatory displaying of Energy that play an important positive social or environmental role, for Performance Certificate (“EPC”) ratings on all houses example through providing access to educational information put on the market – and Rightmove has more data (RELX), encouraging saving for the future (Schroders, than anybody in the UK. Hargreaves Lansdown) or encouraging environmental progress and developing best practice (e.g., Diageo, As a capital-light, primarily digital company with low Mondelez). Lindsell Train believes that such positive benefits carbon emissions, Rightmove’s inclusion marginally for society should be consistent with its aim to generate decreases the weighted carbon footprint of the competitive long-term returns, thus helping it meet its clients’ Portfolio. Additionally, from a net zero alignment investment objectives. Furthermore, through its engagement perspective, Rightmove is currently “Aligning”, which strategy, Lindsell Train increasingly seeks to encourage and suggests that the company is moving in the right support its companies to meet their own ESG commitments direction; however we will engage with management with the aim of improving standards and enhancing returns. to encourage further progress. 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. 2024 2023 38.0% 23.4% 22.3% 8.4% 30 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 7.9% Source: Frostrow Capital LLP | | 2024 | 2023 | | --- | --- | --- | | Consumer Staples (”CS”) | 28.7% | 38.0% | | Financials (”F”) | 25.2% | 23.4% | | Consumer Discretionary (”CD”) | 22.4% | 22.3% | | Industrials (”I”) | 13.5% | 8.4% | | Technology (”T”) | 10.2% | 7.9% | Source: Frostrow C apital LL P STRATEGIC REPORT GOVERNANCE INDEPENDENT^{}[] STATEMENT REPORT FINANCIAL RIGHT^{}[] STATEMENTS REPORT FURTHER^{}[] INFORMATION ## 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) [tCO$_{2}$e/EM Sales] ![img-6.jpeg](img-6.jpeg) ### CARBON FOOTPRINT BY EVIC\* (tCO$_{2}$e/EM invested) ![img-7.jpeg](img-7.jpeg) 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 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 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 CO$_{2}$ 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 31 ### STRATEGIC REPORT BUSINESS REVIEW – CONTINUED With regards to the current status of Lindsell Train portfolios, remained broadly unchanged over the two years, though Lindsell Train has not yet formally published its progress as at we have identified examples where companies have made 2024; however Lindsell Train has committed to do so in early progress. For example, Young & Co Brewery has advanced 2025 once it has had a chance to digest the revised Net Zero from “Committed to Aligning” to the “Aligning” stage. If there Investment Framework “NZIF 2.0”, which was released in June are cases of companies not making adequate progress, we this year. will continue to remind management of our expectations and point them to similar companies where we have identified Whilst Lindsell Train has not formally published a figure for 2024 improvements, to encourage collaboration, as well as at a portfolio level, it has been encouraged by the progress of supplying details of potentially useful ‘gold standard’ resources a number of companies over the past year, including some such as the Science Based Targets Initiative. that are held in the Trust. Our engagement work this year has shown that the introduction of mandatory TCFD reporting Lindsell Train’s clients have urged it to set realistic targets and has had the desired effect of driving progress and supporting the investment team feel strongly that targets should be set consistency of reporting. Where action is not mandated, there in line with industry expectation, which they truly believe are is a risk that certain companies or geographies fail to prepare achievable and will therefore strive to meet or better. The 55% appropriately for the costs and business risks brought about target figure is above the IIGCC’s recommendation that 50% by the climate emergency’s physical and transition risks. of portfolio companies should be “Aligned” by 2030 and is also philosophically in line with the requirement to deliver a fair Two years on from having measured our baseline and set share of the 50% global reduction in CO2 emissions by 2030, our interim target, we are pleased with the progress that identified as a requirement in the IPCC special report on global has been made by the companies within the portfolio. The warming of 1.5°C. chart below shows the progress made by all strategies at Lindsell Train, including the UK Equity Strategy of which Further information on Lindsell Train’s TCFD related disclosures the Company forms a part. The proportion of companies can be found in its 2023 TCFD Report, which can be found on aligned, aligning, committed to aligning and not aligned Lindsell Train’s website. 2022 2023 | 80% | | | | | | 80% | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 60% | | | | | | 60% | | | | | | | 40% | | | | | | 40% | | | | | | | 20% | | | | | | 20% | | | | | | | 0% | | | | | | 0% | | | | | | | | LT Combined | Global | Japan | UK | North | | LT Combined | Global | Japan | UK | North | | | Strategies | Equities | Equities | Equities | American | | Strategies | Equities | Equities | Equities | American | | | | | | | Equities | | | | | | Equities | | | Not Aligned Committed to Aligning Aligning Aligned | | | | | | Not Aligned Committed to Aligning Aligning Aligned | | | | | 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 100% 100% 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. 32 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 FINANCIAL INDEPENDENT FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION ### Engagement ENGAGEMENT BY TOPIC 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 Governance Structure & Policies 42% senior management, board members, or if appropriate with Capital Allocation & Strategy 40% the company chairperson or the senior non-executive director. Remuneration 6% The feedback from these meetings is then discussed amongst Human Rights 3% the Investment Team. In some instances, the matter on Other Social (e.g. supply chain, health & nutrition) 9% which it is engaging is swiftly resolved, and in other cases, the response may be a multistage, multi-year process. As long as Source: Lindsell Train. 1 October 2023 – 30 September 2024. 12 topics raised the dialogue is constructive and ongoing, and management with 13 companies. 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 33 ### STRATEGIC REPORT BUSINESS REVIEW – CONTINUED CASE STUDY | ENGAGEMENT CASE STUDY | Proxy Voting | | --- | --- | | Company name: Unilever | The primary voting policy of Lindsell Train is to protect or | | Year Founded: 1929 | enhance the economic value of its investments on behalf of | its clients. Lindsell Train has appointed Glass Lewis to aid the Year FGT first invested: 2000 administration of proxy voting and provide additional support Sector: Consumer Staples in this area. However, the Investment Team maintains decision Engagement topics: Capital Allocation & Strategy and making responsibility based on its detailed knowledge of the Reputation investee companies. It is Lindsell Train’s policy to exercise all Date of engagements: July 2024 voting rights which have been delegated to Lindsell Train by Engagement format: Call its clients. Reason for Engagement: Ongoing engagement regarding Unilever’s capital allocation and strategy. Voting record for companies held in Finsbury Growth & Income Trust PLC: During the second half of 2023, the Lindsell Train investment team engaged with Unilever on its decision Management Shareholder Total to retain its presence in Russia, and changes to capital Proposals Proposals Proposals allocation & strategy. On Russia, it sought justification for With Management 382 3 385 this decision and, whilst the team recognises that there was no easy choice, Lindsell Train conveyed its expectation Against Management 0 0 0 that management would keep the situation under active review with the hope of finding the ‘least worst’ outcome. Abstain 0 1 1 As we are long-term holders of Unilever in both our UK and Totals 382 4 386 Global strategy, we have continued to engage regularly Source: Glass Lewis. 1 October 2023 – 30 September 2024. with management over our holding period. During 2024, we closely monitored Unilever’s position in Russia and Votes against management and abstentions have typically were pleased to receive confirmation that the company been in the low single-digit range. As mentioned above, had completed the sale of the Russian subsidiary during the main reason for this is that our long-term approach to October this year. investment generally leads us to be supportive of company Separately, during Q3 2024, following news that Unilever management. Furthermore, it is Lindsell Train’s aim to be will spin off its ice cream business, we reignited our invested in ‘exceptional’ companies with strong corporate engagement with CFO, Fernando Fernandes, to review governance and hence it ought to be rare that Lindsell Train capital allocation and strategic priorities. We were finds itself in a position where it is voting against management. particularly interested to understand why Unilever continues to maintain substantial debt on its balance During Q2 2024, Lindsell Train abstained on a shareholder sheet. Fernandes reconfirmed Unilever’s capital allocation proposal for Mondelez, proposing an independent chair. policy, which remains unchanged, noting that the business In general, Lindsell Train has a preference for chairs to be priority remains focused on increasing volume growth to independent, though we sympathise with management’s view 2+%, up from 1% at present. From a strategic perspective, that the existing set-up is appropriate for the business. As a the CFO is acutely alert to the need to be in premium result, we decided to abstain on this resolution rather than segments with global scalability and so future capital vote against. 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. 34 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 FINANCIAL INDEPENDENT FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION ### 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 ### STRATEGIC REPORT BUSINESS REVIEW – CONTINUED ### INTEGRITY AND BUSINESS ETHICS MANAGEMENT ARRANGEMENTS The Company is committed to carrying out business in an ### Alternative Investment Fund Manager (“AIFM”) honest and fair manner. The Board has adopted a zero- Under the terms of its AIFM agreement with the Company, tolerance approach to instances of bribery and corruption. Frostrow provides, inter alia, the following services: Accordingly, it expressly prohibits any Director or associated persons when acting on behalf of the Company from • oversight of the portfolio management function delegated to Lindsell Train; accepting, soliciting, paying, offering or promising to pay or authorise any payment, public or private, in the United • promotion of the Company; Kingdom or abroad to secure any improper benefit from • investment portfolio administration and valuation; themselves or for the Company. • risk management services; • share price discount and premium management; The Board applies the same standards to its service providers • administrative and company secretarial services; in their activities for the Company. • advice and guidance in respect of corporate governance A copy of the Company’s Anti Bribery and Corruption requirements; Policy can be found in the Board and Policies section of the • maintenance of the Company’s accounting records; Company’s website. The policy is reviewed annually by the • maintenance of the Company’s website; Audit Committee. • preparation and publication of annual reports, half year In response to the implementation of the Criminal Finances reports and monthly fact sheets; and Act 2017, the Board adopted a zero-tolerance approach to the • ensuring compliance with applicable legal and regulatory criminal facilitation of tax evasion. A copy of the Company’s requirements. policy on preventing the facilitation of tax evasion can be The AIFM Agreement may be terminated by either party on found in the Board and Policies section of the Company’s giving notice of not less than 12 months. website. The policy is reviewed annually by the Audit ### Committee. Portfolio Manager Lindsell Train, as delegate of the AIFM, is responsible for the In carrying out its activities, the Company aims to conduct management of the Company’s portfolio of investments under itself responsibly, ethically and fairly, including in relation to an agreement between it, the Company and Frostrow (the social and human rights issues. As an investment company “Portfolio Management Agreement”). with limited internal resource, the Company has little Under the terms of its Portfolio Management Agreement, impact on the environment. The Company believes that Lindsell Train provides, inter alia, the following services: high standards of ESG make good business sense and have the potential to protect and enhance investment returns. • seeking out and evaluating investment opportunities; Consequently, the Portfolio Manager’s investment criteria • recommending the manner by which monies should be ensure that ESG and ethical issues are taken into account invested, realised or retained; and best practice is encouraged. The Board’s expectations • advising on how rights conferred by the investments are that its principal service providers have appropriate should be exercised; governance policies in place. • analysing the performance of investments made; and • advising the Company in relation to trends, market ### COMPANY PROMOTION movements and other matters which may affect the The Company has appointed Frostrow to promote the investment objective and policy of the Company. Company’s shares to professional investors in the UK and The Portfolio Management Agreement may be terminated by Ireland. As investment company specialists, the Frostrow team either party on giving notice of not less than 12 months. provides a continuous, proactive marketing and investor ### Annual Fees relations service that aims to promote the Company by encouraging demand for the shares. PORTFOLIO FEES ON THAT PART OF MARKET CAP AIFM 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. 36 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 FINANCIAL INDEPENDENT FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION • monitoring the Company’s compliance with investment ### AIFM AND PORTFOLIO MANAGER EVALUATION restrictions and leverage limits set by the Board and the AIFM. ### AND RE-APPOINTMENT In accordance with the AIFM Rules the Depositary acts as The performance of Frostrow as AIFM and Lindsell Train as global custodian and may delegate safekeeping to one or Portfolio Manager is continuously monitored by the Board with more global sub-custodians. The Depositary has delegated a formal evaluation being undertaken each year. As part of safekeeping of the assets of the Company to The Bank of New this process the Board monitors the services provided by the York Mellon SA/NV and/or The Bank of New York Mellon (The AIFM and the Portfolio Manager as well as receiving regular Global Sub-custodians). reports and views from them. The Board has also considered the assessment carried out by the AIFM as required by the As at the date of this report, the applicable active sub- FCA’s Consumer Duty obligations, that the Company’s Shares custodians appointed by the Depositary who might be provide fair value. It also receives comprehensive long-term relevant for the purposes of holding the Company’s performance measurement reports to enable it to determine investments are: whether or not the performance objective set by the Board has been met. COUNTRY NAME OF SUB-CUSTODIAN REGULATOR Following a review at the Board meeting in September 2024, The Netherlands The Bank of New York Financial Services the Board considers that the continuing appointment of Mellon SA/NV and Markets Frostrow and Lindsell Train, under the terms described above, Authority, Belgium is in the best interests of the Company’s Shareholders. In United States The Bank of New York US Securities coming to this decision, it took into consideration the following of America Mellon, New York and Exchange additional reasons: Commission • the quality and depth of experience of the company France The Bank of New York The Autorité des secretarial, administrative and marketing team that the Mellon SA/NV Marchés Financiers AIFM brought to the management of the Company; and • the quality and depth of experience that the Portfolio ### Custodian Manager brought to the management of the portfolio, the The Global Sub-Custodians’ safekeeping fees are charged clarity and rigour of the investment process, consideration according to the jurisdiction in which the holdings are based. of ESG targets, the high degree of engagement with The majority of the Company’s assets attract a custody fee portfolio companies on ESG matters, the level of past of 0.0033% of their market value. Variable transaction fees are long-term performance of the portfolio in absolute terms also chargeable. and also by reference to the benchmark index. The Depositary Agreement may be terminated by either party ### Depositary on giving notice of not less than 90 days. The Bank of New York Mellon (International) Limited (the “Depositary”) acts as the Company’s depositary in accordance On behalf of the Board 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: Simon Hayes • responsibility for the safe-keeping of custodial assets of Chairman the Company; • verification and maintenance of a record of all other 3 December 2024 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 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 37 ### GOVERNANCE ## Board of Directors ## 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. ### SIMON HAYES SANDRA KELLY, ACA JAMES ASHTON Chairman Chair of the Audit Committee Non-Executive Director and Senior Independent Director | Simon Hayes has served on the | Sandra Kelly has served on the Board | James Ashton has served on the | | --- | --- | --- | | Board since 29 June 2015 and was | since 9 October 2019. A Chartered | Board since 14 October 2020. James | | appointed as Chairman with effect | Accountant, she was formerly | is Chief Executive of the Quoted | | from 17 February 2021. Simon was | Finance Director of the Canal & River | Companies Alliance, a membership | | Chairman of Peel Hunt Limited until | Trust. Prior to that she spent eight | body which represents the interests | | July 2022. He joined Peel Hunt in | years as Finance Director at NHBC | of small and mid-sized publicly | | 1993 and was appointed Head of | (National House-Building Council). | traded companies with government, | | Corporate Finance in 2003, Chief | She is a Trustee of the Land Trust. | regulators and the media. He is the | | Executive in 2006 and Chairman in | She previously held senior finance | author of several business books and | | 2016. | positions in the commercial sector, | chairs Oscar’s Book Prize, the annual | | | most notably for BMW GB. | 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. | Number of shares held* 200,000 | | Number of shares held* 8,096 | | Number of shares held* 1,575 | | | --- | --- | --- | --- | --- | --- | | Annual Remuneration* £43,000 | | Annual Remuneration* £35,000 | | Annual Remuneration* £28,500 | | | Shared directorships with | | Shared directorships with | | Shared directorships with | | | | None | | None | | None | | other Directors | | other Directors | | other Directors | | All members of the Board are Non-Executive and serve as members of the Audit Committee. *Information as at 30 September 2024 38 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 INDEPENDENT FINANCIAL FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION ### KATE CORNISH-BOWDEN PARS PUREWAL, FCA LORNA TILBIAN Non-Executive Director Non-Executive Director Non-Executive Director | Kate Cornish-Bowden has served | Pars Purewal has served on the | Lorna Tilbian has served on the | | --- | --- | --- | | on the Board since 26 October 2017. | Board since 28 November 2022. | Board since 26 October 2017. Lorna | | Kate was formerly a Fund Manager | Pars has broad investment sector | is a Non-Executive Director and | | for Morgan Stanley where she was | experience gained over a 38-year | Senior Independent Director of | | Managing Director and head of the | career at PricewaterhouseCoopers | Premier Foods plc, ProVen VCT plc | | global core equity team. Kate is a | LLP, including 25 years as Partner | and a Non-Executive Director of | | Non-Executive Director and Chair of | across the business’ Audit and | Rightmove plc where she chairs the | | the Audit Committee at CC Japan | Advisory, People, Sales and UK | Remuneration Committee. Lorna | | Income & Growth Trust plc, the Non- | Asset Management teams. Pars is a | is also Chair of Dowgate Capital | | Executive Chairman of International | Fellow of the Institute of Chartered | Ltd. She was formerly an Executive | | Biotechnology Trust plc and a Non- | Accountants in England and Wales, | Director of Deutsche Numis, a Non- | | Executive Director and the Senior | the Chair of Royal London Asset | Executive director of Euromoney | | Independent Director of European | Management Limited, aNon- | Institutional Investor PLC, Jupiter | | Assets Trust PLC. She was formerly | Executive Director on the boards of | UK Growth Investment Trust PLC | | a Non-Executive Director and Senior | The Royal London Mutual Insurance | and M&C Saatchi PLC, a Director | | Independent Director at Schroder | Society Limited and The Law | of Dowgate Wealth Ltd, WestLB | | Oriental Income Fund Limited. | Debenture Corporation plc. He was | Panmure Limited and S G Warburg | | | formerly on the boards of Brewin | Securities. | Dolphin Holdings PLC, Federated Hermes Limited and Beyond Food Foundation. | Number of shares held* 10,200 | | Number of shares held* 17,802 | | Number of shares held* 11,500 | | | --- | --- | --- | --- | --- | --- | | Annual Remuneration* £28,500 | | Annual Remuneration* £28,500 | | Annual Remuneration* £28,500 | | | Shared directorships with | | Shared directorships with | | Shared directorships with | | | | None | | None | | None | | other Directors | | other Directors | | other Directors | | All members of the Board are Non-Executive and serve as members of the Audit Committee. *Information as at 30 September 2024 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 39 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 30 September 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 page 58. 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 Act 2010. 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 page 72. 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 30 September 2024 a total of £29.2 million was drawn down from this facility (2023: £36.7 million) which equates to gearing of 0.7%. ## DIRECTORS The current Directors of the Company are listed on pages 38 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. 40 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 STRATEGIC REPORT GOVERNANCE ENVIRONMENT STATEMENT REPORT FINANCIAL STATEMENTS REPORT FURTHER INFORMATION ## 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 Annual Report. 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 23 August 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 41 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. ### PROFILE OF THE COMPANY'S OWNERSHIP % OF SHARES HELD AT 30 SEPTEMBER 2024 ![img-8.jpeg](img-8.jpeg) Source: EquinB ROIR 42 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 STRATEGIC REPORT GOVERNANCE INDEPENDENT STATEMENTS REPORT FINANCIAL STATEMENTS REPORT FURTHER INFORMATION ## 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 change to 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. ### 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 43 ### GOVERNANCE REPORT OF THE DIRECTORS – CONTINUED ### Independent Auditor GOING CONCERN Following an audit tender which commenced in December The Company’s portfolio, investment activity, the Company’s 2023, a resolution to appoint Deloitte LLP as the Company’s cash balances and revenue forecasts, the trends and factors auditor and authorise the Audit Committee to determine its likely to affect the Company’s performance are reviewed and remuneration will be proposed at the forthcoming Annual discussed at each Board meeting. The Board has considered General Meeting. Further details of the audit tender are included a detailed assessment of the Company's ability to meet its in the Chairman’s Statement and the Report of the Audit liabilities as they fall due, including stress tests and reverse Committee. stress tests which modelled the effects of substantial falls in portfolio valuations and liquidity constraints on the Company’s ### Statement of Disclosure of Information to the NAV, cash flows and expenses. ### Auditors Based on the information available to the Directors at the date So far as the Directors are aware, there is no relevant of this report, including the results of these stress tests, the information (as defined in the Companies Act 2006) of which conclusions drawn in the Viability Statement in the Strategic the Company’s Auditors are unaware. The Directors have Report beginning on page 24, the Company’s cash balances taken all steps they ought to have taken to make themselves and access to funding, the Directors are satisfied that the aware of any relevant audit information (as defined) and to Company has adequate financial resources to continue in establish that the Auditors are aware of such information. operation for at least the next 12 months from the date of The above confirmation is given and should be interpreted approval of this report and that, accordingly, it is appropriate in accordance with the provisions of Section 418 of the to continue to adopt the going concern basis in preparing the Companies Act 2006. 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 44 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 INDEPENDENT FINANCIAL FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION ## Corporate Governance model and how its governance contributes to the delivery ### CORPORATE GOVERNANCE STATEMENT of its strategy. The Company’s investment objective and The Board is committed to maintaining and demonstrating investment policy are set out on pages 1 and 17. The Board’s high standards of corporate governance. The Board has key responsibilities are to set the Company's strategy, values considered the principles and recommendations of the AIC and standards; to provide leadership within a controls Code of Corporate Governance (the “AIC Code”). The AIC framework which enables risks to be assessed and managed; Code addresses all the principles set out in the UK Corporate to challenge constructively and scrutinise performance of all Governance Code issued by the Financial Reporting Council outsourced activities; and to review regularly the contracts, (“FRC”) (the “UK Code”), as well as setting out additional performance and remuneration of the Company’s principal principles and recommendations on issues that are of specific service providers and, in particular, the Portfolio Manager. relevance to investment companies. ### Board Committees The Board considers that reporting against the principles The Directors have decided that, given the size of the Board, and recommendations of the AIC Code will provide the best it is unnecessary to form separate Remuneration and information to Shareholders and the FRC has confirmed that Nomination Committees; the duties that would ordinarily fall to by following the AIC Code, boards of investment companies those Committees are carried out by the Board as a whole. will meet their obligations in relation to the UK Corporate ### Governance Code and associated disclosure requirements The Audit Committee under paragraph 6.6.6 of the UK Listing Rules. The Corporate The Audit Committee’s key responsibilities are to monitor Governance Code can be viewed at www.frc.org.uk. The AIC the integrity of the Annual Report and Financial Statements; Code is available on the AIC website (www.theaic.co.uk). to oversee the risk and control environment and financial Itincludes an explanation of how the AIC Code adapts the reporting; and to review the performance of the Company’s external auditor. Principles and Provisions set out in the Corporate Governance Code to make them relevant for investment companies. All Independent non-executive Directors are members of the Committee. Although Simon Hayes is Chairman of the In January 2024 the FRC published a revised UK Corporate Board, in light of his continued independence and his valued Governance Code which will apply to financial years beginning contributions in Committee meetings, the Audit Committee on or after 1 January 2025. The 2018 UK Code remains in place considers it appropriate that he continues to be a member. until this time. The Board will consider the updated provisions Copies of the full terms of reference, which clearly define the concerning internal control of both the new UK Code and the responsibilities of the Audit Committee, can be obtained from revised AIC Code in due course. the Company Secretary. They will be available for inspection at the Annual General Meeting or at the offices of the Company ### STATEMENT OF COMPLIANCE Secretary and can be found in the Corporate Information The Company has complied with the recommendations of the section on the Company’s website. AIC Code and the relevant provisions of the UK Code, except in ### relation to certain provisions relating to: Board Meetings • the role of the chief executive; Representatives of the Portfolio Manager, AIFM and Company Secretary are expected to be present at all meetings. The • executive directors’ remuneration; and primary focus at Board meetings is a review of investment • the need for an internal audit function. performance and associated matters. The Chairman For the reasons set out in the AIC Code, and as explained in the encourages open debate within the Board and a supportive UK Code, the Board considers these provisions are not relevant and co-operative relationship with the Company’s AIFM, to the position of the Company as it is an externally managed Portfolio Manager, advisers and other service providers. The investment company. In particular, all of the Company’s day-to- table overleaf sets out the number of formal Board and day management and administrative functions are outsourced Committee meetings held during the year ended 30September to third parties. As a result, the Company has no executive 2024 and the number of meetings attended by each Director. directors, employees or internal operations. Therefore, the In addition to the scheduled Board and Committee meetings, Company has not reported further in respect of these provisions. Directors attend ad hoc meetings to consider matters such as the approval of regulatory announcements, management ### COMPANY accounts and interimdividends. The Directors receive monthly portfolio update briefings from ### Company’s Purpose, Values and Strategy representatives of the Portfolio Manager and AIFM. 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 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 45 ### GOVERNANCE CORPORATE GOVERNANCE – CONTINUED Board Audit committee or removal of the AIFM , Portfolio Manager and other Total number of meetings 5 4 service providers, and review of the Investment Policy. Simon Hayes 5 4 • Matters relating to the Board and Board committees, James Ashton 5 4 including the terms of reference and membership of the committees, the appointment of Directors (including the Kate Cornish-Bowden 5 4 Chairman) and the determination of Directors’ remuneration. Sandra Kelly 5 4 Day-to-day operational and portfolio management is Pars Purewal 5 4 delegated to Frostrow and Lindsell Train respectively. Lorna Tilbian 5 4 The Board takes responsibility for the content of communications All of the Directors attended the Annual General Meeting in January2024. regarding major corporate issues, even if Frostrow or Lindsell Train acts as spokesperson. The Board is kept informed of ### BOARD relevant promotional material that is issued by Frostrow. ### Role of The Board ### Composition, Succession and Evaluation The role of the Board is to promote the long-term sustainable The Board seeks to ensure that it is well-balanced and success of the Company, generating value for Shareholders refreshed regularly by the appointment of new directors with and contributing to wider society. the skills and experience necessary, in particular, to replace those lost by directors’ retirements. The Board further ensures ### Board Leadership and Purpose that it is comprised of members who collectively: Responsibility for effective governance and for the overall management of the Company’s affairs lies with the Board. The i. display the necessary balance of professional skills, governance framework of the Company reflects the fact that experience, length of service and industry/Company as an investment company it outsources company secretarial, knowledge; and administration, marketing, portfolio and risk management ii. are fit and proper to direct the Company’s business with services to Frostrow. Portfolio management is then delegated prudence and integrity; and provide policy guidance on to Lindsell Train by Frostrow. the structure, size and composition of the Board (and its Committee) and the identification and selection of suitable ### Culture candidates for appointment to the Board (and its Committee). The Board seeks to establish and maintain a corporate culture characterised by fairness in its treatment of the Company’s The composition and skills of the Board are reviewed annually service providers, whose efforts are collectively directed and at such other times as circumstances may require. towards delivering returns to Shareholders in line with the ### Board Evaluation Company’s purpose and objectives. It is the Board’s belief that this contributes to the greater success of the Company, During September and October 2024 an external independent as well as being an appropriate way to conduct relations review of the Board, its committee and individual Directors was between parties engaged in a common purpose. carried out by an independent third party, Lintstock. ### Matters Reserved For Decision By The Board The Board reviewed the report from Lintstock in November 2024 and the Chairman is leading on implementation of The Board has adopted a schedule of matters reserved for its minimal changes recommended by the report that the Board decision. This includes, inter alia, the following: considered should be made. • Requirements under the Companies Act 2006, including The review concluded that the Board worked in a collegiate, approval of the half yearly and annual financial efficient and effective manner and did not identify any statements, recommendation of any dividend, the material weaknesses or concerns. The Chairman is satisfied appointment or removal of the Company Secretary, and that the structure and operation of the Board continues to determining the policy on share issuance and buy-backs. be effective and relevant and that there is a satisfactory mix • Matters relating to certain Stock Exchange requirements of skills, experience, length of service and knowledge of the and announcements, the Company’s internal controls, and Company. the Company’s corporate governance structure, policy The Board has considered the position of all of the Directors as and procedures. part of the evaluation process and believes that it would be in • Decisions relating to the strategic objectives and overall the Company’s best interests to propose them for re-election. management of the Company, including the appointment Lintstock has no other connection with the Company or the individual Directors. 46 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 INDEPENDENT FINANCIAL FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION ### Diversity Policy Board Diversity The Board supports the principle of boardroom diversity and The Board is supportive of the FCA’s UK Listing Rules therefore the Company’s Diversity Policy applies to both the (UKLR6.6.6(9)) to encourage greater diversity on listed Board and Audit Committee. company boards and has implemented the FCA’s disclosure requirements. The Company’s policy is that the Board should be comprised of directors who collectively display the necessary balance of The Board has chosen to align its diversity reporting reference date with the Company’s financial year end and proposes to professional skills, experience, length of service and industry maintain this alignment for future reporting periods. knowledge and that appointments to the Board should be made on merit, against objective criteria, including diversity The Company met the three targets on board diversity as at in its broadest sense. The objective of the policy is to have a its chosen reference date, 30 September 2024: broad range of approaches, backgrounds, skills, knowledge (i) at least 40% of the individuals on its board of directors are and experience represented on the Board. The Board believes women; that this will make the Board more effective at promoting (ii) at least one of the following senior positions on its board of the long-term sustainable success of the Company and directors is held by a woman*: generating value for all Shareholders by ensuring there is a breadth of perspectives among the Directors and the (A) the chair; challenge needed to support good decision-making. (B) the chief executive; To this end achieving a diversity of perspectives and (C) the senior independent director; or backgrounds on the Board during the year has been, and (D) the chief financial officer; and will continue to be, a key consideration in any Director (iii) at least one individual on its board of directors is from a search process. The gender balance of three men and three minority ethnic background. women, as at the date of the Annual Report, exceeds the requirements of the UK Listing Rules. The Board is aware that The relatively small size of the Company’s Board, and therefore gender representation objectives have been set for FTSE 350 more infrequent vacancies and opportunities for recruitment, companies and that targets concerning ethnic diversity have make achieving diversity on the Board a more challenging been recommended. The Parker Review set a target for each process. As succession planning of the Board progresses FTSE 100 Board to have at least one director of colour by 2021 over future years, the Company will continue to strive for and for each FTSE 250 Board to have the same by 2024. increased diversity on its Board of which gender and ethnicity are two important aspects. Further details on the Company’s The Board will not display any bias in respect of age, gender, appointment process can be found under Appointments race, sexual orientation, religion, ethnic or national origins, to the Board on the following page. This includes engaging disability, or educational, professional or socio-economic recruitment agencies that sign up to recognised codes of background in considering the appointment of its Directors. conduct, which include principles on diversity with the aim of increasing board diversity integrated through their search processes. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 47 ### GOVERNANCE CORPORATE GOVERNANCE – CONTINUED 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. Number of Percentage Number of senior positions on the board Board members of the Board (Chair and SID)* Men 3 50% 1 Women 3 50% 1 Not specified/prefer not to say – – – Number of Percentage Number of senior positions on the board Board members of 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 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. ### In order to collect the data required to fulfil the disclosures in Appointments to the Board the tables above, the Board agreed that self-reporting by the The rules governing the appointment and replacement of individuals concerned was the most appropriate method. Directors are set out in the Company’s Articles of Association Thedata was collected anonymously by the Company and the aforementioned succession planning policy. Where Secretary using a web-based survey where the following two the Board appoints a new Director during the year or after the questions were posed, and individuals were reminded that ‘Not year end and before the notice of annual general meeting is specified / prefer not to say’ could be recorded in response: published, that Director will stand for election by Shareholders 1. For the purposes of the UK Listing Rules disclosures, how at the next Annual General Meeting. should you be categorised; and When considering new appointments, the Board endeavours to 2. Please advise your ethnicity. ensure that it has the capabilities required to be effective and oversee the Company’s strategic priorities. This will include an There have been no changes in Board composition that have appropriate range, balance and diversity of skills, experience occurred between the reference date and the date on which and knowledge. The Company is committed to ensuring that the Annual Report was approved. any vacancies arising are filled by the best qualified candidates. ### Policy on Director Tenure Subject to there being no conflict of interest, all Directors are The tenure of each non-executive Director, including the entitled to vote on candidates for the appointment of new Chairman, is not ordinarily expected to exceed nine years. Directors and to recommend to Shareholders the re-election of Directors at the Annual General Meeting. The Chairman However, the Board has agreed that the tenure of the will not chair the meeting when the Board is dealing with the Chairman may be extended for an agreed time provided appointment of his successor. such an extension is conducive to the Board’s overall orderly ### succession. The Board believes that this more flexible Induction/Development approach to the tenure of the Chairman is appropriate in New appointments to the Board are provided with a full the context of the regulatory rules that apply to investment induction programme. The programme covers the Company’s companies, which ensure that the Chairman remains investment strategy, policies and practices. New Directors are independent after appointment, while being consistent with also given key information on the Company’s regulatory and the need for regular refreshment and diversity. statutory requirements as they arise including information 48 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 INDEPENDENT FINANCIAL FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION on the role of the Board, matters reserved for its decision, the procedures are followed and that the Company complies with terms of reference for the Board committee, the Company’s applicable statutory and regulatory requirements. corporate governance practices and procedures and the latest ### financial information. Following their appointment, Directors are Directors’ Interests encouraged to participate in training courses where appropriate. The beneficial interests of the Directors in the Company are set out on page 58. ### Division of Responsibilities ### Responsibilities of the Chairman Directors’ Independence The Chairman’s primary role is to provide leadership to the As at the date of the Annual Report, the Board consists of Board, assuming responsibility for its overall effectiveness in sixnon-executive Directors, each of whom is independent of directing the company. The Chairman is responsible for: Frostrow and Lindsell Train. No member of the Board has been an employee of the Company, Frostrow, Lindsell Train or any of • ensuring that the Board is effective in its task of setting its service providers. Accordingly, the Board considers that all and implementing the Company’s direction and strategy, the Directors are independent and there are no relationships taking the chair at general meetings and Board meetings, or circumstances which are likely to affect or could appear to conducting meetings effectively and ensuring all Directors affect their judgement. are involved in discussions and decision-making; • setting the agenda for Board meetings and ensuring the The Chairman is entitled to a seat on the board of the Directors receive accurate, timely and clear information Company’s AIFM by virtue of the Company’s minority for decision-making; partnership interest in Frostrow. It is a non-executive position and therefore the Board does not believe that this • taking a leading role in determining the Board’s compromises his independence from the Company. At this composition and structure, overseeing the induction of time the Board has decided the Chairman will not take a seat new Directors and the development of the Board as a on the board of Frostrow, but continues to receive updates on whole, leading the annual board evaluation process and the business as part of the review of Frostrow's valuation. assessing the contribution of individual Directors; ### • supporting and also challenging the AIFM and the Portfolio Directors' Other Commitments Manager (and other suppliers where necessary) ensuring Each of the Directors assessed the overall time commitment effective communications with Shareholders and, where of their external appointments and it was concluded that they appropriate, other stakeholders; and have sufficient time to discharge their duties. When appointing • engaging with Shareholders to ensure that the Board has a new Directors, the Board takes into account other demands on clear understanding of shareholder views. the Directors’ time. Any additional external appointments are not undertaken without prior approval of the Board. Responsibilities of the Senior Independent Director (“SID”) The SID serves as a sounding board for the Chairman and ### Independent Professional Advice acts as an intermediary for the other Directors and the The Board has formalised arrangements under which Shareholders. The SID is responsible for: the Directors, in the furtherance of their duties, may seek • working closely with the Chairman and providing support; independent professional advice at the Company’s expense. • leading the annual assessment of the performance of the ### Chairman; RISK AND INTERNAL CONTROL • holding meetings with the other non-executive Directors The Statement of Directors’ Responsibilities on page 52 without the Chairman being present, on such occasions as describes the Directors’ responsibility for preparing this report. necessary; The Audit Committee Report, beginning on page 59, • carrying out succession planning for the Chairman’s role; explains the work undertaken to allow the Directors to make this statement and to apply the going concern basis of • working with the Chairman, other Directors and accounting. It also sets out the main roles and responsibilities Shareholders to resolve major issues; and as well as the work of the Audit Committee and describes • being available to Shareholders and other Directors to address the Directors’ review of the Company’s risk management and any concerns or issues they feel have not been adequately internal control systems. dealt with through the usual channels of communication (i.e. through the Chairman or the Portfolio Manager). A description of the principal risks facing the Company and an explanation of how they are being managed is provided in the ### Company Secretary Strategic Report on pages 20 to 24. The Directors have access to the advice and services of a specialist An overview of the Internal Controls structure of the Company company secretary, who is responsible for advising the Board on all and its service providers is shown overleaf. governance matters. The Company Secretary ensures governance FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 49 ### GOVERNANCE CORPORATE GOVERNANCE – CONTINUED ### INTERNAL CONTROLS STRUCTURE 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. Board of Directors Non-executive Sub-committee: l Audit Committee Principal third party service providers Frostrow Capital LLP The Directors (AIFM, Company Secretary and Administrator) l receive regular reporting at meetings; Reporting l review the assurance report produced by each l Statement of Financial l Compliance with investment policy and guidelines organisation; Position (monthly) l receive additional reporting on the control l Liquidity l Compliance report (quarterly) environment from each of the principal third l Income forecasts l Effectiveness of control environment party service providers; and l Portfolio valuation (semi-annually) l formally evaluate their performance on an l Portfolio transactions l Advice on regulatory changes annual basis. l Investment limits and restrictions (monthly) 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) 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) Secondary third party service providers The Directors Link Group Winterflood Securities Limited (Registrar) (Corporate Broker) l receive ad hoc reporting on their activities at l Effectiveness of control environment l Effectiveness of control environment meetings. (annually) (annually) 50 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 INDEPENDENT FINANCIAL FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION ### STAKEHOLDERS ANNUAL GENERAL MEETING The Annual General Meeting will be held at 12 noon on ### Reporting on Engagement with Stakeholders Tuesday, 28 January 2025. The formal notice of the Annual The AIC Code requires directors to explain their statutory duties General Meeting is set out in the accompanying circular to as stated in Sections 171–177 of the Companies Act 2006. Under Shareholders, together with explanations of the resolutions and Section 172, directors have a duty to promote the success of arrangements for the meeting. the Company for the benefit of its members as a whole and in doing so have regard to the consequences of any decisions By order of the Board 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. Frostrow Capital LLP Company Secretary ### Nominee Share Code 3 December 2024 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 51 ### GOVERNANCE ## Statement of Directors’ ## Responsibilities The Directors are responsible for preparing the Annual Report The Directors’ responsibility also extends to the ongoing and the Financial Statements in accordance with applicable integrity of the financial statements contained therein. law and regulations. ### RESPONSIBILITY STATEMENT Company law requires the Directors to prepare Financial Statements for each financial year. Under that law the The Directors consider that the Annual Report and Directors have prepared the Company's Financial Statements Financial Statements, taken as a whole, are fair, balanced, in accordance with United Kingdom Generally Accepted understandable and provide the information necessary for Accounting Practice (United Kingdom Accounting Standards, Shareholders to assess the Company’s position, performance, comprising FRS 102 “The Financial Reporting Standard applicable business model and strategy. in the UK and Republic of Ireland”, and applicable law). Each of the Directors, whose names and functions are listed in Under company law the Directors must not approve the the ‘Board of Directors’ section on pages 38 and 39, confirms Financial Statements unless they are satisfied that they give a that, to the best of their knowledge: true and fair view of the state of affairs of the Company and of • the Company's Financial Statements, which have been the profit or loss of the Company for that period. In preparing prepared in accordance with United Kingdom Accounting the Financial Statements, the Directors are required to: Standards give a true and fair view of the assets, liabilities, • select suitable accounting policies and then apply them financial position and profit of the Company; and consistently; • the Strategic Report includes a fair review of the • state whether applicable United Kingdom Accounting development and performance of the business and the Standards, comprising FRS 102 have been followed, subject position of the Company, together with a description of to any material departures disclosed and explained in the the principal risks and uncertainties that it faces. Financial Statements; Approved by the Board of Directors and signed on its behalf by • 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. Simon Hayes Chairman The Directors are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for 3 December 2024 the prevention and detection of fraud and other irregularities. The Directors are responsible for keeping adequate Note to those who access this document by electronic means: accounting records that are sufficient to show and explain The Annual Report for the year ended 30 September 2024 has been approved the Company's transactions and disclose with reasonable 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 accuracy at any time the financial position of the Company made available in electronic format for the convenience of readers. Printed copies and enable them to ensure that the Financial Statements are available from the Company Secretary's office in London. 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. 52 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 INDEPENDENT FINANCIAL FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION ## 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. | | | PROJECTED FEES | | | CURRENT FEES | | | --- | --- | --- | --- | --- | --- | --- | | | DATE OF | | YEAR ENDING | | YEAR ENDED | | | APPOINTMENT | | | 30 SEPTEMBER | | 30 SEPTEMBER | | | TO THE BOARD | | | | 2025 | | 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 53 ### 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. Theterms and conditions of the Directors’ appointments are set out in formal letters of appointment which are available forreview 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. 54 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 STRATEGIC REPORT GOVERNANCE INDEPENDENT STATEMENT REPORT FINANCIAL STATEMENTS REPORT FURTHER INFORMATION # 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 the Board. | | Additional Fee: Chair of the Audit Committee | £6,500 | £6,500 | For the greater time required on the financial and reporting affairs of the Company. | | 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 the Company. | * 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 55 ### 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) | | | TAXABLE | | † | TOTAL | | TAXABLE | | † | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | DATE OF | FEES | BENEFITS | | | FEES | FEES | BENEFITS | | | TOTAL FEES | | | APPOINTMENT | 2024 | | 2024 | | 2024 | 2023 | | 2023 | | | 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. | | | YEAR TO | | YEAR TO | | YEAR TO | | | YEAR TO | | YEAR TO | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Fee Rates: | 30 SEPT 2020 | | 30 SEPT 2021 | | 30 SEPT 2022 | | | 30 SEPT 2023 | | 30 SEPT 2024 | | | Chairman £37,500 | | | | £40,000 | | £40,000 | | | £41,000 | | £43,000 | | | | 0.0% | | +6.7% | | | 0.0% | | +2.5% | | +4.7% | | Chair of the Audit Committee £30,000 | | | | £32,000 | | £32,000 | | | £33,000 | | £35,000 | | | | 0.0% | | +6.7% | | | 0.0% | | +3.1% | | +5.8% | | Directors’ fees £24,500 | | | | £26,000 | | £26,000 | | | £27,000 | | £28,500 | | | | 0.0% | | +6.1% | | | 0.0% | | +3.8% | | +5.4% | Additional fees – – – – - 56 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 STRATEGIC REPORT GOVERNANCE INDEPENDENT STATEMENTS REPORT FINANCIAL STATEMENTS REPORT FURTHER INFORMATION ## 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 ![img-9.jpeg](img-9.jpeg) Source: Morningstar Rebased to 100 at 30 September 2014 ## 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. ![img-10.jpeg](img-10.jpeg) Source: Frostrow Capital LLP FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 57 ### GOVERNANCE DIRECTORS’ REMUNERATION REPORT – CONTINUED ### 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) | | | | | | (AUDITED) | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 30 SEPTEMBER 2024 | | | | VALUATION* | | 30 SEPTEMBER 2023 | | | | VALUATION* | | | NUMBER OF SHARES | | | 30 SEPTEMBER 2024 | | | NUMBER OF SHARES | | | 30 SEPTEMBER 2023 | | | | | | HELD | | | £'000 | | | HELD | | | £’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 | | | VALUATION* | | 30 SEPTEMBER 2023 | | | VALUATION* | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | NUMBER OF SHARES | | 30 SEPTEMBER 2024 | | | NUMBER OF SHARES | | 30 SEPTEMBER 2023 | | | | | HELD | | | £’000 | | HELD | | | £’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 58 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 INDEPENDENT FINANCIAL FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION ## Audit Committee Report On behalf of the Board, I am pleased to present the Audit 3. To ensure compliance with Section 1158 of the Committee’s Report for the year ended 30 September 2024. Corporation Tax Act 2010. The Committee obtained confirmation from Frostrow that the Company continues to ### ROLE AND COMPOSITION meet the regulatory requirements. The Audit Committee (the "Committee") comprises all the 4. To agree the scope of the Auditors’ work and their Directors of the Company. remuneration. The Committee review their independence and the effectiveness of the audit process. The role of the Committee is to ensure that shareholder interests are properly protected in relation to the application 5. To consider any non-audit work to be carried out by the of financial reporting and internal control principles, risk Auditors. The Committee reviews the need for non-audit management and to assess the effectiveness of the audit. services in accordance with the Company’s non-audit The Committee’s role and responsibilities are set out in full in services policy. its terms of reference which are available in the Corporate 6. To consider the need for putting the audit out to tender. Information section of the Company’s website. The Company is required to carry out a tender every The Committee as a whole has competence relevant to tenyears. Please refer to pages 62 and 63 for further the investment company sector with Committee members information on the recent Audit Tender which commenced having a range of financial and investment experience. The at the beginning of 2024. requirement for at least one member of the Committee to have recent and relevant experience is satisfied by myself and ### MEETINGS Pars Purewal being chartered accountants. The Committee held four meetings during the financial year and meeting attendance is shown on page 46. ### RESPONSIBILITIES Representatives of Frostrow acting as AIFM attended each As Chair of the Committee I can confirm that the Committee’s of the Committee’s meetings and reported on the proper main responsibilities during the year and how it fulfilled them is conduct of business in accordance with the regulatory set out below: environment in which the Company and the AIFM operate. The Committee also met the Auditors twice during the 1. To review the Company’s half year and annual financial year and once, following completion of the audit, without statements together with announcements and other representatives of the AIFM being present. 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 59 ### GOVERNANCE AUDIT COMMITTEE REPORT – CONTINUED ### 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 The Committee once again reviewed the impact of the risk of fraudulent activity. Following an Activity 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 The Committee reviewed an assessment of the impact of climate change and the weighted Change 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 1January 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 In light of the relative simplicity of the operations and the use of independent external consultants, 2018, Provision 25: necessity of an who report directly to the Committee, to advise on regulatory compliance and adherence to Internal Audit function internal procedures, it was concluded that no internal audit function was required. Cancellation of Share Premium The Committee reviewed the Share Premium Account noting that the Company had built up a Account 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. ### Internal Controls and Risk Management and agrees amendments to both risks and mitigating actions if necessary. The Directors have identified(StrategicReportpages 20 to 23) sixmain areas of risk and have identified the actions to In preparation for the Audit Committee meeting held in evaluate and manage the specific risks in those six areas: September 2024, each Director, Lindsell Train Limited as • Corporate Strategy; Portfolio Manager and Frostrow Capital LLP as AIFM were each asked to independently list what they considered to be the • Investment Strategy and Activity; greatest five risks that could impact the sustainable success of • Shareholder Relations and Corporate Governance; the Company, without reference to the Company’s existing risk • Operational; register. During the Audit Committee meeting the Committee were invited to consider the risks identified by the individuals • Financial; and and whether these should be added to the Company’s risk • Accounting, Legal and Regulatory. register, and if so, consider the appropriate scoring to be The Committee reviews the various actions taken and satisfies applied. The purpose of the exercise was to reassess the itself that they are sufficient: in particular the Committee principal risks and identify any new, emerging risks and to take reviews the Company’s schedule of key risks at each meeting any necessary action to mitigate their potential impact. 60 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 INDEPENDENT FINANCIAL FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION As a result of this exercise the Company’s existing risks were the cash and cash equivalents position of the Company, the broadened to include the new emerging risk factors that were diversification of the portfolio, and the analysis of portfolio identified by the Committee: further information can be found liquidity, which estimated a liquidation of c.79.6% of the in the Strategic Report on pages 23 and 24. portfolio within seven trading days (based on current market volumes). Stress testing and reverse stress testing were The Board has overall responsibility for the Company’s risk completed to determine the appropriateness of preparing the management and systems of internal controls and for Financial Statements on a going concern basis. reviewing their effectiveness. In common with the majority of investment companies, investment management, accounting, ### Interest in unquoted investment company secretarial and custodial services have been The Committee reviewed the valuation methodology of the delegated to third parties. The effectiveness of the internal Company’s partnership interest in Frostrow Capital LLP. The controls is assessed on a continuing basis by the AIFM, the valuation, based upon a multiple of earnings, was accepted. Portfolio Manager and the Depositary. Each maintains its own systems and prepares independently audited internal control ### Internal audit reports. The Committee reviews these audited reports and Since the Company delegates its day to day operations to additionally receives regular reports from these third parties. third parties and has no employees, the Committee again The Committee is satisfied that appropriate systems have determined that there is no requirement for an internal audit been in place for the year under review. function. ### ANNUAL REPORT AND FINANCIAL ### Internal Controls ### STATEMENTS The Committee is responsible for ensuring that suitable The Annual Report and the Financial Statements as a whole controls are in place to prevent and detect fraud, error and are the responsibility of the Board. The Directors’ Responsibility misstatement of financial information. As the Company Statement is contained on page 52. The Board looks to outsources all of its functions to third parties, neither the the Committee to advise them in relation to the Financial Committee nor the Company has any internal control structure Statements both as regards their form and content, and on in place but instead requires its third party service providers to any specific areas requiring judgement. report on their internal controls. These reports are received at Although the Committee did not identify any significant least annually, including reports which have been independently issues as part of its review of the Annual Report and Financial verified by the relevant service provider’s independent Auditor. Statements, it paid particular attention to: ### Long-Term Viability ### Accounting Policies The Committee considered, on behalf of the Board, the The accounting policies, as set out on pages 76 to 79, have longer-term viability of the Company in connection with the been applied throughout the year. In light of there being Board’s statement (see page 24). The Committee reviewed no unusual transactions during the year or other possible the Company’s financial position (including its cash flows and reasons, the Committee found no cause to change any of liquidity position), the principal risks and uncertainties and the thepolicies. results of stress tests. The stress tests considered the impact of one or more of the key risks crystallising and then modelled ### Existence of investments the impact on the portfolio. The results demonstrated the impact on the Company’s NAV, its expenses and its ability to During the year the Committee met with representatives of meet its liabilities. the Depositary who provided reassurance concerning the safekeeping of the Company’s investments. In even the most stressed scenario, the Company was shown to have sufficient cash, or to be able to liquidate a ### Going Concern sufficient portion of its listed holdings, in order to be able to The Audit Committee, at the request of the Board, considered meet its liabilities as they fall due. Based on these results the the ability of the Company to adopt the going concern Committee concluded it was reasonable for the Board to basis for the preparation of the Financial Statements. Having expect that the Company will be able to continue in operation reviewed the Company’s financial position, the Committee and meet its liabilities as they fall due over the next five is satisfied that it is appropriate for the Board to prepare financial years. 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 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 61 ### GOVERNANCE AUDIT COMMITTEE REPORT – CONTINUED ### Recognition of Income from Investments In order to consider the effectiveness of the audit process, the Committee reviewed: The Committee received assurance that all dividends receivable, including special dividends, had been accounted • the Auditors’ fulfilment of the agreed audit plan, for appropriately. • the report arising from the audit itself, and ### Review of Disclosure and Communication • feedback from the AIFM on the conduct of the audit. The Committee reviews whether it is following best practice in The Committee satisfied itself concerning the Auditors’ its disclosure and whether it is communicating clearly. In order independence and the effectiveness of the audit process, to do this, the Committee receives reports on current and together with the degree of diligence and professional future changes to regulatory and accounting reporting from scepticism brought to bear. the Company Secretary and Auditors. The Committee monitors the level of non-audit work carried During the year the Committee reviewed the Annual Report in out by the Auditors and seeks assurances from the Auditors order to refresh the format and content to ensure it continues that they maintain suitable policies and processes ensuring to be informative to readers. independence, and monitor compliance with the relevant regulatory requirements on an annual basis. No non-audit ### Valuation of Investments work was carried out by the Auditors during the year. The Committee reviewed the robustness of the AIFM’s The Company does not allow any non-audit services processes in place for recording investment transactions as permitted under the 70% fee cap set out in the FRC’s 2019 well as ensuring the valuation of investments is in accordance ethical standard. with the adopted accounting policies as detailed within ### Frostrow’s independent controls report. Audit Process and Tender During the year, in accordance with the Company’s audit tender guidelines, the Audit Committee led a competitive ### EXTERNAL AUDITORS audit tender process. A selection of audit firms was invited ### Meetings to participate, including members of the ‘big four’ firms and mid-tier firms; four firms submitted proposals and three were The nature and scope of the 2024 audit, together with Deloitte interviewed by the Audit Committee. audit plan, were reviewed by the Committee on 20 May 2024. Each firm that participated in the process was given extensive I met with the Engagement Leader, Michael Caullay, and the access to documentation, met with the Committee Chair and Audit Manager on 11 November 2024 to discuss the audit and was requested to submit a written proposal to the Committee. the draft 2024 Annual Report and Financial Statements. The The firms then gave presentations to the Committee and were Committee then met them on 25 November 2024 to review judged against a number of objective criteria determined in the outcome of the audit. advance of the process. Details of the fees paid to the Auditors for audit services are The Committee submitted two audit firm candidates to the set out in note 4 to the Financial Statements on page 80. Board for consideration together with a justified preference for ### Independence and Effectiveness one of them. In order to fulfil the Committee’s responsibility regarding the The Committee concluded that Deloitte LLP was the preferred independence of the Auditors, the Committee reviewed: firm to conduct the audit engagement judged against the selection criteria and the quality of the proposed team and firm • the senior audit personnel in the audit plan, (including industry experience) and the approach to managing • the Auditors’ arrangements concerning potential conflicts the audit. The Board agreed with the recommendation and the of interest, Company will seek shareholder approval of the appointment of Deloitte LLP at the forthcoming Annual General Meeting. • the statement by the Auditors that they remain independent within the meaning of the regulations and Accordingly, PricewaterhouseCoopers LLP resigned as the their professional standards, Company’s auditor and provided a statement explaining the reasons for its resignation which was posted to Shareholders • the extent of any non-audit services to ensure this was in in accordance with the Companies Act 2006. The statement is line with the Company’s policy. available on the Company’s website. The Directors wish to thank PricewaterhouseCoopers LLP for its service as auditor. 62 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 INDEPENDENT FINANCIAL FINANCIAL INDEPENDENT FURTHER FURTHER STRATEGIC REPORT GOVERNANCE AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION 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 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 63 ### 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 thenended; • 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 CapitalTrusts”. ### 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. 64 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 FINANCIAL INDEPENDENT FINANCIAL INDEPENDENT FURTHER FURTHER GOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION ### 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 accountingincluded: • 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 65 ## 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. | 66 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 FINANCIAL INDEPENDENT FINANCIAL INDEPENDENT FURTHER FURTHER GOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION Net assets Materiality £1,593m £15.82m Net assets Audit Committee reporting threshold Materiality £0.79m ### 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 listedinvestments. ### 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 67 ### INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FINSBURY GROWTH & INCOME TRUST PLC – CONTINUED ### 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 financialstatements. 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. 68 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 FINANCIAL INDEPENDENT FINANCIAL INDEPENDENT FURTHER FURTHER GOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION ### 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 offraud. 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 ofbusiness. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 69 ### INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF FINSBURY GROWTH & INCOME TRUST PLC – CONTINUED 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. 70 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 FINANCIAL INDEPENDENT FINANCIAL INDEPENDENT FURTHER FURTHER GOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION ### 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 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 71 FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS – CONTINUED # Income Statement for the year ended 30 September 2024 | | NOTE | YEAR ENDED 30 SEPTEMBER 2024 | | | YEAR ENDED 30 SEPTEMBER 2023 | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | 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. 72 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 INDEPENDENT FINANCIAL INDEPENDENT FINANCIAL FURTHER FURTHER GOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT STATEMENTS AUDITORS’ REPORT INFORMATION INFORMATION ## Statement of Changes in Equity ## for the year ended 30 September 2024 | | CALLED UP | | | SHARE | | SPECIAL | | CAPITAL | | | | | TOTAL | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | SHARE | PREMIUM | | DISTRIBUTABLE | | REDEMPTION | | CAPITAL | REVENUE | | SHAREHOLDERS’ | | | | | CAPITAL | ACCOUNT | | | RESERVE | | RESERVE | RESERVE | RESERVE | | | FUNDS | | NOTE | | £’000 | | £’000 | | £’000 | | £’000 | £’000 | | £’000 | | £’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 30September 2023 8 – – – – – (21,454) (21,454) First interim dividend (8.8pper share) for the year ended 30September 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. | | CALLED UP | | | SHARE | | SPECIAL | | CAPITAL | | | | | TOTAL | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | SHARE | PREMIUM | | DISTRIBUTABLE | | REDEMPTION | | CAPITAL | REVENUE | | SHAREHOLDERS’ | | | | | CAPITAL | ACCOUNT | | | RESERVE | | RESERVE | RESERVE | RESERVE | | | FUNDS | | NOTE | | £’000 | | £’000 | | £’000 | | £’000 | £’000 | | £’000 | | £’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 30September 2022 8 – – – – – (21,182) (21,182) First interim dividend (8.5pper share) for the year ended 30September 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 73 FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS – CONTINUED # Statement of Financial Position as at 30 September 2024 | | 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) 74 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 STRATEGIC REPORT GOVERNANCE INDEPENDENT^{}[] STATEMENT REPORT PARAPHRENT^{}[] STATEMENT REPORT FURTHER^{}[] INFORMATION # Statement of Cash Flows for the year ended 30 September 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. The notes on pages 76 to 91 form part of these Financial Statements. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 75 FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS # Notes to the Financial Statements for the year ended 30 September 2024 ## 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. 76 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 INDEPENDENT FINANCIAL INDEPENDENT FINANCIAL FURTHER FURTHER GOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT STATEMENTS AUDITORS’ REPORT INFORMATION INFORMATION 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 77 ### 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. 78 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 STRATEGIC REPORT GOVERNANCE INDEPENDENT STATEMENT REPORT PARATEMENT STARTSHEET REPORT FURTHER INFORMATION 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 note 1(E) on page 77 for further details. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 79 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 | | Depository'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 excluding VAT (2023: £57,780). During the year the Company incurred legal expenses amounting to £126,000 in relation to the cancellation of the share premium account; 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** | 80 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 STRATEGIC REPORT GOVERNANCE INDEPENDENT STATEMENT REPORT PARAPHRENT STATEMENT REPORT FURTHER INFORMATION ## 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 81 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. 82 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 INDEPENDENT FINANCIAL INDEPENDENT FINANCIAL FURTHER FURTHER GOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT STATEMENTS AUDITORS’ REPORT INFORMATION INFORMATION ## 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 | | | PAYMENT | | 2024 | 2023 | | --- | --- | --- | --- | --- | --- | --- | --- | | | | DATE | | | DATE | £’000 | £’000 | | Second interim dividend paid for the year ended | | | 10 November | | | | | | 30 September 2023 of 10.5p per share 5 October 2023 | | | | | 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 29 September 4 November 30 September 2022 of 9.8p per share 2022 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 8 November year ended 30 September 2024 (2023: 10.5p) 3 October 2024 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 2023 £’000 £’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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 83 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 | 84 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 INDEPENDENT FINANCIAL INDEPENDENT FINANCIAL FURTHER FURTHER GOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT STATEMENTS AUDITORS’ REPORT INFORMATION INFORMATION ## 12. Bank Loan 2024 2023 £’000 £’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 £60million (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 page18 and the Report of the Directors on page 40 for further details. ## 13. Called Up Share Capital 2024 2023 £’000 £’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 | | | | | CAPITAL | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | RESERVE | | | | | RESERVE | | | CAPITAL | | INVESTMENT | | | CAPITAL | | INVESTMENT | | | | RESERVE | HOLDING GAINS | | | 2024 | RESERVE | HOLDING GAINS | | | 2023 | | REALISED | | UNREALISED | | TOTAL | REALISED | | UNREALISED | | TOTAL | | £'000 | | | £'000 | £'000 | £'000 | | | £'000 | £'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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 85 **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 pages 36 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 30 September 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 30 September 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. 86 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 INDEPENDENT FINANCIAL INDEPENDENT FINANCIAL FURTHER FURTHER GOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT STATEMENTS AUDITORS’ REPORT INFORMATION INFORMATION 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 page9). If the fair value of the Company’s investments at the Statement of Financial Position date increased or decreased by10%, while all other variables remained constant, the capital return and net assets attributable to Shareholders for the year ended 30September 2024 would have increased or decreased by £159,322,000 or 94.99p per share (2023: £183,666,000 or 89.80pper 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 | MORE THAN | | WITHIN | MORE THAN | | | --- | --- | --- | --- | --- | --- | | ONE YEAR | ONE YEAR | | ONE YEAR | ONE YEAR | | | £'000 | | £'000 | £'000 | | £'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. At30September 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 87 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 historical trends. 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). 88 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 INDEPENDENT FINANCIAL INDEPENDENT FINANCIAL FURTHER FURTHER GOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT STATEMENTS AUDITORS’ REPORT INFORMATION INFORMATION As at 30 September 2024, the exposure to credit risk was £17,263,000 (2023: £21,814,000), comprising: 2024 2023 £’000 £’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. Asat30September 2024 it is estimated that 98.1% of the investment portfolio could be realised within 30 days with 79.6% insevendays, based on current trading volumes. Liquidity risk exposure | | 30 SEPTEMBER | | 30 SEPTEMBER | | | --- | --- | --- | --- | --- | | | | 2024 | | 2023 | | FINANCIAL LIABILITIES COMPRISE: | | £'000 | | £'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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 89 ### 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: LEVEL 1 LEVEL 2 LEVEL 3 TOTAL AS AT 30 SEPTEMBER 2024 £'000 £'000 £'000 £'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. | | | LEVEL 1 | | LEVEL 2 | LEVEL 3 | TOTAL | | --- | --- | --- | --- | --- | --- | --- | | AS AT 30 SEPTEMBER 2023 | | £'000 | | £'000 | £'000 | £'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 30September 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 2023 £’000 £’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. 90 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 INDEPENDENT FINANCIAL INDEPENDENT FINANCIAL FURTHER FURTHER GOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT STATEMENTS AUDITORS’ REPORT INFORMATION INFORMATION 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, LondonBranch 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 2023 £’000 £’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: % OF ISSUED SHARE CAPITAL OR | | NUMBER OF | | | 2024 | LIMITED LIABILITY | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | SHARES | FAIR VALUE | | | PARTNERSHIP | | | COMPANY OR LIMITED LIABILITY PARTNERSHIP | | HELD | | £'000 | | | 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 91 ### FURTHER INFORMATION GLOSSARY OF TERMS AND ALTERNATIVE PERFORMANCE MEASURES ## Glossary of Terms and ## Alternative Performance Measures – ## Unaudited ### 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. 30 SEPTEMBER 30 SEPTEMBER DISCOUNT OR PREMIUM (APM) PAGE 2024 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% 92 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 FINANCIAL INDEPENDENT FINANCIAL INDEPENDENT FURTHER FURTHER GOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION ### 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. | | 30 SEPTEMBER | | 30 SEPTEMBER | | | --- | --- | --- | --- | --- | | | | 2024 | | 2023 | | PAGE | | £’000 | | £’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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 93 ### 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. 30 SEPTEMBER 30 SEPTEMBER NAV TOTAL RETURN PAGE 2024 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. | | 30 SEPTEMBER | | 30 SEPTEMBER | | | --- | --- | --- | --- | --- | | | | 2024 | | 2023 | | PAGE | | £'000 | | £'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. 94 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 STRATEGIC REPORT GOVERNANCE INDEPENDENT STATEMENT REPORT FINANCIAL STATEMENTS REPORT FURTHER INFORMATION ## 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 dividend growth. ### 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 95 ### 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. 96 FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 FINANCIAL INDEPENDENT FINANCIAL INDEPENDENT FURTHER FURTHER GOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTSGOVERNANCESTRATEGIC REPORT AUDITORS’ REPORT STATEMENTS INFORMATION INFORMATION ## Company Information Share Prices Registrars The Company’s ordinary shares are listed on the London Stock If you have any queries in relation to your shareholding please Exchange under ‘Investment Companies’. contact: Link Group Central Square Daily Net Asset Value per share 29 Wellington Street The daily net asset value per share of the Company’s sharescan Leeds LS1 4DL be obtained on the Company’s website www.finsburygt.com Email: shareholderenquiries@linkgroup.co.uk and is published daily via the London Stock Exchange. Telephone +44 (0)371 664 0300 Website: www.linkgroup.eu Registered Office Calls are charged at the standard geographic rate and will vary by 50 Lothian Road provider. Calls outside the United Kingdom will be charged at the Festival Square applicable international rate. Lines are open between 09:00 and 17:30, Edinburgh EH3 9WJ Monday to Friday excluding public holidays in England and Wales. Incorporated in Scotland with company no. SC013958 and Shareholder Portal registered as an investment company under Section 833 of the If you hold your shares directly you can register online to view your Companies Act 2006. holdings using the Share Portal, a service offered by Link Group www.signalshares.com. AIFM, Company Secretary and Administrator The Share Portal is an online service enabling you to quickly and Frostrow Capital LLP easily access and maintain your shareholding online – reducing 25 Southampton Buildings the need for paperwork and providing 24 hour access to your London WC2A 1AL shareholding details. Telephone: 020 3008 4910 Email: info@frostrow.com Corporate Broker Website: www.frostrow.com Winterflood Securities Limited Authorised and regulated by the Financial Conduct Authority. Riverbank House 2 Swan Lane Portfolio Manager London Lindsell Train Limited EC4R 3GA 3rd Floor | 66 Buckingham Gate | Identification Codes | | --- | --- | | London SW1E 6AU | Shares: SEDOL: 0781606 | | Telephone: 020 7808 1225 | ISIN: GB0007816068 | | Website: www.lindselltrain.com | BLOOMBERG: FGT LN | | Authorised and regulated by the Financial Conduct Authority. | EPIC: FGT | | Independent Auditors | Legal Entity Identifier (LEI) | | Deloitte LLP | 213800NN4ZKX2LGIGQ40 | 1 New Street Square Global Intermediary Identification Number (GIIN) London EC4A 3HQ QH4BH0.99999.SL.826 Depositary Disability Act The Bank of New York Mellon (International) Limited You can contact the Company or the Company’s registrar, 160 Queen Victoria Street LinkGroup, using Relay UK, a service that helps people with hearing London EC4V 4LA and speech difficulties communicate with anyone over the phone using the national relay service. You can download their app or call Global Custodian 0800731 1888 to access this service. 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. FINSBURY GROWTH & INCOME TRUST PLC | Annual Report 2024 97 ### 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. Avoid investment fraud Report a Scam ## Be ScamSmart | | 1 Reject cold calls | If you suspect that you have been | | --- | --- | --- | | Please note that it is very unlikely that either the Company or | If you’ve received unsolicited contact about | approached by fraudsters please tell the | | | an investment opportunity, chances are | FCA using the reporting form at | the Company’s Registrar, Link Group, would make unsolicited ### Investment scams are it’s a high risk investment or a scam. You www.fca.org.uk/consumers/report- telephone calls to Shareholders. Such calls would relate only to should treat the call with extreme caution. scam-unauthorised-firm. You can also call ### designed to look like | | official documentation already circulated to Shareholders and | The safest thing to do is to hang up. | the FCA Consumer Helpline on | | --- | --- | --- | --- | | genuine investments | | | 0800 111 6768 | | | never in respect of investment ‘advice’. | 2 Check the FCA Warning List | | The FCA Warning List is a list of firms and Spot the warning signs If you have lost money to investment fraud, individuals we know are operating without you should report it to Action Fraud on Have you been: Shareholders who suspect they may have been approached by our authorisation. 0300 123 2040 or online at • contacted out of the blue fraudsters should advise the Financial Conduct Authority (“FCA”) 3 Get impartial advice www.actionfraud.police.uk • promised tempting returns Think about getting impartial financial using the share fraud report form at www.fca.org.uk/scams or call and told the investment is safe advice before you hand over any money. Find out more at • called repeatedly, or the FCA Customer Helpline on 0800 111 6768. You may also wish to Seek advice from someone unconnected to www.fca.org.uk/scamsmart • told the offer is only available the firm that has approached you. call either the Company Secretary or the Registrar whose contact for a limited time? details can be found on page 97. If so, you might have been contacted by fraudsters. ### Remember: if it sounds too ### good to be true, it probably is! 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. 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. ### Mobius Investment Trust Plc ### 25 Southampton Buildings, London WC2A 1AL ### www.mobiusinvestmenttrust.com Perivan 256419 A member of the Association of Investment Companies