THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## The Brunner ## Investment Trust PLC ## A GLOBAL EQUITY INVESTMENT TRUST ## Annual Report, 30 November 2024 ## The Brunner Investment Trust PLC ### A GLOBAL EQUITY INVESTMENT TRUST | Capital growth and dividends | ‘All-weather’ portfolio | Independence | | --- | --- | --- | | The Brunner Investment Trust PLC (Brunner) | The company provides a balanced | Brunner has an independent board of | | aims to provide growth in capital value and | solution for investors looking for a global | directors and no employees. Like many | | dividends for investors over the long term | and UK portfolio of equities and a quarterly | other investment companies, it outsources | | through investing in a portfolio of global and | dividend. The company’s investment | investment management and administration | | UK equities. | policy is set out in the Strategic Report on | to an investment management company | | | page 11. | – Allianz Global Investors – and other third | The Key Performance Indicators (KPIs) on parties to provide shareholders with an page 16 show how effective the company efficient, competitive, cost-effective way has been in delivering its strategy. to gain wide equity investment exposure through a single investment vehicle. | Risk and gearing | Benchmark | Association of Investment Companies | | --- | --- | --- | | A statement explaining how the assets have | For the year under review the benchmark | Brunner is a member of the Association | | been invested to spread risk and how gearing | against which the portfolio is measured was | of Investment Companies (AIC) and the | | is managed is included under Investment | a composite of 70% FTSE World Ex UK Index | company’s shares are recognised by the | | Policy on page 12. | and 30% FTSE All-Share Index. | AIC as suitable for retail investors. AIC | Category: Global. ## A family investment from the beginning… | Like many long-established investment | century. In 1873 he and the scientist Ludwig | John Brunner was a passionate campaigner, | | --- | --- | --- | | trusts, Brunner’s name reflects its history | Mond founded Brunner, Mond and Co, | including for welfare reforms and free | | rather than its investment strategy. Johannes | the largest of the four companies which | trade, and used his wealth for philanthropic | | Brunner was born in Canton Zürich and | came together to form ICI in 1926. The | purposes. Jim Sharp, a director of the | | migrated to Lancashire in 1832. His son, Sir | following year the Brunner family chose | company, is connected to the Brunner | | John Brunner, Bart, was one of the most | to sell its ICI shares and establish a broad, | family by marriage and continues the | | successful industrialists of the nineteenth | long-term investment vehicle – so in 1927, | link between board and family. Brunner | | century, and in politics an influential radical | The Brunner Investment Trust was formed. | family share ownership information is | | Liberal MP until well into the twentieth | | included on pages 62 and 64. | Sir John BrunnerBrunner, Mond & Co. factory, worker cottages and Co-operative Society ### WWW.BRUNNER.CO.UK ## Contents Overview 2 Financial highlights ## 2 5 Chair’s Statement 9 Performance – review of the year 10 Historical record Strategic Report 12 Introduction 13 Section 172 report 16 Key Performance Indicators ## 11 18 Risk report 23 Environmental, Social and Governance (ESG) Issues Investment Manager’s Review 26 Portfolio Managers’ report 41 Investment philosophy and stock selection process 43 Company engagement activities 44 Environmental, Social and Governance performance ## 45 Top twenty holdings 25 50 Portfolio analysis 52 Listed equity holdings 55 Distribution of invested funds Governance 58 Directors, Manager and advisers 61 Directors’ Report 66 Corporate Governance Statement ## 57 68 Management Engagement Committee Report 69 Nomination Committee Report 70 Remuneration Committee Report 73 Audit Committee Report 76 Statement of Directors’ Responsibilities in respect of the financial statements Financial Statements ## 77 78 Independent auditors’ report to the members of The Brunner Investment Trust PLC 84 Income Statement 85 Balance Sheet 86 Statement of Changes in Equity 87 Cash Flow Statement 88 Statement of Accounting Policies 90 Notes to the Financial Statements ## 103 Investor Information 104 Investor information (unaudited) 107 Notice of Meeting 111 Glossary The fountain photograph on the cover of this report is inspired by the Arms of the Brunner family. The family originated from Switzerland and ’Brunnen’ is German for fountain. 1 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## Financial highlights ### For the year ended 30 November 2024 Dakeng, Taichung, Taiwan. Taiwanese semiconductor giant TSMC was the largest contributor to performance in the year. 2 2 OVERVIEW OVERVIEW 4 | Net Asset Value total return | | Net Asset Value total return | | Benchmark total return index | | --- | --- | --- | --- | --- | | | 2 | | 2 | | | Debt at fair value | | Debt at par | | | ## +17.9% +18.2% +23.6% ### 2023 2023 2023 ## +8.7% +8.2% +5.5% 1 1 2 5 Net assets per ordinary share Net assets per ordinary share Share price total return 2 Debt at fair value Debt at Par ## 1,459.6p 1,438.8p +39.3% ### 2023 1,258.6p 2023 1,237.2p 2024 1,460.0p ## +16.0% +16.3% 2023 1,065.0p 3 Earnings per ordinary share Dividend per ordinary share Revenue reserves per ordinary share for the year ## 27.4p 23.75p 33.0p ### 2023 26.4p 2023 22.7p 2023 ## +3.8% +4.6% 29.6p 2 Consumer price index Discount – average in the year ## 4.6% +2.6% ### 2023 2024 135.1 ### 2023 131.7 ## 11.5% All figures are UK GAAP unless they are stated to be Alternative Performance Measures. (Glossary page 111). 1 All references to Net Asset Value (NAV) in our commentary and the Strategic Report are to NAV with debt at fair value since this is the measure that the board considers best reflects the value to shareholders. However, NAV with debt at par value is reported above and in 2 3 the Performance – review of the year on page 9. Alternative Performance Measures (APM). See Glossary on page 111. The dividend 4 per ordinary share includes the proposed final dividend of 6.05p. The benchmark index of 70% FTSE World Ex UK Index and 30% FTSE All- 5 Share Index. Share price total return is based on the movement in share price including dividends reinvested. 3 3 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 | 1973 | 1973 | 1974 | 1976 | 1979 | 1982 | 1984 | 1986 | | --- | --- | --- | --- | --- | --- | --- | --- | | Britain joins | Yom Kippur | Bear market | Britain borrows | ‘Winter of | Economic | 12-month UK | ‘Big Bang’ | | the European | war | | money from | Discontent’ | recession | miners’ strike | enhances | | Community | | | the IMF | | leads to high | | London’s status | | | | | | | unemployment | | as a financial | | | | | | | in the UK | | capital | 1 ## 2024 ## yrs ## 23.75p ## 53 ## 4,947.9% 2 ### (CAGR 7.6%) ## of continual ## dividend growth ## 1,748.5% ## 1972 ## 0.48p Inflation growth of 1,748.5% over the period. RPI 1972-1986. CPI 1987-2024. 1 Total dividend: from 0.48p to 23.75p over the period Final dividend for approval at the 2025 AGM. 2 Brunner dividend growth of 4,947.9% over the period. Compound Annual Growth Rate (CAGR) of 7.6%. | 1987 | 200 | 0 | 2001 | 2003 | 2008 | 2016 | 2020 | 2022 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | ‘Black | Beginning of | | 9/11 | The Second | Financial crisis | Brexit vote | COVID-19 | Invasion | | Monday’ | the end of the | | | Gulf War | | | pandemic | of Ukraine | dot-com boom 4 4 OVERVIEW ## Chair’s Statement Dear Shareholder, would like to note that the increased Global backdrop demand for Brunner shares resulted in 2024 provided no shortage of world I wanted to start by sharing the the share price discount to Net Asset events and geopolitical shocks, excitement of your board and managers Value (NAV) narrowing considerably, continuing the trend of the past many that, in the past year, our trust won followed by a period where it went years. In a year that saw a heating up the ‘Investment Company of the to a premium – trading above NAV. of the space race, Paris host the latest Year – Global’ award from Investment That scenario allowed us to issue new Olympic Games and significant surges Week and was promoted to the FTSE shares for the first time, something forward in the development of AI, we 250 Index. that will benefit existing as well as new also witnessed political upheaval and shareholders as we will describe later. regime changes in a year dominated by Welcome elections across the globe, the ongoing A warm welcome to shareholders old As noted, the year culminated with the Russian offensive in Ukraine and further and new – those that have been with us long-term performance and success of globally-unsettling conflict engulfing the on a longer journey over many years and the strategy being recognised with a Middle East. | through various market cycles and those | win in the Investment Week ‘Investment | | | | --- | --- | --- | --- | | joining more recently. Brunner pleasingly | Company of the Year Awards’ – a | Whilst these many events inevitably | | | saw a marked increase in demand in | badge now proudly displayed on the | drove some market volatility, overall | | | the second half of the financial year, so | cover of this report. This recognises the | global markets managed to continue | | | as well as thanking those longer-term | efforts of a large team – from the board | trending upwards and provided good | | | shareholders who may have topped- | through the investment manager, our | gains again this year, though somewhat | | | up or more materially increased their | many advisers and suppliers and all | more selectively compared to other | | | holdings, we also have the pleasure of | those looking after the promotion and | years when disaggregating geographies | | | welcoming many new holders. I hope | distribution of our shares. The award | and sectors. The US in particular has | | | that whichever of these categories you | not only examines the performance | surged further forward and cemented | | | fall into that you are pleased with your | record over a three year period but also | its ‘leadership’ position in equity market | | | investment in the trust and will have | looks at many other factors such as | terms – the | Portfolio Managers’ Report | | many fruitful years with Brunner as a | the investment approach, how we look | starting on page 26 looks at this | | | part of your own investment portfolio. | at risk, and how we make use of the | in more detail and we would like to | | | We will cover it more formally, but I | investment trust structure. | commend shareholders to read that | | ## The increased demand for Brunner shares resulted ## in the share price discount to Net Asset Value ## narrowing considerably, followed by a period where ## it went to a premium – trading above NAV. 5 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 detailed analysis of the drivers and make of absolute return or constant up of that stock market dominance, as outperformance of the benchmark – well as the examination of if that scenario rather it means the pursuit of consistent can continue. performance, delivered with a strong focus on risk management, finding Performance companies with dominant market Against this volatile backdrop, positions that the portfolio managers Brunner was unfortunately unable to believe should provide steady long-term extend its previous five year record returns for shareholders. of outperformance, this year trailing We believe that, over time, we its benchmark over the year to 30 continue to demonstrate the substance November 2024. Brunner’s NAV per of our ‘all weather global equity ordinary share total return (calculated on portfolio’ claim, providing solid returns a net dividends reinvested basis with debt through a variety of market and at fair value) was +17.9%, versus +23.6% macroeconomic conditions. for the composite benchmark (70% FTSE World Ex. UK / 30% FTSE All-Share). By Environmental, Social and virtue of the strongly narrowing discount, Governance (ESG) the share price return recorded was some measure ahead however at +39.3%. As noted in previous reporting, whilst the strategy of the trust does not aim to Although the NAV return generated by meet any specific sustainability criteria, the portfolio was behind benchmark, the board remains of the view that it is this should be viewed in the context in shareholders’ interests to be aware of of continued narrow dominance in and consider environmental, social and terms of companies and sectors driving governance factors when selecting and overall market performance. Without retaining investments. Active stewardship any need to paraphrase, I include the is a key task of any responsible following quote from the Portfolio asset owner. | Managers’ Report | which neatly sums up | | | --- | --- | --- | | the main reasons for falling behind the | | We give a full and clear account of ESG | | benchmark this year, but also describes | | considerations within this report (see | | the counterbalance that the associated | | page 23). We also have a page on our | | positioning remains appropriate in their | | website that describes the investment | | view and aligned with Brunner’s long | | manager’s ESG processes in more detail. | | term strategy. | | Over the year the board has maintained | a focus on understanding the investment ‘Most of the underperformance is best manager’s approach to ESG and ## We are pleased to explained at the stock level within the how it has been integrated within the Financials and Technology sectors. Both ## see further efforts by investment process. We take account of these important sectors roared ahead. of our performance in this area against ## regulators and the Our holdings participated but did not our objectives using both the investment keep up. To a large extent, this reflects ## industry in general to manager’s internal analysis and external our balanced approach, but also our measures and benchmarks. bias to prudency. For example, within ## ensure fair treatment the diverse Financials sector our skew We are pleased to see further efforts by ## of investors in terms of is to higher quality, recurring fee-based regulators and the industry in general to business models. This year saw the ensure fair treatment of investors in terms ## ESG and sustainability outperformance of lower quality, more of ESG and sustainability in relation to asset intensive businesses like traditional ## in relation to investments. The latest of these moves banks and insurers. We had exposure is the SDR (Sustainability Disclosure ## investments. here, but not enough to keep up with the Requirements) regulation which is market. Where we have exposure, it is now in place and aims to harmonise generally at the less levered and less risky sustainability naming conventions as end of the spectrum. This means that we well as requiring investment managers to always run the risk of underperforming meet certain criteria in the management in a cyclical rally, as happened this of a portfolio should they want to claim year, but we should be better protected any sustainability credentials in their on the downside in the event of a fund names or marketing materials. In cyclical downturn.’ addition, the regulation aims to ensure Ultimately, our ‘All-Weather’ approach that nothing either explicitly or implicitly does not mean chasing some kind creates the impression of sustainability 6 OVERVIEW Share issuance will only be carried out when the trust is trading at an established premium to Net Asset Value – thereby being naturally accretive to existing shareholders. if it does not genuinely exist (known as greenwashing). ### Earnings per share Over the past year our portfolio companies have been able to continue paying dividends at levels that meant the portfolio's generation of income and earnings grew once more through 2024, with earnings per share for the year rising by 3.8%, from 26.4p to 27.4p. This has put Brunner in the strong position once again to be able to cover our increased dividend payment to shareholders and still put a sizeable amount into revenue reserves to help with any future dividend drought, such as that witnessed during the pandemic. ### Dividend The proposed final dividend of 6.05p, if approved by shareholders, will be paid on 4 April 2025 to shareholders on the register on 21 February 2025, with an ex-dividend date of 20 February 2025. For those shareholders in the Dividend Reinvestment Plan (DRIP), the last date for this will be 7 March 2025. In line with board's dividend policy, which is outlined on page 16, the total dividend for 2024, including the proposed final dividend, will be 23.75p. This represents an increase of 4.6% over the 2023 dividend which was 22.7p and means Brunner has now reached 53 years of consecutive dividend increases, remaining in place near the top of the AIC's 'Dividend Heroes' list. Revenue reserves will remain strong at 32.6p after the payment of the proposed final dividend. ### Marketing and discount We have spoken previously about our belief in the power of demand generation through effective promotional activity being a stronger lever than purely financial measures such as share buy backs for narrowing the trust's discount. As illustration of this, without having to buy back any stock, but by highlighting Brunner's steady philosophy and approach, combined with our notable long-term performance and lower volatility versus some peers, has seen us progress from a double-digit discount at the start of the financial year to a premium at the end of the year. In the latter half of the year a definite momentum appeared in the trading of the company's shares, which combined with our entry into the FTSE 250 to spark even further investor interest. This in turn led to Brunner issuing shares for the first time. The board very carefully considered the issuance of new ordinary shares when the shares began to trade at a premium and issued when it became clear that it would be destabilising to existing shareholders not to go ahead. Share issuance will only be carried out when the trust is trading at an established premium to Net Asset Value – thereby being naturally accretive to existing shareholders. In addition, the organic growing of the otherwise fixed pool of capital is beneficial to investors both in terms of additional investable capital being available to the managers but also allowing fixed costs to be spread over a wider share base, thereby marginally reducing their impact. ### Cost disclosure 2024 was the year that the investment trust industry consolidated behind a rallying cry of 'disclose but don't double count'. There were certainly nuances to the debate, but credit must go to the campaigners who tirelessly brought the campaign up from its genesis to the eventual curtailment of the perpetuation of misleading information requirements and the commitment of the UK Government to make the FCA re-think the application of disclosure requirements for investor protection, to the particular model that investment trusts fall into. We supported our manager's initial conservative stance, wanting to make sure we were not barred from being traded by retail investors on the investment 'platforms', and we have encouraged our manager to take advantage of the interim rulings to harmonise the Key Information Document to include the same ongoing charge figure as we disclose in this report in accordance with the Association of Investment Companies (AIC) methodology, rather than the previous European-derived PRIIPS (packaged retail and insurance-based investment products) methodology which was felt to be misleading for investment trusts. Furthermore there is now a narrative statement within that document, as well as on our monthly factsheets, the essence of which is to remind prospective investors and shareholders that the 'charges' disclosed are already accounted for within the NAV and therefore also the price paid – investors do not have to pay any further charges to their investment trust or its manager after purchasing shares, though of course the platform or stockbroker used to execute the trade will likely levy some kind of charge. There will be further changes in terms of cost disclosure over the coming year. There is an ongoing FCA consultation on its proposed CCI (Consumer Composite Investments) regime, which will replace PRIIPS. There is concern in the investment trust industry that current proposals could be as unfavourable as PRIIPS, though we are not at the final point yet and lobbying continues from the AIC and many other market participants. From Brunner's 7 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## We are very happy to report that in 2024 we received ## a ‘Highly Commended’ award for last year’s Annual ## Report in the Association of Investment Companies’ ## Shareholder Communications Awards. perspective, please be assured that we Although we have come a long way in To this end enormous effort goes into the will continue to do all we can to ensure the taming of inflation across the globe preparation of all our literature and this investors have access to the appropriate and central banks have generally been report and accounts. information, whatever the requirements able to start moderating interest rates, we So, we are very happy to report that in of any prevailing regulation may be. must acknowledge that this is not a ‘done 2024 we received a ‘Highly Commended’ deal’ yet. Certainly, markets remain jittery award for last year’s Annual Report in Outlook over any contra-indications. the AIC’s Shareholder Communications | Brunner’s new financial year has already | All of these factors can pose risks on the | Awards. The judges noted that they | | --- | --- | --- | | begun with a mix of optimism and | global stage – to society as well as to | felt that the 2023 report was a ‘delight | | turmoil. Markets have been anything | economies and financial systems. We | to read’ – we hope shareholders and | | but calm or predictable and, in the world | remain stoic that the key benefit we | other readers feel the same about this | | at large, we have seen the momentous | offer our shareholders is maintaining a | year’s report. | | toppling of the Assad regime in Syria, | strategy focused solely on constructing | | | continuation of the conflict in Gaza up to | a well-diversified portfolio of companies | Annual General Meeting | | a brokered ceasefire in January, a South | which overall should provide steady | At our 2024 Annual General Meeting | | Korean martial law crisis and the shock | performance under the myriad of | (AGM) in March, it was a pleasure to once | | resignation of Justin Trudeau in Canada. | global ‘conditions’ – the reason behind | again host an event well attended by | | Extreme weather events continued | our ‘All-Weather’ tagline. Amidst all the | shareholders, with an interesting range | | around the world including major storms | ‘macro’ signals we remain a ‘bottom-up’ | of questions and discussion. We look | | at home in the UK and the recent wildfires | trust, seeking diverse opportunities from | forward to welcoming shareholders once | | devastating L.A. | individual companies – cognisant of the | again this year to the AGM which is to be | | | effect that external factors could have on | held at Trinity House, Trinity Square, Tower | Many western nations are becoming that portfolio of companies, but not trying Hill, London, EC3N 4DH, at 12.00 noon uneasy at the deepening military and to predict outcomes or have investment on Wednesday 2 April 2025. Attending trade links between Russia, China, Iran decisions guided in a wholesale fashion shareholders will receive a presentation and North Korea (dubbed the ‘Axis of by those factors. from the portfolio managers before the Upheaval’ amongst a collection of similar formal business takes place. We would To end on a high note in what has been monikers). Whether this (as yet informal) be delighted to meet with all those a positive year for the recognition of the alliance will exacerbate any of the current shareholders who are able to attend. trust by investors, the world remains at a world conflicts or stand-offs remains to high cadence in terms of advancement. AI Shareholders can send any questions be seen, but what is certain is that it has springs immediately to mind here, but the to be answered at the AGM by the refocused most nations on defence and world in general is seeing technological board and portfolio managers care of assured spending in that area is both advancement across so many fields. As the company secretary at investment- bolstered, but also more accepted by a prudent investors we have to recognise trusts@allianzgi.com or in writing to public at large. | | the risks that carries (particularly market | the registered office (further details are | | --- | --- | --- | | Trump’s second term has already seen | over-exuberance), however there can be | available on page 106) and we will | | both mixed signals and reactions. We will | no doubt that opportunities to invest in | publish questions and answers on the | | have to wait to see how much will change | great companies continue to abound. | website after the meeting. We encourage | | under his premiership. In investment | | all shareholders to exercise their votes in | | terms we will also have to see whether | Communication | advance of the meeting by completing | | the anticipative moves already made | The board and portfolio managers | and returning the form of proxy. | | by markets will prove to be correct, or | believe that as the trust is owned by its | | Carolan Dobson whether more volatility will ensue. The shareholders, they must do all they can Chair latter could be highly likely given the news to honestly and clearly describe what 12 February 2025 flow sensitivity of markets, and what we the trust is trying to offer and accurately have seen before of the Trump ‘playbook’. critique whether this is being delivered. 8 OVERVIEW # Performance – review of the year ## Revenue | Year ended 30 November | 2024 | 2023 | % change | | --- | --- | --- | --- | | Income available for ordinary dividend | £11,685,745 | £11,251,047 | +3.9 | | Earnings per ordinary share | 27.4p | 26.4p | +3.8 | | Dividends per ordinary share | 23.75p | 22.7p | +4.6 | | Consumer price index | 135.1 | 131.7 | +2.6 | ## Assets | As at 30 November | 2024 | 2023 | Capital return % change | Total return^{1} % change | | --- | --- | --- | --- | --- | | Net Asset Value per ordinary share with debt at fair value | 1,459.6p | 1,258.6p | +16.0 | +17.9 | | Net Asset Value per ordinary share with debt at par | 1,438.8p | 1,237.2p | +16.3 | +18.2 | | Share price | 1,460.0p | 1,065.0p | +37.1 | +39.3 | | Total net assets with debt at fair value^{2} | £627,111,895 | £537,307,615 | +16.7 | - | | Total net assets with debt at par | £618,182,360 | £528,209,759 | +17.0 | - | | Ongoing charges^{3} | 0.63% | 0.64% | - | - | ## Net Asset Value with debt at fair value$^{4}$ relative to benchmark$^{5}$ | | Capital return | Total return^{1} | | --- | --- | --- | | Change in Net Asset Value | 16.0% | 17.9% | | Change in benchmark | 20.5% | 23.6% | | Percentage point performance against benchmark | -4.5 | -5.7 | A Glossary of Alternative Performance Measures (APMs) can be found on page 111. $^{1}$ Total return is based on the capital Net Asset Value, including dividends reinvested. (APM). $^{2}$ Total net assets with debt at fair value. (APM). $^{3}$ The ongoing charges percentage is calculated in accordance with the explanation given on page 111. (APM). $^{4}$ The board prefers to measure performance using Net Asset Value with debt at fair value in line with industry practice, as demonstrated in the Chair's statement on page 5. (APM). $^{5}$ For the financial year under review the benchmark was 70% FTSE World Ex UK Index and 30% FTSE All-Share Index. 9 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## Historical record 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Revenue Total income (£000s) 8,735 9,996 11,000 10,968 11,505 9,195 11,487 12,623 14,426 15,233 Earnings per share 14.09p 16.40p 18.40p 19.67p 21.66p 15.96p 20.35p 22.66p 26.35p 27.37p Dividend per share 15.30p 15.80p 16.50p 18.15p 19.98p 20.06p 20.15p 21.50p 22.70p 23.75p Capital 1 Total net assets (£ms) 273.6 318.3 368.0 360.3 403.8 422.1 502.4 497.1 528.2 618.2 2 Total net assets (£ms) 262.5 307.7 359.2 361.1 400.2 416.5 497.5 503.2 537.3 627.1 1 Net Asset Value per ordinary share 636.2p 742.8p 862.0p 843.9p 945.8p 988.7p 1,176.9p 1,164.4p 1,237.2p 1,438.8p 2 Net Asset Value per ordinary share 610.3p 718.0p 841.4p 845.8p 937.4p 975.5p 1,165.4p 1,178.7p 1,258.6p 1,459.6p Share price 540.5p 591.8p 785.0p 745.0p 862.0p 842.0p 1,050.0p 1,020.0p 1,065.0p 1,460.0p 2 | Year end discount % | | 11 18 7 12 8 14 10 14 15 | 0 | | --- | --- | --- | --- | | 1 | 2 | | | | Debt at par. | Debt at fair value. | | | 30 25 20 15 10 Net Asset Value Return % 5 10 Re-based to 100. Source: AllianzGI/Thomson Reuters DataStream. Benchmark: 70% FTSE World Ex UK Index and 30% FTSE All-Share Index. Brunner debt at par Alternative Performance Measure (APM). See Glossary on page 111. Brunner debt at fair value 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Net Asset Value total return with debt at fair value and debt at par Benchmark 0 ## Strategic ## Report 12 Introduction 13 Section 172 Report 16 Key Performance Indicators 18 Risk report 23 Environmental, Social and Governance (ESG) Issues Connecticut, USA. Electronic and fiber optic components and systems manufacturer Amphenol, headquartered in the state, was a notable contributor to performance. 11 11 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## Introduction Purpose Our purpose is to provide the company’s company’s shares are attractive to The company has a main market shareholders with growth in capital new investors and investor groups, listing on the London Stock Exchange. value and dividends over the long term particularly individuals with smaller In addition to annual and half-yearly through investing in a portfolio of global portfolios held either directly or in self- financial reports, the company invested pension plans for whom we can announces Net Asset Values per share and UK equities. The company aims to provide a balanced solution for equity daily and provides further information achieve a return higher than that of our investment. It is also our objective to monthly to the market, in order for benchmark, after costs, and to achieve provide good value for shareholders investors and market professionals to steady dividend growth in real terms. and ensure that the costs of running compare its performance with its peer the company are reasonable and group. The investment manager also Strategy review competitive. Information on Revenue issues a monthly update on investment We hold an annual strategy meeting and Invested Funds in the year is performance which is posted on the outside the normal timetable of board summarised on page 61. company’s website and is available meetings. At the most recent meeting the by email. topics covered included: Brunner has an independent board of non-executive directors and no – Investment strategy and how AI can Manager’s investment style employees or premises of its own. be used The essence of the investment style Like other investment companies, it – Market conditions and sources which we ask the investment manager outsources investment management, of return to follow is to select the best stocks in accounting, company secretarial and – Marketing strategy and the focus a ‘bottom up’ approach, before any other administration services to an sector or country consideration. The for 2025. investment management company – portfolio is concentrated into 55 stocks Allianz Global Investors UK Ltd – and to at 30 November 2024 (60 stocks in Business model other parties, including HSBC Bank plc 2023). Within that concentration modest The Brunner Investment Trust PLC carries as depositary and custodian, and MUFG, gearing – employing the company’s formerly Link Group as registrar. This on business as an investment company borrowings to invest – is within guidelines enables Brunner to provide shareholders and follows the investment policy set by the board. with a competitive, cost-effective way to described below. gain wide investment exposure through By pursuing our investment objective a single investment vehicle. we aim to appeal to a broad range of investors and to ensure that the ## Investment Policy | Investment objective | Risk diversification | Gearing | | --- | --- | --- | | The Brunner Investment Trust PLC aims | The company aims to achieve a spread | The company seeks to enhance | | to provide growth in capital value and | of investments across geographies and | returns over the long term through | | dividends for investors over the long | sectors. The maximum holding in any | appropriate gearing. The board | | term through investing in a portfolio of | single stock is limited to 10% of gross | monitors the gearing, which is | | global and UK equities. | assets at the time of investment and | employed within the guidelines | | | the portfolio will consist of at least 50 | set from time to time by the board. | The benchmark against which stocks. The company will not invest Gearing in any case will not exceed performance is measured is 70% FTSE more than 15% of its gross assets in 20% of net assets at the time World Ex UK Index and 30% FTSE other UK listed investment companies. of borrowing. All-Share Index. In the investment policy above, gross assets means the company’s assets before deduction of all debt and other obligations, net assets means the company’s assets after deduction of all debt and other obligations based on the fair value of the long- term debt and preference shares. 12 STRATEGIC REPORT ### Section 172 report ## Engagement with key stakeholders ### The company’s shareholders are its primary stakeholders. Other stakeholders include service ### providers and the companies in which it invests. The board’s strategy is facilitated by the ### manager reporting interaction on its behalf with a wide range of stakeholders through ### meetings, seminars, presentations and publications and through contacts made through our ### suppliers and intermediaries. Engagement with the company’s stakeholders enables the company to fulfil its strategies and to promote the success of the company for the benefit of the shareholders as a whole. In the year we were pleased to hold the Annual General Meeting (AGM) as an in-person event which was well attended and we hope to see and meet with more shareholders in 2025. Set out below are some examples of the ways in which Brunner has interacted with key stakeholders to demonstrate how the board and its agents have considered stakeholders in pursuit of the success of the company and the promotion of that success for the long-term: Stakeholders and how they are taken into account Activity in the year Outcome Shareholders are identified as the Participation in investor conferences The investment team with co-leads primary stakeholders as the investors and webinars, together with videos Julian Bishop and Christian Schneider in the company. The company’s and podcasts on the website informs continues to engage constructively objective is to provide growth in shareholders of the investment with shareholders, journalists capital value and dividends for management activity and and industry commentators. The investors over the long term and performance of the company. investment team has multiple skill the company’s strategy is to provide sets (including Income, Growth, The further use of new presentation shareholders with the desired returns Global and UK) and has an increasing styles to engage investors such as by diversifying to take into account recognition in the investment audio (podcasts), video and the Turtl risk appetite. trust arena. platform to distribute information to shareholders and the wider Both the company’s market rating investment community, including in (reflected in the discount and shorter, more digestible formats. premium) and the liquidity of the company’s shares have continued Jim Sharp’s relationship to the to improve steadily over the year Brunner family shareholders provides as shown in the KPI reporting on further insight for the board into the page 17. views of investors to be used for the advantage of all. The discount, one of the company’s KPIs, notably fell in 2024 and for a period the shares traded at a premium. The movement of the discount over the year is shown on page 17. Since the year end the company’s shares have traded at a low discount. 13 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 Stakeholders and how they are taken into account Activity in the year Outcome Readers of communications including The user experience on the website Continual enhancements and our shareholders and other investors, continued to be developed during the improvements to the website looking for information about the year. The manager has worked with including both helpful background company on the website and in online other publications, such as Citywire, and educational material. We strive media coverage. to provide more information about to keep information as relevant and the trust online, keeping it fresh current as possible. with new video content, interviews and podcasts. Public Relations and media – the There is an Integrated PR PR activity (generating exposure company continues to work with programme. Investment managers in consumer finance titles and the public relations advisers to ensure Julian Bishop, Christian Schneider national press) is crucial in providing information about the company, and James Ashworth provide information for self-directed investors its strategies and performance can interviews, presentations and record through the platform market. Reports reach a wide audience to update podcasts to inform and educate. to the board show there is a direct shareholders and potential investors correlation between press articles We work with a third party, Lansons through press articles and online appearing and spikes of interest and Communications, and the campaign media coverage. purchases of the company’s shares. work is aligned with AllianzGI’s marketing activity. Following feedback that people want bite-sized, shorter presentations, the majority of content for engagement is in short form, with longer form content accessible for those that want to delve deeper. Service providers – the company’s In addition to regular contact and Assurances from direct service stakeholders need to be assured of assurance testing that sound and providers on their internal controls good governance and controls in effective controls are in place from are given formally to the company the company. all of these service providers, there twice yearly but day-to-day contact is a rolling programme of due with the investment trust team As well as the management company, diligence visits to suppliers of third ensures that issues are quickly the board has appointed a depositary, party services by the AllianzGI’s identified and acted upon and that a custodian and a registrar to provide investment trust team to ensure remedial action can take place. specialist services. that the company is getting good quality services with robust and fit for purpose internal controls. AllianzGI’s investment trust team and supporting operations also receive detailed due diligence assessments by direct suppliers, for example, looking at NAVs and the pricing process and on general controls, by HSBC, the company’s depositary and custodian. A visit took place in 2024, with HSBC’s annual assessment of the AllianzGI UK Ltd entity as the AIFM, and no issues were raised. 14 STRATEGIC REPORT Stakeholders and how they are taken into account Activity in the year Outcome Potential new investors are an The marketing team also works on Outcome: Analysis is in the form of important stakeholder group and events and campaigns with other detailed investor group feedback getting key information to the research and marketing companies, and in considering the metrics of key investment market so that investors including Edison and Kepler. activity over the year: in particular both current and prospective can the board can see the effectiveness Resources were allocated by the make informed investment choices is a of communicating with investors by board during the year for publishing significant activity. monitoring daily traffic on the website research and event participation. and investment through ‘spikes’ Research platforms and distribution ‘Direct to consumer’, for self-directed of investment on platforms after partnerships are employed to reach a investment, is primarily driven by publications and events throughout wider audience of investors. platforms. Platforms essentially give the year. Interest in Brunner is also convenient access to the majority of tracked through search engine the investment universe for investors. optimisation (SEO). The board has encouraged activity The board continues to believe that to increase recognition by those the best approach for Brunner is to operating the platforms through follow a steady path and to be an influencers (including through PR, ‘all-weather’ global equity portfolio video recordings with Asset TV and for investors, aiming for long-term the company’s digital marketing stability of capital return and strategy). ‘Influencing’ activity involves provision of a steadily rising dividend sponsored content, advertising and to shareholders. client events, targeting the platforms themselves alongside the key research platforms. In the past two years the board has consistently described the trust as an ‘all-weather’ global equity portfolio, setting out clearly what Brunner offers its investors. 15 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 # Key Performance Indicators The board uses the following Key Performance Indicators (KPIs) to monitor and evaluate the performance of the company in executing its strategy. ## Performance against the benchmark index Net Asset Value total return with debt at fair value and debt at par | | Debt at fair value | Debt at par | Benchmark | Percentage point relative return | Percentage point relative return | | --- | --- | --- | --- | --- | --- | | 2024 | +17.9% | +18.2% | +23.6% | -5.7 | -5.4 | | 2023 | +8.7% | +8.2% | +5.5% | +3.2 | +2.7 | | 2022 | +3.0% | +0.8% | +1.4% | +1.6 | -0.6 | ![img-0.jpeg](img-0.jpeg) Source: AllianzGI/Thomson Reuters DataStream. Benchmark: 70% FTSE World Ex UK Index and 30% FTSE All-Share Index. Alternative Performance Measure (APM). See Glossary on page 111. This is the most important KPI by which performance is judged. The principal objective is to achieve a return higher than that of the benchmark index over the long term, after absorbing costs. For this indicator, we measure the performance against the benchmark using NAV with debt at fair value, in line with industry practice. We have also disclosed here the performance against the benchmark using NAV with debt at par value for information purposes. Capital returns are shown on page 9 and in the Chair's Statement. ## Dividends Annual dividend ![img-1.jpeg](img-1.jpeg) Includes the proposed final dividend. The board aims to pay an increased dividend each year, taking into account inflation and the ability to achieve this subject to general earnings growth and dividends received in the portfolio. Dividends paid in the past ten years are set out in the Historical Record table on page 10, and in the graphic on page 4, which show that dividends have risen in every year since 1972 and have increased by 4.6% this year. 16 STRATEGIC REPORT ### Share ownership Percentage of issued capital held by wealth managers and investment platforms The marketing programme targets 2023 2024 professional and retail investors 45.0% and aims to create ongoing and sustained demand for Brunner shares. A successful marketing strategy 36.4% stands to benefit all of the company’s 29.1% 27.7% shareholders by increasing liquidity. 22.8% 21.9% We look at the growth of share holdings of clients of wealth managers 9.8% and of investment platforms to see 3.7% 2.0% 1.7% the impact of retail demand for the company’s shares. 2 | Investment | Direct | | Wealth | Financial | Others | | | --- | --- | --- | --- | --- | --- | --- | | | | 1 | | | | 1 | | platforms | holdings | | managers | institutions | | including Brunner family members | 2 including beneficial owners not known The company’s shares currently trade at a discount to the Net Asset Value ### Discount per share and during the year had traded at a premium from time to time, averaging at a discount of 4.7%. The 10 share price depends on a number of factors, including sentiment towards the 5 company and towards investments in 0 equities in general. The board monitors % the discount with the aim in normal -5 markets of being not out of step with comparable trusts in the sector. -10 The board gives authority in certain -15 circumstances to buy back shares and -20 either cancel the shares or hold them in treasury, which would be likely to -25 result in a temporary narrowing of the Nov 2021 Nov 2022 Nov 2023 Nov 2024 discount. In other circumstances, if the shares trade at a premium the board instructs the issuance of new shares to manage the premium and help provide liquidity to the market. ### Ongoing charges Ongoing charges are operating expenses incurred in the running 0.64% 0.63% of the company, whether charged to revenue or capital but excluding financing costs. The ongoing charge is calculated in accordance with the AIC’s recommended methodology (See Glossary on page 111). This figure does not include costs incurred from trading activities, as these are capitalised within the investment valuation (Note 8 on page 93) which amount to a further 0.05% of net assets 2023 2024 (2023: 0.05%). Ongoing charges are published by the AIC. 17 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## Risk report ### As reported to shareholders in the half-yearly report in 2024, the economic backdrop ### continues to stress test the business models of all companies. The board has maintained its close contact with the manager and other third party service providers to understand their responses to the macroeconomic and geopolitical situation and in particular actions taken to mitigate the effects of these risks on the company and its business. The likelihood of both ‘Market volatility’ and the ‘Emerging’ risks from the impact of AI on our portfolio and continued geopolitical and macroeconomic change remain ‘almost certain’ this year as they were last year, as shown in the heat map below. Risk management policy The board operates a risk management policy to ensure that the level of risk taken in pursuit of the board’s objectives and in implementing its strategy are understood. The principal risks identified by the board are set out in the tables on pages 19 to 21, together with the actions taken to mitigate these risks. The process by which the directors monitor risk is described in the Audit Committee Report on page 73, and includes a review of a more detailed version of these tables, in the form of a risk matrix, at least twice yearly. Risk appetite The directors assess the likelihood of occurrence and perceived impact of each risk after mitigating actions and consider the extent to which the resulting residual risk is acceptable, which is defined as the board’s risk appetite. The results of this exercise are shown in the heat map below: The controls and mitigation of 1.1 IMPACT portfolio and business risk will continue to operate, however, Market volatility there remains a risk that the level of volatility and impact of emerging risks may be such that 4.1 the level of portfolio earnings 3.3 cannot be mitigated by factors Emerging – 3.4 Accounting / geopolitical within the board’s control. legal/regulatory uncertainty Corporate governance 2.1 Investment 4.2 strategy 3.1 Emerging – Organisational impact of AI set-up / process on the portfolio 2.2 3.2 1.3 Shareholder 2.6 relations Outsourcing / Counterparty third party Market Risk is acceptable, no demand | | 2.3 | | 3.6 | additional measures needed | | --- | --- | --- | --- | --- | | Investment | | Financial | | Risk is of concern but | | performance | | Crime/Fraud, | | | 3.5 | | | Cyber and AI | sufficient measures are | | --- | --- | --- | --- | | Key persons | | | defined and have been or are | | | 2.4 | | being implemented | 1.2 2.5 Financial Risk is of concern, sufficient Market liquidity and mitigation measures Liquidity and pricing gearing not possible 3.7 low moderate high very high 1.4 Reputational Currency rare unlikely moderate likely almost certain LIKELIHOOD 18 STRATEGIC REPORT Investment and portfolio Risks Principal risks identified Controls and mitigation 1.1 Market volatility The board meets with the portfolio managers and considers asset Significant market movements may adversely allocation, stock selection and levels of gearing on a regular impact the investments held by the company basis and has set investment restrictions and guidelines that are increasing the risk of loss or challenges to the monitored and reported on by AllianzGI. The board monitors yields investment strategy, reduction of dividends and can modify investment parameters and consider a change to across the market affecting the portfolio yield dividend policy. and the ability to pay in line with dividend policy. Macroeconomic factors and their causes may mean mitigation may Macroeconomic factors could also cause not be possible for significant market movements caused by factors significant market falls, unexpected volatility, outside the board’s control. threat to income or increase in gearing. 1.2 Market liquidity and pricing The board receives reports from the manager on the stress testing of Failure of investments. the portfolio at least twice each year and contact is made with the Chair and board if necessary between board meetings. | 1.3 Counterparty risk | | The manager operates on a delivery versus payment system, | | --- | --- | --- | | | Non-delivery of stock by a counterparty. | reducing the risk of counterparty default. | | 1.4 Currency | | Currency movements are monitored closely and are reported to | | | Exposure to significant exchange rate | the board. | volatility could affect the performance of the investment portfolio. Business and strategic risks Principal risks identified Controls and mitigation 2.1 Investment strategy The board manages these risks by diversification of investments An inappropriate investment strategy e.g., asset through its investment restrictions and guidelines which are allocation or the level of gearing may lead monitored and on which the board receives reports at every meeting. to underperformance against the company’s The board monitors the implementation and results of the investment benchmark index and peer group companies, process with the investment managers, who attend all board resulting in the company’s shares trading on a meetings, and reviews data which shows risk factors and how they wider discount. affect the portfolio. The manager employs the company’s gearing tactically within a strategic range set by the board. The board also meets annually specifically to discuss strategy, including investment strategy. 2.2 Shareholder relations Reports on shareholder sentiment are received from the manager The investment objectives, or views on decisions and brokers and reviewed by the board. Shareholders are actively such as gearing, discount management, dividend encouraged to make their views known. policy, of existing shareholders may not coincide with those of the board leading investors to sell their shares. 2.3 Investment performance The investment manager attends all board meetings to discuss Persistent poor performance against the performance with the directors. The board manages these risks by benchmark or other trusts in our peer group giving investment guidelines which are monitored at each meeting. leads to decline in attractiveness of the company The board reviews the investment performance of the company to investors. against the benchmark and peer group. 19 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 2.4 Financial A rolling income forecast (including special dividends), balance sheet Range of risks including incorrect calculation of and expenses are reviewed at every board meeting. Reporting from NAV, inaccurate revenue forecasts, incorrectly the custodian covering internal controls in place over custody of calculated management fees, issues with title to investments and over appointment and monitoring of sub-custodians investment holdings. is produced and reviewed at least annually. The board’s investment restrictions are input in trading systems to impose a pre-trade check. 2.5 Liquidity and gearing The board meets with the portfolio managers and considers asset Insufficient income generated by the portfolio allocation, stock selection and levels of gearing on a regular basis. and due to stock market falls, gearing increases Investment restrictions and guidelines are monitored and reported to levels unacceptable to shareholders and the on by AllianzGI. Regular compliance information is prepared on market which in extreme circumstances results in a covenant requirements. breach of loan covenants. 2.6 Market demand The board regularly reviews the level of premium and discount and The level of discount of the share price to the existing shares can be bought back by the company when the board NAV moves to unacceptable levels, threatening considers this expedient. confidence in the company’s shares. Operational risks Principal risks identified Controls and mitigation 3.1 Organisation set up and process The manager and the other key service providers report on business Failure in the operational set up of the company, continuity plans and the resilience of their response to extreme through people, processes, systems or external situations. Third party internal controls reports are also received from events could result in financial loss to the company these service providers. or its inability to operate. 3.2 Outsourcing and third party AllianzGI carries out regular monitoring of outsourced administration Risk of inadequate procedures for the functions, which includes compliance visits and risk reviews where identification, evaluation and management of necessary. Results of these reviews are monitored by the board. risks at outsourced providers including AllianzGI Additional assurances on business resilience and cyber security are and its outsourced administration provider, State obtained by the board. Agreed Service Level Agreements (SLAs) Street Bank & Trust Company, HSBC Bank plc and Key Performance Indicators (KPIs) are in place and the board (Depositary and Custodian) and MUFG Corporate receives reports against these. Markets, formerly Link Group, (Registrar). 3.3 Regulatory The board maintains close relations with its advisers and makes Failure to be aware of or comply with legal, preparations for mitigation of these risks as and when they are known accounting and regulatory requirements which or can be anticipated. could result in censure, financial penalty or loss of investment company status. 3.4 Corporate governance The board is highly experienced and knowledgeable about Weak adherence to best practice in corporate corporate governance best practice and includes directors who are governance can result in shareholder discontent board members of other UK plcs and other investment companies. and potential reputational damage to The board takes regular advice on best practice. the company. 3.5 Key person Manager and board succession plans are in place. Cover is available Departure of the portfolio manager, certain for core members of the relevant teams of the manager, and work professional individuals, and/or board members, can be carried out by other team members should the need arise. may impact the management of the portfolio, the achievement of the company’s investment objective and/or disruption to its operations. 20 STRATEGIC REPORT 3.6 Financial crime, fraud, cyber security and AI AllianzGI has anti-fraud, anti-bribery policies and robust procedures That the company and the manager’s firm, its in place. The board is alert to the risks of financial crime and threat of employees, or clients are subject to financial crime cyber attacks and reviews how third party service providers handle or breach elements of the Bribery Act. Risk of these threats. These reports confirm that all systems are secure and increased cyber attacks. Risk from traditional and are updated in response to any new threats as they arise. generative Artificial Intelligence (AI) in respect The board asks for and receives assurance from key suppliers on of malicious AI, its rapid growth and the lack information security and AI developments and threats. of regulation. 3.7 Reputational The portfolio management team is in constant interaction with Association with poor governance in portfolio AllianzGI’s Environmental, Social and Governance (ESG) and companies and operational issues in service Stewardship function and actively engages with investee companies providers which can affect the reputation of on ESG issues and makes investments incorporating ESG factors the company. in the decision process. Service providers are monitored and the manager provides oversight. Emerging risks Principal risks identified Controls and mitigation 4.1 Emerging – geopolitical uncertainty The board carries out horizon scanning by keeping informed through Geopolitical uncertainties including changing its manager and advisers on the political, economic and legal membership of international alliances and landscape, and reviews updates received on regulatory changes that agencies, the conflict in Israel-Gaza and the affect the company. ongoing invasion of Ukraine by Russia, any of which could cause significant market falls, threat to income or increase in gearing. 4.2 Emerging – impact of AI on the The board carries out horizon scanning by keeping informed through investment portfolio its manager and advisers on the political, economic and legal The rapidly changing landscape for the tech sector landscape, and reviews updates received on regulatory changes that and impact of disruptive use of AI on other sectors affect the company. which could cause significant shifts in valuations of The manager reports on its consideration of AI developments and companies in the portfolio. threats in its oversight of investments. 21 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 Going Concern – The liquidity of the portfolio, and the company’s ability to pay dividends and to meet the budgeted expenses, including The directors have considered the company’s investment interest payments, of running the company. objective and capital structure both in general terms and in the context of the current macroeconomic background. Having Based on the results of this assessment, the directors have noted that the portfolio, which is constructed by the portfolio a reasonable expectation that the company will be able to manager on a bottom up basis, consists mainly of securities continue in operation and meet its liabilities as they fall due which are readily realisable, the directors have also continued to over the five year period of their review. consider the risks and consequences of such external factors on the operational aspects of the company and have concluded The future that the company has the ability to continue in operation and As we show in our page on the history of the trust on the meet its objectives in the foreseeable future. For this reason the inside cover of this document, the longevity of the trust and its directors continue to adopt the going concern basis in preparing importance to our investors continues to be a focus. The future the financial statements. attractiveness of Brunner as an investment proposition with The company held some short term debt as a current liability relevance to a wide variety of investors is something we debate as at 30 November 2024, in the form of a Revolving Credit and evaluate continuously. We have to consider the investment Facility (RCF), which matures within one year. The board is environment and wider economic considerations, such as currently evaluating whether to seek a renewal, to refinance increasing inflationary pressures, and take soundings on the the RCF, or to repay the facility at the maturity date in June prospects for our markets, the returns on assets, economic 2025. While the company is in a net current liability position as growth and numerous other factors. Taking all this into account at 30 November 2024, if an obligation arose investments could the board continues to believe that there is a place for Brunner be sold to raise cash. in the range of options available to the investor and that the company remains viable for the five year period here Viability Statement under review. Brunner is an investment company and has operated as an investment vehicle since 1927 with the aim of offering a return The strategy for the future to investors over the long term. The directors have formally The development of the company is dependent on the success assessed the prospects of the company for a period of longer of the company’s investment strategy against the economic than a year. The directors believe that five years is the suitable environment and market developments. I give my view in the outlook period for this review as there is a realistic prospect Chair’s Statement on page 5 and the portfolio managers that the company will continue to be viable whilst seeking discuss their view of the outlook for the company’s portfolio in to achieve its aim to provide growth in capital value and their review starting on page 26. dividends over the long term. This reflects the longevity of the On behalf of the board company and the expectation that investors will want to hold on to their shares for some time. The board also notes that as a high conviction investor, the portfolio manager has a five year Carolan Dobson view on stocks in the portfolio. Chair The board has assessed the long-term viability of the company 12 February 2025 against the principal risks faced by the company, outlined in the reporting under Risk Management Policy on page 18. Many of these matters are subject to ongoing review and the final assessment, to enable this statement to be made, has been formally reviewed by the board. The factors considered at each board meeting are: – The company’s investment strategy and the long-term performance of the company, together with the board’s view that it can continue to provide attractive returns to investors; – As an investment company Brunner is able to put aside revenue reserves in years of good income to cover a smooth payment of growing dividends in years when there are challenges to portfolio revenues; – The financial position of the company, including the impact of foreseeable market movements on future earnings and cash flows. The board monitors the financial position in detail at each board meeting and at least twice each year it stress- tests the portfolio against significant market falls; – In the current environment the board is reviewing earnings prospects, gearing and debt covenants on a continuous basis with the managers; and 22 STRATEGIC REPORT ## Environmental, Social and Governance (ESG) Issues ### The board considers that it is in shareholders’ interests to be aware of and consider ### environmental, social and governance factors when selecting and retaining investments. ### Details of the company’s policy on ESG are set below. Environmental, Social and Governance research How it works in practice and stewardship AllianzGI employs 45 sustainability professionals. The process Active stewardship is an integral component of our investment of integrating ESG analysis involves AllianzGI’s investment manager’s investment approach. This can help to unlock teams reviewing both ESG scores and financially material potential in companies, as well as protect companies from qualitative information for each holding or company of downside risks. interest. The investment teams then make an assessment of the ESG risk or opportunity that supports the broader investment AllianzGI’s approach to ESG analysis case. AllianzGI’s investment professionals have access to both quantitative tools and qualitative ESG research. Brunner’s portfolio managers follow AllianzGI’s proprietary ESG methodology which is designed to enhance risk AllianzGI’s investment professionals generate in-depth research management and engagement by adding another dimension of companies they own or believe to be of interest and often to existing investment processes across all asset classes. closely follow these issuers over long periods of time. Therefore, The main objective of integrating ESG analysis is to develop they can engage actively with the companies that need it most. an assessment of the financially material ESG risks and AllianzGI’s Sustainability Research & Stewardship analysts opportunities within a broader investment case. AllianzGI’s further support the process by providing company, sector and/ approach also fosters active engagement with company or thematic research. All ESG research and engagement notes management. Active proxy voting is an important part of are documented on AllianzGI’s internal Global Collaboration the ESG process. Our manager has a firm-wide exclusion of Platform. This creates a high degree of transparency and controversial weapons and companies relying to some extent provides portfolio managers with an easy way to monitor ESG on coal extraction. Sustainability research and stewardship risk in their portfolios. analysts may further support the ESG process by providing a framework of company, sector and thematic research. ### Proxy voting 1 December 2023 to 30 November 2024 Active proxy voting engagement for clients is seen as a In the year there were 65 shareholder meetings for companies core element of fiduciary responsibilities and the manager in the portfolio and the manager voted on the company’s provides total voting coverage. This active, global approach behalf at 63 of these. The company voted on 97% of all to the exercise of voting rights is aimed at improving resolutions. Source: AllianzGI. governance standards. Company meeting voting record Vote distribution Number of meetings voted Number of votes for: 81% with management: 19 Number of votes against: 12% Number of meetings with Number of votes abstain: 1% at least one vote Against, Withhold or Abstain: 45 Number of votes withhold: <1% Not voted: 5% 23 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 Sustainability ESG reporting The portfolio managers talk about the importance of The board receives information on ESG scores for the portfolio sustainability in the assessment of the quality of portfolio and this is published in the company’s monthly factsheets. This companies in their Investment Philosophy explanation on is also included on page 44. page 41. A summary of the many engagements with portfolio companies on E,S and G matters is set out on page 43. Company engagement The investment manager conducts regular meetings with Brunner’s ESG policy and web links companies which: A summary of the board’s policy on ESG can be found with the – enriches investment analysis and decision making; company’s details on the Association of Investment Companies’ – helps assess company leadership and culture and build trust; website, where there is also more information on ESG for – facilitates active involvement from portfolio managers and investors: sector analysts in company engagements; https://www.theaic.co.uk/esg-and-investment-companies – focuses on material issues in a case-by-case approach; and – provides an organic link to Proxy Voting decisions. Investment research Proxy voting Company engagement Engagement success is part of delivering investment performance More information can be found at: https://uk.allianzgi.com/en-gb/our-firm/sustainable-investing 24 ## Investment ## Manager’s ## Review 26 Portfolio Managers’ report 41 Investment philosophy and stock selection process 43 Company engagement activities 44 Environmental, Social and Governance performance 45 Top twenty holdings 50 Portfolio analysis 52 Listed equity holdings 55 Distribution of invested funds Madrid, Spain is home to Aena, the owner and operator of almost every airport in the country. 25 25 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## Portfolio Managers’ report Christian SchneiderJulian Bishop The US vs Rest of World (RoW) The stellar performance of the US stock dominated by what we might call the market has been well documented. The fundamental return; a combination American exceptionalism was the theme technology sector has been key to this of cash returns such as dividends plus of this financial year. Over the 12 months exceptionalism; America dominates growth in profits. In the short term, to the end of November 2024 the US this lucrative space. Success has been the valuation multiple – how much S&P 500 Index returned 34% in dollars, concentrated amongst a small number investors are willing to pay per unit of compared to just 10% for the MSCI of huge companies. Remarkably, just profit, which is often measured by the Europe; the largest outperformance eight, all American companies out of price-to-earnings (or P/E) multiple – in at least a quarter of a century. more than three thousand accounted for can vary sufficiently to determine the Remarkably, almost one third of the US performance of a stock. However, over half the MSCI All Country World Index’s outperformance was registered in the total return in 2024. the longer term it is the fundamental few weeks following the election, which return that is likely to matter most to After another strong gain in 2024, President Trump won by a surprisingly financial outcomes. With apologies to the US now accounts for around two Hungarian investor André Kostalany, convincing margin. Famed pollster Nate thirds of most the global equity indices. a stock and its fundamentals are like Silver’s predictions of an outcome ‘closer The S&P 500 itself has become a very a man walking his dog. The man (the than a coin toss’ proved quaint, and concentrated index. The top 5 stocks fundamentals) walks in a straight line, allayed fears of a contested election and alone – Apple, Nvidia, Microsoft, whilst the dog (the stock price) darts off, civil unrest. There was no insurrection at Alphabet and Amazon – now account chasing rabbits. Ultimately, they arrive at the Capitol this time. for almost 30% of the S&P 500’s the same place at the same time. value and almost 47% of the tech Given Trump’s economically stimulative Looking at the US market in 2024 with heavy Nasdaq Composite. Ironically, first term, the US stock market and the this analogy in mind is telling. As noted, many trusts and funds offer greater dollar roared ahead. Trump’s America the S&P 500 returned 34% in dollars diversification than the index these days. First platform and proposals for large, over the past twelve months. However, Indeed, it is noteworthy that the Nasdaq sweeping tariffs concurrently unnerved profit growth for the whole index was tracker would easily fall foul of UCITS just 8% over the same period and the markets elsewhere, further increasing regulations designed to protect investors dividend yield was just 1%. Most of the the large divergence in performance from insufficient diversification. return therefore came from the valuation between the S&P and the rest of It can be instructive to examine the multiple increasing: the dog running the world. components of equity market returns. off into the woods. Clearly this is not Over the long term, equity returns are something that can be relied upon to ## The stellar performance of the US stock market has ## been well documented. The technology sector has ## been key to this exceptionalism; America dominates ## this lucrative space. 26 INVESTMENT MANAGER’S REVIEW S&P 500 (USA): contributors to the 10 year total return 20 3.7% 15 7.2% % 10 2.0% 5 2.5% 0 Change in GBP Dividends EPS Growth Change in P/E Source: AllianzGI, as at 31 December 2024. | reoccur, particularly when we consider | based investors has been meaningfully | handicap the outlook for the US market | | --- | --- | --- | | that the forward multiple on the S&P | improved by three factors – a tax cut, a | vs the UK market going forward. Even if | | 500 is now at levels last seen during | currency boost and a valuation re-rating | earnings in the US continue to outgrow | | the dotcom bubble at the end of the | – that are likely to be one off in nature. | those in the UK, as we would expect | | last millennium. | | them to do, the superior dividend in the | Over the same period, UK equities have UK provides considerable compensation. We can extend this analysis over a seen valuations fall. 10 years ago the In the past ten years the fundamental longer time frame. Over the ten years to valuation gap between the UK and return in the UK (which is more skewed the end of 2024, the fundamental return US markets was fairly small. Today it to dividends that EPS growth) hasn’t on US equities (the dividend plus the is yawningly wide. The outcome of this actually been that far behind the US; earnings growth) has been about 9.2% means we begin 2025 with the S&P 500 7.9% vs 9.2%. The realised return has pa, but this return has been boosted sporting a forecast P/E multiple of 22x, been held back by the P/E multiple 3.7% by valuations expanding – the almost double that of the FTSE 100; the declining and the lack of the currency | dog running ahead of its master – as | widest spread in history we could find. | impact. Should the animal spirits in | | --- | --- | --- | | the trailing P/E multiple increased from | The dividend yield on the FTSE 100 is | the US fade or should the UK market | | 17x to 25x. Moreover, earnings were | now almost quadruple that of the S&P | recover from its malaise, then it is entirely | | boosted in 2018 by Trump’s first term | 500 once we take into consideration | possible that the UK (and Europe, where | | corporation tax cut and UK based | American withholding taxes. Whilst | the history and arguments are similar) | | investors have enjoyed the benefit of | we believe it is virtually indisputable | provides a superior investment return | | the dollar appreciating in value against | the S&P 500 houses a better collection | to the US in the coming years. For that | | Sterling 2.5% per annum. In all, the | of businesses than those listed in the | reason, we continue to believe that | | impressive return on US equities for UK | UK, these starting points meaningfully | our unusual benchmark (70% global, | FTSE All-Share (UK): contributors to the 10 year total return 10 4.2% 8 6 -1.7% % 3.7% 4 2 0.0% 0 Change in GBP Dividends EPS Growth Change in P/E Source: AllianzGI, as at 31 December 2024. 27 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 30% UK) provides a useful source Valley is the most famous cluster, two of diversification. of the magnificent 7 – Microsoft and Amazon – are based further up the West As highlighted, we say this despite our Coast in Seattle, a metropolitan area belief that American companies are with a population similar to Birmingham. generally of superior quality. This is a Over the past half century Silicon provable point. Returns on Invested Valley has built a unique ecosystem – Capital, or how much profit firms encompassing entrepreneurial expertise, generate per dollar of capital they have world-leading universities, a culture of invested, are in aggregate higher in supporting and encouraging start-ups, the US than they are for their European and a large, well-developed venture counterparts. The history of earnings capital and funding system. There is growth in the US has also demonstrably a deep pool of highly skilled, highly been far superior. Revenue forecasts rewarded labour which is attracted from investment bank analysts suggest from all over the world under the H1-B ## All our investment this will continue. But dividends, visa system. and valuations, are also important ## decisions look to balance Moreover, there is an extremely components of investment returns over ## quality, growth and shareholder friendly governance the long run. All our investment decisions framework. Cynics might say this is look to balance quality, growth and ## value. Whilst America a result of corporate capture of the value. Whilst America may score best on government. Remarkably, in the 2016 ## may score best on the the first two of these factors, it lags by a election the richest top 1% of the richest growing margin on the third. ## first two of these factors, top 1% (i.e., the top 0.01%) made 40% of all political donations. It would be On American success ## it lags by a growing extraordinarily naive to believe these It is worth considering why America ## margin on the third. contributions were made with no quid trades at such a premium. Primarily pro quo. The victory of Trump in 2024 there is the record of extraordinary completes the picture of a government performance by newly founded that is run in the interests of the rich and, businesses. Over the past 30 years, six by extension, the shareholder. Whilst companies worldwide have reached in Europe the ESG movement means a $1 trillion valuation and all have businesses and investors continue been American. Whilst fourteen US to expand their social remit to other companies founded in the past 30 stakeholders, in the US the shareholder years have reached $100bn in value, reigns supreme. no European companies have done the same. Many of these new companies Indeed, many businesses across the rely primarily on intangible assets (such pond are backtracking on their diversity, as computer software and algorithms) equality and inclusions commitments rather than tangible ones (such as including, recently, Walmart, the largest factories). These intangible assets are retailer and private sector employer in the world. Vivek Ramaswamy, Elon highly scalable, enabling rapid growth Musk’s partner in the newly proposed with modest incremental investment. ‘Department of Government Efficiency’, The combination of high returns on literally wrote the book (‘Woke, Inc’) invested capital and growth has resulted railing against ESG initiatives, painting in massive value creation and high them as an undemocratic politicisation multiples to boot. The presence of these of business whose sole aim, in his view, has a halo effect over the entire market’s should simply be to make money. collective memory. Equity participation Markets, amoral and dispassionate as in the US has been, for most, a one- they are designed to be, are applauding. way street. Higher valuations therefore The comparison with China is also stark. reflect more than just the compositional The Chinese capitalist elite has never impact of a large tech sector alone. captured the state. Fuzzy property rights American banks trade at around twice and inconsistent application of the law the valuation multiple of their European means that the state can and does counterparts. Retailer Walmart trades at regularly check the power of business a P/E multiple of 35x vs 14x for Tesco, its in pursuit of a perceived greater good. most obvious European counterpart. Shareholder outcomes under this The success of American technology framework have been notably less good companies is a subject of much than they have been in the US, despite discussion. Whilst California’s Silicon far faster GDP growth. 28 INVESTMENT MANAGER’S REVIEW Silicon Valley, California, USA has been the traditional home of the country’s technology giants. 29 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 Financial realities can do extraordinary things that defy being widening inequality. We have expectations. Future cash flows are often said that stock market value We believe it is incorrect, however, to | say that a Trump government is entirely | unknown. Proving that businesses of this | accrues in niches. Often those niches | | --- | --- | --- | | business friendly. Most mainstream | type are over-valued is therefore actually | are de facto monopolies, duopolies | | economists caution that his proposals | very difficult. We cannot definitively | or oligopolies where businesses have | | for tariffs will damage growth for all and | prove that Tesla is not worth $1.2trillion | established positions that reduces the | | simply be passed on to consumers in the | dollars despite its scant profits and | intensity of competition that hampers | | form of higher prices. Given the inflation | shrinking sales volumes. If the carrots | profitability for most. Indeed, many | | experienced under Biden is often | Musk likes to dangle in front of his | of Brunner’s core holdings fit that | | cited as a reason for the Democrats’ | acolytes (autonomous driving, humanoid | description. Barriers to entry, sustainable | | convincing electoral defeat, we expect | robots) come good it is possible it is. | competitive advantages and attractive | | to see his proposals watered down with | Enthusiasm for something like Bitcoin, | industry structures are all indicative of | | time. We also note that Trump’s ability | which does not, cannot and will never | a business’s quality and something we | | to stimulate the economy this term | provide interest or dividends or cash | actively look for when selecting our | | via tax cuts is hamstrung by a weak | flows of any sort, is therefore a useful | holdings. Capitalism is constructed so | | fiscal position. The US budget deficit | acid test of common sense. We note | that competition should erode super | | is already large, particularly given we | that if you were to own all Bitcoin in | normal profits but more and more of | | are not in recession, which is typically | existence (theoretical current value c$2 | the stock market in America comprises | | the time governments need to dip | trillion) you would receive dividends of | businesses that have developed | | into their coffers as tax revenues fall | zero. $2 trillion could also buy 75% of the | enviable resistance to new entrants. With | | and unemployment benefit spending | entire FTSE 100, which would generate | that comes high profitability and when | | goes up. Coupled with a large current | dividend income of around $75bn | combined with growth the result has | | account deficit, the US may eventually | per year. | been very positive financial outcomes. | | prove vulnerable to capital flight. Only | | A key risk to this is regulation. Lina Kahn, | In the spirit of open mindedness, we the ‘exorbitant privilege’ of being the the Head of the FTC, is pursuing multiple can see how Bitcoin may be a useful world’s reserve currency is keeping the cases against what she regards as way to launder money or avoid taxes; bond vigilantes at bay and preventing anti-competitive tactics at companies Swiss banking secrecy laws aren’t what America’s ‘Truss’ moment. But this is not like Google, an alleged monopolist, they were, after all. For those who think a right. If America continues to spend albeit one that reached that status on Bitcoin will proffer a useful currency beyond its means that will undermine merit and without, arguably, hurting should modern civilisation collapse, confidence in Treasuries and America will the consumer. US antitrust authorities we’ve consulted the literature on this; struggle to finance its considerable debts are currently publicly investigating books such as Cormac McCarthy’s The at reasonable rates. companies representing more than Road and Emily St Mandel’s Station 40% of the value of the S&P 500. One It is wrong to describe US government Eleven suggest you should instead invest of the posited reasons the US market bonds such as Treasuries as risk free in a shopping trolley, a rifle and a large performed so strongly immediately assets. Whilst the US government is quantity of tinned foods. We’re afraid the after the re-election of Trump is that certain to pay the coupons on bonds Brunner Investment Trust cannot offer his administration will be more tolerant and repay the principle at maturity, the this service. of the status quo – another example value of those payments in real terms of regulatory capture – and that can be undermined by either inflation Profitability and competition he will replace Kahn with someone or weakness in the currency. We note At the heart of the current debate for more tolerant of businesses with that real American interest rates are global investors is the appropriate ‘dominant’ positions. increasing (i.e., the gap between inflation premium for American stocks. With linked Treasury yields and inflation higher returns, higher growth and a Network effects – three case expectations) indicating that some bond more shareholder friendly business studies from three continents investors already want extra reward for environment we believe it is plain some the risks they detect. There are several key sources of premium is warranted. barriers to entry that support high Concerns about the solidity of fiat One manifestation of the superiority of levels of corporate profitability and currencies (i.e., those not backed by American businesses and the American we spend a lot of time thinking about physical assets) are used to support system being loaded in favour of the them. A key one is ‘network effects’; arguments for owning Bitcoin, which are shareholder is the fact that in the US something that can be seen in several by design finite in number. In our view, profits as a % of GDP are at record of our holdings. Take Visa, the payment Bitcoin is a useful barometer of possible highs. ‘Bowley’s Law’ observes that processing company, which exists in a froth in markets. | | economic interests tend to split 70:30 | virtual duopoly alongside Mastercard. | | --- | --- | --- | | It is hard to define or prove when a | labour to capital over time. In the | There are over four billion Visa cards in | | financial bubble comes into being. If | past years that’s changed, with more | circulation accepted at more than 150 | | you add a grain of sand to another and | economic rent accruing to the latter. | million retail points of sale worldwide | | keep on doing so, at what point does it | This helps explains why stock markets | and issued by tens of thousands of | | become a pile? As we have previously | in the US have roared ahead whilst | financial institutions. We believe it is | | noted, growing, asset-light businesses | real wages have stagnated – the result | very unlikely Visa’s two-sided network of | 30 INVESTMENT MANAGER’S REVIEW cards and merchants can be replicated the outlook for free cash flows over the hence we expect Visa to sustain its long term. This is the only thing that high levels of profitability for many gives an equity, or any security, its value. years. Moreover, as Visa takes a small The rise in ‘assets’ like bitcoin are in our percentage fee of most transactions it view demonstrative of a suggestible processes, it also provides the inflation market showing signs of speculative protection we covet too. If prices go up, froth. Part of our job is to protect our so do its revenues. In our opinion, this shareholders from the ‘madness of represents a true currency debasement crowds’; hence we think our approach is hedge, unlike Bitcoin. particularly pertinent at the present time. We sincerely hope that the shopping Another example of a network is trolley and rifle will not be needed Brambles. This Australia based company anytime soon. operates networks of millions of wooden pallets that are shared and reused by Market review manufacturers, distributors and retailers In Pounds Sterling, The FTSE All World to transport goods. Its core business is ex UK increased 27% in the financial called CHEP (Commonwealth Handling year. The UK FTSE All-Share lagged but Equipment Pool) and dates back to still provided a respectable 16% return. the infrastructure developed to handle Together, Brunner’s 70/30 composite defence supplies during WW2. Today benchmark returned 24%. These are their network enables a producer in exceptional returns by any standards Idaho to ship its wares to market in and, as alluded to above, substantially California without having to retrieve driven by increases in valuations. the pallet; it is collected by the CHEP Brunner shareholders should not expect network and then supplied to users in the this to repeat. local market. In this industry, scale is key | as it minimises the cost of operating the | Global markets were led by the US. The | | --- | --- | | network. The business therefore naturally | S&P 500 increased 34%; a remarkable | | veers towards a monopoly providing | outcome. As previously noted, aggregate | | Brambles with a robust, profitable | profit growth for the companies that | | business in which we are glad to invest. | make up the S&P was just 8% which | means that the market got considerably Network effects also explain the ## At the start of the more expensive over the period. At the strength of Auto Trader Group plc, a start of the financial year the S&P was ## recent addition to the Brunner portfolio. financial year the S&P trading at 19x estimates of the next Virtually all consumers in the UK looking ## twelve months profit. By the end it was was trading at 19x to buy a second-hand car will visit the trading at 22.5x; levels not seen since the ## Auto Trader website or app. Because estimates of the next dotcom bubble. For comparison, the UK of this, virtually every second-hand car ## FTSE All-Share trades at just 12x. twelve months profit. By dealer in the UK chooses to pay to list its inventory on Auto Trader. Because Headline multiples of this type garner ## the end it was trading there is an exhaustive list of inventory, a lot of attention. However, they are a ## the consumer has no need to look at 22.5x; levels not seen very rudimentary assessment of value elsewhere. Once such a marketplace is and multiples have had surprisingly little ## since the dotcom bubble. | established it is highly robust. The net | predictive power for many decades. | | --- | --- | | result, perhaps surprisingly, is that Auto | What the ‘right’ multiple is depends | | Trader is one of the most profitable | on many assumptions such as growth, | | businesses in the world with operating | returns on invested capital, risk, interest | | margins close to 70%. Perhaps even | rates and debt levels. These all vary | | more astonishing is that the value of | and future predictions are subject | | the company’s ‘property, plant and | to considerable conjecture. This is | | equipment’ reported on its balance | what makes a market. Differences in | | sheet is just £15m. The physical cost | expectations for these factors help | | of creating Auto Trader was virtually | explain why one company may be worth | | nothing. Intangible assets, not physically | 25x when one isn’t worth 10x. Despite | | reproducible, are often the key to the | being lumped together, equities are a | | best businesses. | very broad asset class indeed. | | We work hard to invest thoughtfully | One of the reasons the US market trades | | in a way that marries prudence and | at a premium to most others is that it is | | opportunism, optimises for quality, | widely regarded as being higher quality | | value and growth, always focusing on | and higher growth than those elsewhere. | 31 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 Almost every second-hand car dealer in the UK pays to list its inventory with Auto Trader Group plc, a recent addition to the portfolio. 32 INVESTMENT MANAGER’S REVIEW | Historically this is a more or less factual | In 2024 they were simply insufficient | | --- | --- | | statement, and sensible forecasts imply | to keep up with a market fixated on | | this superiority will continue. It is worth | technology and surprised by the cyclical | | more for good reason, in our view. | strength in financials. | However, as we note in our opening report, higher valuations handicap Portfolio review future returns. There are therefore good We look to balance quality, value and reasons to think future equity returns growth factors within the portfolio with in the US may be less spectacular in a focus at all times on the quantity, comparison to other markets. trajectory and riskiness of cash flows over the long term. This is a timeless way Europe ex UK was the laggard, returning of investing, designed to withstand the just 8% over the period. Whilst weak vicissitudes of the market. growth and political instability across | the region are cited as culprits, this | In 2024, growth momentum was by | | --- | --- | | ignores the reality of most global listed | far the most important factor driving | | businesses which have little to do with | the market. Other factors like quality | | where they are listed. Germany’s stock | and value, particularly, were relegated | | market actually fared quite well, driven | in relevance. As such, our balanced | | by larger insurers such as Munich Re | approach wasn’t helpful for relative | | and Allianz, and software company SAP. | performance. Whilst NAV growth was | | French stock markets, on the other hand, | very strong in absolute terms, it lagged | | have far more exposure to luxury goods | the market, delivering 17.9% vs 23.6% | | companies such as LVMH which suffered | for our 70/30 composite global/UK | | as China, a key end market, slowed. | benchmark. As highlighted earlier, | the US market has been driven by the Looking at global sectors it was actually performance of a small handful of ## Financials, not Technology, that led Looking at global sectors increasingly expensive stocks and is now the pack in FY2024 with a 37% return. ## more concentrated than many funds and it was Financials that led In many markets traditional insurers trusts. Whilst Brunner’s shareholders are, ## and banks rebounded from low levels; the pack in FY2024 with a of course, free to invest in index funds stubbornly high interest rates and ## they should do so in the knowledge that 37% return… Information strong credit conditions are fertile soil their diversification may in that case for both, and meaningful cash returns ## Technology was close decrease. Nokia’s weight in the Finnish to shareholders from European banks benchmark peaked at 72% in 2004; the ## have finally resumed after a decade behind, providing a idea that the benchmark is necessarily of absence in the wake of the 2008 ## lower risk than a diversified trust is 36% return. financial crisis. Information Technology nonsensical in this context. was close behind, providing a 36% | return. The largest stocks in this sector | When we look at the sector attribution | | --- | --- | | are overwhelmingly listed in the US, | for our relative performance in FY2024, | | helping explain the country’s recent | we can quickly see that our weightings | | performance and valuation. Associated | were on balance positive. We were | | sectors such as Communication Services | under-weight in lagging sectors like | | and Consumer Discretionary (which | Basic Materials and Consumer Staples | | house stocks like Alphabet and Meta, | and over-weight outperforming | | and Amazon and Tesla, respectively) | Financials. This was somewhat offset by | | also fared well, providing a 33% and | an over-weight to the underperforming | | 23% return. | Healthcare sector. As a reminder, these | weightings are an outcome of our Industrials was the other standout bottom-up, stock specific work. The same performer at 28%. Much of the is true for our geographical weightings, excitement here also revolved around where there was nothing of particular the technology theme. Artificial importance to highlight. intelligence data centres, for example, are hugely energy intensive and the Most of the underperformance is best complementary equipment needed explained at the stock level within the has boosted demand across the Financials and Technology sectors. Both industrial landscape. of these important sectors roared ahead. Our holdings participated but did not Laggards include Consumer Staples keep up. To a large extent, this reflects (12%), Healthcare (12%), Materials (6%) our balanced approach, but also our and Energy (11%). In normal times these bias to prudency. For example, within would be considered healthy returns. 33 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## Elsewhere, our top contributors were a mixed bunch. ## Given we aim for Brunner to be a well-diversified, ## timeless investment, we always find this pleasing. the diverse Financials sector our skew Technology hardware tends to be very Group performed well. Results here is to higher quality, recurring fee-based competitive and deflationary. There is a have continued to impress as hotel business models. This year saw the saying in the industry: despite any piece rates continue to increase and owners outperformance of lower quality, more of hardware’s apparent complexity, add new hotels to the IHG franchise asset intensive businesses like traditional at the end of the day ‘everything is a system. Both companies enjoy largely banks and insurers. We had exposure toaster’; easily reverse engineered, and recurring revenues guaranteed under here, but not enough to keep up with ultimately commoditised. long term contracts in a growth industry the market. Where we have exposure, with considerable barriers to entry; For many reasons, we think Nvidia it is generally at the less levered and all are hallmarks we look for in our is better than that and we don’t rule less risky end of the spectrum. This investment cases. out owning it in the future. However, means that we always run the risk of at present we prefer to participate in Despite being London listed, IHG’s underperforming in a cyclical rally, as the nascent AI industry via what we main market is the US; the company happened this year, but we should be believe are more prudent and diversified has little to do with the UK economy. better protected on the downside in the avenues. Our biggest contributor to The same is true for Baltic Classifieds event of a cyclical downturn. We also performance in the year was TSMC; Group, which is also listed in London. had one holding, Close Brothers, which Taiwan Semi. TSMC is a ‘foundry’ This was another top ten contributor had serious company specific issues that manufactures chips on behalf to performance during the year. The related to its motor finance business. of companies such as Nvidia. These company operates the equivalent to On the plus side, we sold the holding are exceptionally complex devices, Rightmove, Auto Trader and eBay in before the full extent of the company’s cramming billions of transistors into Latvia, Lithuania and Estonia. Businesses problems became fully apparent, an area little more than a square inch. like this which have dominant scale necessitating the cancellation of their TSMC are the only company capable enjoy exceptional economics and rank dividend. Ownership was a mistake we of commercially manufacturing at the amongst the most profitable businesses endeavour to learn from. | | highest resolution. They will therefore | in existence. Having seen BCG replicate | | --- | --- | --- | | Within the Technology sector, our | prosper irrespective of whether Nvidia | the model of the UK equivalents, we are | | reluctance to hold Nvidia cost the trust | or an emergent competitor design | pleased to have participated in their | | well over 2% of relative performance. | the chips. They also make chips for | well-deserved success. | | We have pored over Nvidia at length. | numerous other end markets, reducing | | We also had success in UK with The company makes the silicon chips the absolute risk of investing in this building products company Tyman used in AI applications. Whilst we fast-changing area. and homebuilder Redrow. Both were believe the company is deserving of Two of our other top 10 contributors to subject to takeover bids during the year, much admiration, we are uncomfortable performance in the year also benefitted perhaps reflecting the exceptional value with the sustainability of demand for from growth in AI. Both Amphenol and corporate buyers are seeing in the UK their products. Many of the ultimate Schneider Electric make components market at present. users of Nvidia silicon are loss making and systems that are used in the AI start ups, repeatedly ‘training’ Aside from not owning Nvidia, not construction and connection to the grid models, with no clear ‘killer apps’ or owning Meta (parent of Facebook) of energy hungry AI data centres. | credible paths to profitability. In Carlota | | also hurt during the year. Elsewhere, | | --- | --- | --- | | Perez’s seminal study of technological | Elsewhere, our top contributors | detractors were varied. Microchip, | | revolutions, she highlights that it is often | were a mixed bunch. Given we aim | a supplier of basic semiconductors | | not those who provide the hardware | for Brunner to be a well-diversified, | suffered a serious downturn as | | that powers the revolution that are | timeless investment, we always find this | customers worked down inventory they | | the winners, rather those who use the | pleasing. Top contributors include GE | had accumulated after COVID. We | | technology in a value creative way. | Aerospace, a company that makes the | reduced the position but should have | | For example. Facebook and Netflix | jet engines powering three quarters | done so earlier. Our small position | | benefitted more from the internet than | of all commercial flights worldwide; | Nestle also had a tough year, with | | hardware manufacturer Cisco Systems, | a testament to their extraordinary | growth slowing after a series of large | | despite the latter being the most | engineering prowess. Also within the | inflation driven price increases in prior | | valuable company in the world in 2000. | travel space, Intercontinental Hotels | years and costs pressuring margins, | 34 INVESTMENT MANAGER’S REVIEW Over 90 per cent of the world’s most advanced chips are currently manufactured by top performer Taiwan Semiconductor Manufacturing Company. PHOTO © TSMC 35 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 Top contributor GE Aerospace, makes the jet engines powering three quarters of all commercial flights worldwide. 36 INVESTMENT MANAGER’S REVIEW | in addition to investors’ reference for | added seven new names to the portfolio | | | --- | --- | --- | | higher growth firms than defensive | during the year. Six of those were in the | | | consumer staples. | first half. They were: | | | Other detractors include positions in | 1. Bank of Ireland | | | large companies like Thermo Fisher | 2. General Electric (now trading a | | | Scientific (healthcare equipment and | | GE Aerospace) | | services) and Totalenergies (resources) | 3. Inchcape PLC | | and UnitedHealth (health insurance). In 4. Roper Technologies normal times the moves in these stocks 5. Alphabet wouldn’t warrant much of a mention, 6. American Financial Group but in 2024 they simply failed to keep up with the narrow, tech driven market. For details of these, please see our Half Yearly Financial Report, 31 May 2024. ## Portfolio turnover in Investment activity In the second half we added one new ## 2024 was around 18%, Whilst our intention is to only buy stocks name: Auto Trader Group PLC, the ## we will be happy to own for a long time implying an average eponymous classified vehicles listings (ideally, forever) we reserve the right website. Virtually every second-hand ## holding period of around to change our mind. The three primary car dealer in the UK lists its inventory on reasons for doing so are: | | | Auto Trader, where its dominant share | five and a half years. | | --- | --- | --- | --- | | 1. A change to the original | | of consumer attention means it provides | | | | investment case | their primary source of customer traffic. | | | 2. Valuation | | Growth comes from pricing power, | | | 3. Making room for something new | | adding new functionality for dealers | | and forays into the new car market. The The first reason reflects that investment company has no debt and the asset necessarily requires judgement about light nature of the business means future events and that we may well be all accounting profit is converted into incorrect in our initial assumptions. As cash, which is returned to shareholders Keynes said ‘when the facts change, via dividends and buybacks. We are I change my mind – what do you do, excited to own another high, growing sir?’. Everything we have read about and reliable cash flow generator to prediction, such as Dan Gardner’s and the portfolio. Philip Tetlock’s ‘Super-Forecasting’, suggests that altering positions as Full sales during the first half included evidence changes is imperative. We see St James Place (UK wealth manager), little merit in standing still for the sake Close Brothers (UK specialist lender), of it. We aim to have ‘strong opinions, ANZ Group (Australian bank), Rentokil loosely held’. (pest control) and Intuit (software). | Portfolio turnover in 2024 was around | Please see our half year report for detail. | | --- | --- | | 18%, implying an average holding period | In the second half we also sold our small | | of around five and a half years. We | residual positions in Estee Lauder and | New holdings Complete sales Bank of Ireland St James Place GE Aerospace Close Brothers Inchcape PLC ANZ Group Roper Technologies Rentokil Alphabet Intuit American Financial Group Estee Lauder Auto Trader Group PLC Novo Nordisk 37 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 Ozempic and Wegovy manufacturer Novo Nordisk has been a successful investment, but we opted to sell into strength. PHOTO © NOVO NORDISK 38 INVESTMENT MANAGER’S REVIEW ## Thinking about cash flows over a longer period ## is vital. Without Novo Nordisk being able to ## substantially improve upon its current range of drugs, ## it is extremely unlikely the company’s valuation can ## be rationally justified. | Novo Nordisk, which we had been | the short term. As US economist JK | How the AI market evolves is likely | | --- | --- | --- | | selling down for some time. | Galbraith wisely noted, ‘The only function | to be pivotal in 2025. Expectations | | | of economic forecasting is to make | are enormously high. If you follow | Estee Lauder has been a disappointing astrology look respectable’. Rather, we the money, most AI model builders – holding in the last couple of years focus on delivering a portfolio of diverse, Anthropic, etc. – are burning cash. The as sales in China, the key growth use case and method of monetisation robust equity investments which sensibly driver, reversed. Conversely, Danish is not yet clear. Hundreds of billions balance quality, value and growth. If pharmaceutical company Novo has of dollars are being spent on the those investments generate lots of cash been a terrific holding, but we opted industry’s enabling infrastructure. Even to sell into strength. The company has and if their cash-flow streams grow then in a world where we become inured to become very reliant on a single active outcomes in the longer term should large numbers, that is a vast amount ingredient called semaglutide used both be good. of money. Without useful, profitable in Ozempic and Wegovy, its best-selling Having said that, we have alluded in our applications, spend will collapse under drugs for diabetes and weight loss commentary to some of the extremes financial gravity. Capital expenditure of respectively. Semaglutide is patented seen in markets at present. Most this type is generally cyclical. At some by Novo but loses protection in 2031 obviously this includes the transatlantic point a downcycle is therefore likely, in the US, at which point the drugs will gap in valuations and the extreme which will send shockwaves through lose exclusivity and be subject to generic excitement around artificial intelligence. the sector when it comes. However, if competition. History shows us that this artificial intelligence proves as useful We do not want to over-emphasise the is likely to decimate the profitability as its proponents promise we have no transatlantic gap in valuation as it exists of the original. In our interpretation, doubt it will have a lasting impact on for good reason; American companies this made the company too reliant for economies and markets. Bill Gates was comfort on the approval of new drugs grow faster and create more value. prophetic when he said that we always with superior efficacy to the current But, as we highlight, cash returns are overestimate the change that will occur generation. History also shows us that also important to long term equity in the next two years and underestimate the discovery and approval of such outcomes and lower multiples boost the the change that will occur in the next drugs is often little more than a coin toss; percentage cash yields, ceteris paribus. ten. We look forward to seeing the new precisely the sort of investment case we Much focus has been on the Magnificent businesses that inventive, imaginative seek to avoid. Whilst 2031 is beyond the 7 which now account for well over entrepreneurs build using AI technology. horizon of many market participants (the one third of the US market’s value. We’re just not sure we’ve seen them yet. average US investor holds each stock Comparisons with the dotcom bubble for less than 6 months) and certainly are regularly made. We think these beyond the three year profit forecasts are largely misguided. With a couple of most of the financial models upon of notable exceptions, we think the which many investors rely, we think this is valuations for these companies are a great example of why thinking about cash flows over a longer period is vital. broadly reasonable. These are growing, Without Novo being able to substantially very profitable companies with many improve upon its current range of drugs, quality attributes; they deserve to be it is extremely unlikely the company’s valued highly. It is actually elsewhere in valuation can be rationally justified. the American market where we see froth. Relatively low growth companies trading Market outlook at multiples we struggle to understand, We would generally prefer not to make or lower quality companies that are prognostications about the direction riding the AI wave. These are the areas of either economies or markets in we are most keen to avoid. 39 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 INVESTMENT MANAGER’S REVIEW The Holiday Inn Miami Beach-Oceanfront is just one of more than 6,500 hotels in top performer Intercontinental Hotels Group’s portfolio. PHOTO © IHG 40 40 INVESTMENT MANAGER’S REVIEW ## Investment philosophy and ## stock selection process Long-term focus A balanced, diversified portfolio Our focus is on understanding how a business evolves and Drawing on the full resource of AllianzGI’s global platform, we creates value over the long term. It is only over longer periods look across all industries and geographies to select the most that the fundamental attributes of a businesses or industry attractive investment ideas for the trust’s portfolio. We believe reveal themselves. It is also over longer periods that the in building a balanced portfolio that is diversified across a wide power of compounding takes place. A small cohort of high range of idiosyncratic opportunities and risks. In this way the return, growth businesses are able to deliver exceptional portfolio can be relied upon to deliver a steady and consistent outcomes for shareholders over time. Patience is a prerequisite capital and income return. for participation. Research intensive, focus on cash flow Factually, most equities are long duration assets, whose present AllianzGI’s research platform combines a large global value is derived from cash flows expected well into the future. team of equity and credit portfolio managers and analysts, We therefore believe it is sensible to align our analytical environmental, social and governance specialists and our timeframe with that reality. Our attention is skewed to factors own Grassroots* market research organisation. Collectively, such as returns on invested capital, sustainable competitive these provide Brunner’s fund managers with thoughtful, high advantages, barriers to entry, long term growth rates, capital quality analysis of a wide range of businesses and industries, allocation policies and leverage. Ultimately, considerations augmented by insights into structural and cyclical trends. Our such as these will determine the quantity, trajectory and research emphasises the analysis of sustainable company riskiness of the cash flows that the trust will receive from its cash flows, which we believe provides the truest measure holdings. We believe the stock market remains excessively of corporate performance. (*GrassrootsSM is a division focused on the short term. Through detailed research and of AllianzGI) analysis focused on what truly matters, we seek to deliver superior investment returns. Quality: stable above average returns We seek to identify – Long term competitive advantage this universe through – Strong balance sheets fundamental research – High barriers to entry Quality – Management quality – Stable/improving ROCE/RoE – Sound on ESG issues Growth Valuation Value, not just ‘cheap’ Secular growth – Reverse Discounted Cash Flow – Addressable market growth – Enterprise Value vs. Cash returns – Sustainable growth – technology, brand – Price/Book vs. Return on Equity – Long term, through-cycle approach – Dividends – an output not input – Avoid structural decline 41 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 Stock selection – focus on quality, growth Selling stocks and valuation Despite taking a long-term approach, we are still active Our stock selection process blends assessments of business managers. In general, there are three situations where stocks quality, long-term growth potential and valuation, resulting in will be sold from the portfolio: a holistic view of a company, the risk factors and, ultimately, the – Where there has been a material change to the investment drivers of shareholder value. case. Whilst we work hard to minimise mistakes, we Quality is about understanding the intrinsic attributes of a recognise that we can make errors of judgement. Businesses business model. High quality companies are those with high can evolve in an adverse direction, despite our best efforts to returns on invested capital supported by long-term competitive avoid investments in those that do. advantages, shareholder friendly management teams, sound – Where the valuation has reached uncomfortably high levels ESG and strong balance sheets. and imply expectations that clearly exceed what we believe to be reasonable. Such companies tend to be highly profitable, generating – Where a sale is required to raise cash for a superior substantial cash flow that can be used to fund further, value- investment opportunity elsewhere. creative growth or returned to shareholders as dividends or buybacks. Business quality can vary enormously across and Portfolio construction within industries. Fortunately, as global investors with a large The portfolio consists of a minimum of 50 holdings that investible universe, we can afford to be highly selective. are selected on their individual merits whilst taking To assess long-term growth potential, it is important to into consideration the exposure to individual industries, understand the secular forces that are shaping the economy geographies, themes, factors and other idiosyncratic risk and society, such as demographics, electrification and factors, ensuring that the overall portfolio remains well digitalisation. This provides the context in which to assess balanced and diversified. broader industry drivers as well as a company’s position within The size of each individual holding reflects the level of the industry. Particular emphasis is placed on differentiating conviction. Typically, this reflects our balanced judgement between structural and cyclical growth. Whilst we will invest regarding the quality, growth and value of each investment, in cyclical companies, a much greater value is placed on the with additional considerations related to the likely range of structural element. The combination of a high-quality business outcomes (a proxy for risk) and liquidity. model and long-term growth is a particularly powerful driver of shareholder value. Most of the world’s truly great equities have At the portfolio level, the objective is to ensure that stock enjoyed these twin attributes. specific risk – the risk which results from our stock selection decisions – is the primary driver of the portfolio’s returns. Company valuation seeks to determine whether there is Residual risks such as currency, style, geography or sufficient upside to warrant investing. We look for companies macroeconomic are monitored and managed to ensure that where the quality and/or long-term growth potential is not fully they are not driving the overall portfolio’s returns. Ultimately, appreciated. We want to anticipate rather than react and are the aim is to optimise the portfolio to achieve the dual objective careful not to overpay, for example by identifying companies of consistent benchmark outperformance combined with an with structural growth masked by a cyclical downturn or those attractive and growing income. where we believe business quality is improving. We employ a wide range of valuation tools, such as reverse DCFs (which allow us to determine currently discounted assumptions), free cash flow yields and relative multiples. At all times we are intellectually honest, recognising that the valuation of unknown future cash flows is inherently uncertain. We prefer to be directionally correct, rather than precisely wrong. ESG considerations straddle these three factors. Good governance influences quality, for example. Environmental factors will present opportunities for growth and threats to terminal value. AllianzGI’s sustainability research team is fully integrated into the broader investment research platform, allowing us to develop a deep understanding of these risks and opportunities. As long-term investors, these considerations are critical to our investment process. Our ultimate goal is to provide a balanced portfolio, which optimises for aggregate quality, growth and value. 42 INVESTMENT MANAGER’S REVIEW ## Company engagement activities Our investment process does not end with purchases of shares. We believe that we have an important duty to engage with the boards and executive management teams of the companies in the portfolio. This is not purely about holding management to account, but also about influencing company strategy and promoting effective governance, to help improve long term performance. In particular, we focus on the sustainability of the business model and factors such as the environmental impact of the business, social policies and capital management. The table shows the number of our engagements with businesses last year, and breaks this down into different categories and by sector. Communication Services Consumer Discretionary Consumer Staples Energy Financials Health Industrials Materials Technology Utilities Total Audit & ## 1 accounting Business conduct ## 1 and culture Capital ## 4 management Corporate ## 21 governance Environmental ## 14 risks or impacts Financial ## 1 performance Operational ## 2 performance Risk ## 2 management Social risks ## 20 or impacts Strategy or ## 11 business model Transparency ## 4 and disclosure Several issues may be covered in each meeting. 43 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## Environmental, Social and Governance ## performance AllianzGI does considerable proprietary work in ESG analysis and at the moment also uses research provided by MSCI to help identify Environmental, Social and Governance factors that can impact the businesses of the companies in the portfolio. The charts below show that the Brunner portfolio’s ESG ratings compare well against the benchmark’s ESG ratings over the three year period under review. They show the rating of the Brunner portfolio on Environment, Social and Governance risks and combined ESG risk measurements compared to the rating of the Benchmark (70% FTSE World Ex UK Index and 30% FTSE All- Share Index) scored on a scale of 1-10 (where 10 is high) on a quarterly basis over the three years from 1 January 2017 to 31 December 2024. Environmental performance v benchmark Governance performance v benchmark 8.0 8.0 4.0 4.0 Q1 17 Q4 24 Q1 17 Q4 24 Brunner ESG MSCI Environment BM ESG MSCI Environment Brunner ESG MSCI Governance BM ESG MSCI Governance Social performance v benchmark ESG performance v benchmark 8.0 8.0 4.0 4.0 Q1 17 Q4 24 Q1 17 Q4 24 Brunner ESG MSCI Social BM ESG MSCI Social Brunner ESG MSCI Aggregate BM ESG MSCI Aggregate Source: MSCI/AllianzGI. 44 INVESTMENT MANAGER'S REVIEW # Top twenty holdings ![img-2.jpeg](img-2.jpeg) ## Microsoft Sector: Software & Computer Services Headquarters: North America Value of holding: £41,347,211 Percentage of portfolio: 6.4% Microsoft is one of the world's leading technology companies, with a unique position in enterprise software. Under the leadership of CEO Satya Nadella, the company has shifted away from a traditional 'on-premise' model to focus on its Azure cloud computing platform. The company's Office 365 suite has over four hundred million users and its Windows operating system continues to dominate the PC market. The company is an early leader in artificial intelligence applications. ![img-3.jpeg](img-3.jpeg) ## UnitedHealth Sector: Health Care Providers Headquarters: North America Value of holding: £26,921,235 Percentage of portfolio: 4.2% UnitedHealth is a leading health insurer, offering a variety of plans and services to employers, individuals and government programmes such as Medicare in the US. The business operates two complementary divisions – UnitedHealthcare, which manages health benefits, and Optum, which delivers cost-efficient care aided by technology and data. Together, the company plays a key role in operating and managing costs throughout the healthcare system. ![img-4.jpeg](img-4.jpeg) ## Visa Sector: Industrial Support Services Headquarters: North America Value of holding: £26,789,910 Percentage of portfolio: 4.2% Visa operates the world's largest consumer payment system. The company's extraordinary network consists of 4.6bn cards in circulation, issued by over 14,000 financial institutions which can be used at over 150 million merchant locations in more than 200 countries. In 2024 the company processed an average of 639m transactions per day with a total value of $16 trillion. ![img-5.jpeg](img-5.jpeg) ## Taiwan Semiconductor Sector: Technology Hardware & Equipment Headquarters: North America Value of holding: £22,618,867 Percentage of portfolio: 3.5% Taiwan Semiconductor Manufacturing Company (TSMC) is the world's leading semiconductor 'foundry' with an exclusive focus on manufacturing products for clients such as Apple, Nvidia and Broadcom including a virtual monopoly making the most complex, 'leading edge' chips (e.g., the iPhone's A18 chip, which squeezes 15bn transistors into 3cm2). In 2023 the company made 11,895 products for 528 customers across a wide range of end markets, from AI to automotive. 45 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ![img-6.jpeg](img-6.jpeg) ## Intercontinental Hotels **Sector:** Travel & Leisure **Headquarters:** United Kingdom **Value of holding:** £21,290,172 **Percentage of portfolio:** 3.3% Intercontinental Hotels Group is one of the world's largest hotel companies with 6,500 hotels and a further 2,200 in its pipeline. The business model is asset light; a franchise or management fee is charged to hotel property owners who licence its systems and brands – including Holiday Inn, Intercontinental and Six Senses – under long-term contracts. Low capital requirements means it generates lots of free cash which is returned to shareholders via generous dividends and buybacks. ![img-7.jpeg](img-7.jpeg) ## Alphabet **Sector:** Software & Computer Services **Headquarters:** North America **Value of holding:** £20,115,714 **Percentage of portfolio:** 3.1% Alphabet is the parent company of Google, YouTube, Google Cloud and 'Other Bets' such as Waymo (autonomous driving) and Deepmind (AI). Whilst recent results have been terrific, the company trades at a very reasonable valuation, reflecting uncertainty about the future of the search industry in an era of AI. Our belief is that Google's distribution, low cost to serve and ability to weave AI generated answers into search queries makes it unlikely that the company will be unseated as leader. ![img-8.jpeg](img-8.jpeg) ## Auto Trader Group **Sector:** Software & Computer Services **Headquarters:** United Kingdom **Value of holding:** £16,544,635 **Percentage of portfolio:** 2.6% Auto Trader Group operates the UK's primary second hand car digital marketplace. Over 75% of all minutes spent by UK consumers on automotive marketplace websites were spent on Auto Trader. Growth comes from increased revenue per retailer as the company adds new features and increases listing prices. The company's financials are exceptional; operating margins of around 70% are amongst the highest of any listed company worldwide. ![img-9.jpeg](img-9.jpeg) ## American Financial Group **Sector:** Non-Life Insurance **Headquarters:** North America **Value of holding:** £16,457,071 **Percentage of portfolio:** 2.6% American Financial Group (AFG) is a leading US specialty insurer with a strong and consistent track record of good underwriting and investment performance. The company provides insurance across a range of niche risk areas, including crops, marine, and surety. Established in 1872, AFG has been run by the Lindner family for more than 50 years. The family own 15% of the company, aligning incentives with outside shareholders and ensuring the business is run for the long-term. 46 INVESTMENT MANAGER'S REVIEW ![img-10.jpeg](img-10.jpeg) ## Partners Group Sector: Investment Banking & Brokerage Headquarters: Switzerland Value of holding: £15,510,265 Percentage of portfolio: 2.4% Partners Group is a leading private markets firm based in Switzerland, and one of the most valuable publicly listed alternative asset managers in the world. The company provides tailored solutions to over 800 institutional clients seeking investment expertise in private equity, infrastructure, real estate and credit. Partners Group has grown assets under management at more than 16% a year since 2006, and today manages $152 billion. ![img-11.jpeg](img-11.jpeg) ## Arthur J. Gallagher & Co. Sector: Non-Life Insurance Headquarters: North America Value of holding: £15,091,701 Percentage of portfolio: 2.3% Founded in 1927, Gallagher is today one of the world's leading insurance brokerage, risk management, and HR & benefits consulting companies. Gallagher has a particular strength in advising medium-sized clients, where competitors typically lack Gallagher's scale, industry expertise, and data and analytics capabilities. Organic growth combined with frequent acquisitions of smaller competitors has resulted in average revenue growth of 11% a year for the past 20 years. ![img-12.jpeg](img-12.jpeg) ## Charles Schwab Sector: Investment Banking & Brokerage Headquarters: North America Value of holding: £15,298,332 Percentage of portfolio: 2.4% Charles Schwab is the largest discount brokerage in the US, serving both individual investors and registered investment advisors. Charles Schwab's vast size and extensive use of scalable technology results in low costs per customer, allowing it to offer lower fees than most competitors whilst still making a healthy profit. 36.5 million customers trust Schwab with more than $10 trillion of assets. Assets have grown at a rate of 11% a year since 2003. ![img-13.jpeg](img-13.jpeg) ## Thermo Fisher Scientific Sector: Medical Equipment & Services Headquarters: North America Value of holding: £15,086,581 Percentage of portfolio: 2.3% Thermo Fisher Scientific is the world leader in serving the science industry, with annual revenue over $40 billion. With a mission to enable customers 'to make the world healthier, cleaner and safer', they provide a wide range of products and services that enable life sciences research. These range from relatively basic laboratory supplies to electron microscopes, CRISPR gene editing machines, clinical research services and the production of complex pharmaceutical ingredients. 47 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## 13 14 ## Shell General Electric Sector: Oil, Gas & Coal Sector: Aerospace & Defence Headquarters: United Kingdom Headquarters: North America Value of holding: £14,962,008 Value of holding: £14,150,594 Percentage of portfolio: 2.3% Percentage of portfolio: 2.2% Leading integrated energy company Shell has strength in After divesting all other business lines, GE now trades as natural gas, which is used in conjunction with renewable GE Aerospace, a pure play jet propulsion business. The sources to provide uninterrupted power when wind and solar company provides the engines that power three out of generation is low. Liquefied natural gas (LNG) has also proved every four commercial flights worldwide; a testament to the useful replacing Russian gas and is being used to substitute company’s leadership. The company’s large and growing coal, a more polluting fuel. The company is increasing installed base of engines provides a reliable, very profitable investment in low-carbon energy solutions such as EV charging recurring revenue stream coming from the sale of parts and and hydrogen and is committed to being net zero by 2050. maintenance services. ## 15 16 ## AMETEK Aena Sector: Electronic & Electrical Equipment Sector: Industrial Transportation Headquarters: North America Headquarters: Spain Value of holding: £13,863,951 Value of holding: £12,891,115 Percentage of portfolio: 2.2% Percentage of portfolio: 2.0% Ametek is a global manufacturer of electronic instruments and Aena owns and operates virtually every airport in Spain, a electromechanical devices serving a diverse range of niche country with a large tourism industry and substantial domestic markets and applications. Broad end market exposure reduces flight requirements. The company has free rein to charge duty dependence of any single market, technology or customer free retailers, restaurants and other commercial tenants free and the focus on niches allows the company to differentiate market rents. As the number of passengers and the spend per via technology and innovation. Many of their businesses are passenger grows, so will rents, leading to growing EBITDA. aligned with secular growth trends including health care, Unlike many infrastructure companies, Aena owns all the energy, aerospace and industrial automation. airports freehold and carries less debt, permitting a high and growing dividend yield. 48 INVESTMENT MANAGER'S REVIEW ![img-14.jpeg](img-14.jpeg) ## Bank of Ireland Group Sector: Banks Headquarters: United Kingdom Value of holding: £12,520,413 Percentage of portfolio: 1.9% Like many European banks, Bank of Ireland has spent much of the time since the financial crisis rebuilding and strengthening its balance sheet. Significant improvements to lending standards and a less competitive Irish banking landscape has seen returns improve, leverage fall and large cash returns begin in earnest. Credit conditions permitting, we expect these to continue, providing shareholders with dividends and buybacks that dwarf those on offer in most other sectors. ![img-15.jpeg](img-15.jpeg) ## Unilever Sector: Personal Care, Drug & Grocery Headquarters: United Kingdom Value of holding: £12,337,500 Percentage of portfolio: 1.9% Unilever is one of the world's largest consumer goods companies, selling more than 400 brands including Dove, Wall's and Knorr in over 190 countries. It is particularly well known for its strong market position in emerging markets such as India, Nigeria and Indonesia and for its early commitment to reduce the adverse environmental and social impact of its business. Under a new CEO, the company has begun significantly investing in innovation and premiumisation. ![img-16.jpeg](img-16.jpeg) ## DNB Bank Sector: Banks Headquarters: Norway Value of holding: £12,305,014 Percentage of portfolio: 1.9% DNB is Norway's leading bank with high market share and profitability in a rational, consolidated and prudently regulated market. Norway is a stable, wealthy jurisdiction where banks are required to have high levels of capital, protecting them against adverse developments. DNB ranks as one of the world's safest banks with a credit rating of AAA (MSCI) and exceptional performance in the EU's most recent stress tests. The company pays a very generous dividend. ![img-17.jpeg](img-17.jpeg) ## Accenture Sector: Industrial Support Services Headquarters: United Kingdom Value of holding: £12,116,536 Percentage of portfolio: 1.9% Accenture is a leading global professional services company that offers consulting, technology and operations services. Almost 800,000 employees in 49 countries serve more than 9,000 diverse corporate clients worldwide, including three quarters of the Fortune Global 500. The company works with partners such as Microsoft, SAP and Google to provide a comprehensive suite of services and solutions to corporations eager to ensure they employ the best technology possible. Total value of top twenty holdings: £358,218,825 Percentage of portfolio: 55.6% 49 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## Portfolio analysis Data as at 30 November each year ### Geographical distribution (%) 48.74 50 44.29 40 30 27.30 25.09 26.15 19.76 20 10 2.41 2.37 2.06 1.83 0 North America United Kingdom Continental Europe Pacific Basin Japan 2023 2024 ### Historical geographical distribution (%) North America 50 40 30 United Kingdom 20 Europe 10 Pacific Basin 0 Japan 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 50 50 INVESTMENT MANAGER’S REVIEW ### Sector distribution (%) 25 20 15 10 5 0 | | | Consumer | | Consumer | | Basic | | | --- | --- | --- | --- | --- | --- | --- | --- | | | Industrials Technology Financials Health Care | | Energy | | Utilities | | Real Estate | | | | Goods | | Staples | | Materials | | | 2024 | 24.30 24.27 20.49 13.70 7.33 4.02 3.44 2.45 0.00 0.00 | | | | | | | | 2023 | 24.51 19.89 21.09 14.30 7.23 5.06 3.91 2.63 0.93 0.45 | | | | | | | ### Sector breakdown by country (%) 25 20 15 10 5 0 | | | | Consumer | | Consumer | | Basic | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 2024 | Industrials Technology Financials Health Care | | | Energy | | Utilities | | Real Estate | | | | | Goods | | Staples | | Materials | | | North America | | 10.08 14.67 10.18 10.30 0.00 0.00 0.00 0.00 0.00 0.00 | | | | | | | | United Kingdom | | 3.93 2.57 4.24 1.90 6.76 2.32 2.42 1.42 0.00 0.00 | | | | | | | | Other | | 10.29 7.03 6.07 1.50 0.57 1.70 1.02 1.03 0.00 0.00 | | | | | | | 51 51 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## Listed equity holdings at 30 November 2024 % of invested Name Sector Value (£) funds North America Microsoft Software & Computer Services 41,347,211 6.41 UnitedHealth Health Care Providers 26,921,235 4.18 Visa Industrial Support Services 26,789,910 4.16 Taiwan Semiconductor Technology Hardware & Equipment 22,618,867 3.51 Alphabet Software & Computer Services 20,115,714 3.12 American Financial Group Non-Life Insurance 16,457,071 2.55 Charles Schwab Investment Banking & Brokerage 15,298,332 2.37 Arthur J. Gallagher & Co. Non-Life Insurance 15,091,701 2.34 Thermo Fisher Scientific Medical Equipment & Services 15,086,581 2.34 General Electric Aerospace & Defence 14,150,594 2.19 AMETEK Electronic & Electrical Equipment 13,863,951 2.15 Roper Technologies Software & Computer Services 12,077,737 1.87 Cooper Medical Equipment & Services 10,353,203 1.61 S&P Global Finance & Credit Services 10,284,050 1.60 Corpay Industrial Support Services 10,210,030 1.58 Align Technology Medical Equipment & Services 9,389,651 1.46 CME Group Investment Banking & Brokerage 8,542,243 1.32 Microchip Technology Technology Hardware & Equipment 8,139,019 1.26 Amphenol Technology Hardware & Equipment 6,958,547 1.08 Adobe Software & Computer Services 6,010,459 0.93 AbbVie Pharmaceuticals & Biotechnology 4,574,137 0.71 314,280,243 48.74 Top twenty holding. Added during the year. 52 INVESTMENT MANAGER’S REVIEW % of invested Name Sector Value (£) funds United Kingdom Intercontinental Hotels Travel & Leisure 21,290,172 3.30 Auto Trader Group Software & Computer Services 16,544,635 2.57 Shell Oil, Gas & Coal 14,962,008 2.32 Bank Of Ireland Group Banks 12,520,413 1.94 Unilever Personal Care, Drug & Grocery 12,337,500 1.91 Accenture Industrial Support Services 12,116,536 1.88 Baltic Classifieds Software & Computer Services 11,228,750 1.74 SSE Electricity 9,149,443 1.42 IG Group Investment Banking & Brokerage 8,138,750 1.26 Barratt Redrow Household Goods & Home Construction 7,909,274 1.23 Haleon Pharmaceuticals & Biotechnology 7,745,551 1.20 SThree Industrial Support Services 7,204,813 1.12 Inchcape Retailers 7,189,244 1.12 RELX Media 7,132,421 1.11 Admiral Group Non-Life Insurance 6,696,350 1.04 DCC Industrial Support Services 6,011,250 0.93 GSK Pharmaceuticals & Biotechnology 4,527,505 0.70 Diageo Beverages 3,292,800 0.51 175,997,415 27.30 Top twenty holding. Added during the year. 53 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 | Name | Sector | Value (£) | % of invested funds | | --- | --- | --- | --- | | **Continental Europe** | | | | | Partners Group | Investment Banking & Brokerage (*Switzerland*) | 15,510,265 | 2.41 | | Aena | Industrial Transportation (*Spain*) | 12,891,115 | 2.00 | | DNB Bank | Banks (*Norway*) | 12,305,014 | 1.91 | | ASML Holding | Technology Hardware & Equipment (*Netherlands*) | 11,507,773 | 1.78 | | Assa Abloy | Construction & Materials (*Sweden*) | 11,307,092 | 1.75 | | TotalEnergies | Oil, Gas & Coal (*France*) | 10,960,784 | 1.70 | | Schneider Electric | Electronic & Electrical Equipment (*France*) | 10,522,170 | 1.63 | | Roche Holdings | Pharmaceuticals & Biotechnology (*Switzerland*) | 9,673,219 | 1.50 | | Atlas Copco | Industrial Engineering (*Sweden*) | 8,882,510 | 1.38 | | Munich Re | Non-Life Insurance (*Germany*) | 6,991,093 | 1.08 | | Iberdrola | Electricity (*Spain*) | 6,670,760 | 1.03 | | Nestle | Food Producers (*Switzerland*) | 6,482,605 | 1.02 | | Jumbo | Leisure Goods (*Greece*) | 3,681,034 | 0.57 | | | | **127,385,434** | **19.76** | | **Pacific Basin** | | | | | Brambles | General Industrials (*Australia*) | 10,940,110 | 1.70 | | AIA | Life Insurance (*Hong Kong*) | 4,320,498 | 0.67 | | | | **15,260,608** | **2.37** | | **Japan** | | | | | Itochu | General Industrials | 11,813,306 | 1.83 | | | | **11,813,306** | **1.83** | | **Total Invested Funds** | | **644,737,006** | **100.00** | Top twenty holding. Added during the year. 54 INVESTMENT MANAGER’S REVIEW ## Distribution of invested funds at 30 November 2024 Composite | United | | North | | | Other | | 2024 | | benchmark | | 2023 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Kingdom | | America | | countries | | | total | | | sector | total | | | | % | | % | | | % | | % | weighting* | | | % | Industrials Aerospace & Defence - 2.19 - 2.19 2.46 - Construction & Materials - - 1.75 1.75 0.97 2.68 Electronic & Electrical Equipment - 2.15 1.63 3.78 1.32 4.78 General Industrials - - 3.53 3.53 1.89 3.02 Industrial Engineering - - 1.38 1.38 1.05 1.88 Industrial Support Services 3.93 5.74 - 9.67 3.60 10.29 Industrial Transportation - - 2.00 2.00 1.69 1.86 3.93 10.08 10.29 24.30 12.98 24.51 Technology Software & Computer Services 4.31 12.33 - 16.64 10.22 10.74 Technology Hardware & Equipment - 5.85 1.78 7.63 10.89 9.15 4.31 18.18 1.78 24.27 21.11 19.89 Financials Banks 1.94 - 1.91 3.85 7.69 3.41 Finance & Credit Services - 1.60 - 1.60 1.13 1.29 Investment Banking & Brokerage 1.26 3.69 2.41 7.36 4.14 9.02 Life Insurance - - 0.67 0.67 1.17 0.91 Mortgage REITs - - - - 0.01 - Non-Life Insurance 1.04 4.89 1.08 7.01 1.94 6.46 4.24 10.18 6.07 20.49 16.08 21.09 Health Care Health Care Providers - 4.18 - 4.18 1.02 4.42 Medical Equipment & Services - 5.41 - 5.41 2.20 4.65 Pharmaceuticals & Biotechnology 1.90 0.71 1.50 4.11 7.01 5.23 1.90 10.30 1.50 13.70 10.23 14.30 Consumer Goods Automobiles & Parts - - - - 1.75 - Consumer Services - - - - 0.93 - Household Goods & Home Construction 1.23 - - 1.23 0.53 1.25 Leisure Goods - - 0.57 0.57 0.50 0.86 Media 1.11 - - 1.11 2.22 1.57 Personal Goods - - - - 0.75 1.38 Retailers 1.12 - - 1.12 4.60 - Travel & Leisure 3.30 - - 3.30 1.90 2.17 6.76 - 0.57 7.33 13.18 7.23 55 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 Composite | United | | North | | | Other | | 2024 | | benchmark | | 2023 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Kingdom | | America | | countries | | | total | | | sector | total | | | | % | | % | | | % | | % | weighting* | | | % | Energy Oil, Gas & Coal 2.32 - 1.70 4.02 5.36 5.06 Alternative Energy - - - - 0.08 - 2.32 - 1.70 4.02 5.44 5.06 Consumer Staples Beverages 0.51 - - 0.51 1.58 0.70 Food Producers - - 1.02 1.02 1.05 1.42 Personal Care, Drug & Grocery 1.91 - - 1.91 3.63 1.79 Tobacco - - - - 1.35 - 2.42 - 1.02 3.44 7.61 3.91 Utilities Electricity 1.42 - 1.03 2.45 1.58 2.63 Gas, Water & Multi-Utilities - - - - 1.36 - Waste & Disposal Services - - - - 0.19 - 1.42 - 1.03 2.45 3.13 2.63 Basic Materials Chemicals - - - - 1.03 - Industrial Materials - - - - 0.09 - Industrial Metals & Mining - - - - 2.32 0.93 Precious Metals & Mining - - - - 0.30 - - - - - 3.74 0.93 Real Estate Real Estate Investment & Services - - - - 0.45 0.45 Real Estate Investment Trusts - - - - 1.94 - - - - - 2.39 0.45 Telecommunications Telecommunications Equipment - - - - 0.70 - Telecom Service Providers - - - - 1.55 - - - - - 2.25 - Not classified - - - - 1.86 - Total 27.30 48.74 23.96 100.00 100.00 100.00 * The classifications and prior year comparatives have been updated, where required, to reflect recent changes in The Industry Classification Benchmark (ICB) standard. 56 ## Governance 58 Directors, Manager and advisers 61 Directors’ Report 66 Corporate Governance Statement 68 Management Engagement Committee Report 69 Nomination Committee Report 70 Remuneration Committee Report 73 Audit Committee Report 76 Statement of directors’ responsibilities in respect of the financial statements Mountain View, California, USA is home to Alphabet, the parent company of Google, a new addition to the portfolio. 57 57 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## Directors, Manager and advisers Amanda Aldridge BSc FCACarolan Dobson Elizabeth Field MA BSc Chartered FCSI* Board Chair. Chair of the Management Chair of the Audit Committee Engagement Committee and the Nomination Committee | Joined the board in December 2013 and | Joined the board in December 2019. | Joined the board in December 2022. | | --- | --- | --- | | has been Chair since the AGM in March | Amanda is a non-executive director | Elizabeth recently retired as a partner | | 2016. She is Chair of BlackRock Latin | and audit committee chair of Care | at Stephenson Harwood. Elizabeth | | American Investment Trust plc and a | REIT, Staffline Group PLC and Helical | was a corporate lawyer for 35 years | | director of M&G Securities Limited and | plc. She also chairs the audit and risk | with extensive experience of advising | | Investment Trustee and Adviser Limited. | committee of The Low Carbon Contracts | public and private companies on a wide | | Carolan was previously head of UK | Company and The Electricity Settlements | range of corporate transactions across | | equities at Abbey Asset Managers, Head | Company. She was formerly a partner | a variety of sectors, specifically including | | of Investment Trusts at Murray Johnstone | at KPMG LLP and during her career she | investment trusts. | | and was the portfolio manager of two | was Head of the Retail Sector practice | | Experience: investment trusts. before becoming Head of Contract Elizabeth is a lawyer and has experience Governance in the Risk-Consulting Experience: of providing legal and corporate Division. Amanda is a Fellow of the Carolan is an experienced fund manager governance advice to investment Institute of Chartered Accountants in and has held key roles in the investment trusts, asset managers and investment England and Wales. management industry and in advisory trust sponsors. roles and she chairs both investment Experience: Reasons for the recommendation trusts and other organisations. Amanda brings senior experience in for re-election: accounting practice, with specialisms Reasons for the recommendation Elizabeth’s legal knowledge and including risk, and has non-executive for re-election: negotiating skills are valuable to the director and audit committee Carolan’s wise and effective leadership board and she has wide knowledge of chair experience on other public of the board and wide knowledge and the industry. company boards. experience of the industry. Reasons for the recommendation for re-election: Amanda has evident skills and experience both from her background as a chartered accountant and as an audit committee chair. * Independent on appointment as Chair. 58 GOVERNANCE Andrew Hutton MA, CFA Jim Sharp MA Senior Independent Director, Chair of the Remuneration Committee. | Joined the board in April 2020. He is | Joined the board in January 2014. He | Committee memberships | | --- | --- | --- | | owner and director of A.J.Hutton Ltd, an | began his career in corporate finance | All directors are non-executive and | | investment advisory practice established | with J.Henry Schroder & Co. Limited from | independent of the manager. | | in 2007. Andrew started his career in | 1992 to 2002 where he was a director. | | All directors are members of the 1979 at J.P. Morgan where, over 18 He is Chair of The Cotswold Company Management Engagement Committee years, he held investment and business and Monica Vinader. and the Nomination Committee. management positions in London, Experience: New York, Singapore and Australia. He All directors, with the exception of the Jim has a background in financial was subsequently head of investment Chair, Carolan Dobson, and Jim Sharp, services and in addition to experience management at Coutts Group and co- are members of the Audit Committee. in running businesses and insight into CEO of RBS Asset Management. Andrew marketing and promotion he brings All directors, with the exception has served as Senior Independent a connection to the largest group of Jim Sharp, are members of the Director of Baillie Gifford UK Growth of shareholders. Remuneration Committee. Fund and Chairman of JPMorgan Global Emerging Markets Income Trust. Reasons for the recommendation Further details can be found on for re-election: page 67. Experience: Jim’s broad commercial and operational Andrew is an asset management experience and knowledge and professional with senior management understanding of marketing and and money management experience. promotion are valuable and his Reasons for the recommendation connection to a key stakeholder helps for re-election: the board’s understanding of the Andrew brings to the board a requirements of shareholders. deep understanding of portfolio management. 59 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 | The Manager or Alternative | Head of Investment Trusts | Bankers and Custodian | | --- | --- | --- | | Investment Fund | Stephanie Carbonneil | HSBC Bank plc | | Manager (AIFM) | Email: stephanie.carbonneil@ | | | Allianz Global Investors UK Limited | allianzgi.com | Depositary | | (AllianzGI UK) is incorporated in the | | HSBC Securities Services | | UK and its registered office is at 199 | Investment Manager | | | Bishopsgate, London EC2M 3TY. It is | Julian Bishop and Christian Schneider, | Solicitors | | authorised by the Financial Conduct | Co-Lead managers, representing | | Dickson Minto W.S. Authority (FCA). Allianz Global Investors UK Limited, 199 Bishopsgate, London EC2M 3TY Allianz Global Investors GmbH Independent auditors (the manager). (AllianzGI) is an active asset manager PricewaterhouseCoopers LLP operating across nineteen markets Company Secretary and with specialised in-house research Registrars Registered Office teams around the globe, managing MUFG Corporate Markets, formerly Link assets for individuals, families and Kirsten Salt ACG Group (full details on page 106) institutions worldwide. 199 Bishopsgate, London EC2M 3TY Telephone: 020 3246 7513 Stockbrokers As at 30 September 2024, AllianzGI Email: kirsten.salt@allianzgi.com had €560 billion of assets under J.P. Morgan Cazenove management worldwide. Registered number Through its predecessors, AllianzGI 00226323 has a heritage of investment trust management expertise in the UK reaching back to the nineteenth century and as at 31 December 2024 had £3.3 billion assets under management in a range of investment trusts. Website: allianzgi.co.uk 60 GOVERNANCE # Directors' Report The directors present their Report which incorporates the audited financial statements for the year ended 30 November 2024. ## Share capital Details of the company's share capital are set out in Note 11 on page 95. During the year 271,009 new ordinary shares of 25p were issued to J.P. Morgan Securities under the shareholder authority granted at the AGM in 2024 for a total consideration of £3,908,220, at an average price of 1,459.68p. Since the year end a further 283,991 ordinary shares of 25p were issued to J.P. Morgan Securities for a total consideration of £4,175,518, at an average price of 1,448.5p. A resolution to renew the authority to issue new shares will be put to shareholders at the AGM, together with a resolution to renew the authority to purchase shares for cancellation or holding in treasury. The full text of the resolutions is set out in the notice of meeting on page 107. ## Independent auditors A resolution to approve the re-appointment of PricewaterhouseCoopers LLP as auditors of the company will be proposed at the annual general meeting, together with a resolution authorising the directors to determine the auditors' remuneration. Each of the directors at the date of approval of this report confirms that: 1. so far as the director is aware, there is no relevant audit information of which the company's auditors are unaware; and 2. the director has taken all the steps that he/she ought to have taken as a director to make himself/herself aware of any relevant audit information and to establish that the company's auditors are aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006. ## Related party transactions During the financial year no transactions with related parties have taken place which would materially affect the financial position or the performance of the company. ## Management contract and management fee The main expense of the company and therefore the most significant element of the ongoing charges is the investment management fee and the board is keen to ensure this fee remains competitive. The manager's performance under the contract and the contract terms are reviewed annually by the management engagement committee. The committee's report is on page 68. Under the Alternative Investment Fund Managers Directive (AIFMD) the company appointed AllianzGI UK as the designated Alternative Investment Fund Manager (AIFM) for the company on the terms and subject to the conditions of the management and administration agreement between the company and AllianzGI UK (the management contract). AllianzGI UK is authorised and regulated by the Financial Conduct Authority with its registered office at 199 Bishopsgate, London EC2M 3TY. The management contract provides for a management fee based on 0.45% per annum of the value of the company's assets after the deduction of current liabilities, short-term loans with an initial duration of less than one year and the value of the company's investments in any other funds managed by the manager. The contract can be terminated with six months' notice. ## Revenue The revenue earnings attributable to ordinary shareholders for the year amounted to £11,685,745 or 27.37p per share (2023: £11,251,047 or 26.35p per share). The first two quarterly dividends of 5.9p (£2,518,871) were paid during the company's financial year to 30 November 2024 and the board declared a third quarterly dividend of 5.9p (£2,518,871) per ordinary share which was paid on 12 December 2024. The board recommends a final dividend for the year ended 30 November 2024 of 6.05p (£2,599,306), payable on 4 April 2025, making a total distribution for the year of 23.75p per ordinary share. The next quarterly dividend payment is expected to be made in July 2025. ## Invested funds The market value of the company's investments at 30 November 2024 was £645m (2023: £553m). Sales of investments during the year resulted in net gains of £87.4m (2023: gains of £32.2m). Provisions contained in the Finance Act 2010 exempt approved investment trusts from corporation tax on their chargeable gains. Details of the total return of the company and the split between revenue and capital returns are shown in the Income Statement on page 84. The revenue and capital split is explained in more detail in the Statement of Accounting Policies on page 88 under 'Investment management fee and administrative expenses' and on page 91 under 'Finance costs'. The following disclosures are made in accordance with Part 6 of Schedule 7 of the Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008. ## Capital structure The company's capital structure is set out in Note 11 on page 95. ## Listing Rule 6.6.1R There are no matters requiring disclosure under this Rule, other than on share capital which is set out above on this page. 61 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## Voting rights in the company's shares As at 12 February 2025, the company's capital consisted of: | Share class | Number of shares issued | Voting rights per share | Total voting rights | | --- | --- | --- | --- | | Ordinary shares of 25p | 43,247,727 | 1 | 43,247,727 | | 5% Cumulative preference shares of £1 | 450,000 | 0 | 0 | | **Total** | **43,697,727** | | **43,247,727** | ## Common Reporting Standards (CRS) CRS is a global standard for the automatic exchange of information commissioned by the Organisation for Economic Cooperation and Development and incorporated into UK law by the International Tax Compliance Regulations 2015. CRS requires the company to provide certain additional details to HMRC in relation to UK resident foreign investment holders. The reporting obligation began in 2016 and will be an annual requirement going forward. The Registrars, MUFG Corporate Markets, formerly Link Group, have been engaged to collate such information and file the reports with HMRC on behalf of the company. ## Interests in the company's share capital As at 12 February 2025, the company was aware of the following interests in the company's share capital greater than 3%: J Maitland (as trustee 14.05%); Sir Hugo Brunner (beneficial 2.30% – as trustee 10.10%); TBH Brunner (beneficial 0.36% – as trustee 5.93%); and Rathbones Investment Management Limited (3.08%). J Maitland acts as a co-trustee with TBH Brunner in respect of 1,695,680 ordinary shares (3.95%), which form part of TBH Brunner's trustee holding. J Maitland also acts as co-trustee with Sir Hugo Brunner in respect of 4,341,288 ordinary shares (10.10%) which form part of Sir Hugo Brunner's trustee holdings. ## Internal control The directors have overall responsibility for the company's system of internal control. Whilst acknowledging their responsibility for the system of internal control, the directors are aware that such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can provide only reasonable but not absolute assurance against material misstatement or loss. The board has established an ongoing process for identifying, evaluating and managing the significant risks faced by the company. This process has been fully in place throughout the year under review and up to the date of the signing of this Annual Report. The key elements of the process are as follows: - In addition to the review of the principal risks (see pages 18 to 21), the directors regularly review all the risks on the Internal Risk Matrix and every six months the board receives from the manager a formal report which details any known internal controls failures, including those that are not directly the responsibility of the manager. - Allianz Global Investors UK Limited (AllianzGI UK), as the appointed manager, provides investment management, accounting and company secretarial services to the company. The manager therefore maintains the internal controls associated with the day-to-day operation of the company. These responsibilities are included in the Management and Administration Agreement between the company and the manager. The manager's systems of internal control are regularly evaluated by its management and monitored by internal auditors. - There is a regular review by the board of asset allocation and any risk implications. There are also regular and comprehensive reviews by the board of management accounting information, including revenue and expenditure projections, actual revenue against projections and performance comparisons. - Authorisation and exposure limits are set and maintained by the board. - The board meets with senior representatives of AllianzGI and also receives an Internal Controls Report from the manager, together with a report on compliance with the manager's anti-bribery policy. - The audit committee on behalf of the board reviews the Internal Controls Reports of other third party service providers, including those of AllianzGI and all other providers of administrative and custodian services to AllianzGI or directly to the company. The directors confirm that the audit committee has reviewed the effectiveness of the system of internal control, which it has found to be appropriate. ## Accountability and Audit The Statement of Directors' Responsibilities in respect of the financial statements is on page 76 and a statement of going concern is on page 22. The Independent Auditors' Report can be found on page 78. ## The UK Stewardship Code and exercise of voting powers The board has delegated the exercise of voting powers on its behalf to discharge its responsibilities in respect of investments, including the exercise of voting powers on its behalf to the manager, AllianzGI, and receives regular reports on voting activity. There is more information on company engagement in the Strategic Report starting on page 11, and in the Investment Manager's Review on page 43. ## Sustainability disclosure requirements The Financial Conduct Authority (FCA) has introduced a sustainability disclosure requirements and investment labels regime (SDR) to address concerns about misleading environmental claims. The 62 GOVERNANCE | SDR has several dimensions, including | does not have customers. The directors | which will last until the conclusion of the | | --- | --- | --- | | an ‘anti-greenwashing’ rule, designed | therefore consider that the company is | annual general meeting in 2026 or 1 July | | to increase trust and confidence in the | not required to make a statement under | 2026 if earlier. | | sustainable investment market and to | the Modern Slavery Act 2015 in relation | | This authority is limited to a maximum combat providers exploiting demand to slavery or human trafficking. number of 14,401,493 ordinary shares, for sustainable products by making representing approximately one third of unsupported environmental claims. Bribery Act 2010 the existing ordinary share capital of the The company’s website https://www. The board has a zero tolerance policy in company as at the date of this report, brunner.co.uk/en-gb/about-us/esg notes relation to bribery and corruption and provided that there is no change in the that Brunner’s investment process only has received assurance through internal issued share capital between the date includes consideration of ESG factors, controls reporting from the company’s of this report and the annual general not Socially Responsible Investment main third party service providers that meeting to be held on 2 April 2025. | (SRI) (i.e., building sustainable portfolios | adequate safeguards are in place to | | | --- | --- | --- | | by delivering sustainable financial | protect against any such potentially | Disapplication of pre-emption rights | | returns based on the assessment of | illegal behaviour by employees | A resolution was passed at the annual | | ESG practices) nor impact aspects (i.e., | or agents. | general meeting of the company held | | promoting social and environmental | | on 25 March 2024 under section 570 of | | goals and/or/outcomes alongside | | the Companies Act 2006, to authorise | Annual General Meeting business financial returns). the directors to allot ordinary shares Directors’ Re-election for cash other than pro rata to existing The plans for board succession, including TCFD shareholders. The current authority will the arrangements for the retirements The board continues to look at the expire on 24 June 2025 and approval of the directors with over nine years’ carbon footprint of the portfolio which is therefore sought for the renewal service, are described on page 69. is reported in the monthly factsheets. of this authority, which will last until Carolan Dobson, Amanda Aldridge, Whereas as an investment company we the conclusion of the annual general Elizabeth Field, Andrew Hutton and do not report following the requirements meeting in 2026 or 2 July 2026 if earlier. Jim Sharp each retire in accordance of the Task Force on Climate-related This authority is limited to a maximum with the board policy on the annual Financial Disclosures (TCFD) we take an number of 4,324,772 ordinary shares, re-election of directors and offer interest in how the portfolio compares representing approximately 10% of the themselves for re-election at the AGM against available indexed data. On existing ordinary share capital of the in 2025. Biographical details of the page 44 we look at various ESG MSCI company as at the date of this report, directors are on page 58 together performance metrics against those of provided that there is no change in the with the reasons why the board supports the benchmark. issued share capital between the date and recommends their re-election. In accordance with the requirements of this report and the annual general Directors serving during the year and of the TCFD, AllianzGI UK as AIFM is meeting to be held on 2 April 2025. their interests in the share capital of the preparing a product level report for company as at 30 November 2024 are Accordingly resolution 11 as set out in the company. The TCFD report for the set out in the Directors’ Remuneration the notice of meeting on page 115 will company is available on the company’s Report on page 70. be proposed as an ordinary resolution website brunner.co.uk. and resolution 12 will be proposed as a The board’s view is that each director special resolution. who is retiring and offering themselves Greenhouse gas emissions to be re-elected at the AGM continues The directors do not currently intend to As an investment company, the to make a valuable and effective allot shares under these authorities other company’s own direct environmental contribution and remains committed in than to take advantage of opportunities impact is minimal. The company has the role. The board has also considered in the market as they arise and only if no greenhouse gas emissions to report the number of boards on which they believe it would be advantageous from its operations, not does it have each director sits and the other time to the company’s existing shareholders responsibility for any other emissions commitments for each board member to do so. The directors confirm that no producing sources under the Companies and is satisfied that each director has allotments of new shares will be made Act 2006 (Strategic Report and Directors’ the capacity to devote all the time and unless the lowest market offer price of Reports) Regulations 2013. For the attention needed to fulfil their role and the ordinary shares is at least equal to or same reasons, the company considers duties to the company. at a premium to Net Asset Value. itself to be a low energy user under the Streamlined Energy & Carbon Reporting Allotment of new shares Share buy back programme (‘SECR’) regulations and therefore is not A resolution authorising the directors The board is proposing the renewal required to disclose energy and carbon to allot new share capital for cash was of the company’s authority under information. passed at the annual general meeting of section 701 of the Companies Act 2006, the company on 25 March 2024 under to purchase ordinary shares in the Modern Slavery Act 2015 section 551 of the Companies Act 2006. market for cancellation. In addition to The company does not provide goods or The current authority will expire on 24 renewing its powers to buy back shares services in the normal course of business, June 2025 and approval is therefore for cancellation, the board will seek and as a financial investment vehicle sought for the renewal of this authority, shareholder authority to repurchase 63 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 shares for holding in treasury for sale share for the remaining shareholders extended Brunner family have held and reissue at a later date. is enhanced. It is therefore intended shares in the company. Jim Sharp, that purchases will only be made at director, is connected by marriage to the This authority will give the company the prices below Net Asset Value, with the Brunner family. ability to reissue treasury shares quickly purchases to be funded from the realised and cost-effectively (including pursuant Following discussions in 2013, capital profits of the company (which to the authority under resolution 12, see agreement was reached with the are currently in excess of £578 million). above) and provides the company with Takeover Panel that for the purposes The rules of the UK Listing Authority additional flexibility in the management of the City Code on Takeovers and limit the price which may be paid by the of its capital base. Such shares may be Mergers (the Code), Sir Hugo Brunner company to 105% of the average middle resold for cash but all rights attaching and Mr TBH Brunner, together with their market quotation for an ordinary share to them, including voting rights and any children (and their spouses) and related on the five business days immediately right to receive dividends are suspended trusts (the Connected Parties) will be preceding the date of the relevant whilst they are in the treasury. If the treated as acting in concert for the purchase. The minimum price to be paid board exercises the authority conferred purposes of the Code. The Connected will be 25p per ordinary share (being the by resolution 13, which will be proposed Parties currently hold 9,576,819 shares, nominal value). | as a special resolution, the company | | representing 22.29% of the ordinary | | --- | --- | --- | | will have the option of either holding in | Under the Financial Conduct Authority’s | share capital of the company. If the | | treasury or of cancelling any of its shares | Listing Rules, a company is permitted | proposed buy back authority were to be | | purchased pursuant to this authority and | to purchase up to 14.99% of its equity | used in full, the repurchase of ordinary | | will decide at the time of purchase which | share capital through market purchases | shares could result in the Connected | | option to pursue. | pursuant to a general authority granted | Parties holding 26.39% of the reduced | | | by shareholders | ordinary share capital of the company | The board believes that such purchases in general meeting. (assuming that the Connected Parties in the market at appropriate times did not sell any ordinary shares in and prices may be a suitable method The current authority which permits connection with the exercise of the buy of enhancing shareholder value. The the company to purchase up to 14.99% back authority). company would make either a single of the ordinary shares, expires at the purchase or a series of purchases, when conclusion of the forthcoming annual The board and the Annual Report market conditions are suitable, with general meeting. The board believes Following the process reported in the the aim of maximising the benefits to that the company should continue Audit Committee Report, on page shareholders and within guidelines to have authority to make market 73, the board is able to state that set from time to time by the board. purchases of its own ordinary shares it considers that the Annual Report, Additionally, the board believes that the for cancellation or additionally for taken as a whole, is fair, balanced company’s ability to purchase its own holding in treasury. Accordingly, a special and understandable. | shares should create additional demand | resolution to authorise the company to | | --- | --- | | for the ordinary shares in the market | make market purchases of up to 14.99% | | and that this should assist shareholders | of the company’s issued ordinary share | By order of the board wishing to sell their ordinary shares. capital will be proposed. Provided there is no change in the issued share capital Kirsten Salt Where purchases are made at prices between the date of this report and the Company Secretary below the prevailing Net Asset Value of annual general meeting to be held on 2 12 February 2025 the ordinary shares, Net Asset Value per April 2025 such authority is equivalent to 6,482,834 ordinary shares. The authority will last until the annual general meeting of the company to be held in 2026 or until 2 July 2026, whichever is the earlier. The authority will be subject to renewal by shareholders at subsequent annual general meetings. The Brunner family Since the establishment of the company in 1927, various members of the 64 GOVERNANCE Statement of the Depositary’s The Depositary must ensure that: Report of the Depositary to the Responsibilities in Respect Shareholders of The Brunner – the company’s cash flows are of The Brunner Investment Investment Trust PLC (the company) for properly monitored and that cash the year ended 30 November 2024. Trust PLC provided by HSBC of the company is booked into the Securities Services, depositary to cash accounts in accordance with Having carried out such procedures the company. the Regulations; as we consider necessary to discharge our responsibilities as Depositary of – the sale, issue, repurchase, redemption ‘The Depositary must ensure that the the company, it is our opinion, based and cancellation of shares are company is managed in accordance on the information available to us and carried out in accordance with with the Financial Conduct Authority’s the explanations provided, that in all the Regulations; Investment Funds Sourcebook, (the material respects the company, acting Sourcebook), the Alternative Investment – the assets under management through the AIFM has been managed Fund Managers Directive (AIFMD) and the Net Asset Value per share in accordance with the rules in the (together the Regulations) and the of the company are calculated in Sourcebook, the Articles of Association company’s Articles of Association. accordance with the Regulations; of the company and as required by The Depositary must in the context of its – any consideration relating to the AIFMD.’ role act honestly, fairly, professionally, transactions in the company’s assets HSBC Securities Services independently and in the interests of the is remitted to the company within the 13 December 2024 | company and its investors. | usual time limits; | | | --- | --- | --- | | The Depositary is responsible for | – that the company’s income is | Further information about the | | the safekeeping of the assets of | applied in accordance with the | relationship with the Depositary is on | | the company in accordance with | Regulations; and | page 104. | the Regulations. – the instructions of the Alternative Investment Fund Manager (the AIFM) are carried out (unless they conflict with the Regulations). The Depositary also has a duty to take reasonable care to ensure that the company is managed in accordance with the Articles of Association in relation to the investment and borrowing powers applicable to the company. 65 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## Corporate Governance Statement | The board reports against the AIC Code | has demonstrated commitment and | the specification prepared for | | --- | --- | --- | | of Corporate Governance (AIC Code) | devoted the necessary time to his or her | each appointment. | | 2019. As confirmed by the Financial | role. All directors attended all board and | | The board has chosen to align its Reporting Council, following the AIC relevant committee meetings during the diversity reporting reference date with Corporate Governance Guide enables year. The directors all provide challenge the company’s financial year end and investment company boards to meet in board meetings and each offers proposes to maintain this alignment for their obligations under the UK Corporate useful guidance from their own areas future reporting periods. The company Governance Code and Listing Rules. of expertise. has met one of the targets on board The Senior Independent Director diversity as at its chosen reference date, Board composition conducted an appraisal of the Chair 30 November 2024 as at least 40% of There are five directors on the board. following a similar method to the board the individuals on its board of directors We aim to have two investment evaluation. This exercise confirmed are women. The board did not at the professionals, an accountant, a lawyer that the Chair demonstrates effective reference date and does not at the date and a director with commercial expertise, leadership, makes an excellent of this report have any directors from one of which preferably has a connection contribution to the company and is a minority ethnic background. Further with the Brunner family, to provide a assiduous in her engagements with the details on the company’s appointment balanced board. The optimum number of company’s stakeholders. process can be found under Board directors is therefore five, but the number Composition, above, and Succession on could fall to four and go as high as six to page 69. As required under LR 6.6.6, Gender and ethnic diversity cover periods of recruitment, transition further detail in respect of the targets The board is supportive of the FCA’s and retirement. outlined above as at 30 November Listing Rules (LR 6.6.6) to encourage The board has a plan for the retirement 2024 and as at date that the Annual greater diversity on listed company of directors to ensure that an orderly Report was approved is disclosed in the boards and has implemented the FCA’s process of recruitment can take place tables below. disclosure requirements. The board and that the board’s balance of skills and recognises the importance of having a As an externally managed investment relevant experience is maintained. This range of skilled, experienced individuals company, the company has no executive may mean that directors might be on with the right knowledge represented directors, employees or internal the board for longer than nine years to on the board. The board will continue operations. Therefore, columns relating allow for continuity of experience and a to ensure that all appointments are to executive management have been smooth transition. made on the basis of merit against removed from the tables below. The biographies of the directors are set out on pages 58 and 59 together Number of Senior with the skills and experience each Number of Percentage Positions on the director brings to the board for the long- Board members of the Board Board* term sustainable success of the company. Gender No contracts of significance in which Men 2 40% 1 directors are deemed to have been interested have subsisted during the year Women 3 60% 1 under review. Contracts of employment Other - - - are not entered into with the directors, Not specified/prefer not to say - - - who hold office in accordance with the company’s Articles of Association. Ethnicity White British or other white background 5 100% 2 Board evaluation Mixed/Multiple Ethnic Groups - - - The board and its committees were subject to an internally facilitated Asian/Asian British - - - performance appraisal during the course Black/African/Caribbean/Black British - - - of the year. This was conducted by means Other ethnic group, including Arab - - - of a detailed questionnaire and the Not specified/prefer not to say - - - responses were collated into a report in which the respondents were anonymous. * The company only has two of the senior roles specified by the Listing Rules, that is the The Chair conducted the evaluation and position of chair and SID. One of these roles is occupied by a man and one by a woman. The roles of chief executive and chief financial officer are not applicable to the company, it was found that the board is effective However, the company considers that the chair of the audit committee, nomination and that each director continues to be committee and remuneration committee is a senior position. Of these three senior roles, effective, has the appropriate skills and two are performed by a woman and one by a man. 66 GOVERNANCE Conflicts of Interest Directors’ indemnities The Nomination Committee Report is on page 69. Under the Companies Act 2006 directors Directors’ and Officers’ liability insurance must avoid a situation where they have, cover is held by the company and was in Management or can have, a direct or indirect interest place for the whole of the financial year. engagement committee that conflicts, or possibly may conflict, As permitted by the company’s Articles The management engagement with the company’s interests. The board of Association, the company has granted committee met once in the year reports annually on the company’s indemnities to the directors. to review the Management and procedures for ensuring that its powers Administration Agreement and the of authorisation of conflicts are operated Board committees manager’s performance and a report effectively and that the procedures have of management fees. It has defined Audit committee been followed. terms of reference and consists of all The Audit Committee Report is on Each of the directors has provided a the directors. It is chaired by Carolan page 73. statement of all conflicts of interest and Dobson, the Chair of the board. Nomination committee potential conflicts of interest relating to The Management Engagement The nomination committee meets the company. These statements have Committee Report is on page 68. as needed – at least once each year been considered and approved by the – and makes recommendations on board. The directors have undertaken to Remuneration committee board succession planning and the notify the Chair and Company Secretary The remuneration committee met appointment of new directors and of any proposed new appointments and once in the year and consists of all the considers the composition and balance new conflicts or potential conflicts for directors. The committee is chaired of the board. The committee is chaired consideration, if necessary, by the board. by Andrew Hutton. The committee by Carolan Dobson, the Chair of the The board has agreed that only directors determines the company’s remuneration board, and met once in the last year who have no interest in the matter being policy and determines the remuneration when it considered the re-election of considered will be able to participate in of each director within the terms of that directors at the annual general meeting taking the relevant decision and that in policy. The Directors’ Remuneration and the plans for new recruitment taking the decision the directors will act Report is on page 70. to the board. The members of the in a way they consider, in good faith, will The terms of reference for each of committee met separately under the be most likely to promote the company’s the committees may be viewed by leadership of the Senior Independent success. The board can impose limits or shareholders on request and are Director to review the tenure of the conditions when giving authorisation if published on the company’s website Chair and consider the plans for it thinks this is appropriate. For example, brunner.co.uk in the Information/Legal succession. All directors serve on the a director with a potential conflict might Documents section. nomination committee and consider be asked to step out of the meeting nominations made in accordance with room or will be permitted to remain an agreed procedure. in the room but not participate in the discussion or take part in a vote on a It is the board’s policy to use external course of action. agencies to draw up lists of candidates as part of the recruitment of new The board confirms that its powers of directors. The brief to the recruitment authorisation are operating effectively consultant includes the request that the and that the agreed procedures have shortlist should include a diverse range been followed. of candidates. Board attendance Attendance by the directors at formal board and committee meetings during the year was as follows: Board Management strategy Audit Remuneration Nomination engagement Director Board day committee committee committee committee No. of meetings 6 1 2 1 1 1 1 Carolan Dobson 6 1 2 1 1 1 Amanda Aldridge 6 1 2 1 1 1 Elizabeth Field 6 1 2 1 1 1 Andrew Hutton 6 1 2 1 1 1 1 1 Jim Sharp 6 1 2 1 1 1 1 Invited to attend meetings, although not a committee member. 67 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## Management Engagement Committee Report | Role of the committee | AIFM | Committee evaluation | | --- | --- | --- | | The Management Engagement | Details of the current AIFM, Allianz | The activities of the Management | | Committee reviews the investment | Global Investors UK Limited (‘AllianzGI | Engagement committee were | | management agreement and monitors | UK’), are on page 104. | considered as part of the board | | the performance of the Manager for | | evaluation process completed in | AllianzGI UK is authorised and regulated the investment, secretarial, financial, accordance with standard governance by the Financial Conduct Authority with administration, marketing and support arrangements as summarised on page its registered office at 199 Bishopsgate, services that it provides under that 66. The conclusion from the process London EC2M 3TY. agreement. It also reviews the terms of was that the committee was operating the agreement including the level and effectively, with the right balance of Manager reappointment structure of fees payable, the length membership and skills. The annual evaluation that took place in of notice period and best practice December 2024 included a presentation provisions generally. from the portfolio managers and Carolan Dobson AllianzGI’s Head of Investment Trusts. Composition of the committee Management engagement This covered the work done with the All the directors are members of the committee Chair board on the provision of investment committee. Its terms of reference can be 12 February 2025 and support services, including the found on the website at brunner.co.uk. promotion and distribution of the trust, succession planning and the Manager evaluation process ambitions for 2025; the reporting of The committee met once during the year the ESG strategy; the dividend strategy; for the purpose of the formal evaluation the investment strategy; and the sales of the manager’s performance. and marketing activity, covering the | For the purposes of its ongoing | work with investment platforms and | | --- | --- | | monitoring, the board receives | wealth managers. The evaluation also | | detailed reports and views from the | considered the manager’s fee in relation | | portfolio manager on investment | to the peer group. The committee | | policy and strategies, asset allocation, | met in a private session following the | | stock selection, attributions, portfolio | presentation and concluded that in its | | characteristics, gearing and risk. The | opinion the continuing appointment of | | board also assesses the manager’s | the manager on the terms agreed was in | | performance against the investment | the interests of shareholders as a whole | | controls set by the board. | and recommended this to the board. | | The manager also reported to the | Note 2 to the Financial Statements on | | board on its succession plans for the key | page 90 provides detailed information | | individuals, including the members of the | in relation to the management fee. | portfolio management team. Performance information is set out on page 9. 68 GOVERNANCE ## Nomination Committee Report Role of the committee Succession Committee evaluation The Nomination Committee leads the Succession planning is considered The activities of the Nomination process for board appointments and regularly by the committee. Committee were considered as part of makes nomination recommendations the board evaluation process completed The members of the committee met to the board. The committee reviews in accordance with standard governance separately under the leadership of the and makes recommendations on board arrangements as summarised on page Senior Independent Director to review structure, size and composition, the 66. The conclusion from the process the tenure of the Chair and consider the balance of knowledge, experience, was that the committee was operating plans for succession. Notwithstanding skill ranges and diversity and considers effectively, with the right balance of her length of service on the board, succession planning and tenure policy. membership and skills. the directors are unanimously agreed that Carolan Dobson continues to be Composition of the committee independent and remains a highly All directors are members of the Carolan Dobson effective Chair with strong leadership committee and its terms of reference can Nomination committee Chair of the board. Taking this into account be found on the website at brunner.co.uk 12 February 2025 and as the board has a majority of independent directors, it was agreed Activities of the committee that Carolan Dobson’s tenure as the The committee met during the year Chair of the board should continue for a and considered, in accordance with its further two years. terms of reference the structure, size There is a plan in place to recruit a new and composition of the board and director in advance of the Chair stepping satisfied itself with regard to succession down and it has been agreed that an planning, making recommendations to externally facilitated evaluation of the the board. The committee reviewed the Chair, the board, the individual directors succession plan, as mentioned below, and committees will be conducted and recommended it to the board. during 2025 in which there will be a brief The committee also discussed the to consider this succession plan in detail. results of the board and committee evaluation exercise, which covered the structure and size of the board and its composition, particularly in terms of succession planning, and the experience and skills of the individual directors and the topic of board diversity and inclusion. The AIC guidelines on directors serving on the board for more than nine years are considered in the evaluation of the individual skills and contributions of the directors. The table on page 66 shows the current board composition. 69 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 # Remuneration Committee Report ![img-18.jpeg](img-18.jpeg) As chair of the remuneration committee, I am pleased to present the committee’s report for year ended 30 November 2024. ## Composition All the directors are members of the committee and its terms of reference can be found on the website at brunner.co.uk. ## Role The Remuneration Committee leads the process for fixing directors’ remuneration and makes recommendations to the board. ## Activities The committee’s activities are set out in the report from the committee which follows. ## Directors’ Remuneration Report This is the Directors’ Remuneration Report for the year. The report is submitted in accordance with Schedule 8 of the Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008, as amended August 2013, for the year ended 30 November 2024. An ordinary resolution for the approval of the Directors’ Remuneration Policy Report was first put to a binding shareholder vote at the annual general meeting in 2014 and was placed before shareholders for approval at the AGM in 2023. The results of the vote at the 2023 AGM for this resolution were as follows: In favour 99.85%, against 0.15% and 136,291 shares were withheld (in aggregate, 14,567,534 votes). It will next be put to shareholders at the AGM in 2026. The Directors’ Remuneration Implementation Report is to be put to the AGM, annually, as an advisory shareholder vote. The results of the advisory vote at the 2024 AGM for the resolution to approve the Implementation Report were as follows: In favour 99.82%, against 0.18% and 34,254 shares were noted as votes withheld (in aggregate 13,987,411 votes). The information provided in this part of the Directors’ Remuneration Report is not subject to audit unless specified below. ## The Board The board of directors is composed solely of non-executive directors. The determination of the directors’ fees is guided by the remuneration policy (see below) and the recommendations of the remuneration committee which is made up of the independent directors and is chaired by Andrew Hutton. ## Directors’ interests (audited) The directors are required to hold 4,000 shares in the company under the company’s Articles. Pursuant to Article 19 of the EU Market Abuse Regulations the directors’ interests in the share capital of the company are shown in the table below. | Ordinary shares of 25p | 2024 beneficial | 2024 non-beneficial | 2023 beneficial | 2023 non-beneficial | | --- | --- | --- | --- | --- | | Carolan Dobson | 4,750 | - | 4,750 | - | | Amanda Aldridge | 4,000 | - | 4,000 | - | | Elizabeth Field | 4,000 | - | 4,000 | - | | Andrew Hutton | 6,000 | - | 6,000 | - | | Peter Maynard^{1} | N/A | - | 4,000 | - | | Jim Sharp | 131,814 | 651,956 | 124,799 | 651,956 | $^{1}$ Retired 31 March 2023. 70 GOVERNANCE Directors retire and offer themselves for re-election annually. No director has a service contract with the company. The company’s policy is for the directors to be remunerated in the form of fees, payable quarterly in arrears. In accordance with the AIC Code of Corporate Governance, there are no long term incentive schemes and fees are not related to the individual director’s performance, nor to the performance of the board as a whole. No exit payments are made when a director leaves the board. Directors’ remuneration policy The board’s policy, subject to the overall limit in the Articles, is to determine the level of directors’ fees having regard to the level of fees payable to non-executive directors in the investment trust industry generally, the rate of inflation, the increasing requirements in the nature of the role that individual directors fulfil, and the time committed to the company’s affairs. These requirements are particularly relevant to the Chair and the Chair of the audit committee. The board believes that levels of remuneration should be sufficient to attract and retain non-executive directors with the relevant experience and skills to oversee the company. The company’s Articles currently limit the aggregate fees payable to the board of directors to a total of £300,000 per annum. The company’s Articles also provide that additional discretionary payments can be made for services which in the opinion of the directors are outside the scope of the ordinary duties of a director. Directors are entitled to be reimbursed for any reasonable expenses properly incurred by them in connection with the performance of their duties and attendance at meetings. Directors are not eligible for bonuses, pension benefits, share options or other incentives or benefits. There are no agreements between the company and its directors concerning compensation for loss of office. This directors’ remuneration policy is the same in all material respects as that currently followed by the board and summarised in the last Directors’ Remuneration Report and approved by shareholders at the annual general meeting held on 25 March 2024. The company has no employees and consequently has no policy on the remuneration of employees. The board will consider, where raised, shareholders’ views on directors’ remuneration. Implementation Report The policy is to review directors’ fee rates from time to time, but reviews will not necessarily result in a change to the rates. In the year under review the directors were paid at a rate of £29,200 per annum and the Chair at a rate of £47,000 per annum, with an additional £6,400 for the Chair of the audit committee, and an additional £2,100 for the Senior Independent Director. The current fees have been effective since 1 December 2023. The fees were reviewed during the year and the committee compared industry reports and other independent data. It was noted that fees had fallen against the market. With further board recruitment planned it was agreed that it was important to make relatively modest increases to remain competitive. It was determined that the following fees would apply with effect from 1 December 2024: Chair £50,000, directors £32,000, with an additional unchanged £6,400 to the Chair of the audit committee, and an additional unchanged £2,100 for the Senior Independent Director. Directors’ emoluments (audited) The directors received directors’ fees and no other remuneration or additional discretionary payments during the year and therefore the directors’ emoluments during the year and in the previous year are as follows: | | 2024 | | | 2024 | | 2024 | | | 2023 | | | 2023 | | 2023 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | base salary | | | taxable expenses | | total** | | | base salary | | | taxable expenses | | | total** | | | | | £ | | | £ | | £ | | | £ | | | £ | | £ | Carolan Dobson 47,000 5,417 52,417 44,500 6,386 50,886 Amanda Aldridge 35,600 - 35,600 34,500 - 34,500 Elizabeth Field 29,200 - 29,200 28,100 - 28,100 Andrew Hutton 31,300 - 31,300 29,500 - 29,500 Peter Maynard* - - - 10,066 - 10,066 Jim Sharp 29,200 - 29,200 28,100 - 28,100 Total 172,300 5,417 177,717 174,766 6,386 181,152 * Retired from the board 31 March 2023. ** Taxable travel and subsistence expenses incurred in attending Board and Committee meetings, gross pre-tax amounts. 71 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 | | | % change | | | | % change | | | | % change | | | | % change | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 2024 | | 2023 to | | 2023 | | 2022 to | | 2022 | | 2021 to | | 2021 | | 2020 to | | 2020 | | | | £ | | 2024 | | £ | | 2023 | | £ | | 2022 | | £ | | 2021 | | £ | Base salary Board Chair 47,000 5.6 44,500 6.0 42,000 7.7 39,000 0.0 39,000 Audit Chair 35,600 3.2 34,500 6.2 32,500 1.6 32,000 0.0 32,000 Senior Independent Director 31,300 3.6 30,200 6.0 28,500 1.8 28,000 0.0 28,000 Independent Director 29,200 3.9 28,100 6.0 26,500 1.9 26,000 0.0 26,000 Expenses Carolan Dobson 5,417 -15.2 6,386 585.9 931 311.9 226 -94.3 3,935 Any increase in pay was effective from 1 December in any given year. Analysis of pay against distributions A table showing actual expenditure by the company on remuneration and distributions to shareholders for the year and the prior year is below: Expenditure by the company on remuneration and distributions to the shareholders 2024 2023 £ £ Remuneration paid to all directors 172,300 174,766 Distributions paid during the financial year 9,990,098 9,520,477 This disclosure is a statutory requirement. The directors, however, do not consider that the comparison of directors’ remuneration with distributions to shareholders is a meaningful measure of the company’s overall performance. Performance graph The performance graph below measures the company’s share price and Net Asset Value performance on a total return basis against the benchmark index: 70% FTSE World Ex UK Index and 30% FTSE All-Share Index. An explanation of the company’s performance is given in the Chair’s Statement and the Investment Manager’s Review. ### The Brunner Investment Trust PLC 30 November 2014 – 30 November 2024 350 Share Price 242% NAV debt at fair value 194% 300 Benchmark 174% 250 % 200 150 100 Nov 14 Nov 15 Nov 16 Nov 17 Nov 18 Nov 19 Nov 20 Nov 21 Nov 22 Nov 23 Nov 24 Source: AllianzGI/Thomson Reuters DataStream Andrew Hutton Remuneration committee Chair 12 February 2025 72 GOVERNANCE ## Audit Committee Report Composition accounting policies and confirmed their appropriateness and reviewed Andrew Hutton and Elizabeth Field in detail the annual and half-yearly served on the committee throughout financial reports and in each case the year. The Chair of the board recommended them for adoption by and Jim Sharp are invited to attend the board. At the meeting for the half audit committee meetings, as are year the auditors presented the audit representatives of the manager. plan for the year ending 30 November As you will see from my biography on 2024. In the meeting relating to the page 58, I am a Chartered Accountant year end the committee considered and until 2017, I was an audit and the auditors’ report on the annual advisory partner, at KPMG, London. financial statements. I also chair the audit committee of ## As chair of the audit At each meeting the committee received two other listed companies. During ## committee, I am a report on the operation of controls the year the board reviewed the relating to the company and the proper composition of the audit committee and ## delighted to present conduct of its business in accordance it considers that, collectively, its members with the regulatory environment in which ## the committee’s report have sufficient recent and relevant both the company and the manager financial experience to discharge their ## for the year ended 30 operate. The committee has also responsibilities fully. received reports from the company’s ## November 2024. service providers on their continuing Role response to cyber security risks and The principal role of the committee is related business continuity updates. to assist the board in relation to the reporting of financial information, review Risk of financial controls and management Although the board has ultimate of risk. The committee has defined responsibility for the management terms of reference and duties and the of risk, the audit committee assists by terms of reference are published on monitoring the formal reports from the company’s website, brunner.co.uk. the manager and third-party service These include: providers on risk and internal controls. – responsibility for the review of the During the year the committee reviewed Annual Report and the half-yearly the risk management framework and Financial Report; concluded that existing processes were – consideration of the nature and scope, adequate to ensure that its assessment independence and effectiveness of of risk is robust and of sufficient the external audit and of the auditors’ frequency, namely carried out at each findings and recommendations; and committee meeting and twice annually – review of the terms of appointment by the board as follows: of the auditors, including their remuneration and the provision of any – A matrix of risks is reviewed at each non-audit services by them. audit committee meeting. We consider whether new risks should be added Activities or previously identified risks removed, The committee meets twice each year. assess their likelihood of occurring and These meetings are attended by the potential scale, review the mitigating auditors and also by representatives of actions and assess the residual risk the manager, including both risk and against what we regard as acceptable compliance officers. It is the practice of – ‘risk appetite’. Economic and the committee to meet with the auditor political volatility, including continued without management present at least international conflict and tensions and once each year. the outcome of the US presidential election have all been considered by At the scheduled meetings in respect the board in this review and discussed of the year ended 30 November 2024 by the board. the committee reviewed the company’s 73 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 – Assurance over mitigating actions in – audit communication including verification exercise which was relation to these risks is provided in details of planning, information on satisfactorily concluded. a series of reports from all the third relevant accounting and regulatory Based on this the committee concluded party service providers. developments, and recommendations that the valuation and existence of – Resulting from the work of the on corporate reporting; the investments in the portfolio is audit committee, the principal risks – the audit processes, evidence of appropriately recorded in the annual and uncertainties are identified oversight by the audit lead; and report and accounts, for disclosure and discussion in our – the reasonableness of audit fees; annual report. The committee also Accuracy, occurrence and completeness The committee sought comments from assesses residual risks after controls of dividend income representatives of the manager on the and mitigating actions have been During the year, income reports and provision of services by the auditor and applied, and evaluates whether these forecasts are reviewed in detail with the the effectiveness of the external audit for fall within our risk appetite. The risks manager at each meeting of the board, the year ended 30 November 2024 and identified, together with mitigating including yield information. Changes to considered whether the audit team as actions, and the results of the risk the forecast for each portfolio stock from a whole demonstrated an appropriate appetite assessment are set out in the meeting to meeting are also scrutinised. level of challenge to the Board and the Strategic Report on page 11. manager in fulfilling their role. The auditor conducts an independent analysis of the expected income stream Viability Statement Based on all of the above, the committee from the investment portfolio for the Taking into account this review of risk concluded that we have no concerns year. We discussed the outcome of the committee reviewed a paper that with the performance of the auditor and this analysis and were satisfied based supported the board’s conclusion, set out has recommended to the board that a on this and the dividend income was on page 22 in the Strategic Report, resolution proposing the re-appointment appropriately recorded in the annual of their reasonable expectation that the of the auditor is put to shareholders at report and accounts. company is viable in the longer term, the annual general meeting. assessed as the next five years. In addition we noted the manner in Financial report and which expenses are allocated between significant Issues capital and income and concluded that The audit, its effectiveness and the ratio of 70:30 remains appropriate the terms of appointment of The significant issues identified for since it fairly reflects our investment the auditor the review of the financial statements policy and split of prospective capital The committee reviewed the terms of this year, that is, those identified as and income returns. This area was appointment of the auditor, monitored presenting the greatest risks, were subject to a detailed review last year. the audit process, assessed the auditors’ the valuation and existence of the independence and objectivity as well as investments in the portfolio; and the We also confirmed, as stated in the the effectiveness of the audit process. It accuracy, occurrence and completeness Statement of Accounting Policies was noted that there were no non-audit of dividend income. These and other on page 88, that there are no services provided by the firm, and that matters, identified as posing lesser risk, judgements, estimates, and assumptions none are planned in the financial year to were considered and discussed with the about the carrying amounts of assets 30 November 2024. manager and the auditor as part of the and liabilities that are not readily year end process. apparent from other sources. This is PricewaterhouseCoopers’ seventh year as our auditor and under Valuation and existence of the The committee considered the audit current FRC guidance, the next audit investments in the portfolio materiality and error reporting tender will be required in respect of the Listed investments are valued using thresholds in the audit plan and year ending 30 November 2028. Until stock exchange prices provided by third confirmed that they were satisfied with then, we will continue to monitor the party financial data vendors. Unlisted these. As in previous years, the auditor auditor’s performance and make any investments are recognised on a fair set the materiality threshold as 1% of appropriate recommendations. value basis and are reviewed by the Net Asset Value to align closely with manager’s valuation committee before comparable companies, but continues As part of our review of the performance being approved by the company and to report to the committee on matters of the auditor, the members of the being made available to the auditor. We below that level on qualitative grounds. committee and those representatives discussed the work done by the auditor of the manager involved in the audit The audit committee and the whole on valuation of investments and received process reviewed and considered a board reviewed the entire annual assurance that there were no concerns number of areas including: report and noted all of the supporting regarding valuation of the investments. information received. It then considered – the reputation and standing of the The manager confirms to us the whether the annual report satisfactorily audit firm including annual reports existence and ownership of portfolio reflected a true picture of the company from the auditor’s regulator; investments. The manager receives and its activities and performance in – the skills, experience and information from the custodian which the year, with a clear link between the specialist knowledge of the audit is reconciled with the portfolio list. relevant sections of the report and team, particularly relating to The auditor conducts an independent concluded that it did so. The directors investment trusts; 74 GOVERNANCE were then able to confirm that the Service enhancements that resulted Whistleblowing annual report, taken as a whole, is fair, from this included lower tolerance As the company has no employees balanced and understandable and thresholds for additional reporting of it does not have a formal policy provides the information necessary for daily NAV movements, quicker responses concerning the raising, in confidence, shareholders to assess the company’s to requests for information, a new of any concerns about improprieties for performance, business model escalation protocol and service industry appropriate independent investigation. and strategy. benchmarking. The manager has The audit committee has received confirmed that it believes the service has and noted the manager’s policy on Internal control and stabilised as these remediations have whistleblowing. Any matters concerning internal audit taken effect. the company should be raised with the In July 2023, it was brought to the audit Chair or Senior Independent Director. The audit committee’s view continues to committee’s attention that an issue had be that the company does not require arisen with the capital NAV calculated an internal audit function of its own as Amanda Aldridge by AllianzGI’s third party service provider it delegates its day-to-day operations Audit committee Chair and reported to the market in the daily to third parties from whom it receives 12 February 2025 NAV announcements. It was noted that internal control assurance reports. this did not impact the cum-income Reports from third party auditors on the NAV announced throughout the period internal controls maintained on behalf concerned, nor did it affect the half-year of the company by AllianzGI and by financial statements which were being other key providers of administrative and considered at that time. Since then, the custodian services to AllianzGI or directly manager, AllianzGI, has reported to the to the company were reviewed during board on the due diligence performed, the year. No issues of concern relating to the corrective actions taken and the the company were raised in the reports. plans now in place to prevent recurrence. 75 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## Statement of Directors’ Responsibilities ## in respect of the financial statements The directors are responsible for The directors are responsible for In the case of each director in office preparing the Annual Report and the safeguarding the assets of the company at the date the directors’ report financial statements in accordance with and hence for taking reasonable steps is approved: applicable law and regulation. for the prevention and detection of fraud – so far as the director is aware, there and other irregularities. | Company law requires the directors | | is no relevant audit information of | | --- | --- | --- | | to prepare financial statements for | The directors are also responsible for | which the company’s auditors are | | each financial year. Under that law the | keeping adequate accounting records | unaware; and | | directors have prepared the financial | that are sufficient to show and explain | – they have taken all the steps that they | | statements in accordance with United | the company’s transactions and disclose | ought to have taken as a director in | | Kingdom Generally Accepted Accounting | with reasonable accuracy at any time | order to make themselves aware of | | Practice (United Kingdom Accounting | the financial position of the company | any relevant audit information and to | | Standards, comprising FRS 102 ‘The | and enable them to ensure that the | establish that the company’s auditors | | Financial Reporting Standard applicable | financial statements and the Directors’ | are aware of that information. | | in the UK and Republic of Ireland’, and | Remuneration Report comply with the | | This responsibility statement was applicable law). Companies Act 2006. approved by the board of directors on | Under company law directors must not | The directors are responsible for the | 12 February 2025 and signed on its | | --- | --- | --- | | approve the financial statements unless | maintenance and integrity of the | behalf by: | | they are satisfied that they give a true | company’s website. Legislation in | | | and fair view of the state of affairs of the | the United Kingdom governing the | | | company and of the profit or loss of the | preparation and dissemination of | Carolan Dobson | | company for that period. In preparing | financial statements may differ from | Chair | | these financial statements, the directors | legislation in other jurisdictions. | | are required to: Directors’ confirmations – select suitable accounting policies and Each of the directors, whose names then apply them consistently; and functions are listed in Directors, – state whether applicable United Manager and Advisers on pages 58 Kingdom Accounting Standards, to 60, confirm that, to the best of comprising FRS 102 have been their knowledge: followed, subject to any material | departures disclosed and explained in | – the company financial statements, | | --- | --- | | the financial statements; | which have been prepared in | | – make judgements and accounting | accordance with United Kingdom | | estimates that are reasonable and | Accounting Standards, comprising FRS | | prudent; and | 102, give a true and fair view of the | | – prepare the financial statements on | assets, liabilities, financial position and | | the going concern basis unless it is | profit of the company; and | | inappropriate to presume that the | – the Strategic Report includes a fair | | company will continue in business. | review of the development and | performance of the business and the position of the company, together with a description of the principal risks and uncertainties that it faces. 76 ## Financial ## Statements 78 Independent auditors’ report 84 Income Statement 85 Balance Sheet 86 Statement of Changes in Equity 87 Cash Flow Statement 88 Statement of Accounting Policies 90 Notes to the Financial Statements New investment Roper Technologies develops mission- critical, industry-specific software. The company is headquartered in Sarasota, Florida, USA. 77 77 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## Independent auditors’ report to the members of ## The Brunner Investment Trust PLC ### Report on the audit of the financial statements Opinion In our opinion, The Brunner Investment Trust PLC’s financial statements: – give a true and fair view of the state of the company’s affairs as at 30 November 2024 and of its profit and cash flows for the year then ended; – have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, including FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ and applicable law); and – have been prepared in accordance with the requirements of the Companies Act 2006. We have audited the financial statements, included within the Annual Report, which comprise: the Balance Sheet as at 30 November 2024; the Income Statement, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended; the Statement of Accounting Policies; and the notes to the financial statements. Our opinion is consistent with our reporting to the Audit Committee. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (‘ISAs (UK)’) and applicable law. Our responsibilities under ISAs (UK) are further described in the auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We remained independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided. We have provided no non-audit services to the company in the period under audit. Our audit approach Overview Audit scope – The company is a standalone Investment Trust company and engages Allianz Global Investors UK Limited (the ‘Manager’) to manage its assets. – We conducted our audit of the financial statements using information from State Street Bank & Trust Company (the ‘Administrator’) to whom the Manager has, with the consent of the directors, delegated the provision of certain administrative functions. – We tailored the scope of our audit taking into account the types of investments within the company, the involvement of the third parties referred to above, the accounting processes and controls, and the industry in which the company operates. – We obtained an understanding of the control environment in place at both the Manager and the Administrator and adopted a fully substantive testing approach using information obtained from the Administrator. Key audit matters – Valuation and existence of investments – Accuracy, occurrence and completeness of Income from investments Materiality – Overall materiality: £6,181,824 (2023: £5,282,098) based on 1% of Net Asset Value. – Performance materiality: £4,636,368 (2023: £3,961,574). The scope of our audit As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. 78 FINANCIAL STATEMENTS Key audit matters Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the 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) identified by the auditors, including 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, and any comments we make on the results of our procedures thereon, 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. This is not a complete list of all risks identified by our audit. The key audit matters below are consistent with last year. Key audit matter How our audit addressed the key audit matter Valuation and existence of investments We tested the valuation of the listed equity investments by The investment portfolio at the year-end comprised listed agreeing the prices used in the valuation to independent equity investments valued at £644.7m. third party sources. We focused on the valuation and existence of investments We tested the existence of the investment portfolio because investments represent the principal element of the by agreeing investment holdings to an independent Net Asset Value as disclosed on the Balance Sheet in the custodian confirmation. financial statements. We have no matters to report as a result of this testing. Accuracy, occurrence and completeness of Income We assessed the accounting policy for investment income from investments recognition for compliance with accounting standards Income from investments consists primarily of and the AIC SORP and performed testing to check that dividend income. income had been accounted for in accordance with this stated accounting policy. We found that the accounting We focused on the accuracy, occurrence and completeness policies implemented were in accordance with accounting of investment income recognition as incomplete or standards and the AIC SORP, and that income has inaccurate income could have a material impact on the been accounted for in accordance with the stated company’s Net Asset Value and dividend cover. accounting policy. We also focused on the accounting policy for investment We tested the accuracy of dividend income by agreeing income recognition and its presentation in the Income the dividend rates from investments to independent Statement for compliance with the requirements of market data. The Association of Investment Companies Statement of Recommended Practice (the ‘AIC SORP’), as To test for completeness, we tested that all dividends incorrect application could indicate a misstatement in declared in the market by investment holdings had income recognition. been recorded. We tested occurrence by testing that all dividends recorded in the year had been declared in the market by investment holdings. We also tested the allocation and presentation of dividend income between the revenue and capital return columns of the Income Statement in line with the requirements set out in the AIC SORP by determining reasons behind dividend distributions. We have no matters to report as a result of this testing. How we tailored the audit scope We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the company, the accounting processes and controls, and the industry in which it operates. All audit procedures were conducted by a UK audit team. We tested and examined information using sampling and other auditing techniques, to the extent we considered necessary to provide a reasonable basis for us to form our own judgements. The impact of climate risk on our audit In planning our audit, we made enquiries of the directors and manager to understand the extent of the potential impact of climate change on the company’s financial statements. 79 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 The directors and investment manager concluded that the impact on the measurement and disclosures within the financial statements is not material because the company’s investment portfolio is made up of Level 1 quoted securities which are valued at fair value based on market prices. We found this to be consistent with our understanding of the company’s investment activities. We also considered the consistency of the climate change disclosures included in the Strategic Report, Investment Manager’s Review and Directors’ Report with the financial statements and our knowledge from our audit. Materiality The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole. Based on our professional judgement, we determined materiality for the financial statements as a whole as follows: | Overall company materiality | £6,181,824 (2023: £5,282,098). | | --- | --- | | How we determined it | 1% of Net Asset Value | | Rationale for benchmark applied | We have applied this benchmark, which is a generally accepted auditing practice | for investment trust audits. We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality was 75% (2023: 75%) of overall materiality, amounting to £4,636,368 (2023: £3,961,574) for the company financial statements. In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was appropriate. We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £309,091 (2023: £264,105) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons. Conclusions relating to going concern Our evaluation of the directors’ assessment of the company’s ability to continue to adopt the going concern basis of accounting included: – evaluating the directors’ updated risk assessment and considering whether it addressed relevant threats to the company; – evaluating the directors’ assessment of potential operational impacts, considering their consistency with other available information and our understanding of the business and assessed the potential impact on the financial statements; – reviewing the directors’ assessment of the company’s financial position in the context of its ability to meet future expected operating expenses and debt repayments, their assessment of liquidity as well as their review of the operational resilience of the company and oversight of key third-party service providers; and – assessing the implication of significant reductions in Net Asset Value as a result of market performance on the ongoing ability of the company to operate. 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 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. However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the company’s ability to continue as a going concern. In relation to the directors’ reporting on how they have 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. 80 FINANCIAL STATEMENTS Reporting on other information The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon. In connection with our audit of the financial statements, 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 audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. 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 based on these responsibilities. With respect to the Strategic report and Directors’ Report, we also considered whether the disclosures required by the UK Companies Act 2006 have been included. Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described below. Strategic report and Directors’ Report In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors’ Report for the year ended 30 November 2024 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements. In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we did not identify any material misstatements in the Strategic report and Directors’ Report. Directors’ Remuneration In our opinion, the part of the Directors’ Remuneration Report, which is included within the Remuneration Committee Report to be audited has been properly prepared in accordance with the Companies Act 2006. Corporate governance statement The Listing Rules require us to review the directors’ statements 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. Our additional responsibilities with respect to the corporate governance statement as other information are described in the Reporting on other information section of this report. 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, and we have nothing material to add or draw attention to in relation to: – The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks; – The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and an explanation of how these are being managed or mitigated; – The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern basis of accounting in preparing them, and their identification of any material uncertainties to the company’s ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements; – The directors’ explanation as to their assessment of the company’s prospects, the period this assessment covers and why the period is appropriate; and – The directors’ statement as to whether they have a reasonable expectation that the company will be able to continue in operation and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions. Our review of the directors’ statement regarding the longer-term viability of the company was substantially less in scope than an audit and only consisted of making inquiries and considering the directors’ process supporting their statement; checking that the statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the statement is consistent with the financial statements and our knowledge and understanding of the company and its environment obtained in the course of the audit. In addition, 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: 81 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 – The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides the information necessary for the members to assess the company’s position, performance, business model and strategy; – The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and – The section of the Annual Report describing the work of the Audit Committee. We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the company’s compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing Rules for review by the auditors. Responsibilities for the financial statements and the audit Responsibilities of the directors for the financial statements As explained more fully in the Statement of Directors’ Responsibilities in respect of the financial statements, the directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also responsible for such internal control as they 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. Auditors’ 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 auditors’ 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. 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. Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to the ongoing qualification as an Investment Trust under the Corporation Tax Act 2010, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting of inappropriate journal entries to increase income or to overstate the value of investments and increase the Net Asset Value of the company. Audit procedures performed by the engagement team included: – discussions with the directors, the manager and the administrator, including consideration of known or suspected instances of non-compliance with laws and regulation and fraud; – reviewing relevant meeting minutes, including those of the Audit Committee; – evaluation of the controls implemented by the Manager and the Administrator designed to prevent and detect irregularities; – assessment of the company’s compliance with the requirements of section 1158 of the Corporation Tax Act 2010, including recalculation of numerical aspects of the eligibility conditions; – identifying and testing journal entries, in particular year end journal entries posted by the administrator during the preparation of the financial statements; and – designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing. There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non- compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected. 82 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 auditors’ report. Use of this report This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. ### Other required reporting Companies Act 2006 exception reporting Under the Companies Act 2006 we are required to report to you if, in our opinion: – we have not obtained all the information and explanations we require for our audit; or – adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or – certain disclosures of directors’ remuneration specified by law are not made; or – the financial statements and the part of the Directors’ Remuneration Report, which is included within the Remuneration Committee Report to be audited are not in agreement with the accounting records and returns. We have no exceptions to report arising from this responsibility. Appointment Following the recommendation of the Audit Committee, we were appointed by the directors on 19 December 2018 to audit the financial statements for the year ended 30 November 2018 and subsequent financial periods. The period of total uninterrupted engagement is 7 years, covering the years ended 30 November 2018 to 30 November 2024. Iain Kirkpatrick (Senior Statutory Auditor) for and on behalf of PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors Edinburgh 12 February 2025 83 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## Income Statement for the year ended 30 November 2024 | | | 2024 | | 2024 | | | 2024 | | | 2023 | | 2023 | | | 2023 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Revenue | | | Capital | | Total Return | | | Revenue | | | Capital | | Total Return | | | | Notes | | | £ | | £ | | | £ | | | £ | | £ | | | £ | Gains on investments held at fair value through 8 - 87,449,624 87,449,624 - 32,247,788 32,247,788 profit or loss Losses on foreign currencies - (208,121) (208,121) - (294,696) (294,696) Income 1 15,233,118 - 15,233,118 14,426,006 - 14,426,006 Investment management fee 2 (822,531) (1,919,239) (2,741,770) (716,931) (1,672,839) (2,389,770) Administration expenses 3 (954,818) (3,198) (958,016) (855,035) (1,887) (856,922) Profit before finance costs and taxation 13,455,769 85,319,066 98,774,835 12,854,040 30,278,366 43,132,406 Finance costs: interest payable and similar charges 4 (433,648) (953,784) (1,387,432) (407,927) (898,583) (1,306,510) Profit on ordinary activities before taxation 13,022,121 84,365,282 97,387,403 12,446,113 29,379,783 41,825,896 Taxation 5 (1,336,376) - (1,336,376) (1,195,066) - (1,195,066) Profit after taxation attributable to ordinary 11,685,745 84,365,282 96,051,027 11,251,047 29,379,783 40,630,830 shareholders Earnings per ordinary share (basic and diluted) 7 27.37p 197.57p 224.94p 26.35p 68.82p 95.17p Dividends to be distributed in respect of the financial year ended 30 November 2024 total 23.75p (2023: 22.70p), amounting to £10,155,919 (2023: £9,691,248). Details are set out in Note 6 on page 92. The total return column of this statement is the profit and loss account of the company. The supplementary revenue return and capital return columns are both prepared under the guidance published by the Association of Investment Companies. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. Profit after taxation attributable to ordinary shareholders disclosed above represents the company’s total comprehensive income. The Statement of Accounting Policies on pages 88 and 89 and the Notes on pages 90 to 102 form an integral part of these Financial Statements. 84 FINANCIAL STATEMENTS # Balance Sheet at 30 November 2024 | | Notes | 2024 £ | 2024 £ | 2023 £ | | --- | --- | --- | --- | --- | | **Fixed assets** | | | | | | Investments held at fair value through profit or loss | 8 | | 644,737,006 | 553,377,318 | | **Current assets** | | | | | | Other receivables | 9 | 5,471,482 | | 1,661,906 | | Cash at bank and in hand | 9 | 4,812,419 | | 9,864,904 | | | | **10,283,901** | | **11,526,810** | | **Current liabilities** | | | | | | Other payables | 9 | (11,727,937) | | (11,593,648) | | **Net current liabilities** | | | **(1,444,036)** | **(66,838)** | | **Total assets less current liabilities** | | | **643,292,970** | **553,310,480** | | Creditors: amounts falling due after more than one year | 10 | | (25,110,610) | (25,100,721) | | **Total net assets** | | | **618,182,360** | **528,209,759** | | **Capital and reserves** | | | | | | Called up share capital | 11 | | 10,740,934 | 10,673,181 | | Share premium account | 12 | | 3,840,467 | - | | Capital redemption reserve | 12 | | 5,326,819 | 5,326,819 | | Capital reserve | 12 | | 578,995,798 | 494,630,516 | | Revenue reserve | 12 | | 19,278,342 | 17,579,243 | | **Total shareholders funds** | 13 | | **618,182,360** | **528,209,759** | | **Net Asset Value per ordinary share** | 13 | | **1,438.8p** | **1,237.2p** | The financial statements of The Brunner Investment Trust PLC, company number 00226323, as set out in pages 84 to 102, were approved and authorised for issue by the Board of Directors on 12 February 2025 and signed on its behalf by: Carolan Dobson Chair The Statement of Accounting Policies on pages 88 and 89 and the Notes on pages 90 to 102 form an integral part of these Financial Statements. 85 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## Statement of Changes in Equity for the year ended 30 November 2024 | | Notes | Called up share capital £ | Share premium account £ | Capital redemption reserve £ | Capital reserve £ | Revenue reserve £ | Total £ | | --- | --- | --- | --- | --- | --- | --- | --- | | Net assets as at 1 December 2022 | | 10,673,181 | - | 5,326,819 | 465,250,733 | 15,846,230 | 497,096,963 | | Revenue profit | | - | - | - | - | 11,251,047 | 11,251,047 | | Dividends on ordinary shares | 6 | - | - | - | - | (9,520,477) | (9,520,477) | | Unclaimed dividends | | - | - | - | - | 2,443 | 2,443 | | Capital profit | | - | - | - | 29,379,783 | - | 29,379,783 | | **Net assets as at 30 November 2023** | | **10,673,181** | **-** | **5,326,819** | **494,630,516** | **17,579,243** | **528,209,759** | | Net assets as at 1 December 2023 | | 10,673,181 | - | 5,326,819 | 494,630,516 | 17,579,243 | 528,209,759 | | Revenue profit | | - | - | - | - | 11,685,745 | 11,685,745 | | Shares issued during the year | 11 | 67,753 | 3,840,467 | - | - | - | 3,908,220 | | Dividends on ordinary shares | 6 | - | - | - | - | (9,990,098) | (9,990,098) | | Unclaimed dividends | | - | - | - | - | 3,452 | 3,452 | | Capital profit | | - | - | - | 84,365,282 | - | 84,365,282 | | **Net assets as at 30 November 2024** | | **10,740,934** | **3,840,467** | **5,326,819** | **578,995,798** | **19,278,342** | **618,182,360** | The Statement of Accounting Policies on pages 88 and 89 and the Notes on pages 90 to 102 form an integral part of these Financial Statements. 86 FINANCIAL STATEMENTS # Cash Flow Statement for the year ended 30 November 2024 | | Notes | 2024 £ | 2023 £ | | --- | --- | --- | --- | | **Operating activities** | | | | | Profit before finance costs and taxation* | | 98,774,835 | 43,132,406 | | Less: gains on investments held at fair value through profit or loss | | (87,449,624) | (32,247,788) | | Less: overseas tax suffered | | (1,336,376) | (1,195,066) | | Add: losses on foreign currency | | 208,121 | 294,696 | | Purchase of fixed asset investments held at fair value through profit or loss | | (121,280,716) | (115,960,271) | | Sales of fixed asset investments held at fair value through profit or loss | | 117,370,652 | 118,633,336 | | Decrease in other receivables | | 98,644 | 111,737 | | Increase in other payables | | 127,369 | 142,596 | | **Net cash inflow from operating activities** | | **6,512,905** | **12,911,646** | | **Financing activities** | | | | | Interest paid and similar charges | | (1,348,216) | (1,130,222) | | Dividend paid on cumulative preference stock | | (22,407) | (22,500) | | Dividends paid on ordinary shares | 6 | (9,990,098) | (9,520,477) | | Unclaimed dividends over 12 years | | 3,452 | 2,443 | | **Net cash outflow from financing activities** | | **(11,357,269)** | **(10,670,756)** | | **(Decrease) increase in cash and cash equivalents** | | **(4,844,364)** | **2,240,890** | | Cash and cash equivalents | | 9,864,904 | 7,918,710 | | Effect of foreign exchange rates | | (208,121) | (294,696) | | Cash and cash equivalents at the end of the year | | 4,812,419 | 9,864,904 | | **Comprising:** | | | | | Cash at bank | | 4,812,419 | 9,864,904 | * Cash inflow from dividends was £13,372,249 (2023: £12,717,117) and cash inflow from interest was £161,411 (2023: £196,203). The Statement of Accounting Policies on pages 88 and 89 and the Notes on pages 90 to 102 form an integral part of these Financial Statements. 87 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 # Statement of Accounting Policies for the year ended 30 November 2024 The company is incorporated in the United Kingdom under the Companies Act. The company is a public company limited by shares and is registered in England and Wales. The address of the company's registered office is shown on page 60. The principal activity of the company and the nature of its operations are set out in the strategic report on page 11. The company conducts its business so as to qualify as an investment trust company within the meaning of sub-section 1158 of the Corporation Tax Act 2010. The principal accounting policies are summarised below. They have all been applied consistently throughout the year and to the preceding year. **1 Basis of preparation** – The financial statements have been prepared under the historical cost convention, except for the revaluation of financial instruments held at fair value through profit or loss and in accordance with applicable United Kingdom law and UK Accounting Standards (UK GAAP), including Financial Reporting Standard 102 - the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102), the requirements of the Companies Act 2006 and in line with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued by the Association of Investment Companies (AIC SORP) in July 2022. In order to better reflect the activities of an investment trust company, and in accordance with guidance issued by the AIC, supplementary information which analyses the Income Statement between items of revenue and capital nature has been presented alongside the Income Statement. The directors believe that it is appropriate to continue to adopt the going concern basis in preparing the financial statements as the assets of the company consist mainly of securities, which are readily realisable and significantly exceed liabilities. Accordingly, the directors believe that the company has adequate financial resources, to continue in operational existence for the foreseeable future. The company's business, the principal risks and uncertainties it faces, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report on page 11. **2 Income** – Dividends received on equity shares are accounted for on an ex-dividend basis. Foreign dividends are grossed up at the appropriate rate of withholding tax. Special dividends are recognised on an ex-dividend basis and treated as a capital or revenue item depending on the facts and circumstances of each dividend. The board reviews special dividends and their treatment at each meeting. Where the company has elected to receive its dividends in the form of additional shares rather than in cash, the equivalent of the cash dividend is recognised as income. Any excess in the value of the shares received over the amount of the cash dividend is recognised in capital reserves. Deposit interest receivable is accounted for on an accruals basis. **3 Investment management fee and administrative expenses** – The investment management fee is calculated on the basis set out in Note 2 to the financial statements and is charged to capital and revenue in the ratio 70:30 to reflect the company's investment policy and prospective capital and income growth. Other administrative expenses are charged in full to revenue, except custodian handling charges on investment transactions which are charged to capital. All expenses are on an accruals basis. **4 Investments** – As the company's business is investing in financial assets with a view to profiting from their total return in the form of increases in fair value, financial assets are held at fair value through profit or loss in accordance with FRS 102 Section 11: 'Basic Financial Instruments' and Section 12: 'Other Financial Instruments'. The company manages and evaluates the performance of these investments on a fair value basis in accordance with its investment strategy, and information about investments is provided on this basis to the board. Investments held at fair value through profit or loss are initially recognised at fair value. After initial recognition, these continue to be measured at fair value, which for quoted investments is either the bid price or the last traded price depending on the convention of the exchange on which they are listed. Gains or losses on investments are recognised in the capital column of the Income Statement. Purchases and sales of financial assets are recognised on the trade date, being the date which the company commits to purchase or sell assets. 88 FINANCIAL STATEMENTS 5 Finance costs – In accordance with the FRS 102 Section 10 Dividends – In accordance with FRS 102 Section 32: ‘Events 11: ‘Basic Financial Instruments’ and Section 12 ‘Other After the End of the Reporting Period’, the final dividend Financial Instruments’, long term borrowings are stated proposed on ordinary shares is recognised as a liability at the amortised cost being the amount of net proceeds when approved by shareholders. Interim dividends are on issue plus accrued finance costs to date. Finance costs recognised only when paid. Dividends are paid from the are calculated over the term of the debt on the effective revenue reserve. interest rate basis. 11 Foreign currency – In accordance with FRS 102 Section Finance costs net of amortised premiums are charged to 30: ‘Foreign Currency Translation’, the company is required capital and revenue in the ratio 70:30 to reflect the board’s to nominate a functional currency, being the currency in investment policy and prospective split of capital and which the company predominately operates. The functional revenue returns. and reporting currency is pounds sterling, reflecting the Dividends payable on the 5% cumulative preference stock primary economic environment in which both the company are classified as an interest expense and are charged in full and its’ shareholders predominantly operate and in which to revenue. its’ expenses are generally paid. Transactions in foreign currencies are translated into pounds sterling at the rates 6 Taxation – Where expenses are allocated between capital of exchange ruling on the date of the transaction. Foreign and revenue, any tax relief obtained in respect of those currency monetary assets and liabilities are translated expenses is allocated between capital and revenue on into pounds sterling at the rates of exchange ruling at the marginal method and the company’s effective rate the balance sheet date. Profits and losses thereon are of corporation tax for the accounting period. Deferred recognised in the capital column of the income statement taxation is recognised in respect of all timing differences and taken to the capital reserve. that have originated but not reversed at the balance sheet date, where transactions or events that result in an 12 Significant judgements, estimates and assumptions – In obligation to pay more tax or a right to pay less tax in the the application of the company’s accounting policies, which future have occurred. Timing differences are differences are described above, the directors are required to make between the company’s taxable profits and its results as judgements, estimates, and assumptions about the carrying stated in the financial statements. amounts of assets and liabilities that are not readily apparent from other sources. The investment portfolio A deferred tax asset is recognised when it is more likely currently consists of listed investments and therefore no than not that the asset will be recoverable. Deferred tax significant estimates have been made in valuing these is measured on a non-discounted basis at the rate of securities. corporation tax that is expected to apply when the timing differences are expected to reverse. There are no significant judgements, estimates, and assumptions. 7 Shares repurchased for cancellation and for holding in Estimates and underlying assumptions are reviewed on treasury – Share capital is reduced by the nominal value of an ongoing basis. Revisions to accounting estimates are the shares repurchased, and the capital redemption reserve recognised in the period in which the estimate is revised is correspondingly increased in accordance with Section if the revision affects only that period, or in the period of 733 Companies Act 2006. The full cost of the repurchase the revision and future periods if the revision affects both is charged to the capital reserve within Gains (Losses) on current and future periods. Sales of Investments. For shares repurchased for holding in treasury, the full cost is charged to the capital reserve 8 Shares sold (reissued) from treasury – Proceeds received from the sale of shares held in treasury are treated as realised profits in accordance with Section 731 of the Companies Act 2006. Proceeds equivalent to the original cost, calculated by applying a weighted average price, are credited to the capital reserve; proceeds in excess of the original cost are credited to the share premium account. 9 Shares issued – Share capital is increased by the nominal value of shares issued. The proceeds in excess of the nominal value of shares net of expenses are allocated to the share premium account. 89 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## Notes to the Financial Statements for the year ended 30 November 2024 ### 1. Income 2024 2023 £ £ Income from Investments* † Equity income from UK investments 4,777,907 5,229,024 †† Equity income from overseas investments 10,293,800 9,000,779 15,071,707 14,229,803 Other Income Deposit interest 161,411 196,203 161,411 196,203 Total income 15,233,118 14,426,006 * All dividend income is derived from listed investments. † Includes special dividends of £nil (2023: £101,750). †† Includes special dividends of £701,078 (2023: £1,326,776). ### 2. Investment management fee | | 2024 | | 2024 | | 2024 | | | 2023 | | 2023 | | 2023 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Revenue | | | Capital | | Total | | Revenue | | | Capital | | Total | | | | | £ | | £ | | £ | | | £ | | £ | | £ | Investment management fee 822,531 1,919,239 2,741,770 716,931 1,672,839 2,389,770 Under the terms of the Management and Administration Agreement the company’s manager is Allianz Global Investors UK Ltd. The agreement was restated in July 2014, with the appointment of AllianzGI as the Alternative Investment Fund Manager. On 30 May 2023 the Agreement was novated from Allianz Global Investors GmbH to Allianz Global Investors UK Limited (AllianzGI UK). In both cases the terms of the agreement were unchanged: it provides for a management fee based on 0.45% per annum of the value of the assets after deduction of current liabilities, short-term loans under one year and other funds managed by Allianz Global Investors GmbH, calculated monthly. The fee is charged in the ratio 70:30 between capital and revenue as set out in the Statement of Accounting Policies. The provision of investment management services, company administrative and secretarial services by AllianzGI UK under the Management and Administration Agreement may be terminated by either the company or AllianzGI UK on not less than six months’ notice. 90 FINANCIAL STATEMENTS ### 3. Administration expenses 2024 2023 £ £ Auditors’ remuneration for audit services 45,478 44,275 VAT on auditors’ remuneration 9,096 8,855 54,574 53,130 Other administration expenses 1 Directors' fees 174,183 174,766 Depositary fees 63,686 55,724 Custody fees 44,097 41,777 Registrars' fees 54,892 67,087 Association of Investment Companies' fees 21,839 21,455 Marketing costs 370,471 351,843 Printing and postage 43,268 39,539 Directors' and officers' liability insurance 17,733 18,188 Professional and advisory fees 27,983 8,145 Stock Exchange fees 28,750 22,878 Stock Exchange block listing fee 24,794 - Other 77,409 65,976 VAT recovered (48,861) (65,473) 954,818 855,035 1 Directors’ fees are set out in the Directors’ Remuneration Report on page 70. The above expenses include value added tax where applicable. Custodian handling charges of £3,198 were charged to capital (2023: £1,887). ### 4. Finance costs: interest payable and similar charges | | 2024 | | 2024 | | 2024 | | | 2023 | | 2023 | | 2023 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Revenue | | | Capital | | Total | | Revenue | | | Capital | | Total | | | | | £ | | £ | | £ | | | £ | | £ | | £ | On 5% Cumulative Preference Stock repayable 22,407 - 22,407 22,500 - 22,500 after more than five years On 2.84% Fixed Rate Notes 2048 repayable after 213,334 497,779 711,113 215,882 503,725 719,607 more than five years On Revolving Credit Facility 195,431 456,005 651,436 169,225 394,858 564,083 On sterling overdraft 2,476 - 2,476 320 - 320 433,648 953,784 1,387,432 407,927 898,583 1,306,510 91 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ### 5. Taxation | | 2024 | | 2024 | | 2024 | | | 2023 | | 2023 | | 2023 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Revenue | | | Capital | | Total | | Revenue | | | Capital | | Total | | | | | £ | | £ | | £ | | | £ | | £ | | £ | Overseas taxation 1,336,376 - 1,336,376 1,195,066 - 1,195,066 Total tax 1,336,376 - 1,336,376 1,195,066 - 1,195,066 Reconciliation of tax charge Profit before taxation 13,022,121 84,365,282 97,387,403 12,446,113 29,379,783 41,825,896 Tax on profit at 25.00% (2023: 23.01%) 3,255,530 21,091,321 24,346,851 2,863,851 6,760,288 9,624,139 Effects of Non taxable income (3,769,985) - (3,769,985) (3,257,278) - (3,257,278) Non taxable capital gains - (21,810,375) (21,810,375) - (7,352,713) (7,352,713) Disallowable expenses - 800 800 5,177 434 5,611 Overseas tax suffered 1,336,376 - 1,336,376 1,195,066 - 1,195,066 Excess of allowable expenses over taxable income 514,455 718,254 1,232,709 388,250 591,991 980,241 Total tax 1,336,376 - 1,336,376 1,195,066 - 1,195,066 The company’s taxable income is exceeded by its tax allowable expenses, which include both the revenue and capital elements of the management fee and finance costs. As at 30 November 2024, the company had accumulated surplus expenses of £114.6 million (2023: £109.7 million) and eligible unrelieved foreign tax of £nil (2023: £nil). The company has not recognised a deferred tax asset of £28.7 million (2023: £27.4 million) in respect of these expenses, based on a prospective corporation tax rate of 25% (2023: 25%) because there is no reasonable prospect of recovery. The increase in the standard rate of corporation tax was substantively enacted on 24 May 2021 and was effective from 1 April 2023. ### 6. Dividends on ordinary shares 2024 2023 £ £ Dividends paid on ordinary shares Third interim dividend – 5.55p paid 12 December 2023 (2022: 5.15p) 2,369,446 2,198,675 Final dividend – 6.05p paid 4 April 2024 (2023: 6.05p) 2,582,910 2,582,910 First interim dividend – 5.90p paid 25 July 2024 (2023: 5.55p) 2,518,871 2,369,446 Second interim dividend – 5.90p paid 12 September 2024 (2023: 5.55p) 2,518,871 2,369,446 9,990,098 9,520,477 Dividends payable at the year end are not recognised as a liability under FRS 102 Section 32 ‘Events After the End of the Reporting Period’ (see page 88: Statement of Accounting Policies). Details of these dividends are set out below. 2024 2023 £ £ Third interim dividend – 5.90p paid 12 December 2024 (2023: 5.55p) 2,518,871 2,369,446 Final proposed dividend – 6.05p payable 4 April 2025 (2024: 6.05p) 2,599,306 2,582,910 5,118,177 4,952,356 92 FINANCIAL STATEMENTS The proposed final dividend accrued is based on the number of shares in issue at the year end. However, the dividend payable will be based on the numbers of shares in issue on the record date and will reflect any changes in the share capital between the year end and the record date. All dividends disclosed in the tables above have been paid or are payable from the revenue reserves. ### 7. Earnings per ordinary share | | 2024 | | 2024 | | 2024 | | | 2023 | | 2023 | | 2023 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Revenue | | | Capital | | Total | | Revenue | | | Capital | | Total | | | | | £ | | £ | | £ | | | £ | | £ | | £ | Profit after taxation attributable to ordinary 11,685,745 84,365,282 96,051,027 11,251,047 29,379,783 40,630,830 shareholders Earnings per ordinary share 27.37p 197.57p 224.94p 26.35p 68.82p 95.17p The earnings per ordinary share is based on a weighted number of shares 42,701,544 (2023: 42,692,727) ordinary shares in issue. ### 8. Investments held at fair value through profit or loss 2024 2023 £ £ Opening book cost 355,552,866 321,784,618 Opening investments holding gains 197,824,452 201,044,464 Opening market value 553,377,318 522,829,082 Additions at cost 121,280,716 115,960,271 Disposals proceeds received (117,370,652) (117,659,823) Gains on investments 87,449,624 32,247,788 Market value of investments held at 30 November 2024 644,737,006 553,377,318 Closing book cost 394,630,081 355,552,866 Closing investment holding gains 250,106,925 197,824,452 Closing market value 644,737,006 553,377,318 Gains on investments Gains on investments 87,449,624 32,247,788 Gains on investments 87,449,624 32,247,788 The company received £117,370,652 (2023: £117,659,823) from investments sold in the year. The book cost of these investments when they were purchased was £82,203,903 (2023: £82,192,022). 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. Transaction costs and stamp duty on purchases amounted to £267,885 (2023: £231,783) and transaction costs on sales amounted to £26,855 (2023: £38,689). 93 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ## 9. Other receivables, cash at bank and in hand and other payables | | 2024 £ | 2023 £ | | --- | --- | --- | | **Other receivables** | | | | Shares issued | 3,908,220 | - | | Accrued income | 1,511,492 | 1,612,128 | | Prepayments | 51,770 | 49,778 | | | **5,471,482** | **1,661,906** | | **Cash at bank and in hand** | | | | Current account | 4,812,419 | 9,864,904 | | | **4,812,419** | **9,864,904** | | **Other payables: amounts falling due within one year** | | | | Other payables | 1,147,675 | 1,020,306 | | Interest on borrowings (see below) | 313,841 | 313,934 | | Revolving Credit Facility | (i) 10,266,421 | 10,259,408 | | | **11,727,937** | **11,593,648** | The carrying amount of other receivables, cash and cash equivalents and other payables: amounts falling due within one year, each approximate their fair value. | | 2024 £ | 2023 £ | | --- | --- | --- | | **Interest on outstanding borrowings consists of:** | | | | 5% Cumulative preference stock | 11,218 | 11,311 | | 2.84% Fixed Rate Note 2048 | 302,623 | 302,623 | | | **313,841** | **313,934** | (i) On 27 June 2022 the company entered into a revolving credit facility agreement of £10m (replacing an existing facility of £10m). The full amount of £10m is currently drawn down. The rate of interest for the revolving credit facility is made up of a fixed margin plus SONIA rate. Under this agreement £10m was rolled over on 27 December 2024, with a maturity date of 27 June 2025. The repayment date of the revolving facility is the last day of its interest period and the termination date is 27 June 2025. The company pays a commitment fee of 0.30% p.a. on any undrawn amounts. ## 10. Creditors: amounts falling due after more than one year | | 2024 £ | 2023 £ | | --- | --- | --- | | 5% Cumulative preference stock | (i) 450,000 | 450,000 | | 2.84% Fixed Rate Note 2048 | (ii) 24,660,610 | 24,650,721 | | | **25,110,610** | **25,100,721** | (i) The 5% Cumulative Preference Stock is recognised as a creditor due after more than one year under the provisions of FRS102 Section 11: 'Basic Financial Instruments' and Section 12: 'Other Financial Instruments'. The right of the preference stockholders to receive payments is not calculated by reference to the company's profits and, in the event of a return of capital are limited to a specific amount, being £450,000. Dividends on the preference stock are payable on 30 June and 31 December each year. (ii) The Fixed Rate Notes of £25,000,000 is stated at £24,660,610 (2023: £24,650,721) being the net proceeds of £24,601,800 (2023: £24,601,800) plus accrued finance costs of £58,810 (2023: £48,921). The Note is repayable on 28 June 2048 and carries interest at 2.84% per annum on the principal amount. Interest is payable in June and December each year. The effective interest rate of the loan inclusive of the issue costs is 2.94%. 94 FINANCIAL STATEMENTS ## 11. Called up share capital | | 2024 £ | 2023 £ | | --- | --- | --- | | **Allotted and fully paid** | | | | 42,963,736 ordinary shares of 25p each (2023: 42,692,727) | 10,740,934 | 10,673,181 | | | | | | | 2024 Number | 2024 £'000s | | | 2023 Number | 2023 £'000s | | **Allotted 25p ordinary shares** | | | | Brought forward | 42,692,727 | 10,673,181 | | Shares issued during the year | 271,009 | 67,753 | | **Carried forward** | **42,963,736** | **10,740,934** | | | 42,692,727 | 10,673,181 | The directors are authorised by an ordinary resolution passed on 25 March 2024 to allot relevant securities, in accordance with section 551 of the Companies Act 2006, up to a maximum of 14,230,908 ordinary shares of 25p each. This authority expires on 24 June 2025 and accordingly a renewed authority will be sought at the annual general meeting on 2 April 2025. During the year nil (2023: nil) ordinary shares were repurchased by the company. The aggregate purchase price of these shares, amounting to £nil (2023: £nil) was charged to the capital reserve, within gains on sales of investments (see Note 12). During the year 271,009 shares were issued (2023: nil) for a total consideration of £3,908,220 (2023: £nil), net of issues costs of £7,047 (2023: £nil). Since the year end a further 283,991 shares have been issued for a total consideration of £4,175,518, net of issue costs of £7,529, as at 12 February 2025. ## 12. Reserves | | Share premium account £ | Capital redemption reserve £ | Capital Reserve | | Revenue reserve £ | | --- | --- | --- | --- | --- | --- | | | | | Gains (losses) on sales of Investments £ | Investment holding gains (losses) £ | | | Balance at 1 December 2023 | - | 5,326,819 | 297,343,743 | 197,286,773 | 17,579,243 | | Gains on realisation of investments | - | - | 69,887,573 | - | - | | Transfer on disposal of investments | - | - | (34,720,422) | 34,720,422 | - | | Movement in investment holding losses | - | - | - | 17,562,051 | - | | Losses on foreign currency | - | - | - | (208,121) | - | | Issue of ordinary shares | 3,840,467 | - | - | - | - | | Investment management fee | - | - | (1,919,239) | - | - | | Finance costs of borrowings | - | - | (953,784) | - | - | | Other capital expenses | - | - | (3,198) | - | - | | Dividends appropriated in the year | - | - | - | - | (9,990,098) | | Profit retained for the year | - | - | - | - | 11,685,745 | | Unclaimed dividends | - | - | - | - | 3,452 | | **Balance at 30 November 2024** | **3,840,467** | **5,326,819** | **329,634,673** | **249,361,125** | **19,278,342** | All paid or payable dividends for the year are payable from the revenue reserve (2023: same). 95 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ### 13. Net Asset Value total return The Net Asset Value total return for the year is the percentage movement from the capital Net Asset Value as at 30 November 2023 to the Net Asset Value, on a total return basis as at 30 November 2024. The Net Asset Value total return with debt at fair value is 17.9% (2023: 8.7%) and the Net Asset Value total return with debt at par is 18.2% (2023: 8.2%). The Net Asset Value per ordinary share is based on 42,963,736 ordinary shares in issue at the year end (2023: 42,692,727). The method of calculation of the Net Asset Value with debt at fair value is described in Note 15(c) on page 100. The Net Asset Value per ordinary share was as follows: | Debt at | Debt | Debt at | Debt | | --- | --- | --- | --- | | fair value | at par | fair value | at par | | 2024 | 2024 | 2023 | 2023 | Net Asset Value per ordinary share attributable 1,459.6p 1,438.8p 1,258.6p 1,237.2p Effect of dividends reinvested on the respective ex-dividend dates 23.8p 23.8p 22.7p 22.7p Net Asset Value total return 1,483.4p 1,462.6p 1,281.3p 1,259.9p Net Asset Value attributable £627,111,895 £618,182,360 £537,307,615 £528,209,759 ### 14. Contingent liabilities, capital commitments and guarantees At 30 November 2024 there were no contingent liabilities, capital commitments or guarantees (2023: £nil). ### 15. Financial risk management policies and procedures The company invests in equities and other investments in accordance with its investment objective as stated in the Strategic Report on page 12. In pursuing its investment objective, the company is exposed to certain inherent risks that could result in either a reduction in the company’s net assets or a reduction in the profits available for distribution by way of dividends. The main risks arising from the company’s financial instruments are: market risk (comprising market price risk, market yield risk, foreign currency risk and interest rate risk), liquidity risk and credit risk. The directors’ approach to the management of these risks, are set out below. The directors determine the objectives and agree policies for managing each of these risks, as set out below. The manager, in close cooperation with the directors, implements the company’s risk management policies. These policies have remained substantially unchanged during the current and preceding year. (a) Market risk The manager assesses the exposure to market risk when making each investment decision, and monitors the risk on the investment portfolio on an ongoing basis. Market risk comprises of market price risk (price and yield), foreign currency risk and interest rate risk. (i) Market pricerisk Market price risk arises mainly from the uncertainty about future prices of financial instruments held. It represents the potential loss the company might suffer through holding market positions in the face of price movements. An analysis of the company’s portfolio begins on page 50. Market price risk sensitivity The value of the company’s listed equities which were exposed to market price risk as at 30 November 2024 and 2023 was as follows: 2024 2023 £ £ Listed equity investments held at fair value through profit or loss 644,737,006 553,377,318 The following illustrates the sensitivity of the return after taxation for the year and the net assets to an increase or decrease of 30% (2023: 30%) in the fair values of the company’s quoted equities. This level of change is considered to be reasonably possible based on observation of market conditions in recent years. The sensitivity analysis on the profit after taxation and net assets is based on the impact of a 30% increase or decrease in the value of the company’s listed investments at each closing balance sheet date and the consequent impact on the investment management fees for the year, with all other variables held constant. 96 FINANCIAL STATEMENTS | | 2024 | | | 2024 | | | 2023 | | | 2023 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 30% increase | | | 30% decrease | | | 30% increase | | | 30% decrease | | | | in fair value | | | in fair value | | | in fair value | | | in fair value | | | | | | £ | | | £ | | | £ | | | £ | Revenue earnings Investment management fee (261,118) 261,118 (224,118) 224,118 Capital earnings Gains (losses) on investments at fair value 193,421,102 (193,421,102) 166,013,195 (166,013,195) Investment management fee (609,276) 609,276 (522,942) 522,942 Change in net earnings and net assets 192,550,708 (192,550,708) 165,266,135 (165,266,135) Management of market price risk The directors meet regularly to review the asset allocation of the portfolio recommended by the manager, in order to minimise the risk associated with particular countries or industry sectors. Dedicated fund managers have the responsibility for monitoring the existing portfolio selection in accordance with the company’s investment objectives and seek to ensure that individual stocks meet an acceptable risk reward profile. (ii) Market yield risk Market yield risk arises from the uncertainty about the company’s ability to maintain its income objectives due to a systematic decline in corporate dividend levels. Management of market yield risk The directors regularly review the current and projected yield of the investment portfolio, and discuss with the manager the extent to which it will enable the company to meet its investment income objective. The board has also committed to using the strong revenue reserve if required. (iii) Foreign currency risk Foreign currency risk is the risk of the movement in the values of overseas financial instruments as a result of fluctuations in exchange rates. Management of foreign currency risk Transactions in foreign currencies are translated into sterling at the rates of exchange ruling on the date of the transaction. Foreign currency assets and liabilities are translated into sterling at the rates of exchange ruling at the balance sheet date. The company does not currently hedge against foreign currency exposure. The table below summarises in sterling terms the foreign currency risk exposure: | | 2024 | | | | 2024 | | | | 2024 | | | 2023 | | | | 2023 | | | | 2023 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | Other net assets | | | | Total currency | | | | | | | Other net assets | | | | Total currency | | | | | Investments | | | | (liabilities) | | | | exposure | | | Investments | | | | (liabilities) | | | | exposure | | | | | | £ | | | | £ | | | | £ | | | £ | | | | £ | | | | £ | Pounds Sterling 151,360,466 (27,962,100) 123,398,366 138,847,724 (27,578,843) 111,268,881 Australian Dollar 10,940,110 - 10,940,110 8,320,391 114,964 8,435,355 Danish Krone - 30,811 30,811 5,790,389 37,735 5,828,124 Euro 75,745,143 277,035 76,022,178 76,635,351 272,067 76,907,418 Hong Kong Dollar 4,320,498 - 4,320,498 5,009,435 - 5,009,435 Japanese Yen 11,813,306 128,044 11,941,350 11,411,833 143,345 11,555,178 Norwegian Krona 12,305,014 80,744 12,385,758 10,710,122 - 10,710,122 Swedish Krona 20,189,603 7,170 20,196,773 20,345,454 7,479 20,352,933 Swiss Franc 31,666,088 581,469 32,247,557 31,175,786 588,358 31,764,144 Taiwan Dollar - - - - 871,056 871,056 US Dollar 326,396,778 302,181 326,698,959 245,130,833 376,280 245,507,113 Total 644,737,006 (26,554,646) 618,182,360 553,377,318 (25,167,559) 528,209,759 The following table details the company’s sensitivity to a 20% increase and decrease in sterling against the relevant foreign currencies and the resultant impact that any such increase or decrease would have on net return and net assets. The sensitivity analysis includes only outstanding foreign currency denominated items and adjusts their translation at the year end for a 20% change in foreign currency rates. 97 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 | | 2024 | | | 2024 | | | 2023 | | | 2023 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 20% decrease in | | | 20% increase in | | | 20% decrease in | | | 20% increase in | | | | sterling against | | | sterling against | | | sterling against | | | sterling against | | | | foreign currencies | | | foreign currencies | | | foreign currencies | | | foreign currencies | | | | | | £ | | | £ | | | £ | | | £ | Australian Dollar 2,735,028 (1,823,352) 2,108,839 (1,405,893) Danish Krone 7,703 (5,135) 1,457,031 (971,354) Euro 19,005,545 (12,670,363) 19,226,855 (12,817,903) Hong Kong Dollar 1,080,125 (720,083) 1,252,359 (834,906) Japanese Yen 2,985,338 (1,990,225) 2,888,795 (1,925,863) Norwegian Krona 3,096,440 (2,064,293) 2,677,531 (1,785,020) Swedish Krona 5,049,193 (3,366,129) 5,088,233 (3,392,156) Swiss Franc 8,061,889 (5,374,593) 7,941,036 (5,294,024) Taiwan Dollar - - 217,764 (145,176) US Dollar 81,674,740 (54,449,827) 61,376,778 (40,917,852) Total 123,696,001 (82,464,000) 104,235,221 (69,490,147) (iv) Interest rate risk Interest rate risk is the risk of movements in the value of financial instruments as a result of fluctuations in interest rates. Interest rate exposure The table below summarises in sterling terms the financial assets and financial liabilities whose values are directly affected by changes in interest rates. | | | 2024 | | | 2024 | | 2024 | | | 2024 | | 2023 | | | 2023 | | 2023 | | 2023 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | Fixed | | Floating | | | | | | | | Fixed | | Floating | | | | | | | | | | rate | | | rate | | | Nil | | | | rate | | | rate | | | Nil | | | | | | interest | | interest | | | Interest | | | Total | | interest | | interest | | | Interest | | Total | | | | | | £ | | | £ | | £ | | | £ | | £ | | | £ | | £ | | £ | | Financial assets | | | - 4,812,419 644,737,006 649,549,425 - 9,864,904 553,377,318 563,242,222 | | | | | | | | | | | | | | | | | | | Financial Liabilities | (25,110,610) - - (25,110,610) (25,100,721) - - (25,100,721) | | | | | | | | | | | | | | | | | | | | | Net financial (liabilities) assets | (25,110,610) 4,812,419 644,737,006 624,438,815 (25,100,721) 9,864,904 553,377,318 538,141,501 | | | | | | | | | | | | | | | | | | | | | Short term receivables and payables - - - | | | | | | | | | (6,256,455) - - - (9,931,742) | | | | | | | | | | | | Net (liabilities) assets per balance (25,110,610) 4,812,419 644,737,006 618,182,360 (25,100,721) 9,864,904 553,377,318 528,209,759 sheet As at 30 November 2024, the interest rates received on cash balances, or paid on bank overdrafts respectively, is approximate to 2.55% and 5.75% per annum (2023: 2.75% and 6.25% per annum). The fixed rate interest bearing liabilities bear the following coupon and effective rates as at 30 November 2023 and 30 November 2024. | | | | Amount | | | | Effective | | --- | --- | --- | --- | --- | --- | --- | --- | | | Maturity | | borrowed | | Coupon | | rate since | | 2024 | | date | | £ | | rate | inception* | 5% Cumulative Preference Stock n/a 450,000 5.00% n/a 2.84% Fixed Rate Note 2048 28/06/2048 25,000,000 2.84% 2.94% | | | | Amount | | | | Effective | | --- | --- | --- | --- | --- | --- | --- | --- | | | Maturity | | borrowed | | Coupon | | rate since | | 2023 | | date | | £ | | rate | inception* | 5% Cumulative Preference Stock n/a 450,000 5.00% n/a 2.84% Fixed Rate Note 2048 28/06/2048 25,000,000 2.84% 2.94% * The effective rates are calculated in accordance with FRS 102 Section 12: ‘Other Financial Instruments’ as detailed in the Statement of Accounting Policies on page 88. 98 FINANCIAL STATEMENTS The weighted average effective rate of the company’s fixed interest bearing liabilities (excluding the 5% cumulative preference stock) is 2.94% (2023: 2.94%) and the weighted average period to maturity of these liabilities is 23.5 years (2023: 24.5 years). The above year end amounts are reasonably representative of the exposure to interest rates during the year, as the level of exposure does not change materially. The company’s profit after tax and net assets, is not significantly affected by changes in interest rates. Management of interest rate risk The company invests mainly in equities, the values of which are not directly affected by changes in prevailing market interest rates. The company finances its operations through a mixture of share capital, retained earnings and long term borrowings which are subject to fixed rates. Movement in interest rates will not materially affect the finance costs of the company. The company is considered to have low direct exposure to interest rate risk. (b) Liquidity risk Liquidity risk relates to the capacity to meet liabilities as they fall due and is dependent on the liquidity of the underlying assets. Maturity of financial liabilities The table below presents the future cash flows payable by the company in respect of its financial liabilities. Cash flows in respect of the principal and interest on the 2.84% Fixed Rate Note 2048 reflect the maturity dates set out in Note 10 on page 94. Cash flows in respect of the 5% cumulative preference stock, which has no fixed repayment date, assume maturity of 20 years from the balance sheet date. Cash flows have not been discounted. | | Three | | | Between | | Between | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | months | | three months | | | one and | | More than | | | | | | or less | | and one year | | | five years | | five years | | Total | | | 2024 | | £ | | | £ | | £ | | £ | | £ | Other payables Finance costs of borrowing 366,250 366,250 - - 732,500 Revolving Credit Facility 303,855 10,000,000 - - 10,303,855 Other payables 1,147,675 - - - 1,147,675 Creditors: amounts falling due after more than one year Maturity of borrowings - - - 25,450,000 25,450,000 Finance costs of borrowing - - 2,930,000 13,827,500 16,757,500 1,817,780 10,366,250 2,930,000 39,277,500 54,391,530 | | Three | | | Between | | Between | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | months | | three months | | | one and | | More than | | | | | | or less | | and one year | | | five years | | five years | | Total | | | 2023 | | £ | | | £ | | £ | | £ | | £ | Other payables Finance costs of borrowing 366,250 366,250 - - 732,500 Revolving Credit Facility 320,516 10,000,000 - - 10,320,516 Other payables 1,020,306 - - - 1,020,306 Creditors: amounts falling due after more than one year Maturity of borrowings - - - 25,450,000 25,450,000 Finance costs of borrowing - - 2,930,000 14,537,500 17,467,500 1,707,072 10,366,250 2,930,000 39,987,500 54,990,822 Other creditors include trade creditors only, no accrued finance costs included. Management of liquidity risk Liquidity risk is not considered to be significant as the company’s assets mainly comprise realisable securities, which can be sold to meet funding requirements. Short-term flexibility can be achieved through the use of overdraft facilities, where necessary. The company has an undrawn committed borrowing facility of £5 million (2023: £5 million). 99 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ### (c) Credit risk Credit risk is the risk of default by a counterparty in discharging its obligations under transactions that could result in the company suffering a loss. There were no impaired assets as of 30 November 2024 (30 November 2023: nil). The counterparties which the company engages with are regulated entities and are of high credit quality. #### Management of credit risk Outstanding settlements are subject to credit risk. Credit risk is mitigated by the company through its decision to transact with counterparties of high credit quality. The company only buys and sells investments through brokers which are approved counterparties, thus minimising the risk of default during settlement. The credit rating of brokers are reviewed quarterly by the manager. The company is also exposed to credit risk through the use of banks for its cash position. Bankruptcy or insolvency of banks may cause the company's rights with respect to cash held by banks to be delayed or limited. The company's cash balance is held by HSBC Bank plc, rated A1 by Moody's rating agency. The directors believe the counterparties the company has chosen to transact with are of high credit quality, therefore the company has minimal exposure to credit risk. In summary, the exposure to credit risk at 30 November 2024 and 2023 was as follows: | | 2024 £ | 2023 £ | | --- | --- | --- | | **Other receivables:** | | | | Share issue | 3,908,220 | - | | Accrued income | 1,511,492 | 1,612,128 | | Prepayments | 51,770 | 49,778 | | | **5,471,482** | **1,661,906** | | Cash at bank and in hand | 4,812,419 | 9,864,904 | | | **10,283,901** | **11,526,810** | #### Fair values of financial assets and financial liabilities Investments are designated as held at fair value through profit or loss in accordance with FRS 102 sections 11 and 12. FRS 102 sets out three fair value levels. Level 1 – The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date. Level 2 – Inputs other than quoted prices included within Level 1 that are observable (i.e., developed using market data) for the asset or liability, either directly or indirectly. Level 3 – Inputs are unobservable (i.e., for which market data is unavailable) for the asset or liability. With the exception of those financial liabilities measured at amortised cost, all other financial assets and financial liabilities are either carried at their fair value or the balance sheet amount is a reasonable approximation of their fair value. As at 30 November 2024 the financial assets at fair value through profit and loss of £644,737,006 (2023: £553,377,318) are categorised as follows: | | 2024 £ | 2023 £ | | --- | --- | --- | | Level 1 | 644,737,006 | 553,377,318 | | Level 2 | - | - | | Level 3 | - | - | | | **644,737,006** | **553,377,318** | There were no transfers between levels for financial assets and financial liabilities during the year recorded at fair value as at 30 November 2024 and 30 November 2023. 100 FINANCIAL STATEMENTS The financial liabilities measured at amortised cost have the following fair values:* | | 2024 | | | 2024 | | | 2023 | | | 2023 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Book value | | | Fair value | | | Book value | | | Fair value | | | | | | £ | | | £ | | | £ | | | £ | Preference Stock 450,000 411,075 450,000 377,865 Fixed Rate Note 24,660,610 15,770,000 24,650,721 15,625,000 25,110,610 16,181,075 25,100,721 16,002,865 The Net Asset Value per ordinary share, with the debt at fair value is calculated as follows: 2024 2023 £ £ Net assets per balance sheet 618,182,360 528,209,759 Add: financial liabilities at book value 25,110,610 25,100,721 Less: financial liabilities at fair value* (16,181,075) (16,002,865) Net assets (debt at fair value) 627,111,895 537,307,615 Net Asset Value per ordinary share (debt at fair value) 1,459.6p 1,258.6p * The fair value has been derived from the closing market value as at 30 November 2024 and 30 November 2023. The fair value of the long term debt is calculated with reference to the nearest relevant gilt based on repayment date. A margin is added to the yield of the relevant reference gilt to calculate the fair value. This margin is derived from the excess of UK corporate bond yields over gilt yields. The Net Asset Value per ordinary share is based on 42,963,736 ordinary shares in issue at 30 November 2024 (2023: 42,692,727). ### 16. Capital management policies and procedures The company’s objective is to provide growth in capital value and dividends over the long term through investing in a portfolio of UK and international securities. The company’s capital at 30 November comprises: 2024 2023 £ £ Debt Revolving Credit Facility 10,266,421 10,259,408 Creditors: amounts falling due after more than one year 25,110,610 25,100,721 35,377,031 35,360,129 Equity Called up share capital 10,740,934 10,673,181 Share premium account and other reserves 607,441,426 517,536,578 618,182,360 528,209,759 Total capital 653,559,391 563,569,888 Debt as a percentage of total capital 5.4% 6.3% 101 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 The board, with the assistance of the manager, monitors and reviews the broad structure of the company's capital on an ongoing basis. The level of gearing is monitored, taking into account the manager's view on the market and the future prospects of the company's performance. Capital management also involves reviewing the difference between the Net Asset Value per share and the share price (i.e., the level of share price discount or premium) to assess the need to repurchase shares for cancellation. The company is subject to several externally imposed capital requirements. The company has an overdraft facility of £5m (2023: £5m) available, hence any amounts drawn under this facility should not exceed £5m, and as a public company the minimum share capital is £50,000. The company's objective, policies and processes for managing capital are unchanged from the preceding accounting period, and the company has complied with them. The terms of the debt instruments have various covenants which prescribe that moneys borrowed should not exceed 33% of the adjusted Net Asset Value. These are measured in accordance with the policies used in the annual financial statements. The company has complied with these. ## 17. Transactions with the Investment Manager and related parties The amounts paid to the investment manager together with details of the investment management contract are disclosed in note 2 on page 90. The existence of an independent board of directors demonstrates that the company is free to pursue its own financial and operating policies and therefore, under FRS102 Section 33: 'Related Party Disclosures', the investment manager is not considered to be a related party. The company's related parties are its directors. Fees paid to the company's board are disclosed in the Directors' Remuneration Report on page 70. There are no other identifiable related parties at the year end, and as of 12 February 2025. ## 18. Post Balance Sheet Events Since the year end a further 283,991 shares have been issued for a total consideration of £4,175,518, net of issue costs of £7,529, as at 12 February 2025. 102 ## Investor ## Information 104 Investor information (unaudited) 107 Notice of Meeting 111 Glossary Notable performer InterContinental Hotels Group is headquartered in Windsor, United Kingdom. 103 103 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 # Investor information (unaudited) ## AIFM and Depositary Allianz Global Investors UK Limited (AllianzGI UK) is designated the Alternative Investment Fund Manager (AIFM). AllianzGI UK is authorised to act as an AIFM and to conduct its activities by the Financial Conduct Authority (FCA) in accordance with AIFMD and FCA requirements. The management fee and the notice period are unchanged in the restated management and administration agreement (details in Note 2 on page 90). The company appointed HSBC Bank PLC as its depositary and custodian in accordance with AIFMD under an agreement between the company, AllianzGI UK and HSBC. Depositary fees are charged in addition to custody fees and are calculated on the basis of net assets. ## Leverage and risk policies under AIFMD Details of leverage and risk policies required under AIFMD are published on the website brunner.co.uk under Literature/Trust Documents/Disclosures to Investors under AIFMD. These policies represent no change to the board's policies in existence prior to AIFMD and are in place to ensure that these limits would not be breached under any foreseeable circumstances. ## Remuneration disclosure of the AIFM The following table shows that total amount of remuneration granted to the employees of AllianzGI UK in the financial year to 31 December 2023 divided into fixed and variable components. It is also broken down by material risk takers, members of management/senior management function ('SMF') holders without control function, members of management/SMF with control function and other risk takers. Number of employees: 290 | | All employees | Risk taker | Board member | Other risk taker | Employees with control function | Employees with comparable compensation | | --- | --- | --- | --- | --- | --- | --- | | Fixed remuneration | 21,487,405 | 2,160,697 | 1,444,946 | 176,167 | 539,584 | 3,685,675 | | Variable remuneration | 17,371,547 | 4,130,354 | 2,883,067 | 76,245 | 1,171,042 | 10,443,368 | | **Total remuneration** | **38,858,952** | **6,291,051** | **4,328,013** | **252,412** | **1,710,626** | **14,129,043** | Note: Operational start of AllianzGI UK Ltd on 30 May 2023, therefore only partial year is shown. The information on employee remuneration does not include remuneration paid by delegated managers to their employees. AllianzGI UK does not pay remuneration to employees of delegated companies directly from the fund. ## Setting the remuneration AllianzGI UK is subject to certain requirements applicable to investment management companies with regard to structuring the remuneration system. The board of directors of AllianzGI UK has set up a remuneration committee. It has the overall responsibility for overseeing the implementation of the remuneration policy and practices. Working in close cooperation with control functions as well as with external advisers and in conjunction with the management, the human resources department has developed AllianzGI UK's remuneration policy. The remuneration committee ensures that on a regular basis the implementation of the remuneration policy is subject to a central and independent internal review. ## Remuneration structure The primary components of monetary remuneration are the basic salary, which typically reflects the scope, responsibilities and experience required in a particular role, and an annual variable remuneration. The total amount of the variable remuneration payable throughout AllianzGI UK depends on the performance of the business and on the company's risk position and will therefore vary every year. In this respect, the allocation of specific amounts to particular employees will depend on the performance of the employee and their departments during the period under review. Variable remuneration includes an annual bonus paid in cash following the end of the financial year. In the case of employees whose variable remuneration exceeds a certain threshold, a substantial portion of the annual variable remuneration is deferred for a period of three years. The deferred portions increase in line with the level of the variable remuneration. Half of the deferred amount is linked to the performance of AllianzGI UK, and the other half is invested in the funds managed by AllianzGI UK. The amounts ultimately distributed depend on the company's business performance or the performance of shares in certain investment funds over several years. In addition, the deferred remuneration elements may be withheld under the terms of the plan. 104 INVESTOR INFORMATION ## Performance evaluation The level of pay awarded to employees of AllianzGI UK is linked to both quantitative and qualitative performance indicators. For investment managers, whose decisions make a real difference in achieving our clients' investment goals, quantitative indicators are geared towards sustainable investment performance. For portfolio managers in particular, the quantitative element is aligned with the benchmark of the client portfolios they manage or with the client's expected return, measured over a period of one year and three years. For client-facing employees, goals also include client satisfaction, which is measured independently. The remuneration of employees in controlling functions is not directly linked to the business performance of individual departments monitored by the controlling function. ## Risk takers The following groups of employees of AllianzGI UK were qualified as risk takers: members of management/Senior Management Function holders without control function, members of management/Senior Management Function holders with control function and other risk takers. ## Risk avoidance AllianzGI UK has comprehensive risk reporting in place, which covers both current and future risks of our business activities. Risks which exceed the organisation's risk appetite are presented to the global remuneration committee, which will decide, if necessary, on the adjustments to the total remuneration pool. Individual variable compensation may also be reduced or withheld in full if employees violate our compliance policies or take excessive risks on behalf of AllianzGI UK. ## Annual review and material changes to the remuneration system The board of AllianzGI UK approved the remuneration policy which had been implemented in accordance with the remuneration regulations. ## Key Investor Information Document (KID) The Key Investor Information (KID) is a standardised pan-European document that contains product, risk, charges and other information. It is a regulatory requirement that you are provided with a KID before you invest, and you will be required to declare that you have seen the latest KID when you make your investment. The Brunner Investment Trust KID is available under Information/Documents at brunner.co.uk. However, your chosen platform provider or stockbroker should provide you with a copy before accepting your investment instructions. Please note that existing investors do not need to review the KID unless planning to add to an investment. The KID's standardised format is intended to allow potential investors to compare funds easily, on a like-for-like basis. The KID now includes the same ongoing charge figure as we disclose in this report (in line with the AIC methodology described in the Glossary at the back of this document). There is also now a narrative statement within that document, as well as on our monthly factsheets, which reminds prospective investors and shareholders that the 'charges' disclosed are already accounted for within the NAV and therefore also the price paid – investors do not have to pay any further charges to their investment trust or its manager after purchasing shares. ## Financial calendar Year end 30 November. Full year results announced and Annual Report posted to shareholders in February. Annual General Meeting held in March/April. Half year results announced and half-yearly Financial Report posted to shareholders in July. ## Ordinary dividends It is anticipated that dividends will be paid as follows: | 1st quarterly | June/July | | --- | --- | | 2nd quarterly | September | | 3rd quarterly | December | | Final | March/April | ## Preference dividends Payable half-yearly 30 June and 31 December. ## Benchmark For the year under review the benchmark was 70% FTSE World Ex UK Index / 30% FTSE All-Share Index. For further information, the FTSE 100 Index was 8,287.30 at 30 November 2024, compared to 7,453.75 at 30 November 2023, an increase of 11.2%. ## Market and portfolio information The company's ordinary shares are listed on the London Stock Exchange. The market price range, gross yield and Net Asset Value are shown daily in the Financial Times and The Daily Telegraph under the headings 'Investment Companies' and 'Investment Trusts', respectively. The Net Asset Value of the ordinary shares is calculated daily and published on the London Stock Exchange Regulatory News Service. The geographical spread of investments and ten largest holdings are published monthly on the London Stock Exchange Regulatory News Service. They are also available from the manager's Investors Helpline on 0800 389 4696 or via the company's website: brunner.co.uk. ## Website Further information about The Brunner Investment Trust PLC, including monthly factsheets, daily share price and performance, is available on the company's website: brunner.co.uk. ## How to Invest Information is available from AllianzGI UK either via Investor Services on 0800 389 4696 or on the company's website: brunner.co.uk. A list of providers can be found on the company's website: brunner.co.uk/about-us/how-to-invest. ## Dividend The board is recommending a final dividend of 6.05p to be payable on 4 April 2025 to shareholders on the Register of Members at the close of business on 21 February 2025, with an ex-dividend date of 20 February 2025, making a total distribution of 23.75p per share for the year 105 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 ended 30 November 2023, an increase of 4.8% over last year's distribution. A Dividend Reinvestment Plan (DRIP) is available for this dividend and the relevant Election Date is 7 March 2025. Cash dividends will be sent by cheque to first-named shareholders at their registered address. Dividends may be paid directly into shareholders' bank accounts. Details of how this may be arranged can be obtained from MUFG Corporate Markets, formerly Link Group. Dividends mandated in this way are paid via Bankers' Automated Clearing Services (BACS). ### Registrars MUFG Corporate Markets, Central Square, 29 Wellington Street, Leeds LS1 4DL. Telephone: 0371 664 0300. Lines are open 9.00 a.m. to 5.30 p.m. (UK time) Monday to Friday. Email: shareholderenquiries@cm.mpms.mufg.com Website: https://eu.mpms.mufg.com ### Shareholder enquiries In the event of queries regarding their holdings of shares, lost certificates, dividend payments, registered details, etc., shareholders should contact the registrars on 0371 664 0300. Lines are open 9.00 a.m. to 5.30 p.m. (UK time) Monday to Friday. Calls to the helpline number from outside the UK are charged at applicable international rates. Different charges may apply to calls made from mobile telephones and calls may be recorded and monitored randomly for security and training purposes. Changes of name and address must be notified to the registrars in writing. Any general enquiries about the company should be directed to the Company Secretary, The Brunner Investment Trust PLC, 199 Bishopsgate, London EC2M 3TY. Telephone: 020 3246 7513. ### Dividend Reinvestment Plan for ordinary shareholders (DRIP) The registrars offer a DRIP which gives ordinary shareholders the opportunity to use their cash dividend to buy further shares in the company under a low-cost dealing arrangement. Terms and Conditions and an application form are enclosed with each dividend payment. For more information please email sharedeal@cm.mpms.mufg.com or call 0371 664 0381. ### Share dealing services MUFG Corporate Markets, formerly Link Group, operate an online and telephone dealing facility for UK resident shareholders with share certificates. Stamp duty and commission may be payable on transactions. For further information on these services please contact: sharedeal@cm.mpms.mufg.com for online dealing or 0371 664 0445 for telephone dealing. Lines are open 8.00 a.m. to 4.30 p.m. (UK time) Monday to Friday. Calls to the helpline number from outside the UK are charged at applicable international rates. Different charges may apply to calls made from mobile telephones and calls may be recorded and monitored randomly for security and training purposes. ### Share Portal MUFG Corporate Markets, formerly Link Group, offer shareholders a free online service called Share Portal, enabling shareholders to access a comprehensive range of shareholder related information. Through Share Portal, shareholders can: view their current and historical shareholding details; obtain an indicative share price and valuation; amend address details; view details of dividend payments; and apply for dividends to be paid directly to a bank or change existing bank details. Shareholders can access these services at signalshares.com. Shareholders will need to register for a Share Portal Account by completing an on-screen registration form. An email address is required. ### International payment services MUFG Corporate Markets, formerly Link Group, operate an international payment service for shareholders, whereby they can elect either for their dividend to be paid by foreign currency draft or they can request an international bank mandate. This service is only available for dividend payments of £10 or more and a small administration fee per dividend payment applies. For further information on this service please contact: 0371 664 0385. Lines are open between 9.00am and 5.30pm (UK time), Monday to Friday. ### Shareholder proxy voting Shareholders may submit their proxy electronically using the Share Portal service at www.signalshares.com. Or via the registrars' new LinkVote+ shareholder App. Further details on voting via the LinkVote+ App, online through the registrars' Share Portal, or by post using the personalised proxy card provided, are contained within the Notice of Meeting Notes on page 108. ### CREST proxy voting Shares held in uncertificated form (i.e., in CREST) may be voted through the CREST Proxy Voting Service in accordance with the procedures set out in the CREST manual. Voting via the ProxyMity platform is also available to institutional shareholders. Further details are contained within the Notice of Meeting Notes on page 108. ### Association of Investment Companies (AIC) The company is a member of the AIC, the trade body of the investment trust industry, which provides a range of literature including fact sheets and a monthly statistical service. Copies of these publications can be obtained from the AIC, 9th Floor, 24 Chiswell Street, London EC1Y 4YY, or at theaic.co.uk. AIC Category: Global. 106 INVESTOR INFORMATION # Notice of Meeting Notice is hereby given that the ninety-eighth annual general meeting of The Brunner Investment Trust PLC will be held at Trinity House, Trinity Square, Tower Hill, London EC3N 4DH on Wednesday 2 April 2025 at 12 noon to transact the following business: ## Ordinary business 1. To receive and adopt the Directors' Report and the Financial Statements for the year ended 30 November 2024 with the Auditors' Report thereon. 2. To declare a final dividend of 6.05p per ordinary share. 3. To re-elect Carolan Dobson as a director. 4. To re-elect Amanda Aldridge as a director. 5. To re-elect Elizabeth Field as a director. 6. To re-elect Andrew Hutton as a director. 7. To re-elect Jim Sharp as a director. 8. To approve the Directors' Remuneration Implementation Report. 9. To re-appoint PricewaterhouseCoopers LLP as the auditor of the company. 10. To authorise the directors to determine the remuneration of the auditor. ## Special business To consider and, if thought fit, pass the following resolutions of which resolution 11 will be proposed as an ordinary resolution and resolutions 12 and 13 will be proposed as special resolutions: 11. That the directors be and are hereby generally and unconditionally authorised pursuant to section 551 of the Companies Act 2006 to allot relevant securities (within the meaning of section 551 of that Act) provided that this power shall be limited to the allotment of relevant securities up to an aggregate nominal amount of £3,600,373 (14,401,493 ordinary shares) and shall expire at the conclusion of the next annual general meeting of the company held after the meeting at which this resolution is passed or 1 July 2026 if earlier, save that the directors may before such expiry make an offer or agreement which would or might require relevant securities to be allotted after such expiry and the directors may allot relevant securities in pursuance of such offer or agreement as if the power conferred hereby had not expired. 12. That the directors be and are hereby empowered, pursuant to section 570 of the Companies Act 2006, to allot equity securities (as defined in section 560 of that Act) pursuant to the authority conferred by resolution 11 above or by way of a sale of treasury shares as if section 561 of that Act did not apply to any such allotment, provided that this power shall be limited to the allotment of equity securities for cash of an aggregate maximum nominal amount of £1,081,175 (4,324,772 ordinary shares) and shall expire at the conclusion of the next annual general meeting of the company held after the meeting at which this resolution is passed or 1 July 2026, if earlier, save that the directors may before such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance of such offer or agreement as if the power conferred had not expired. 13. That the company be and is hereby generally and unconditionally authorised in accordance with section 701 of the Companies Act 2006 (the Act) to make market purchases (within the meaning of section 693(4) of the Act) of ordinary shares of 25p each in the capital of the company (ordinary shares) either for retention as treasury shares or for cancellation, provided that: (i) the maximum number of ordinary shares hereby authorised to be purchased shall be 6,482,834; (ii) the minimum price which may be paid for an ordinary share is 25p; (iii) the maximum price which may be paid for an ordinary share is an amount equal to 105% of the average of the middle market quotations for an ordinary share taken from the London Stock Exchange Official List for the 5 business days immediately preceding the day on which the ordinary share is purchased or such other amount as may be specified by the London Stock Exchange from time to time; (iv) the authority hereby conferred shall expire at the conclusion of the annual general meeting of the company in 2026 or 1 July 2026 if earlier, unless such authority is renewed prior to such time; and (v) the company may make a contract to purchase ordinary shares under the authority hereby conferred prior to the expiry of such authority which will or may be executed wholly or partly after the expiration of such authority and may make a purchase of ordinary shares pursuant to any such contract. By order of the board Kirsten Salt Company Secretary 12 February 2025 199 Bishopsgate, London EC2M 3TY 107 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 # **Notes:** The following notes explain your general rights as a shareholder and your right to attend and vote at this Meeting or to appoint someone else to vote on your behalf. 1. To be entitled to attend and vote at the Meeting (and for the purpose of the determination by the company of the number of votes they may cast), shareholders must be registered in the register of members of the company at close of trading on Monday 31 March 2025 (the record date). Changes to the register of members after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the Meeting. 2. Shareholders are entitled to appoint another person as a proxy to exercise all or part of their rights to attend and to speak and vote on their behalf at the Meeting. A shareholder may appoint more than one proxy in relation to the Meeting provided that each proxy is appointed to exercise the rights attached to a different ordinary share or ordinary shares held by that shareholder. A proxy need not be a shareholder of the company. 3. A personalised form of proxy which may be used to make such appointment and give proxy instructions accompanies this Notice. If you do not have a form of proxy and believe that you should have one, or if you require additional forms, please contact the registrar of the company whose contact details are provided in note 6 below. 4. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the company's Register of Members in respect of the joint holding (the first named being the most senior). 5. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. If no voting indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the Meeting. 6. To be valid, any form of proxy or other instrument appointing a proxy, must be returned by no later than 12 noon on Monday 31 March 2025 through any one of the following methods: (i) by post, courier or (during normal business hours only) hand to the company's registrar at: MUFG Corporate Markets PXS1 Central Square 29 Wellington Street Leeds LS1 4DL (ii) electronically through the website of the company's registrar at www.signalshares.com (see note 8 below). (iii) via LinkVote+ (see note 9 below). (iv) via Proxymity (see note 10 below). (v) in the case of shares held through CREST, via the CREST system (see notes below). 7. If you return more than one proxy appointment, either by paper or electronic communication, the appointment received last by the Registrar before the latest time for the receipt of proxies will take precedence. You are advised to read the terms and conditions of use carefully. Electronic communication facilities are open to all shareholders and those who use them will not be disadvantaged. 8. To submit your proxy instructions electronically through the company's registrar, please complete the online form of proxy by logging on to www.signalshares.com. If you have not previously registered for the share portal you will need your investor code (IVC) which is detailed on your share certificate or is available by calling our Registrar, MUFG Corporate Markets, on 0371 664 0300 or, if calling from overseas, on +44 (0) 371 664 0300. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The Registrar is open between 09:00 – 17:30, Monday to Friday excluding public holidays in England and Wales. 9. LinkVote+ is a free app for smartphone and tablet provided by MUFG Corporate Markets (the company's registrar). It offers shareholders the option to submit a proxy appointment quickly and easily online, as well as real-time access to their shareholding records. The app is available to download on both the Apple App Store and Google Play. QR codes to facilitate this are shown below. Your vote must be lodged by 12 noon on Monday 31 March 2025 in order to be considered valid or, if the meeting is adjourned, by the time which is 48 hours before the time of the adjourned meeting. Apple App Store ![img-19.jpeg](img-19.jpeg) GooglePlay ![img-20.jpeg](img-20.jpeg) 10. If you are an institutional investor, you may be able to appoint a proxy electronically via the Proxymity platform, a process which has been agreed by the company and approved by the Registrar. For further information regarding Proxymity, please go to www.proxymity.io. Your proxy must be lodged by 12 noon on Monday 31 March 2025 in order to be considered valid or, if the meeting is adjourned, by the time which is 48 hours before the time of the adjourned meeting. Before you can appoint a proxy via this process you will need to have agreed to Proxymity's associated terms and conditions. It is important that you read these carefully as you will be bound by them and they will govern the electronic appointment of your proxy. An electronic proxy appointment via the Proxymity platform may be revoked completely by sending an authenticated 108 INVESTOR INFORMATION message via the platform instructing the removal of your proxy vote. 1. 11. The return of a completed form of proxy, electronic voting online or via the app or any CREST Proxy Instruction (as described in note 13 below) or the appointment of a proxy via Proximity will not prevent a shareholder from attending the Meeting and voting in person if he/she wishes to do so. 2. 12. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the Meeting (and any adjournment of the Meeting) by using the procedures described in the CREST Manual (available from www.euroclear.com). CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. 3. 13. In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message (a 'CREST Proxy Instruction') must be properly authenticated in accordance with Euroclear UK & International Limited's specifications and must contain the information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by the issuer's agent (ID RA10) by 12 noon on Monday 31 March 2025. For this purpose, the time of receipt will be taken to mean the time (as determined by the timestamp applied to the message by the CREST application host) from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means. 4. 14. CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & International Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001. 5. 15. Unless otherwise indicated on the Form of Proxy, CREST voting, Proximity or any other electronic voting channel instruction, the proxy will vote as they think fit or, at their discretion, withhold from voting. 6. 16. Corporate representatives are entitled to attend and vote on behalf of the corporate member in accordance with section 323 of the Companies Act 2006. Pursuant to the Companies (Shareholders' Rights) Regulations 2009 (SI 2009/1632), multiple corporate representatives appointed by the same corporate member can vote in different ways provided they are voting in respect of different shares. 7. 17. As at 12 February 2025, (being the latest practicable business day prior to the publication of this Notice), the total number of shares in the company in respect of which members are entitled to exercise voting rights was 43,247,727 ordinary shares, of 25p each. Each ordinary share carries the right to one vote and therefore the total number of voting rights in the company on 12 February 2025 is 43,247,727. The 5% cumulative preference shares do not ordinarily have any voting rights. 8. 18. The right to appoint a proxy does not apply to persons whose shares are held on their behalf by another person and who have been nominated to receive communications from the company in accordance with section 146 of the Companies Act 2006 (nominated persons). Nominated persons may have a right under an agreement with the registered shareholder who holds the shares on their behalf to be appointed (or to have someone else appointed) as a proxy. Alternatively, if nominated persons do not have such a right, or do not wish to exercise it, they may have a right under such an agreement to give instructions to the person holding the shares as to the exercise of voting rights. Nominated persons should contact the registered member by whom they were nominated in respect of these arrangements. 9. 19. Members have a right under section 319A of the Companies Act 2006 to require the company to answer any question raised by a member at the AGM, which relates to the business being dealt with at the meeting, although no answer need be given: (a) if to do so would interfere unduly with the preparation of the meeting or involve disclosure of confidential information; (b) if the answer has already been given on the company's website; or (c) it is undesirable in the best interests of the company or the good order of the meeting. 10. 20. Members satisfying the thresholds in section 527 of the Companies Act 2006 can require the company, at its expense, to publish a statement on the company website setting out any matter which relates to the audit of the company's financial statements that are to be laid before the meeting. Any such statement must also be sent to the company's auditor no later than the time it is made available on the website and must be included in the business of the meeting. 11. 21. Any shareholder attending the Meeting has the right to ask questions. The company must cause to be answered any such question relating to the business being dealt with at the Meeting but no such answer need be given if: (a) to do so would interfere unduly with the preparation for the Meeting or involve the disclosure of confidential information; (b) the answer has already been given on a website in the form of an answer to a question; or (c) it is 109 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 undesirable in the interests of the company or the good order of the Meeting that the question be answered. 22. Further information regarding the meeting which the company is required by section 311A of the Companies Act 2006 to publish on a website in advance of the meeting (including this notice), can be accessed at brunner.co.uk. 23. Contracts of services are not entered into with the directors, who hold office in accordance with the Articles. 110 INVESTOR INFORMATION # Glossary ## UK GAAP performance measures **Net Asset Value** is the value of total assets less all liabilities. The Net Asset Value, or NAV, per ordinary share is calculated by dividing this amount by the total number of ordinary shares in issue. The debt in the company used in the calculation is measured at par value, that is, the net proceeds on issue plus accrued finance costs to date. As at 30 November 2024, the NAV with debt at par value was £618,182,360 (2023: £528,209,759) and the NAV per share was 1,438.8p (2023: 1,237.2p). **Earnings per ordinary share** is the profit after taxation, divided by the weighted average number of shares in issue for the period. For the year ended 30 November 2024 earnings per ordinary share was 27.37p (2023: 26.35p), calculated by taking the profit after tax of £11,685,745 (2023: £11,251,047), divided by the weighted average shares in issue of 42,701,544 (2023: 42,692,727). ## Alternative Performance Measures (APMs) **Net Asset Value, debt at fair value** is the value of total assets less all liabilities, with the company's debt measured at the fair value at the time of calculation. The Net Asset Value, or NAV, per ordinary share with debt at fair value is calculated by dividing this amount by the total number of ordinary shares in issue (see page 96). As at 30 November 2024, the NAV with debt at fair value was £627,111,895 (2023: £537,307,615) and the NAV per share with debt at fair value was 1,459.6p (2023: 1,258.6p). (Further details can be found in Note 15(c) on page 100). **Net Asset Value per ordinary share, total return** represents the theoretical return on NAV per ordinary share, assuming that dividends paid to shareholders were reinvested at the NAV per ordinary share at the close of business on the day the shares were quoted ex dividend (see Note 13 on page 96). **Share price Total Return** the theoretical return to a shareholder, on a closing market price basis, assuming that all dividends received were reinvested, without transaction costs, into the ordinary shares of the company at the close of business on the day the shares were quoted ex dividend (see page 3). The share price as at 30 November 2024 was 1,460.0p, an increase of 395.0p from the price of 1,065.0p as at 30 November 2023. The increase in share price of 395.0p plus the dividends declared for the year of 23.75p are divided by the opening share price of 1065.0p to arrive at the share price total return for the year ended 30 November 2024 of +39.3% (2023: +6.6%). **Benchmark Total Return** is the return on the benchmark, on a closing market price basis, assuming that all dividends received were reinvested into the shares of the underlying companies at the time their shares were quoted ex dividend (see page 3). **Discount or premium** is the amount by which the stock market price per ordinary share is lower (discount) or higher (premium) than the Net Asset Value, or NAV, with either debt at par or debt at market value, per ordinary share. The discount/premium is normally expressed as a percentage of the NAV per ordinary share (see page 2). **Ongoing charges** are operating expenses incurred in the running of the company, whether charged to revenue or capital, but excluding financing costs. These are expressed as a percentage of the average Net Asset Value during the year and this is calculated in accordance with guidance issued by the Association of Investment Companies (see page 17). | | 2024 £ | 2023 £ | | --- | --- | --- | | Management fee | 2,741,770 | 2,389,770 | | Administration expenses | 954,818 | 855,035 | | **Total expenses (A)** | **3,696,588** | **3,244,805** | | Average Net Asset Value with debt at market value (B) | 585,576,405 | 507,451,778 | | **Ongoing charge (A/B)** | **0.63%** | **0.64%** | The ongoing charge differs from the ongoing charge in the company's KID, which is calculated in accordance with the PRIIPs regulations and includes finance costs. **Yield** represents dividends declared in the past year as a percentage of share price. 111 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 | | 2024 | 2023 | | --- | --- | --- | | Dividends declared for the year | 23.75p | 22.7p | | Share price at year end | 1,460.0p | 1,065.0p | | **Annual dividend as a percentage of share price** | **1.6%** | **2.1%** | **Gearing** is the amount of debt as a percentage of the net assets (see Note 16 on page 101). **Revenue reserve per ordinary share** of 33.0p (2023: 29.6p) is the revenue reserve per the balance sheet of £19,278,342 (2023: £17,579,243) less the third dividend and final proposed dividend in respect of the year (Note 6) of £5,118,177 (2023: £4,952,356), payable after the year end, divided by the total number of ordinary shares in issue of 42,963,736 (2023: 42,692,727). 112 Warning to Shareholders We are aware that some shareholders may have received unsolicited telephone calls or correspondence concerning investment matters. These are typically from overseas based organisations who target UK shareholders offering to sell them, what often turn out to be, worthless or high risk shares in US or UK investments or encourage them to dispose of UK shares. They can be extremely persistent and persuasive. Shareholders are therefore advised to be very wary of any unsolicited advice or offers. Please note that it is most unlikely that either the company or the company’s Registrar, MUFG Corporate Markets (formerly Link Group), would make unsolicited telephone calls to shareholders. Any such calls would only ever relate to official documentation already circulated to shareholders and never in respect of investment ‘advice’. If you are in any doubt about the veracity of an unsolicited telephone call, please call the Company Secretary on +44 (0)800 389 4696 or the Registrar on +44 (0) 371 664 0300. THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 THE BRUNNER INVESTMENT TRUST PLC ANNUAL REPORT 30 NOVEMBER 2024 The Brunner Investment Trust PLC 199 Bishopsgate London EC2M 3TY +44 (0)203 246 7000 www.brunner.co.uk 1