Annual Report and Financial Statements
fortheyearendedSeptember
Strategic Report
Why Troy Income & Growth Trust plc 1
Financial Highlights 2
Performance 3
Chairman’s Statement 4
Investment Process 6
Managers' Review 8
Investment Portfolio 12
Distribution of Assets and Liabilities 14
Business Model 15
Responsible Investment 17
Promoting the Success of the Company 19
Risk Management 21
Governance
Your Board 22
Directors’ Report 23
Statement of Corporate Governance 28
Audit Committee Report 32
Statement of Directors’ Responsibilities 34
Directors’ Remuneration Report 35
Independent Auditors’ Report 37
Financial Statements
Statement of Comprehensive Income 43
Statement of Financial Position 44
Statement of Changes in Equity 45
Cash Flow Statement 46
Notes to the Financial Statements 47
Investor Information
Alternative Performance Measures 62
Glossary of Terms and Definitions 63
Ten Year Record 64
Financial Calendar 64
Notice of Annual General Meeting 65
Corporate Information 69
Ways to Invest in the Company 70
Easy Access to Information 71
CONTENTS
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the action you should
take, you are recommended to seek your own financial advice from your stockbroker, bank manager, solicitor, accountant or other financial
adviser authorised under the Financial Services and Markets Act 2000 (as amended by the Financial Services Act 2012) if you are in the United
Kingdom or, if not, from another appropriately authorised financial adviser. If you have sold or otherwise transferred all your Ordinary shares in
Troy Income & Growth Trust plc, please forward this document, together with the accompanying documents immediately to the purchaser or
transferee, or to the stockbroker, bank or agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.
ABOUTTROYINCOME&GROWTHTRUSTPLC
Investment Objective
The investment objective of Troy Income & Growth Trust
plc (the ‘Company’) is to provide Shareholders with
an attractive income yield and the prospect of income
and capital growth through investing in a portfolio of
predominantly UK equities.
Dividends
Dividends on the Ordinary shares are payable quarterly at
the end of January, April, July and October. It is intended
that the investment policy of the Company generates an
income yield that will permit the Company’s dividend to
grow over time.
Focused portfolio managed by Troy Asset
Management Limited
Troy Asset Management Limited (‘TAML’ or the ‘Managers’)
was appointed as Manager on 1 August 2009 and is
an independent fund management company aiming to
generate absolute returns for investors over the long term.
Discount Control Mechanism
The Company’s discount control mechanism aims to ensure
that the Ordinary shares trade at close to their underlying
net asset value by virtue of buying-in or issuing shares,
asappropriate.
Capital Structure
The Company’s issued share capital as at 30 September
2022 consisted of 282,284,487 Ordinary shares of 25p each,
with 65,227,500 Ordinary shares held in treasury, and at
15November 2022 there were 278,184,487 Ordinary shares in
issue and 69,327,500 Ordinary shares were held in treasury.
Continuation Vote
A continuation vote was passed at the AGM on 23 January
2019. As a result of this the Company’s next continuation vote
will be held at the Company’s AGM following the year ending
30 September 2023 and at each fifth AGM thereafter.
Strategic Report Governance Financial Statements Investor Information
WHYTROYINCOME&GROWTHTRUSTPLC
The Company aims to:
Deliver an attractive income yield and
the prospect of income and capital growth
through investing in a portfolio of
predominantly UK equities.
Provide a sustainable and growing income stream.
Avoid permanent capital loss, particularly in times
of market weakness.
The Company’s approach to equity income is simple
and differentiated, targeting long-term holdings in a
concentrated number of high-quality companies capable of
strong cash generation and resilient dividend growth.
The Company invests in 30-50 high-quality businesses. Its
strategy predominantly focuses on UK-listed companies,
with selective investment in the shares of overseas
businesses. The long-term approach, and emphasis on
reasonably valued, cash-generative companies, leads to low
portfolio turnover.
TAML’s Structure and Culture
TAML is a privately owned, independent investment
boutique whose aim is to protect and grow its investors’
capital over the long term. It was established in 2000
by the late Lord Weinstock and Sebastian Lyon to serve
investors who shared the objective of long-term absolute
returns, whilst ignoring the distraction of short-term market
noise and benchmarks.
TAML’s strengths come from its independent structure,
strong governance, culture and alignment of interest with
investors. It is focused on:
• A distinctive, cautious and disciplined investment
approach.
• In-depth primary research.
TAML is passionately committed to investment trusts
and currently manages three: Troy Income & Growth
Trust plc, Personal Assets Trust plc and Securities Trust
ofScotlandplc.
Benefits of the Company Structure
• Discount Control Mechanism
Through the Discount Control Mechanism, the
Company is committed to buying-in shares when there
is excess demand in the market and issuing shares
when there is excess supply. This provides liquidity
to investors and aims to ensure that the share price
tradesat close to the underlying net asset value on an
ongoing basis.
• Distributable Reserves
The Company’s distributable reserves enable the Board
and the Managers to manage the Company’s dividend
growth through periods of market volatility and to allow
portfolio management flexibility.
• Gearing
The Company has the ability to gear modestly to take
advantage of opportunities in the equity markets.
• Independent Board
The Company is overseen by an independent Board
of Directors. By engaging with and listening to
Shareholders, the Board ensures that the Company
continues to offer a distinctive investment proposition
that is relevant to investors’ needs.
Experienced Team
The Company is co-managed by Blake Hutchins and Hugo
Ure with the support of two dedicated UK Equity analysts
and TAML’s wider Investment Team, which totals 14.
Hugo has worked on TAML’s UK equity income portfolios
since 2009, becoming Assistant Manager of the Company
in 2011 and co-manager in 2015. Blake became co-manager
in November 2020 and has managed UK-Equity portfolios
since 2011.
2022
Net asset value total return^ -9.9%
Share price total return^ -10.2%
FTSE All-Share Index total return -4.0%
Increase in dividends per share +0.5%
Dividend yield*^ 2.9%
^ Alternative Performance Measure – full details can be found on page 62.
* Dividends per share as a percentage of share price at 30 September.
30 September
2022
30 September
2021 Change
Total investments £194,448,000 £244,514,000 -20.5%
Shareholders’ funds £193,315,000 £248,621,000 -22.2%
Market capitalisation £189,131,000 £245,035,000 -22.8%
Net asset value per share 68.48p 77.72p -11.9%
Share price (mid market) 67.00p 76.60p -12.5%
(Discount)/premium to NAV^ (2.2)% (1.4)%
Gearing
1
2.6% –
Ongoing charges^ 0.89% 0.92%
Dividends and earnings
Revenue return per share
2
1.77p 1.68p +5.4%
Dividends per share
3
1.97p 1.96p +0.5%
Revenue reserves
4
£6,896,000 £6,092,000
1
Gearing is borrowings expressed as a percentage of Shareholders' funds.
2
Measures the revenue earnings for the year divided by the weighted average number of Ordinary shares in issue (see Statement of Comprehensive Income).
3
The figures for dividends per share reflect the years in which they were earned (see note 7 on pages 51 and 52).
4
The revenue reserve figure does not take account of the fourth interim dividend amounting to £1,411,000 (2021 – fourth interim £1,565,000). The third interim dividend of
£1,444,000 was paid from distributable capital reserves (2021 – £1,598,000), all other dividends were paid from revenue.
^ Alternative Performance Measure – full details can be found on page 62.
Net Asset Value per Ordinary share
At 30 September – pence
Dividends per Ordinary share
At 30 September – pence
Share price per Ordinary share
At 30 September – pence
0
20
40
60
80
100
60.2
13 14 15 16 17 18 19 20 21
22
64.1
68.9
76.4
78.6
79.0
83.5
72.6
77.7
68.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2.13
13 14 15 16 17 18 19 20 21
22
2.23
2.33
2.43
2.56
2.67
2.75
2.78
1.96 1.97
0
20
40
60
80
100
60.5
13 14 15 16 17 18 19 20 21
22
64.3
69.4
77.0
77.5
78.3
84.4
72.0
76.6
67.0
FINANCIAL HIGHLIGHTS
Strategic Report Governance Financial Statements Investor Information
Total Return (for the periods to 30 September 2022)
One Year Three Years Five Years Ten Years
Share price -10.2% -13.0% +1.6% +65.5%
Net asset value per share -9.9% -10.6% +2.2% +70.1%
FTSE All-Share Index -4.0% +2.4% +11.3% +79.5%
Total Return of NAV and Share Price vs FTSE All-Share Index
Ten years to 30 September 2022 (rebased to 100 at 30/09/12)
30/09/1430/09/1330/09/12 30/09/20 30/09/21 30/09/2230/09/15 30/09/16 30/09/17 30/09/18
80
220
200
180
160
140
120
100
Share Price NAV Index
30/09/19
Source: Refinitiv Datastream
Share Price Premium/(Discount) to NAV
Ten years to 30 September 2022
5
4
2
3
1
0
-1
-2
30/09/1430/09/13 30/09/21
-3
30/09/12
30/09/22
30/09/15 30/09/16 30/09/17 30/09/18 30/09/2030/09/19
Source: Refinitiv Datastream
PERFORMANCE
The objective of the
Company is to provide an
attractive income yield and
the prospect of income
and capital growth through
investing in a portfolio of
predominantly UK equities.
David Warnock
Chairman
Performance
The Company delivered a Net Asset Value ('NAV') total
return of -9.9% and share price total return of -10.2% for the
year ended 30 September 2022. Over the same period, the
FTSE All-Share Index produced a total return of -4.0%.
In a period of sharply rising inflation and interest rates, the
values of many assets have contracted, against which the
FTSE All-Share has been comparatively stable. However,
the UK equity market has been significantly helped by a
handful of companies that have benefited from current
circumstances – the combined forces of war and inflation
have remained highly supportive of oil & gas and mining
companies that are directly benefitting from extreme price
rises. The large weightings of these sectors in the UK stock
market have contributed to the FTSE All-Share comfortably
outperforming other indices. Over the past 12 months, the
FTSE All-Share (GBP) has fallen by -4.0% versus the S&P
500 (USD) -15.5% and MSCI World (USD) -19.2%.
Economic and Stock Market Background
It has once again been a year of extraordinary global events.
Upheaval to world economies stemming from the COVID-19
pandemic has continued to pervade, with inflation dominating
the narrative over the past year. In the face of many warning
signs last year, central banks had initially proved complacent
to the risk of stubbornly higher inflation resulting from years
of loose monetary policy (quantitive easing), COVID-19 driven
supply/demand disruptions, and the energy shocks caused by
Russia's invasion of Ukraine. With increasingly high inflation
numbers reported over the course of 2022, we have witnessed
policymakers’ attempts to rapidly make up for lost time. The
Bank of England has raised their base rate seven times this
year, marking a swift end to the ultra-low interest rate era
that has persisted since the Global Financial Crisis. Related
and concurrent to this, geopolitics has raised its head in the
ugly form of the Russia-Ukraine war, creating a humanitarian
tragedy and economic stresses that are rippling across Europe
and further afield. These are fuelling unprecedented spikes
in energy costs and second-order pressures on many other
goods and services. The landscape is unsettled and measures
of market volatility such as the VIX Index remain elevated.
There have been few places to hide in either bond or equity
markets – the popular ‘60/40’ portfolio of US stocks and bonds
is on track for its second worst calendar year in history after
1931, down -21% in the nine months to the end of September.
The Managers provide further context and discussion
on the Company’s performance in their review, as well
as detailing the portfolio changes. Their process and
objectives remain unchanged. While in aggregate the past
12 months have been challenging for the strategy, the risks
of weaker corporate earnings and a recession from here are
growing and the Board would expect these to be supportive
of the Managers’ longstanding strategy and preference for
resilient and predictable businesses.
Dividends
A fourth quarterly dividend payment of 0.50p was announced
in September. The dividend for the year totalled 1.97p,
representing a yield of 2.9% on the year-end share price.
As noted in the Interim Report, the Managers had
anticipated robust growth in dividends from the underlying
portfolio companies this year, and it is pleasing to have
seen this materialise despite difficult economic conditions.
Also noted in the Interim Report was the Board’s intention
to begin increasing the Company’s dividend while also
rebuilding dividend cover. The quarterly dividend was
increased to 0.50p per share in September of this year,
representing a 2.0% rise in the quarterly rate. It is the
Board’s intention, barring unforeseen circumstances, to
at least maintain the quarterly dividend rate of 0.50p per
share for the year to 30 September 2023.
The Board decided to pay the third interim dividend from
the Company’s distributable capital reserves this year, as it
has done for the previous two years, enabling the Company
to continue to bridge its revenue deficit while the impact
of the pandemic recedes and dividend growth in the
portfoliocontinues to recover and even accelerate.
Gearing
The Company secured a three-year revolving loan facility
of £15 million with The Royal Bank of Scotland International
Limited on 15 June 2022.
The Company has not had a gearing facility since April 2021.
Having reviewed the situation, the Board and Managers
concluded that a new facility should be instituted. The
intention is for gearing to be used at a fairly low level on
an ongoing basis, and from time to time more materially
(up to around 10%) on a tactical basis. The Managers
have a proven, conservative, investment style and it is the
Board’s view that adding modest gearing to the Company
is appropriate, enabling efficient management of the
Company’s balance sheet and the enhancement of total
returns over time. At the period end the Company had
drawn down £5 million under the facility.
CHAIRMAN’SSTATEMENT
Strategic Report Governance Financial Statements Investor Information
Under the terms of the facility, the Company has the
option to increase the level of the commitment from
£15million to £20 million at any time, subject to the bank’s
credit approval, thus avoiding the expense of undrawn
commitment fees on this additional £5 million.
Discount Control Mechanism
The Discount Control Mechanism (‘DCM’), which has been
in place since January 2010, seeks to ensure that investors
can purchase and sell the Company’s shares at a time of
their choosing and at a price very close to NAV. The DCM
continues to enhance the NAV per share by consistently
buying-in shares at a small discount and issuing shares at
a small premium. This is a key differentiating feature of the
Company, providing liquidity for both buyers and sellers of
the Company’s shares and protecting investors from the
negative effects of excessive discount volatility.
The DCM was active during the year with the Company
buying-in 37.6m shares at a cost of £27.9m. The shares
bought-in are now held in treasury. The Board is resolute in
its operation of the DCM.
Reduction in Management Fee
In January the Board was pleased to announce a reduction
in the annual management fee payable to the Company’s
Investment Managers. With effect from 1 January 2022, the
Company moved to a tiered annual management fee of
0.55% of net assets (i.e., excluding any gearing facility) up to
£250 million and 0.50% of net assets above £250 million. This
compares to the previous fee of 0.65% and so the new fee
represents a reduction of 15% up to £250 million of net assets
(£250,000 per annum cost saving) and a reduction of 23%
on net assets greater than £250 million. This fee reduction
reflects the commitment of both the Board and the Managers
to creating value for Shareholders and to ensuring the
Company’s ongoing charges are competitive.
Annual General Meeting
As at previous AGMs, the Board will again ask Shareholders
to approve resolutions it believes are vital to the effective
management of the DCM. Specifically, the Board is seeking
permission to allow the Company to issue shares on a non
pre-emptive basis equivalent to 20% of its equity and to
buy-in up to 14.99%. There are two separate resolutions
concerning the issue of shares. The first resolution seeks
permission to issue 10%, and the second (extra) resolution
seeks permission to issue up to a further 10% solely in
connection with the DCM; for an aggregate of 20%.
The Board believes this approach to seeking non pre-emption
authorities is Shareholder friendly. It gives any Shareholder
who may be unhappy that the aggregate authority sought
is higher than that recommended by corporate governance
guidelines the ability to express their concern via the second
resolution, whilst still allowing their approval for the first and
more conventional resolution dealing with 10% issuance.
While the Board appreciates some Shareholders’ reticence
about non pre-emption authorities, it strongly believes that
in the circumstances of the NAV enhancing impact of the
DCM’s operations, the overall 20% authority sought is in the
best interests of Shareholders, and so is continuing to seek
such authority at the upcoming AGM.
Board Changes
I will be retiring at the AGM in January after twelve years
as a Director and eight years as Chairman. The Board is
delighted to announce that Bridget Guerin will be proposed
for election as a Director of the Company with effect from
17 January 2023. Subject to Shareholders' approval of her
election, Bridget will take over from me as Chair following
my retirement at the AGM. As can be seen from her
biography on page 22, Bridget has extensive experience
in the asset management industry, including longstanding
involvement with investment trusts as both a Non-Executive
Director and Chair. The Board is very much looking forward
to working with Bridget and benefiting from her experience
and leadership.
I would like to take this opportunity to express my gratitude
to my fellow Directors for their support and valued
contribution during my eight years as Chairman.
Outlook
If we needed any further reminder of the deeply unsettled
environment, the UK market over the final month of the
reporting period has proved a remarkable case in point.
September saw sterling sink to the lowest levels in modern
history against the dollar and the yield on the benchmark
10-year UK government bond more than doubled in just
over a month, necessitating Bank of England intervention to
stabilise markets. Global economies are variously continuing
to navigate the forces of COVID-19, inflation, rising interest
rates, and geopolitical unrest. Against this backdrop, the
Managers are emphasising more than ever the importance
of businesses with defensive earnings and reasonable
valuations. The Board agrees with the observation that the
coming months will prove highly challenging for corporate
profits – this is likely a time for resilience and reliability. The
Managers of the Company have always emphasised the
virtues of low cyclicality and capital-light business models,
focusing on dependable and diverse companies such as
global consumer staples franchises. The Board continues
to support this approach and sees the virtues of such a
strategy, particularly in challenging markets.
David Warnock
Chairman
16 November 2022
Own what are considered to be durable business franchises with exceptional economics, sustainable
competitive advantages, and high-quality management teams.
Invest in companies with an ability and willingness to pay growing dividends, supported by strong balance
sheets and funded from genuinely surplus cash flow.
Buy into companies at reasonable valuations, based on the proportion of sustainable free cash flow they
generate compared to their market value.
The Managers invest in profitable, high-quality businesses
that they believe can grow in a predictable manner for
many years to come. They favour large, global businesses
that have demonstrated their resilience through varied
economicconditions.
They look for companies with sensible balance sheets and
talented management teams that can allocate capital well
and, crucially, seek to pay sensible prices for the shares of
such businesses.
Under TAML’s management of the Company, the investment
process has generated returns with significantly lower
volatility (as measured by standard deviation of returns)
and maximum drawdown than both peers and the market
indexcomparators.
The Managers’ preferred profile of company naturally draws
them to sectors with low levels of cyclicality and capital
intensity, such as healthcare, businesses selling regular
repeat-purchase goods, or subscription services. Examples
of core holdings in the Company include:
• The global spirits giant Diageo, owner of iconic brands
such as Johnnie Walker whisky and Tanqueray gin.
• Croda, the maker of specialist ingredients for numerous
products in sectors such as consumer personal care,
drugs & vaccines, and crop care. Croda’s products
are used in small volumes but perform vital roles – for
example, the ‘magic ingredient’ in anti-wrinkle cream –
leading to very stable demand.
• Experian, the world’s largest credit bureau. Experian
generates highly recurring revenues by collating and
analysing vast datasets to help millions of businesses
and consumers manage their credit.
All these businesses have proven their profitability and
stability for many years, leading to long-term track records
of reliable dividend growth. Conversely, the Managers
deliberately and explicitly avoid certain sectors without
these attributes, such as mining, housebuilding and
airlinecompanies.
Income is a key part of investment returns and the
Managers aim to deliver a consistent, growing dividend
for the Company. Their approach to income investing is
differentiated through; a conservative, quality-orientated
process, a focus on total return, and a prioritisation of
dividend growth above high yield.
The Company has no explicit yield target and instead we
emphasise real growth and long-term sustainability of
income above producing the highest dividend yield today.
Several holdings such as Diageo, Croda, and Bunzl have
grown their dividends consistently for multiple decades.
INVESTMENTPROCESS
Strategic Report Governance Financial Statements Investor Information
The table below illustrates the current Top 10 holdings in the Company, showing portfolio companies from a variety of
industries but all sharing characteristics common to the Managers’ investment philosophy.
The Top 10 – concentrated portfolio, quality companies
Found from website recreated PMS
.
Source: Google Images and Troy Asset Management Limited, 30 September 2022.
The full investment portfolio can be found on pages 12 to 13.
Investment Background
Difficult markets
It has been an eventful year in global markets. Investors
have faced a challenging backdrop on multiple fronts,
but perhaps most especially from pronounced shifts in
fiscal and monetary policy. COVID-19 continued to impact
economies, with countries emerging from the pandemic
at differing speeds, and global supply chain disruptions
driving elevated inflation. Interest rates in the US and UK
have risen from rock-bottom levels at a rapid pace and
there are deep humanitarian, economic and geopolitical
impacts stemming from Russia’s deplorable war on Ukraine.
A little over a year ago, inflation and interest rates were
still widely forecast to remain low. However, as at the
end of September 2022, the most recent CPI (consumer
price index) inflation points in the UK and US were +9.9%
and +8.3% year-on-year respectively. Central banks have
responded by raising rates and government bond yields
have moved sharply upwards. 2-year UK and US bond
yields ended the period at 4.2% and 4.3% respectively
– up from 0.4% and 0.3% 12 months ago. The impact of
inflation on bond returns has been dramatic; as yields
rise, prices fall, leaving many owners of developed
market bonds sitting on significant paper losses.
The rise in interest rates also has a considerable
negative impact on equity markets; driving discount
rates higher and valuations lower. The re-emergence
of inflation is leading to the real erosion of consumers’
purchasing power and investors’ wealth.
US dollar and commodity strength
A prominent feature of markets for UK investors
over the past year has been US dollar strength and
sterling weakness. With the Federal Reserve leading
the fight against inflation, investors have flocked to
the dollar. Additionally, its status as a relative safe-
haven has once again come to the fore amid market
volatility and geopolitical unrest in Europe. Sterling
was driven lower in the final month of the period by
concerns over UK fiscal policy – falling as low as 1.04 to
the dollar, a historical low. This weakness has been to
the benefit of global businesses listed in the UK that
translate overseas earnings into sterling but to the
detriment of domestic businesses and consumers.
Commodity-producing companies such as mining
companies and the oil majors, in which we do
not invest on account of their low and volatile
returns on capital, have also performed very well.
Over the past year, investors have turned to hard
commodities as a hedge against rising inflation.
The distinctive macro backdrop has led to very clear
trends within the UK equity market over the past year.
Large-cap companies have materially outperformed
mid-caps. High growth and technology companies
have lagged more mature businesses. Companies with
significant US dollar earnings have beaten UK domestic
companies. And commodity-producing sectors have
outperformed all others. In that context, the FTSE 350
Energy Index has risen +37.4% over the last 12-months,
comfortably beating the total returns of all other sectors.
A skewed UK-index
We have often written about the unusual make-up of the
FTSE-All Share, which is dominated in market cap terms
by a few, extremely large companies. Many of these,
such as the banks, oils and miners, are highly cyclical,
and areas in which we do not invest. The performance of
these companies tends to heavily skew the total return of
the FTSE All-Share Index, sometimes for better (such as
this past year), but often, in our experience, for worse. By
way of comparison, the table on page 9 shows the total
return of the FTSE All-Share Index, the Company, the
FTSE-100 equally weighted index, the FTSE-250 and the
MSCI World over the past year. The chart illustrates the
unusual strength of the FTSE All-Share Index whilst also
putting the Company’s returns into a relative context.
MANAGERS’REVIEW
Hugo Ure
Co-Manager
Blake Hutchins
Co-Manager
Strategic Report Governance Financial Statements Investor Information
Troy Income & Growth Trust plc vs FTSE and MSCI total return indices (12 months to September 2022)
-4.0%
-10.2%
-18.1%
-19.2%
-23.5%
-30.0%
-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
FTSE All-ShareTroy Income & Growth
Trust plc
FTSE 100 Equally
Weighted Net Tax GBP
MSCI World USDFTSE 250 GBP
Source: Bloomberg
Valuations
With the benefit of hindsight, equity markets were
‘expensive’ this time last year. Interest rate and inflation
expectations were low and investors were looking forward
to a strong recovery in earnings and dividends as we
emerged from the worst of the pandemic. Subsequent
sticky inflation and rising interest rates have resulted in
a sharp re-pricing of equities. Looking at the valuations
across the portfolio in terms of Price-to-Earnings ratios, we
currently find our companies to be valued roughly in the
middle of their 15-year ranges. The portfolio trades with
a forward earnings yield of around 5.5% which supports
a portfolio dividend yield of around 3.4%. This strikes us
as attractive on a medium-term view, given the quality
of the businesses the Company holds. Valuations could
of course go lower before stabilising, but we are of the
view that the most dramatic rises in interest rates (and
consequent repricing of assets) are now behind us. We
believe that the bigger risk to equities from here may come
from the potential for corporate earnings to be hurt by a
recession. Given our strong preference for relatively non-
cyclical, high-quality, dividend growth businesses, such a
scenario ought to favour the Company on a relative basis.
The importance of dividends
Dividends have arguably been somewhat out of favour in
recent years, with much of the market narrative focused
on the revaluation of high growth stocks and less on
sustainable compounding of dividend growth. This could
be set to change. Dividends serve as a truly tangible
component of return; they can be spent as income,
or reinvested for compound growth. In uncertain and
volatile markets, the dividend component of return can
become even more important for investors. Additionally,
if dividends are reinvested through soft markets, an
investor is naturally buying back into the market at
prices that are lower and at prospective returns that
are higher. In a world in which interest rates are positive
once more, we would not be surprised if investing for
dividend growth returns to popularity once more.
Performance
As managers, we seek to invest for the long term in
high-quality companies capable of resilient dividend
growth. Typically, we favour highly cash-generative,
growing companies, with high and stable returns
on capital. As such, the portfolio has investments in
consumer staples companies, software companies,
high-quality industrials, non-bank financials and some
consumer discretionary companies, particularly those
with franchise-like models. Some such businesses have
been out of favour over the past year, whilst many of
the businesses we tend not to invest in, such as oil
companies, miners and banks, have performed very well.
The Company delivered a NAV total return of -9.9% and
a share price total return of -10.2% over the year. This
compares with the FTSE All-Share Index total return of
-4.0%. The difference between the share price and NAV
performances generated by the Company is partially
explained by a move from a 1.4% discount to a 2.2%
discount. This performance places the Company 11th out
of its 18-strong AIC UK equity income peer group when
ranked by NAV performance and 13th by share price.
Contributors to returns
Information Technology was the largest positive
contributor to returns, with the share price of Paychex,
the US HR & Payroll software company, performing
especially well at +24% in sterling terms. Paychex is one
of the Company’s few overseas holdings and several
of these have benefitted meaningfully from US dollar
strength. Consumer staples companies also contributed
positively to returns, with Diageo, Nestlé, British American
Tobacco, Unilever and Procter & Gamble all rising over
the year. The Company’s sole holding in the utilities
sector, National Grid, also performed well, up +10.3%.
Elsewhere, holdings in global catering company Compass
Group and pharmaceutical giant AstraZeneca contributed
strongly, rising +20.0% and +13.7% over the year.
MANAGERS’REVIEW
Detractors from returns
Non-bank financials holdings detracted most from returns,
with IntegraFin and St. James’s Place the most notable.
IntegraFin, the financial advisor investment platform
provider, was particularly weak, declining -56.6%. This
fall was largely due to their linkage to financial markets,
but also due to rising costs as they seek to hire new
software developers in a competitive and inflationary
labour market. St. James’s Place fell -28.1%, having risen
strongly in the prior year. Given the emerging cost
of living crisis, Consumer Discretionary holdings also
detracted from returns, due to weakness in relatively
modest holdings in Domino’s Pizza and Next. Real Estate
was also a negative contributor as rising interest rates
placed pressure on property values across the sector.
Portfolio changes over the year
Selective changes were made to holdings over the
course of the year, with the aim of further improving
the quality, resilience and valuation of the portfolio.
In the year, a new holding was started in the distributor
business, Bunzl. Bunzl is the clear global leader in
the distribution of essential ‘not-for-resale’ items to
thousands of businesses in more than 30 countries,
such as food packaging and cleaning products to the
food service industry, gloves, gowns, and bandages
to healthcare operators, and hard hats, boots, and ear
and eye protection to the industrial and construction
markets. Bunzl’s products are vital for their customers to
operate yet are a very small part of their costs, leading
to very resilient revenues. Through years of steady
organic growth and by carrying out small acquisitions,
the business has been able to compound free cash
flow and dividend per share in a metronomic fashion,
including through recessions. This is evidenced by a
29-year track record of uninterrupted dividend growth.
We added to several core holdings over the year, in
particular, to our Consumer Staples companies. We have
long been attracted to the reliable and defensive dividend
growth these companies have been able to produce, and
believe these attributes will prove valuable in today’s tough
backdrop. Consumer Staples is the largest sector exposure
across the portfolio and at varying points in the year we
topped up Unilever, British American Tobacco, Reckitt
Benckiser and Diageo. We also added to pharmaceutical
company GSK. After many years of planning, they finally
spun out their consumer health business, Haleon. We
believe this will free them up to reinvest in their core
pharma and vaccine franchises and generate better
growth and returns from here. We also added to overseas
holding CME Group. CME is one of the world’s largest
derivatives and commodities exchanges, and benefits
from interest rate volatility, offering differentiated
exposure to our other holdings. It is also a rare US
company that prioritises dividends over share buy-backs.
There were a handful of outright sales in the period. We
sold two low-yielding, overseas holdings in American
Express and Visa. Whilst both are fine companies,
their respective dividend yields of 1.2% and 0.7%
were the lowest in the portfolio. Both companies are
also not without risk; American Express issues credit
as a core part of its business, whilst Visa is a play on
global commerce. With both having proven defensive
(in sterling) over the past year, we felt it was prudent
to sell and reinvest in better value elsewhere.
We also exited MoneySupermarket and Sabre Insurance.
Both companies earn the majority of their profits from the
UK motor insurance industry. Sabre has suffered heavily
from inflation and we are concerned about the path to
recovery and sustainable growth. MoneySupermarket in
our view has an increasingly challenging long-term growth
outlook and we are concerned that the well-regarded CFO
has decided to leave the company – the latest in a raft of
management changes. Rather than continue to hold these
companies, we have focused our capital on Admiral, a
business we believe has a powerful competitive advantage
and far better growth prospects. Elsewhere, towards the
end of 2021, we also sold the portfolio’s relatively small
holding in Hargreaves Lansdown. Whilst we continue to
like the structural growth on offer from the UK savings
industry, we had become incrementally more cautious
about competition in the UK platform market and reduced
exposure to the sub-sector accordingly. Finally, having seen
its valuation more than fully recover after the pandemic
we exited the Company’s holding in WH Smith in favour
of larger companies with more attractive valuations.
Overall, we would characterise the portfolio changes in
the period as enhancing the defensive qualities of the
portfolio, with additions to those companies we believe
will generate resilient profits and dividends in what could
continue to be a challenging earnings environment.
Growing income
We are pleased to see the Company’s dividend begin to
grow once more. This is a reflection of the dynamics of the
underlying portfolio, where dividends are well covered by
earnings and are growing at a healthy rate. The portfolio
Strategic Report Governance Financial Statements Investor Information
is built around large, resilient, growing businesses that
pay sustainable dividends. We anticipate that portfolio
companies should be able to consistently grow their
dividends into the medium term and that as dividend cover
is fully rebuilt, the Company’s dividend growth should trend
towards the dividend growth rate of the overall portfolio.
Responsible Investment
We at TAML have always prioritised the avoidance of
permanent capital loss, investing for the long-term and
emphasising quality within our investment process. It has
become increasingly clear to us that companies that do
not prioritise a strong corporate governance culture and
which are not proactively managing their social impact and
environmental footprint, will suffer from greater regulation
combined with declining support from customers and
shareholders. We have seen nothing in the more volatile
times since the Russian invasion of Ukraine to suggest
that, for long-term investors, this is no longer the case.
Our preference for less capital-intensive businesses
means the portfolio’s carbon intensity is about 12%
of that of the benchmark. While we believe this is an
encouraging starting point, we are committed to the
continued reduction of emissions by our portfolio
companies in line with the goals of the Paris Agreement.
We will continue our engagement with portfolio
companies on physical and transitional climate risks.
We exercise voting rights and use engagement to ensure
companies act in the best long-term interests of their
shareholders. Our interactions with Unilever in early 2022
following the leaked Haleon bid are a good example of
this. Our analysis showed us that the proposal to acquire
GSK’s consumer health business was ill-conceived and
that Unilever were overpaying for an asset of which
they were unlikely to be the best owners. We engaged
with management both bilaterally and, after initiating a
collaborative engagement, through Investor Forum. While
we were pleased to see management walk away from the
transaction, we also opted to vote against the remuneration
structures, which we felt partially incentivised such
acquisitions. We continue to communicate with
Unilever on a regular basis and their responsiveness
has given us increased conviction in our investment.
Further details of our approach to Responsible Investment
& Stewardship can be found on pages 17 and 18.
Investment Outlook
In today’s challenging investment environment, we are
prioritising resilient cash flows, reasonable valuations,
and sustainable dividend growth more than ever.
Corporate earnings have remained broadly resilient to
date, but it seems likely to us that there will be a wave
of profit warnings over the coming months. Companies
will be battling slowing growth and significantly
higher interest payments against a shaky geopolitical
environment and myriad inflationary pressures. For
each of the Company's holdings, we have refreshed
our analysis and are comforted by the operational and
cash flow resilience we find across the portfolio.
At TAML, we try to invest in high-quality businesses,
with relatively low levels of cyclicality that we can
hold for many years – possibly even decades. Equally
importantly, we strive to avoid companies whose profits
and cash flows might be highly volatile. This enables
us to have a long-term perspective and remain patient
equity investors, as we know that if we stick to quality,
we can recover from short-term market declines through
the steady accumulation of earnings and dividends.
The flip side to a weaker equity market is much
improved valuations. With sterling weak and current
political uncertainty high, UK equities are trading at
increasingly attractive valuations. Whilst we prioritise
defensive earnings, and have particularly done so in
recent months, we are convinced that over the course
of the next year considerable valuation opportunities
will emerge. As long-term equity investors, we are
excited about the prospect of being able to purchase
great companies at discounted prices. We know the
companies we would love to own at the right price; we
have a clearly defined universe of well-researched stocks
and will stay alert for opportunities to further improve
the quality, growth and valuation of the portfolio.
Troy Asset Management Limited
16 November 2022
INVESTMENTPORTFOLIO
As at 30September 2022
Valuation
£’000
Total portfolio
%
Unilever 17,675 9.1
Diageo 15,752 8.1
Relx 13,970 7.2
Reckitt Benckiser 12,039 6.2
Experian 8,284 4.3
Compass Group 8,153 4.2
GSK 7,944 4.1
Astrazeneca 7,380 3.8
Paychex 6,808 3.5
Croda International 6,522 3.3
Ten largest investments 104,527 53.8
CME Group 6,250 3.2
Proctor & Gamble 5,967 3.1
Bunzl 5,729 2.9
National Grid 5,696 2.9
British American Tobacco 5,497 2.8
Nestlé 4,539 2.3
St. James’s Place 4,373 2.2
Diploma 4,194 2.2
InterContinental Hotels Group 3,980 2.1
Medtronic 3,850 2.0
Twenty largest investments 154,602 79.5
Admiral Group 3,070 1.6
Domino’s Pizza Group 2,971 1.5
Primary Health Properties 2,584 1.3
Next 2,572 1.3
Schroders 2,548 1.3
Aveva Group 2,547 1.3
International Public Partnerships 2,495 1.3
Londonmetric Property 2,472 1.3
Assura 2,256 1.2
AJ Bell 2,108 1.1
Thirty largest investments 180,225 92.7
Strategic Report Governance Financial Statements Investor Information
Valuation
£’000
Total portfolio
%
Big Yellow Group 2,101 1.1
Halma 2,097 1.1
3I Infrastructure 2,054 1.0
Intertek Group 1,851 1.0
Haleon 1,530 0.8
Fevertree Drinks 1,435 0.7
Victrex 1,419 0.7
IntegraFin 1,102 0.6
Safestore 634 0.3
Total investments at fair value 194,448 100.0
As at 30September 2022
Valuation at
30September
2021 Purchases Sales
Increase/
(decrease)
Valuation at
30September
2022
£’000 % £’000 £’000 £’000 £’000 %
Listed investments
Ordinary shares 244,514 98.4 53,108 (77,172) (26,002) 194,448 100.6
Current assets 5,081 2.0 9,265 4.8
Current liabilities (974) (0.4) (10,398) (5.4)
Net assets 248,621 100.0 193,315 100.0
Net asset value per share 77.72p 68.48p
Analysis of Listed Equity Portoflio
By sector (excluding cash)
2022
%
2021
%
Consumer Staples
33.1 24.7
Industrials 17.5 14.6
Financials 10.0 16.4
Health Care 9.9 9.0
Consumer Discretionary 9.1 10.5
Information Technology
5.9 6.9
Real Estate 5.2 6.7
Materials 4.1 6.0
Utilities 2.9 2.3
Other 2.3 2.0
Communication Services 0.0 0.9
100.0 100.0
By region (excluding cash)
2022
%
2021
%
United Kingdom 85.9 83.2
United States 11.8 13.6
Switzerland 2.3 3.2
100.0 100.0
By asset class (including cash and borrowings)
2022
%
2021
%
Equities 100.2 98.4
Cash 2.4 1.6
Borrowings (2.6) 0.0
100.0 100.0
DISTRIBUTIONOFASSETSANDLIABILITIES
Strategic Report Governance Financial Statements Investor Information
BUSINESSMODEL
Introduction
The Company carries on business as an investment trust.
Investment trusts are collective investment vehicles,
constituted as closed-ended public limited companies.
The Company is managed by a Board of Non-Executive
Directors who are responsible for the overall stewardship
of the Company, including investment objectives and
strategy, investment policy, gearing, dividends, corporate
governance procedures and risk management. Biographies
of the Directors can be found on page 22.
The management of the investment portfolio has been
contractually delegated to the Manager, Troy Asset
Management Limited (‘TAML’ or the ‘Manager’), who follow
the investment objective and policy in implementing that
mandate. Further details of the Company’s management
arrangements are provided in the Directors’ Report on
page 24.
Investment Policy
Equities are selected for their inclusion within the portfolio
solely on the basis of the strength of the investment case
with the focus being on long-term income growth along
with capital preservation.
Asset classes other than equities will be purchased from
time to time, will vary as opportunities are identified and
will include convertibles, preference shares, fixed income
securities and corporate bonds. Investments will be made
when prospective risk-adjusted returns appear to be
superior to those from equity markets or are considered
likely to exceed the Company’s cost of capital including
any borrowing costs. However, non-equity securities will
not constitute the majority of the portfolio. The Company
may also use derivatives for the purpose of efficient
portfolio management, including reducing, transferring
or eliminating investment risk in its investments and
protection against currency risk, to exploit an investment
opportunity and to achieve an overall return.
There are no pre-defined maximum or minimum exposure
levels for asset classes but these exposures are reported
to, and monitored by, the Board in order to ensure that
adequate diversification is achieved. The Company
is permitted to hold up to 20% of gross assets in
non-UKinvestments.
The Company does from time to time invest in other
UK listed investment companies but the Company will
not invest more than 15% of gross assets in other listed
investment companies.
The portfolio will be relatively concentrated and the
number of individual holdings in equities and funds
will vary over time but, in order to diversify risk, will
typically be between 30 and 50. The Board monitors the
aggregateexposure to any one equity across the whole
investment portfolio.
While there is a comparative index (the FTSE All-Share
Index) for the purpose of measuring performance over
material periods, no attention is paid to the composition
of this index when constructing the portfolio and the
composition of the portfolio is likely to vary substantially
from that of the index.
The Company may utilise gearing in a tactical and
flexible manner to enhance returns to Shareholders.
As an investment trust, the Company is able to borrow
money and does so when the Board and the Manager
have sufficient conviction that the assets funded by
borrowed monies will generate a return in excess of the
cost of borrowing. Such gearing may be in the form of
bank borrowings or through derivative instruments which
provide a geared exposure to equity markets. Gearing
levels are discussed by the Board and the Manager at
every Board meeting and monitored between meetings
and adjusted accordingly with regard to the outlook.
During the year, the Company initiated a three-year
revolving loan facility of £15 million with The Royal Bank
of Scotland International Limited. Further details of the
gearing facility can be found on page 24.
A description of the Manager’s investment approach can
be found on pages6 to 7.
Investment Guidelines
Although not part of the investment policy the following
guidelines have been adopted by the Company in seeking
to achieve its objective:
• It is intended that the Company will generally remain
fully invested but the Company will retain the ability to
hold cash or cash equivalents from time to time. TAML’s
commitment to capital preservation means that the
level of cash held in portfolios which it manages has
always been an active investment decision.
• Various guidelines to limit the portfolio exposure have
been set by the Board in conjunction with the Manager.
These (which may be varied only with the permission of
the Board) include:
– equity portfolio to comprise between 30 and 50
individual holdings;
– overseas investments not to exceed 20% of
grossassets;
– no more than 10% of gross assets in any
individualstock;
– no more than 3% of gross assets in any one mid or
small cap stock;
BUSINESSMODEL
– no more than 30% of gross assets in any one Global
Industry Classification Standard ('GICS') industry
sector; and
– individual stocks representing 5% or more of gross
assets when aggregated not to exceed 40% of
gross assets.
During the year, the Board increased the limit of exposure
to any one GICS industry sector from 30% of gross
assets to 35% of gross assets on a temporary basis, to be
reviewed at each Board Meeting.
Monitoring Performance – Key Performance
Indicators
At each Board meeting the Directors consider a number of
performance indicators to assess the Company’s success
in achieving its objectives, which include absolute and
relative performance compared to market indices and the
peer group. The key performance indicators (‘KPIs’) are
established industry measures and are as follows:
• net asset value total return;
• share price total return;
• the premium/discount to net asset value at which the
shares trade;
• expenses and the ongoing charges ratio; and
• dividend yield.
Key performance indicators are shown in the financial
highlights on page 2, with historic performance data on
page 3, and in the alternative performance measures on
page 62. These are discussed in the Chairman’s Statement
on pages 4 and 5 and the Managers’ Review on pages8
to11.
Performance and Future Development
A review of the business performance, market background,
investment activity and portfolio during the year under
review, together with the investment outlook, is provided
in the Chairman’s Statement on pages 4 and 5, and the
Managers’ Review on pages 8 to 11.
Details of the Company’s investments can be found on
pages 12 and 13 with the distribution of assets and liabilities
on page 14.
Social, Community and Employee Responsibilities
The Directors recognise that their first duty is to act in the
best financial interests of the Company’s Shareholders and
to achieve good financial returns against acceptable levels
of risk, in accordance with the objectives of the Company.
In asking the Manager to deliver against these objectives,
they have also requested that the Manager take into
account the broader environmental, social and governance
issues of companies within the portfolio, acknowledging
that companies failing to manage these issues adequately
run a long-term risk to the sustainability of their businesses.
A description of the Company’s approach to responsible
investment can be found on pages 17 and 18.
As an investment trust with its current structure the
Company has no direct social, community, employee or
environmental responsibilities of its own.
The Company has no greenhouse gas emissions to report
from its operations for the year ended 30September 2022,
nor does it have responsibility for any other emissions
producing sources under the Companies Act 2006
(Strategic Report and Directors’ Reports) Regulations 2013
(including those within the underlying investment portfolio).
Details on Diversity can be found in the Statement of
Corporate Governance on page 29.
Approval of Strategic Report
The Strategic Report on pages 1 to 21 was approved by the
Board on 16 November 2022.
By Order of the Board
Juniper Partners Limited
Secretary
16 November 2022
Strategic Report Governance Financial Statements Investor Information
RESPONSIBLEINVESTMENT
The Board and Manager view Responsible Investment as the
fundamental integration of material Environment, Social and
Governance (‘ESG’) factors into investment analysis, decision
making and portfolio construction, and into stewardship
activities, including voting and engagement, in order to
improve the risk and return profile of the portfolio. The
Company’s long investment horizon means that social and
environmental materiality and financial materiality are largely
indivisible. As such, the analysis of material ESG risks and
opportunities is integrated into the investment process.
Research Process
The Board and Manager define ‘ESG factors’ as non-
financial, environmental, social or governance factors.
TAML carries out an analysis of these ESG factors by
considering both the positive and negative effect such
factors may have on an investment. Within this framework,
TAML analyses ‘sustainability risks’, being risks relating to
an ESG event or condition that, if they occur, could cause
an actual or potential material negative impact on the value
of an investment.
TAML also considers the materiality of ESG factors in
relation to their outward impact on the environment and
society. TAML may seek to deliver positive environmental
or social outcomes where doing so is aligned with
improving the risk and return profile of an investment,
or is not contrary to that objective. TAML will not seek
environmental or social outcomes at the expense of
portfolio returns. In all but rare circumstances, TAML
believes that long investment time horizons create
alignment between an investment’s risk and return
objectives and any environmental or social benefit.
TAML does not seek to narrowly define or limit the factor
categories but rather appreciates that such analysis
must necessarily take place in the context of the wider
assessment of risk and reward. Some, but by no means all,
of the areas which will be assessed for the impact of ESG
factors are: climate change, natural resources, pollution and
waste, environmental opportunities, human capital, product
liability, stakeholder opposition, social opportunities,
corporate governance, and corporate behaviours.
Climate Change
In considering ESG matters, the Board and Manager are
increasingly focussing on climate-related risks. Climate
change is considered to be one of the most significant and
complex systemic risks facing our society, economy and
financial markets today.
Time horizon: The Company aims to invest in stocks that
can be held for the long term (five years or more). This
time horizon clearly extends into the time frame over which
one can reasonably expect the impact of climate change
to be felt. As such the management of climate risk is
implemented within the investment process.
Transition risk: The Manager assesses that the risks
associated with a transition to a lower carbon economy fall
well within the Company’s investment time horizon of more
than five years. Whilst TAML’s investment process favours
capital-light investments, and the Company has no material
direct exposure to many of the most carbon-intensive
sectors, the analysis and mitigation of transition risk at the
individual stock and portfolio level remains an important
part of the investmentprocess.
Physical risk: The risks associated with a warming climate,
including from coastal flooding, wind storms, wildfires
and other extreme weather events, impact almost all
companies. TAML seeks to engage with our portfolio
companies to improve their resilience to these physical
risks. As the risks of a delayed transition to net zero
increase, physical risks in the portfolio also increase.
TCFD: In recognition of the importance of the influence of
climate change on future returns, TAML has committed to
implementing the recommendations of the Task Force for
Climate-Related Financial Disclosures (TCFD). As part of
this implementation, TAML has set net zero targets under
the Net Zero Asset Managers Initiative. The Company’s
portfolio is managed in line with these targets.
Monitoring of, and Engagement with, Investee
Companies
Whilst the Company seeks to invest in companies
whose business strength and corporate governance
policies mean they generally do not require significant
shareholder intervention, the Manager does recognise
that engagement is an important aspect of fiduciary duty.
Engagement is generally conducted proactively and as part
of an investee company’s decision-making process; TAML
is also willing to engage reactively where a company has
taken a course of action that conflicts with its standpoint.
The impetus to engage may stem from a breach by the
company of generally accepted business practice norms,
TAML’s proxy voting process or integrated ESG analysis.
Any engagement would be expected to meet the following
criteria: there is a clear objective in engaging with a
company; the matter for engagement must be material; and
the engagement with the company is constructive.
RESPONSIBLEINVESTMENT
Voting
The Board and Manager consider (proxy) voting an
important part of the Company’s stewardship activities
and investment process and aims to use its rights to
both safeguard the interests of investors and encourage
environmental and social sustainability (where these
objectives are aligned). The Manager will seek to instruct
votes, on behalf of the Company, on all resolutions for
which it has voting authority.
TAML conducts analysis of each management or
shareholder resolution ahead of voting. Votes are then
cast in line with what is deemed to be in the best long-
term interest of shareholders. Environmental and social
sustainability are considered alongside governance factors
in this analysis.
Whenever possible, voting on any resolution is incorporated
as part of the wider engagement with management. TAML’s
preferred course of action would be to have dialogue with
any company ahead of casting a vote against management.
Where appropriate TAML may also seek to engage with a
company following a vote against management.
The Responsible Investing section of the Managers' Review
on page 11 provides an example of engagement with an
investee company during the year.
UN Principles for Responsible Investment
As part of the Manager’s commitment to responsible
investing, TAML became a signatory to the United Nations’
Principles for Responsible Investment in September 2016.
UK Stewardship Code
In 2021 TAML became a signatory to the 2020 UK
Stewardship Code. The Manager’s most recent
Stewardship Code report can be found on TAML’s website
at https://www.taml.co.uk/responsible-investing.
Strategic Report Governance Financial Statements Investor Information
PROMOTINGTHESUCCESSOFTHECOMPANY
The Board is required to describe to the Company’s Shareholders how the Directors have discharged their duties and
responsibilities over the course of the financial year under section 172(1) of the Companies Act 2006. This statement provides
an explanation of how the Directors have promoted the success of the Company for the benefit of its members as a whole,
taking into account the likely long-term consequences of decisions and the need to foster relationships with all stakeholders.
The Board is focused on promoting the long-term success of the Company and regularly reviews the Company’s long-term
strategic objectives, including consideration of the impact of the Manager’s actions on the marketability and reputation of the
Company and the likely impact on the Company’s stakeholders of the Company’s principal strategies.
The Company’s main stakeholders are its Shareholders, Manager, service providers and debt provider. The Manager also
engages with the investee companies where appropriate, particularly on performance and ESG issues. The Responsible
Investing section of the Managers' Review on page 11 details an example of engagement with an investee company during
theyear.
The Board considers its stakeholders at Board meetings and receives feedback on the Manager’s interactions with them.
Stakeholder How we engage
Shareholders Shareholders are key stakeholders and the Board places great importance on communication with
them. The Board welcomes all Shareholders’ views and aims to act fairly between all Shareholders.
The Manager and the Company’s broker meet regularly with current and prospective Shareholders
to discuss the Company and its performance. Shareholder feedback is discussed by the Directors
at Board meetings and regular updates are provided to Shareholders through the Annual Report,
Interim Report, monthly factsheets, Company announcements, including daily net asset value
announcements, and the Company’s website. The Company’s Annual General Meeting and
the Manager’s annual investment trust seminar provide forums, both formal and informal, for
Shareholders to meet and discuss issues with the Directors and Manager.
Manager The Managers’ Review on pages 8 to 11 details the key investment decisions taken during the
year. The Manager has continued to manage the Company’s assets in accordance with the
mandate provided by Shareholders, with the oversight of the Board. The Board reviews regularly
the Company’s performance against its investment objective and undertakes an annual strategy
review to ensure that the Company is positioned well for the future delivery of its objective.
The Board receives presentations from the Manager at every Board meeting to help it exercise
effective oversight of the Manager and the Company’s strategy and, through the Management
Engagement Committee, formally reviews the performance of the Manager at least annually.
Service providers The Board seeks to maintain constructive relationships with the Company’s suppliers, either
directly or through the Manager, with regular communications and meetings. A key relationship
is with Juniper Partners Limited (‘Juniper Partners’), who provide AIFM, company secretarial and
fund administration services, as well as operating the DCM. The Board conducts an annual review
of the performance, terms and conditions of the Company’s main service providers to ensure
they are performing in line with Board expectations and providing value for money.
Debt provider The Company’s debt provider is The Royal Bank of Scotland International (‘RBSI’). The Board
maintains a relationship with RBSI via Juniper Partners. Juniper Partners provides RBSI with
regular updates on compliance with its loan covenants.
PROMOTINGTHESUCCESSOFTHECOMPANY
The Board is always mindful of its responsibilities to the stakeholders of the Company and this forms part of every Board
decision. Specific example of stakeholder considerations during the year were:
Key stakeholder considerations What action was taken
Management of the Portfolio The Managers’ Review on pages 8 to 11 details the key investment decisions
taken during the year. The overall shape and structure of the investment
portfolio is an important factor in delivering the Company’s stated investment
objective.
Responsible Investing The Board is mindful of its responsibilities to the Company’s stakeholders and
to the wider community of responsible investing. During the period, the Board
and Manager continued to develop the Company’s approach to responsible
investment and full details can be found on pages 17 and 18.
Dividends During the year, the Board had numerous discussions surrounding the dividend
and the timetable for growth. The Board believes that in order to maximise
total return to Shareholders, the income component of the return needs to
be both sustainable and able to grow. The Company’s distributable reserves
enable the Board to manage the Company’s dividend growth through periods
of market volatility and to allow portfolio management flexibility.
DCM During the year the Company bought back 37.6m Ordinary shares through
the operation of the DCM. The shares were bought back at a discount to
NAV, thereby providing a small accretion to the NAV per share. The Board
believes the operation of the DCM is very important for Shareholders as it
provides liquidity and reduces discount volatility.
Reduction in Management Fee As detailed in the Chairman's Statement on page 5, the Board agreed
a reduction in the management fee paid to TAML. This reflects the
commitment of both the Board and TAML to creating value for Shareholders
and ensuring the Company’s ongoing charges are competitive.
Gearing The Company initiated a three-year revolving loan facility of £15 million with
The Royal Bank of Scotland International Limited, full details of which can
be found on page 24. The Board believes that adding modest gearing to the
Company is appropriate, enabling efficient management of the Company’s
balance sheet and the enhancement of total returns over time.
Succession Planning The Board considers succession planning on a regular basis and believes
that Shareholders’ interests are best served by ensuring a smooth and
orderly refreshment of the Board with experienced candidates, whilst
maintaining a small, but focussed, independent Board. The Board carried
out a recruitment exercise during the year to find a replacement for David
Warnock, who is retiring at the AGM in January 2023. As detailed in the
Chairman’s Statement on page 5 and in the Directors’ Report on page 23,
Bridget Guerin was selected and will be proposed for election at the AGM.
Strategic Report Governance Financial Statements Investor Information
RISKMANAGEMENT
The Directors are responsible for supervising the overall management of the Company, whilst the day-to-day management of
the Company’s assets has been delegated to the Manager. Portfolio exposure has been limited by the guidelines which are
detailed within the Investment Guidelines section on pages 15 and 16.
The Board can confirm that the principal risks of the Company, including those which would threaten its business model,
future performance, solvency or liquidity, have been robustly assessed for the year ended 30September 2022. A description
of the principal risks and how they are managed is set out below, with disclosure of financial risk, including liquidity risk, set
out in note 15 on pages 56 to 59. Due to the high level of share buybacks over the course of the year, the Board has decided
to add Shareholder risk to the principal risks. The Board has also assessed the emerging risks of geopolitical events, climate
change and rising inflation under performance and market risks.
Risk Mitigation
Performance risk: The Board is responsible
for deciding the investment strategy to fulfil
the Company’s objective and monitoring the
performance of the Manager. An inappropriate
strategy or poor execution of strategy might
lead to long-term underperformance against the
comparator index and the Company’s peer group.
To manage this risk the Manager provides an explanation of significant
stock selection decisions and the rationale for the composition of the
investment portfolio, including responsible investment considerations.
The Board also receives and reviews regular reports showing an
analysis of the Company’s performance against the FTSE All-Share
Index (total return) and its peer group. The impact on the investment
strategy of the Russia/Ukraine conflict and rising inflation has been
kept under regular review by the Board.
Market risk: Market risk arises from uncertainty
about the future prices of the Company’s
investments.
The Board monitors and maintains an adequate spread of investments
in order to minimise the risks or factors specific to a particular
investment or sector, based on the diversification requirements
inherent in the Company’s investment policy. The guidelines which
limit the portfolio exposure are set out on pages 15 and 16. The Board
also monitors the implementation of gearing strategy and responsible
investment strategy. The underlying risks and potential increased
volatility associated with the Russia/Ukraine conflict, and inflation rate
rises, are considered within market risk.
Resource and operation risk: Like most other
investment trusts, the Company has no employees.
The Company therefore relies on services
provided by third parties and their control systems.
Disruption to, or failure of, systems and controls,
including cyber-attacks, at the Company’s service
providers could result in financial and reputational
damage to the Company.
The Board reviews the performance of its service providers, their
internal controls and their compliance with agreements on a
regularbasis.
Shareholder risk: Shareholder risk arises from
ongoing share buybacks reducing the size of the
Company threatening its viability.
The Board reviews the performance of the Company at each Board
meeting along with the business development and marketing strategy
in order to keep the Company an attractive investment. The Board
along with the Managers have also developed a marketing strategy
that reflects the shift of investors to platforms which can make direct
engagement more difficult. The Board constantly monitors the
implementation of the discount and premium control policy with the
help of Juniper Partners.
Regulatory risk: Breach of regulatory rules could
lead to the suspension of the Company’s London
Stock Exchange listing, financial penalties or a
qualified audit report. Breach of sections 1158 and
1159 of the Corporation Tax Act 2010 could lead to
the Company being subject to tax on capital gains.
The Company Secretary monitors the Company’s compliance with
all relevant regulations and compliance with the principal rules is
reviewed by the Directors at each Board meeting.
David Warnock
(Chairman)
David was appointed a
Non-Executive Director
on 17 November 2010
and became Chairman
on 23January 2014. He
co-founded the investment
firm of Aberforth
Partners and was a
partner for 19 years until his retirement in 2008. David
is currently Chairman of CT Global Managed Portfolio
Trust plc, a Non-Executive Director of ICG Enterprise
Trust plc and an active investor in a number of private
companies. He has held Non-Executive Directorships
of several public and private companies, and before
Aberforth was with Ivory & Sime plc and 3i Group plc.
Fees for year £36,415; beneficial interest 670,272 shares.
Roger White
Roger was appointed a
Non-Executive Director on
29 April 2014 and is Senior
Independent Director. He
has been Chief Executive
of AGBarrplc since
2004, having joined that
company as Managing
Director in 2002. Roger
previously held a number of senior positions with Rank
Hovis McDougall, is a past President of the British Soft
Drinks Association (BSDA) and is currently a member of
BSDAs Board of Management and Executive Council.
Fees for year £25,025; beneficial interest 300,000 shares.
Bridget Guerin
Bridget will be appointed
as a Non-Executive
Director, subject to her
election by Shareholders,
on 17 January 2023. She is
currently a Non-Executive
Director of Mobeus Income
& Growth VCT plc and
Invesco Perpetual UK
Smaller Companies Investment Trust plc, and previously
held the position of Chair on the Board of Schroder
Income Growth Fund plc. Bridget has held senior
positions as marketing director at Ivory & Sime plc and
Schroders and was managing director of Matrix Money
Management Limited. She is also Chair of York Racecourse
and trustee of the York Racecourse Pension Fund.
Brigid Sutcliffe
Brigid was appointed a
Non-Executive Director
on 1 August 2021 and
became Chair of the Audit
Committee on 19 January
2022. After qualifying as a
Chartered Accountant in
1983 and gaining an MBA
in 1987, Brigid spent thirty
years working in investment banking and as a strategic
change management consultant, advising companies across
a wide range of sectors. She has been a Non-Executive
Director for a variety of organisations in the public,
private and third sectors over the past fourteen years.
Fees for year £27,125; beneficial interest 50,000 shares.
David Garman
David was appointed a
Non-Executive Director
on 19 January 2016.
He is currently a Non-
Executive Director of
Speedy Hire plc and
several private companies.
He was formerly Chief
Executive of TDGplc and
has also held Non-Executive Directorships of Phoenix
IT Group plc, Victoria plc, StModwen Properties plc,
Kewill plc, Carillion plc and John Menzies plc.
Fees for year £25,025; beneficial interest 250,000 shares.
YOURBOARD
Strategic Report Governance Financial Statements Investor Information
DIRECTORS’REPORT
Status of the Company
The Company has received approval from HM Revenue
& Customs as an investment trust company under
sections 1158 and 1159 of the Corporation Tax Act 2010
and is conducting its affairs so as to enable it to retain
such approved status. The Company is incorporated and
domiciled in Scotland.
Results and Dividends
The financial statements for the year ended 30September
2022 appear on pages 43 to 61. Dividends in respect of
the year amounted to 1.97p per share (2021 – 1.96p). The
fourth interim dividend of 0.50p per share announced
on 15September 2022 (2021 – fourth interim 0.49p)
will be accounted for in the financial year ending on
30September2023.
Share Capital
The issued share capital at 30September 2022 consisted
of 282,284,487 Ordinary shares of 25p each and there
were 65,227,500 Ordinary shares held in treasury. As at
the last practicable date of 15 November 2022 the issued
share capital consisted of 278,184,487 Ordinary shares of
25p each and there were 69,327,500 Ordinary shares held
in treasury. Each holder of Ordinary shares, excluding
treasury shares, is entitled to one vote on a show of hands
and, on a poll, to one vote for every Ordinary share held.
Directors
Details of the current Directors are set out on page 22.
Allheld office throughout the year and up to the date
of this report. Jann Brown retired from the Board on
19January 2022 and held office from the beginning of the
year up to that date.
The Articles of Association require Directors to offer
themselves for re-election at least once every three years.
In accordance with best practice, the Board has resolved
that all the Directors will retire and offer themselves for
re-election on an annual basis. New Directors will offer
themselves for election at the Annual General Meeting
immediately following their appointment.
As noted in the Chairman's statement on page 5, Bridget
Guerin will be appointed as a non-executive Director of the
Company with effect from 17January 2023, subject to her
election by Shareholders at the Annual General Meeting.
Bridget has had over 30 years of experience in the financial
services industry. She has had longstanding experience of
sitting on the boards of investment/wealth management
companies and funds, including London listed investment
trusts. Bridget has extensive knowledge of the distribution
of investment products to the institutional and retail
markets. Bridget has a detailed knowledge of the wealth
management industry, financial advisory services and retail
fund platforms.
David Warnock will retire from the Board at the 2023
Annual General Meeting after twelve years of service and
will not stand for re-election. In the absence of unforeseen
circumstances, Bridget will assume the role of Chair at
thatpoint.
There were no contracts during or at the end of the year in
which any Director was materially interested. No Director
had a material interest in any investment in which the
Company itself had a material interest.
Directors’ and Officers’ Liability Insurance and
Indemnity Agreements
The Company has and continues to maintain insurance
in respect of Directors’ and Officers’ liabilities in relation
to their acts on behalf of the Company. The Company’s
Articles of Association provide any Director or other
Officer of the Company with a qualifying third-party
indemnity provision out of the assets of the Company
against any liability incurred by him or her as a Director
or other Officer of the Company to the extent permitted
by law. This was in force throughout the financial year
and at the date of approval of this report. In addition, the
Company has entered into individual Director’s indemnity
agreements with each Director.
Conflicts of Interest
Each Director has a statutory duty to avoid a situation where
he or she has, or could have, a direct or indirect interest
which conflicts, or may conflict, with the interests of the
Company. A Director will not be in breach of that duty if
the relevant matter has been authorised by the Board in
accordance with the Company’s Articles of Association.
The Board has approved a protocol for identifying and
dealing with conflicts and conducts a review of actual or
possible conflicts at least annually. No conflicts or potential
conflicts were identified during the year.
Substantial Interests
As at 30September 2022 the Company had received
notification of the following interests in the Ordinary share
capital of the Company:
Shareholder
Number of
shares held % held
Schroder Investment
Management Limited 19,672,375 6.97
Brewin Dolphin clients 14,904,054 5.28
Rathbone Brothers plc clients 14,296,573 5.06
There have been no notifications of changes in interest
since 30September 2022 up to the date of this report.
DIRECTORS’REPORT
Management Arrangements
The Company appointed Juniper Partners, as its alternative
investment fund manager (‘AIFM’) on 22July 2014. With
effect from that date, the AIFM delegated the portfolio
management activities relating to the Company back to
Troy Asset Management Limited (‘TAML’ or the ‘Manager‘)
pursuant to a delegation agreement and TAML continues
to provide portfolio management services to the Company.
These arrangements are fully compliant with theAIFMD.
The AIFM services are provided to the Company by
Juniper Partners for a fee of 0.015% of the Company’s net
assets per annum, subject to a minimum fee of £62,000 per
annum. TAML reduce their investment management fee by
an equal amount so that there is no overall change to the
basis of the management fee incurred by the Company.
The other terms of the AIFM’s appointment are similar to
those applying to TAML under the investment management
delegation agreement detailed below.
Investment Management Delegation
Agreement
Investment management services have been provided to
the Company by TAML since 1August 2009. With effect
from 1January 2022, the annual management fee was
reduced from 0.65% of the Company’s net assets to a
tiered annual management fee of 0.55% of net assets up to
£250 million and 0.50% of net assets above £250 million.
Full details of the fee charged by TAML in the financial
year are set out in note 3 to the financial statements. The
Board believes the fee charged by TAML is competitive
by comparison with other investment trusts with a similar
investment mandate and is priced appropriately given the
level of service provided by the Manager.
The contract between the Company, TAML and the AIFM
may be terminated by any party on six months’ notice. No
compensation is payable to the Manager in the event of
termination of the contract over and above payment in
respect of the required minimum notice.
Following the review by the Management Engagement
Committee outlined on page 29, the Board considers the
continuing appointment of the Manager to be in the best
interests of the Shareholders at this time.
As at 16November 2022, Hugo Ure and Blake Hutchins,
held respectively 460,000 and 150,000 Ordinary shares in
the Company.
Company Secretary
Juniper Partners provides company secretarial, accounting
and administration services to the Company. Juniper
Partners receives a fee for these services of £103,600 per
annum plus an amount equal to 0.1% of the Company’s
net assets between £50 million and £100 million, 0.03% of
the Company’s net assets between £100 million and £250
million and 0.02% of the Company’s net assets between
£250 million up to and including £1,000 million. The fixed
fee element of the fee is adjusted annually by the increase
in the Consumer Price Index.
Depositary
J.P. Morgan Europe Ltd is the Company’s Depositary, with
responsibilities including cash monitoring, safe keeping of
the Company’s financial instruments and monitoring the
Company’s compliance with investment limits and leverage
requirements. The Depositary has delegated the custody
function to J.P. Morgan Chase Bank N.A.
Borrowings
In June 2022, the Company instituted a three-year
revolving loan facility of £15 million with The Royal Bank
of Scotland International Limited. Under the terms of the
facility, the Company has the option to increase the level of
the commitment from £15 million to £20 million at any time,
subject to the bank’s credit approval, thus avoiding the
expense of undrawn commitment fees on this additional
£5 million. As at 30September 2022, £5 million had been
drawn down from this facility at a rate of 1.2% plus SONIA.
Corporate Governance
The Statement of Corporate Governance is set out on
pages 28 to 31 and forms part of this report.
Performance and Future Development
Performance and future development is set out in the
Business Model on page 16.
Going Concern
The Directors have undertaken a rigorous review of the
Company’s ability to continue as a going concern. This
review included consideration of the Company’s investment
objective, its principal risks, the nature and liquidity of the
portfolio, current liabilities and expenditure forecasts.
The Company’s investments consist mainly of readily
realisable securities which can be sold to maintain adequate
cash balances to meet expected cash flows. In assessing
the Company’s ability to meet its liabilities as they fall due,
the Directors took into account the uncertain economic
outlook caused by the ongoing Russia/Ukraine conflict and
the rising interest rates, and reviewed sensitivities around
this. The Directors also considered ongoing investor interest
in the continuation of the Company, looking specifically
at feedback from meetings and conversations with
Shareholders by the Company’s advisers, and the operation
of the DCM, which the Directors believe enhances the
Company’s appeal to investors.
Based on their assessment and considerations, the
Directors believe it is appropriate to continue to adopt the
going concern basis in preparing the financial statements
and the Company has adequate resources, an appropriate
financial structure and suitable management arrangements
in place to continue in operation for at least twelve months
from the date of this report.
Viability Statement
The Directors have assessed the viability of the Company
over a three-year period from the date that the Annual
Report is due to be approved by Shareholders.
The Directors have identified the following factors as
potential contributors to ongoing viability:
• The principal risks and uncertainties detailed on page21
and the mitigating controls in place, including the
ongoing impact of the Russia/Ukraine conflict and the
Company’s operational resilience.
• The ongoing relevance of the Company’s investment
objective in the current environment.
• The level of current and historic ongoing charges
incurred by the Company as disclosed on page 2.
• The utilisation quantum of the discount control
mechanism.
• The level of income generated by the Company.
• The liquidity of the Company’s portfolio.
• The challenges posed by climate change, including any
impact this may have on investee companies.
• The continuation vote to be held at the AGM following
the year ending 30 September 2023.
The Company is fully invested in liquid assets, either in
listed securities or cash. The nature of these mean that
even in a severe market downturn the Company would
be able to convert, in a relatively short period of time,
the portfolio into cash sufficient to meet the Company’s
operating costs which run at approximately 1% per
annum of net assets. This includes both fixed and variable
costs, the largest single element of which is the variable
management fee which is based on the net asset value
of the Company. Based on these facts the Board has
concluded that even in exceptionally stressed operating
conditions, the Company would easily be able to meet its
ongoing operating costs as they fall due.
The Directors have determined that a three-year period
is an appropriate period over which to provide its viability
statement. They consider that three years is a reasonable
time horizon to assess the continuing viability of the
Company and a suitable period over which to measure
the performance of the Company. This three-year period
remains consistent with the planning horizon used by the
Company in managing its activities.
Based on the foregoing, the Directors have a reasonable
expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the
three-year period to the AGM in 2026.
Independent Auditors
Following a tender process in 2015, PricewaterhouseCoopers
LLP were appointed the Company’s Auditors in 2016.
The Directors who held office at the date of approval of
this Directors’ Report confirm that, so far as they are each
aware, there is no relevant audit information of which the
Company’s Auditors are unaware; and each Director has
taken all the steps that he or she ought to have taken as a
Director to make himself or herself aware of any relevant
audit information, and to establish that the Company’s
Auditors are aware of that information.
Strategic Report Governance Financial Statements Investor Information
DIRECTORS’REPORT
Discount Policy
The Company’s discount policy is to ensure that the
Ordinary shares trade at close to net asset value through
a combination of share buy-backs and the issue of new
Ordinary shares at a premium to net asset value where
demand exceeds supply.
This discount control mechanism is operated by Juniper
Partners. The fee for this service is £31,000 per annum
plus the lower of (i) a charge of £250 per transaction; and
(ii) a commission of 0.1% of the aggregate proceeds of any
transaction undertaken in accordance with the discount
control mechanism. The fixed fee element of the fee is
adjusted annually by the increase in the Consumer Price
Index. The fee is charged to the share premium account.
The Directors will continue to seek the renewal of the
Company’s authority to buy-back Ordinary shares annually
and at other times should this prove necessary. From the
authority granted at the January 2022 AGM, the Company,
at 30September 2022, had the remaining authority to buy-
back 15,907,788 Ordinary shares. Any buy-back of Ordinary
shares will be made subject to the Companies Act 2006
and within guidelines established from time to time by the
Board and the making and timing of any buy-backs will be
at the absolute discretion of the Board. The Directors will
be authorised to cancel any Ordinary shares purchased
under such authority or to hold them in treasury. Purchases
of Ordinary shares will only be made through the market
for cash at prices below the prevailing net asset value of
the Ordinary shares. Such purchases will also be made
only in accordance with the rules of the Financial Conduct
Authority which provide that the price to be paid must
not be less than the nominal value of an Ordinary share
nor more than the higher of (a) 5% above the average of
the middle market quotations for the Ordinary shares for
the five business days before the purchase is made and
(b) the higher of the price of the last independent trade
and the highest current independent bid relating to an
Ordinary share on the trading venue where the purchase is
carriedout.
It is the intention of the Directors that the share buy-back
authority is used to purchase Ordinary shares if the middle
market price for an Ordinary share is below the net asset
value per Ordinary share of the Company (taking into
account any rights to which the Ordinary shares are trading
‘‘ex’’). However, nothing in this discount policy will require
the Directors to take any steps that would require the
Company to make a tender offer for its shares or to publish
a prospectus. Notwithstanding this discount policy, there
is no guarantee that the Ordinary shares will trade at close
to the net asset value per Ordinary share. Shareholders
should note that this discount policy could lead to a
reduction in the size of the Company over time.
Annual General Meeting
The notice convening the Annual General Meeting of
the Company to be held on 17January 2023 is given on
pages65 to 68. Among the resolutions being proposed are
the following:
(i) Dividend Policy
As a result of the timing of the payment of the
Company’s quarterly dividends in January, April, July
and October, the Company’s Shareholders are unable
to approve a final dividend each year. As an alternative
the Board will put the Company’s dividend policy to
Shareholders for approval on an annual basis.
The policy includes a provision that allows distributions
to be made from distributable capital reserves.
The third interim dividend for the year ended
30September 2022 was paid from the Company’s
distributable capital reserve.
Resolution 3, which is an ordinary resolution, relates to
the approval of the Company’s dividend policy which is
as follows:
Dividends on the Ordinary shares are payable
quarterly at the end of January, April, July and
October. It is intended that the investment policy
of the Company generates an income yield that will
permit the Company’s dividend to grow over time.
The Company has the flexibility in accordance with
its Articles of Association to make distributions from
distributable capital reserves.
(ii) Directors’ Authority to Allot Shares
Resolution 10, which is an ordinary resolution, will, if
approved, give the Directors a general authority to
allot new Ordinary shares up to an aggregate nominal
value of £23,182,000 representing approximately
one third of the total Ordinary share capital of the
Company in issue (excluding treasury shares) as at the
date of this document.
In line with corporate governance guidelines,
resolution 11, which is a special resolution, will, if
approved, authorise the Directors to allot new
Ordinary shares, or resell Ordinary shares held in
treasury, up to an aggregate nominal amount of
£6,954,000 representing approximately 10% of
the total Ordinary share capital of the Company in
issue (including treasury shares) as at the date of
this document. Resolution 11, if approved, will give
the Directors power to allot such new Ordinary
share for cash without first offering them to existing
Shareholders pro rata to their existing holdings.
In addition to this authority, resolution 12, which
is a special resolution, will if approved, authorise
the Directors to allot further Ordinary shares, or
resell further Ordinary shares held in treasury, up
to an aggregate nominal amount of £6,954,000,
representing approximately 10% of the total Ordinary
share capital of the Company in issue (including
treasury shares) as at the date of this document.
Resolution 12, if approved, will give the Directors
power to allot such new Ordinary shares for cash
without first offering them to existing Shareholders pro
rata to their existing holdings. This additional authority
will only be used to issue new Ordinary shares, or
resell Ordinary shares held in treasury, in accordance
with the Company’s discount control mechanism.
Ordinary shares issued pursuant to these authorities
will be issued for cash only at a price not less than
the net asset value per share. The disapplication of
pre-emption rights also applies in respect of treasury
shares which the Company may sell. It is the intention
of the Board that the resale of any treasury shares
would take place at a price of not less than the net
asset value per share prevailing at the date of sale.
These authorities will expire on 31 March 2024 or, if
earlier, at the conclusion of the AGM of the Company
to be held in 2024.
(iii) Purchase of the Company’s own Ordinary shares
Resolution 13, which is a special resolution, will be
proposed to renew the Company’s authorisation to
make market purchases of its own Ordinary shares.
The maximum number of Ordinary shares which
may be purchased pursuant to the authority shall be
14.99% of the issued share capital of the Company as
at the date of the passing of the resolution (41,699,854
Ordinary shares as at the date of this document). This
authority will expire on 31 March 2024 or, if earlier, at
the conclusion of the next Annual General Meeting
of the Company to be held in 2024 (unless previously
revoked, varied or extended by the Company in
general meeting). Further details in relation to the
Board’s discount policy including the details about the
minimum and maximum price to be paid are set out on
page 26.
(iv) Notice Period for General Meetings
Resolution 14, which is a special resolution, is required
to reflect the Shareholders’ Rights Regulations. The
Shareholders’ Rights Regulations, which amends the
Companies Act 2006, increased the notice period
for general meetings of the Company to 21 days.
The Company’s Articles of Association enable the
Company to call general meetings (other than an
Annual General Meeting) on 14 clear days’ notice,
subject to compliance with statutory requirements. In
order for this to be effective, the Shareholders must
also approve annually the calling of meetings other
than annual general meetings on 14 days’ notice. The
approval will be effective until the Company’s next
Annual General Meeting, when it is intended that a
similar resolution will be proposed. The Company will
also need to meet the requirements for electronic
voting under the Companies Act 2006 (as amended by
the Shareholders’ Rights Regulations), offering facilities
for all Shareholders to vote by electronic means
before it can call a general meeting on 14 days’ notice.
The Directors believe it is in the best interests of the
Shareholders of the Company to preserve the shorter
notice period, although it is intended that this flexibility
will be used only for non-routine business and where
merited in the interests of Shareholders as a whole.
Recommendation
The Directors unanimously recommend you to vote in
favour of the resolutions to be proposed at the AGM as it
is their view that the resolutions are in the best interests of
Shareholders as a whole.
By Order of the Board
Juniper Partners Limited
Secretary
16 November 2022
Strategic Report Governance Financial Statements Investor Information
Introduction
Corporate governance is the process by which the Board
seeks to look after Shareholder interests and protect
and enhance Shareholder value. Shareholders hold the
Directors responsible for the stewardship of the Company.
The Board has considered the principles and provisions of
the Association of Investment Trusts’ Code of Corporate
Governance (‘AIC Code’). The AIC Code is endorsed by
the Financial Reporting Council and adapts the principles
and provisions set out in the UK Corporate Governance
Code to make them relevant to investment companies as
well as incorporating the relevant provisions of the UK
Corporate Governance Code.
The Board believes that the AIC Code provides the most
appropriate governance framework for the Company.
Accordingly, the Company reports against the principles
and provisions of the AIC Code. The February 2019 edition
of the AIC Code is applicable to the year under review and
can be found at www.theaic.co.uk.
By reporting against the AIC Code, the Board is meeting
its obligations in relation to the UK Corporate Governance
Code (and associated disclosure requirements under the
FCA’s Listing Rule 9.8.6R) and, accordingly, the Company
does not need to report further on issues contained in the
UK Corporate Governance Code which are irrelevant to it.
Role of the Board
The Board is ultimately responsible for the framing and
executing of the Company’s strategy and for closely
monitoring risks. The Board sets the Company’s values and
objectives and ensures that its obligations to Shareholders
and are met.
The Board currently consists of four Non-Executive
Directors, one of whom, David Warnock, is Chairman. The
Senior Independent Director is Roger White. Biographies
of the Directors appear on page 22 and demonstrate the
wide range of skills and experience each brings to the
Board. Each Director has signed a letter of appointment to
formalise in writing the terms of his or her engagement as
a Non-Executive Director.
The Board has a formal schedule of matters specifically
reserved to it for decision. These are discussed at regular
intervals (at least once per annum) and comprise corporate
matters, the Company’s objective, advisers, the AIFM,
the Manager and the management agreements. When
necessary, the AIFM and the Manager are requested to
withdraw so that the Directors may discuss matters in
private. There is an agreed procedure for Directors to take
independent professional advice if necessary and at the
Company’s expense. This is in addition to the access which
every Director has to the advice of the Company Secretary.
The Board meets five times a year on a formal basis and
on an ad-hoc basis as required. The primary focus at
the regular Board meetings is a review of investment
performance and associated matters, including marketing
and investor relations and regulatory and industry
issues. In advance of each meeting, the Directors
receive a comprehensive set of papers, including the
Manager’s review and performance reports, revenue
projections and expense budgets, updates on marketing
activities and investor relations, regulatory reports and
documents on any other specific matters of importance.
Key representatives of the Manager attend each Board
meeting, enabling the Directors to probe on matters of
concern and seek clarification on any issues.
The Board has appointed three committees to cover
specific operations as set out below. Copies of the terms of
reference of each committee are available on request from
the Company Secretary and will also be available at the
Annual General Meeting.
Audit Committee
The Audit Committee Report is set out pages 32 and 33.
Nominations Committee
The Nominations Committee, which comprises all of the
Directors of the Company and is chaired by Roger White,
considers the appointment of new Directors bearing in mind
the balance of skills, knowledge, experience and diversity
existing on the Board. Once a decision is made to recruit
an additional Director, a job description is prepared and
each Director is invited to submit nominations and these are
considered by the Committee. External search consultants
may also be used to assist with the appointment of a new
Director should it be considered expedient.
Following discussions by the Board on succession planning
and agreement that, barring unforeseen circumstances,
David Warnock will retire after twelve years’ service
in January 2023, the Nominations Committee carried
out a search for a new Director during the first half of
2022. Cornforth Consulting, an external agency with no
connection to the Company, was engaged to put forward
candidates for interview. The Committee determined that
the new Director should have investment management and
investment trust experience and be able to replace David
as Chair. Diversity was also a key consideration. Cornforth
was provided with a brief to identify an appropriate range of
candidates and, following a detailed candidate review and
interview process, Bridget Guerin was selected and will be
appointed to the Board on 17January 2023, subject to her
election by Shareholders at the Annual General Meeting
on that date. Bridget has over 30 years of experience in
the financial services industry and has had longstanding
experience of sitting on the boards of investment/wealth
management companies, funds and investment trusts.
STATEMENTOFCORPORATEGOVERNANCE
Management Engagement Committee
The Board has constituted a separate Management
Engagement Committee which comprises all of the Directors
and which met once during the year. The main functions of the
Committee are to define the terms of the Agreements with
the Manager and the AIFM, to ensure that they follow good
industry practice, are competitive and are in the best interests
of the Shareholders. The Committee monitors the Manager’s
and AIFM’s compliance with the terms of the Agreements and
their performance. The Committee also reviews the services
and performance of the Company’s other service providers.
A review of the Manager was undertaken during the year and
the Committee considered the continuing appointment of
the Manager to be in the best interest of the Shareholders at
this time. The Committee believes that the Manager has the
skills and experience appropriate to achieving the Company’s
investment objective. The Committee also reviewed the AIFM
and other service providers during the year and concluded
that the services provided to the Company were satisfactory
and that the Agreements entered into with them were
operating in the best interests of Shareholders.
Remuneration Committee
As noted in the Directors’ Remuneration Report on
pages35 and 36, the Board as a whole reviews and sets
the rates of remuneration payable to each Director, and
therefore no separate Remuneration Committee has
beenconstituted.
Directors’ Meetings
The following table shows the number of formal Board and Committee meetings held during the year ended 30September
2022 and the number attended by each Director (with eligibility to attend in brackets):
Meetings held and attendance Board
Audit
Committee
Management
Engagement
Committee
Nomination
Committee
David Warnock 5 (5) 2 (2) 1 (1) 3 (3)
Roger White 5 (5) 2 (2) 1 (1) 3 (3)
David Garman 5 (5)
2 (2)
1 (1) 3 (3)
Brigid Sutcliffe 5 (5) 2 (2) 1 (1) 3 (3)
Jann Brown (retired 19 January 2022) 1 (1) 1 (1) 1 (1) 1 (1)
Directors’ Independence
The Board regularly reviews the independence of its
members and, having due regard to the definitions and
current AIC guidelines on independence, considers all
Directors to be independent of the Company’s Manager.
The Board takes the view that length of service does not
necessarily compromise the independence or contribution
of directors of an investment trust company, where the
characteristics and relationships tend to differ from those
of other companies. The Board believes that continuity and
experience can add significantly to the Board’s strengths.
Mr Warnock has served on the Board for more than nine
years but, given the nature of the Company and the
strongly independent mindset of the individual, the Board
is of the view that Mr Warnock’s length of service does not
compromise his independence.
Succession Planning and Tenure
The Board considers succession planning on at least an
annual basis, having regard to the length of service of
each Director, the combined skill set of the Board and the
diversity and size of the Board. The Board has agreed that,
in the absence of unforeseen circumstances, the tenure of
the Chair will be for a maximum of twelve years.
The Board has agreed that, barring unforeseen
circumstances, David Warnock will retire from the Board
at the Annual General Meeting in January 2023, after
twelve years of service. As detailed in the Nominations
Committee section of this report, Bridget Guerin will be
appointed to the Board to replace David.
Board Diversity
The Board recognises the importance of diversity including
gender, ethnicity and background, and is committed to
ensuring that a wide range of knowledge, experience, skills
and cognitive diversity are represented on the Board. At
30September 2022 there were three male Directors and
one female Director on the Board. When David Warnock
retires from the Board in January 2023 and Bridget Guerin
takes his place as Chair, there will be two male Directors
and two female Directors.
Strategic Report Governance Financial Statements Investor Information
The Board does not consider it appropriate to establish
diversity targets or quotas but considers diversity, in its
broadest sense, as an important factor in its succession
planning and recruitment process, and is committed to
appointing and retaining the most appropriate and well
qualified individuals. However, the Board is mindful of
the new Listing Rules on diversity and inclusion and the
Company’s aim is to have an appropriate level of diversity
on the Board. The Company has no employees so is not
required to report further on gender diversity.
Induction and training
New Directors appointed to the Board are provided with
an induction programme which is tailored to the particular
circumstances of the appointee. Regular briefings are
provided during the year on industry and regulatory matters
and the Directors receive other relevant training as required.
Performance evaluation
The Board undertakes a formal and rigorous annual
evaluation of its own performance and that of its committees
and individual Directors. The Directors consider how the
Board functions as a whole and also review the individual
performance of its members. This process is led by the
Chairman and encompasses quantitative and qualitative
measures of performance implemented by way of an
evaluation questionnaire and Board discussion. The
performance of the Chairman is reviewed by the other
Directors led by the Senior Independent Director. These
reviews form the basis of the decision on whether or not
Directors are nominated for re-election. These processes
have been carried out in respect of the year under review
and will be conducted on an annual basis.
Based on these reviews the Board believes that it continues
to operate in an efficient and effective manner and has a
balanced range of skills and experience, with each Director
making a significant contribution to the performance of
the Company. Given this, the Board recommends the
re-election of each of the Directors, apart from David
Warnock who will not be standing for re-election.
Relations with Shareholders
The Board regularly monitors the shareholder profile
of the Company and the Company reports formally to
Shareholders twice a year by way of the Annual and Interim
Report. All Shareholders have the opportunity to attend and
vote at Annual General Meetings at which Directors and the
Manager are available to discuss key issues affecting the
Company. TAML also conduct meetings with Shareholders
to discuss issues relating to the Company and give them the
opportunity to meet the Board, ifrequired.
As recommended by the AIC Code, the Company makes
available the proxy votes cast at general meetings. In
addition, the Company aims to give Shareholders at least
twenty working days’ notice of the Annual GeneralMeeting.
Internal Control
The Board is ultimately responsible for the Company’s
system of internal control and for reviewing its effectiveness.
However, such a system is designed to manage rather than
eliminate the risk of failure to achieve business objectives
and can provide only reasonable and not absolute assurance
against material misstatement or loss.
The Board has delegated certain functions. The main
service providers are TAML, the Manager; Juniper
Partners, the AIFM, Company Secretary and Administrator;
J.P.Morgan Chase Bank N.A., the Custodian; J.P. Morgan
Europe Ltd, the Depositary; and Equiniti Limited, the
Registrars. TAML and Juniper Partners provide the Board
with regular reports, which cover investment activities and
financial matters, and with periodic reports on the control
procedures and the system of internal financial control.
The AIFM has established a permanent risk function
to ensure that effective risk management policies and
procedures are in place to monitor compliance with risk
limits. The AIFM has a risk policy which covers the risks
associated with the management of the portfolio, and the
adequacy and effectiveness of this policy is reviewed at
least annually. This review includes the risk management
processes and systems and limits for each risk area.
The risk limits, which are set by the AIFM in conjunction
with the Board, take into account the objectives, strategy
and risk profile of the portfolio. These limits, including
leverage (see note 21 on page 61), are monitored and
exceptions are escalated to the AIFM along with any
remedial measures that are required.
It is a requirement that the Board monitors the Company’s
risk management and internal control systems and, at
least annually, carries out a review of their effectiveness.
The monitoring and review covers all material controls,
including financial, operational, compliance and risk
management. To achieve this the Board has in place
regular review procedures for the identification, evaluation
and management of principal risks to the Company
in accordance with the Financial Reporting Council’s
guidance document “Guidance on Risk Management,
Internal Control and Related Financial and Business
Reporting”. These procedures include oversight of the
Company’s risk management processes and regular
reviews of the Company’s detailed risk matrix. The
Directors believe that these processes, which have been in
place throughout the year under review and up to the date
of approval of the Annual Report, are sufficient to provide
reasonable assurance that the assets are safeguarded and
that material errors and irregularities are either prevented
or detected within a timely period.
STATEMENTOFCORPORATEGOVERNANCE
Proxy Voting and Stewardship
The Financial Reporting Council (‘FRC’) published
an updated ‘UK Stewardship Code’ for institutional
shareholders in October 2020. The purpose of the UK
Stewardship Code is to enhance the quality of engagement
between institutional investors and companies to help
improve long-term returns to shareholders and assist
institutional investors with the efficient exercise of their
governance responsibilities.
The Board delegates to the Manager responsibility for
selecting the portfolio of investments, within investment
guidelines established by the Board after discussion with
the Manager, and for monitoring the performance and
activities of investee companies. The Manager carries out
detailed research on investee companies and possible future
investee companies through internally generated research.
The research on a company comprises an evaluation of
fundamental details such as financial strength, quality of
management, market position and product differentiation,
plus an appraisal of issues relevant to it, including policies
relating to socially responsible investment.
The Company’s voting rights in respect of investee
companies are delegated to the Manager, who votes at
all general meetings of UK companies and reports to the
Board on a regular basis. The Manager considers each case
on its individual merits with the primary aim of the use of
voting rights being to ensure a satisfactory return from
investments. The Manager’s statement of compliance with
the UK Stewardship Code can be found on the Manager’s
website at www.taml.co.uk.
Bribery Act
The Company has a zero tolerance policy towards bribery
and is committed to carrying out business fairly, honestly
and openly. The Manager and the AIFM also adopt a zero
tolerance approach and have policies and procedures in
place to prevent and detect bribery.
Criminal Finances Act 2017
The Company has a zero tolerance policy towards the
criminal facilitation of tax evasion.
Taskforce for Climate Related Financial
Disclosures (‘TCFD’)
The Company notes the TCFD recommendations on
climate-related financial disclosures. The Company is an
investment trust and, as such, it is exempt from the Listing
Rules requirement to report against the TCFD framework.
As detailed in the Strategic Report on page 17, TAML has
committed to implementing the recommendations of
theTCFD.
By Order of the Board
Juniper Partners Limited
Secretary
16 November 2022
Strategic Report Governance Financial Statements Investor Information
Composition of the Audit Committee
The Audit Committee comprises all of the Directors of
the Company. The Board considers that it is appropriate
for all Directors to be members of the Committee owing
to the size and composition of the Board. The Audit
Committee, who consider that they have the requisite skills
and experience to fulfil their roles, met twice in 2022 to
coincide with the interim and annual reporting and audit
cycle. Brigid Sutcliffe is the Chair of the Audit Committee.
Role of the Audit Committee
The main responsibilities of the Audit Committee are:
• monitoring and reviewing the integrity of financial
statements and ensuring in particular that, taken as a
whole, they are fair, balanced and understandable;
• reviewing the Company’s internal financial controls;
• making recommendations to the Board in relation
to the appointment, evaluation and dismissal of the
external Auditors, their remuneration, terms of their
engagement and reviewing their independence,
objectivity and effectiveness;
• reviewing the external Auditors' audit plan and
year-end report;
• developing and implementing policy on the engagement
of the external Auditors to supply non-audit services;
• assessing the need for an internal audit function; and
• reviewing the arrangements in place within the AIFM
and Manager whereby their staff may, in confidence,
raise concerns about possible improprieties in matters
of financial reporting or other matters insofar as they
may affect the Company.
Annual Report and Financial Statements
The Board of Directors is responsible for preparing the
Annual Report and Financial Statements. The Audit
Committee advises the Board on the form and content
of the Annual Report and Financial Statements, any
issues which may arise and any specific areas which
requirejudgement.
In the course of finalising the Annual Report and Financial
Statements for the year ended 30September 2022, the
Committee focussed its discussions on the following
significant issues:
• Valuation and existence of investments: Investments
are valued using stock market prices from independent
price sources. The AIFM carries out testing of the
prices and regularly reconciles the portfolio holdings to
confirmations from the Company’s custodian.
• Accuracy, occurrence and completeness of dividend
income: Income received is accounted for in line with
the Company’ accounting policy (as set out on page47)
and is reviewed by the Board at each Board meeting,
including allocation of special dividends.
All of the above matters were satisfactorily addressed
through consideration of reports provided by and
discussed with the AIFM and the Manager.
The Board has asked the Audit Committee to advise it
whether the Annual Report and Financial Statements,
taken as a whole, are fair, balanced and understandable
and provide the information necessary for Shareholders to
assess the Company’s position and performance, business
model and strategy. The Audit Committee has reviewed
the Annual Report and Financial Statements and is satisfied
that, taken as a whole, they meet these requirements. In
reaching this conclusion, the Committee has assumed that
the reader of the Annual Report and Financial Statements
would have a reasonable level of knowledge of the
investment industry in general and of investment trusts
inparticular.
Auditors
PricewaterhouseCoopers LLP (‘PwC’) were appointed
as the Company’s external Auditors during the year to
30September 2016, following a tender process in 2015. The
current audit partner, Gillian Alexander, is in the second
year of her appointment.
The Committee places great importance on ensuring high
standards of both quality and effectiveness in the external
audit process. Audit quality is reviewed throughout the
year with a focus on: strong audit governance; the audit
firm’s methodology and its effective application to the
Company; a robust challenge by the Auditors on any area
which requires management judgement; and the quality of
the senior members of the team.
The effectiveness of the audit has also been assessed by a
number of measures including, but not limited to:
• reviewing the quality and scope of the audit planning;
• monitoring the independence and transparency of the
audit; and
• seeking feedback from the Auditors on any external or
internal quality reviews of the audit.
AUDITCOMMITTEEREPORT
At the end of the audit for the current financial year,
the Committee used a questionnaire to evaluate the
performance of PwC. The Committee also reviewed the
independence of PwC. In completing this review, the
Committee took into account the standing, experience and
tenure of the audit partner, the nature and level of service
provided and confirmation that PwC have complied with
relevant UK independence guidelines. No significant issues
were identified and the Committee ratified the continued
appointment of PwC.
Brigid Sutcliffe
Chair of the Audit Committee
16 November 2022
Strategic Report Governance Financial Statements Investor Information
The Directors are responsible for preparing the Annual
Report and Financial Statements in accordance with
applicable law and regulation.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the
Directors have prepared the financial statements in
accordance with UK-adopted international accounting
standards.
Under company law, the Directors must not approve the
financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Company
and of the profit or loss of the Company for that period.
In preparing the financial statements, the Directors are
required to:
• select suitable accounting policies and then apply
themconsistently;
• state whether applicable UK-adopted international
accounting standards have been followed, subject to
any material departures disclosed and explained in the
financial statements;
• make judgements and accounting estimates that are
reasonable and prudent; and
• prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Company will continue in business.
The Directors consider that the Annual Report and
Financial Statements, taken as a whole, are fair, balanced
and understandable, and provide the information necessary
for Shareholders to assess the Company’s position and
performance, business model and strategy. In reaching this
conclusion the Directors have assumed that the reader of
the Annual Report and Financial Statements would have a
reasonable level of knowledge of the investment industry
and of investment trusts in particular.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Company
and enable them to ensure that its financial statements
comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Company
and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
Under applicable law and regulations, the Directors
are also responsible for preparing a Strategic Report, a
Directors’ Report, a Corporate Governance Statement and
a Directors’ Remuneration Report that comply with that law
and those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information
included on the Company’s website. Legislation in the UK
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Directors’ confirmations
Each of the Directors in office at 16 November 2022, whose
names and functions are listed in ‘Your Board’ on page 22,
confirm that, to the best of their knowledge:
• the Company’s financial statements, which have been
prepared in accordance with UK-adopted international
accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit of the
Company; and
• the Strategic Report and the Directors’ Report include
a fair review of the development and performance
of the business and the position of the Company,
together with a description of the principal risks and
uncertainties that itfaces.
For and on behalf of Troy Income & Growth Trust plc
Brigid Sutcliffe
Chair of the Audit Committee
16 November 2022
STATEMENTOFDIRECTORS'RESPONSIBILITIES
Chairman’s Statement
The following report has been prepared by the Board
in accordance with the requirements of section 421 of
the Companies Act 2006. An ordinary resolution for the
approval of this report, the Annual Report on Remuneration,
will be put to Shareholders at the forthcoming AGM.
The Remuneration Policy set out below was approved by
Shareholders at the AGM held in 2021, and the policy is
subject to a vote at least every three years.
The Company’s independent Auditors are required by law
to audit certain of the disclosures contained in the Directors’
Remuneration Report. Where disclosures have been audited,
they are indicated as such. The independent Auditors’
opinion is included in the report on pages 37 to 42.
No Director has a service contract with the Company,
although each has a letter of appointment confirming his or
her appointment and setting out his or her remuneration as
at the date of the letter. These letters contain no provision
regarding notice period, nor do they make provision for
compensation payable upon early termination of the
Director’s appointment.
Remuneration Policy
The Board as a whole reviews and sets the rates of
remuneration payable to each Director with effect from
the annual review date of 1April each year. The Board is
aware that these should be comparable to market rates
to attract and retain Directors of the appropriate calibre
and reflect the time spent and the responsibilities borne
by Directors in exercising the stewardship required of the
Company. In setting these rates, the Board acts principally
on advice from the Company Secretary, who monitors rates
of Directors’ remuneration in companies of comparable
size and activities and carries out other relevant research
requested by the Board. Any Director who performs
services which in the opinion of the Board go beyond
the ordinary duties of a Director may be paid such extra
remuneration as the Board may in its discretion decide. No
separate remuneration committee has been constituted
in view of the level of work delegated to the Manager and
Company Secretary.
The Articles of Association of the Company set a maximum
aggregate limit within a financial year for Non-Executive
Directors’ remuneration. The limit was approved by
Shareholders in 2006 at £70,000 per annum, increased
annually in line with the change in the Retail Price Index
and pro-rated up or down should the number of Directors
change either temporarily or permanently. Since 2006, the
number of Directors has increased from three to four and,
taking into the account the increase in Retail Price Index, the
limit for the year ended 30September 2022 was£149,000.
The Board has not received any views from the
Company’sShareholders in respect of the levels of
Directors’ remuneration.
The Board considers that the present policy of remunerating
Directors exclusively by fixed fees in cash is appropriate and
adequate for the Company in its present and foreseeable
circumstances and there are no plans to introduce additional
or alternative remuneration schemes.
The new Directors’ remuneration rates, effective from
1April 2022, are as follows:
From
1April 2022
£
From
1April 2021
£
Chairman 37,000 35,830
Audit Committee Chair 29,650 28,700
Other Directors 25,450 24,600
Total Shareholder Return
The chart shown below illustrates the total shareholder return for a holding in the Company’s shares as compared to the
total return on the FTSE All-Share Index for the ten year period to 30 September 2022. This index is deemed to be the most
appropriate one against which to measure the Company’s long-term performance.
SharePrice Index
80
100
120
140
160
180
200
220
240
30/09/2230/09/2130/09/2030/09/1930/09/1830/09/1730/09/1630/09/1530/09/1430/09/1330/09/12
Share Price Total Return
FTSE All-Share Index Total Return
DIRECTORS’REMUNERATIONREPORT
Strategic Report Governance Financial Statements Investor Information
Annual Report on Remuneration (Audited Information)
The total fees payable to each Director who served during the financial year under review and the previous financial year of
the Company are shown in the following table:
2022
£
2021
£
2022
% change
2021
% change
David Warnock 36,415 35,665 2.1% 1.2%
Brigid Sutcliffe (appointed 1 August 2021) 27,125 4,100 N /A* N /A*
Roger White 25,025 24,475 2.2% 1.2%
David Garman 25,025 24,475 2.2% 1.2%
Jann Brown (retired 19 January 2022) 9,759 28,550 N /A* 1.2%
123,349 117,265 5.2% 4.9%
* Change not applicable as Director not in office for full current or prior year.
There is no performance related remuneration scheme such as an annual bonus, or a long-term incentive scheme such as the
granting of share options. The Company does not operate a pension scheme for the Directors and no Director received any
form of remuneration during the financial year under review or the preceding financial year other than the fees shown above.
Relative Importance of Spend on Pay
As the Company has no employees, the Directors do not consider it appropriate to present a table comparing remuneration
paid to employees with distribution to Shareholders. However, for ease of reference, total fees paid to Directors are shown in
the table above, dividends paid to Shareholders are set out in note 7 on page 51 and share buy backs are detailed in note 10 on
page 54.
Directors’ Interests (Audited Information)
The Directors at 30September 2022 had no other interest other than those interests, all of which are beneficial interests,
shown below in the share capital of the Company.
At 30September 2022
Ordinary shares
At 30September 2021
Ordinary shares
David Warnock 670,272 670,272
Brigid Sutcliffe (appointed 1 August 2021) 50,000 –
Roger White 300,000 300,000
David Garman 250,000 100,000
Jann Brown (retired 19 January 2022) N/A 87,563
There have been no changes in the interests of the Directors in the share capital during the period 1 October 2022 to
16November 2022.
There is no requirement under the Directors’ letters of appointment for them to own shares in the Company.
Statement of Voting at Annual General Meeting
The proxy votes cast at the last relevant Annual General Meetings were as follows:
In favour Against
Directors’ Remuneration Report (2022 AGM) 99.4% 0.6%
Directors’ Remuneration Policy (2021 AGM) 99.5% 0.5%
Approved by the Board of Directors on 16 November 2022 and signed on its behalf by:
David Warnock
Chairman
DIRECTORS’REMUNERATIONREPORT
Report on the audit of the financial statements
Opinion
In our opinion, Troy Income & Growth Trust plc’s financial statements:
• give a true and fair view of the state of the Company’s affairs as at 30 September 2022 and of its loss and cash flows for
the year then ended;
• have been properly prepared in accordance with UK-adopted international accounting standards; 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 and Financial Statements (the “Annual Report”),
which comprise: the Statement of Financial Position as at 30 September 2022; the Statement of Comprehensive Income,
the Statement of Changes in Equity and the Cash Flow Statement for the year then ended; and the notes to the financial
statements, which include a description of the significant accounting policies.
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 Troy Asset Management Limited (the “Manager”) to
manage its assets;
• We conducted our audit of the financial statements using information from Juniper Partners Limited (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 and the industry in which the Company operates; and
• 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 reports obtained from the Administrator.
Key audit matters
• Valuation and existence of investments.
• Accuracy, occurrence and completeness of dividend income.
Materiality
• Overall materiality: £1.93m (2021: £2.49m) based on 1% of net assets.
• Performance materiality: £1.45m (2021: £1.86m).
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.
INDEPENDENTAUDITORS’REPORT
to the Members of Troy Income & Growth Trust plc
Strategic Report Governance Financial Statements Investor Information
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
Refer to the Audit Committee Report, Note 1 Accounting
policies and Note 9 Investments held at fair value through
profit or loss.
The investment portfolio at year-end consisted of listed equity
investments valued at £194.4 million (2021: £244.5 million).
We focused on the valuation and existence of investments
because investments represent the principal element of the
net asset value as disclosed in the Statement of Financial
Position in the financial statements.
We tested the valuation of the investments by agreeing the
prices used in the valuation to independent third-party sources
for all investments.
We tested the existence of the investment portfolio by
agreeing investment holdings to an independently obtained
custodian confirmation.
No material differences were identified.
Accuracy, occurrence and completeness of dividend income
Refer to the Audit Committee Report, Note 1 Accounting
policies, Note 2 Revenue and Note 9 Investments held at fair
value through profit or loss.
We focused on the accuracy, occurrence and completeness
of dividend income as incomplete or inaccurate income
could have a material impact on the Company’s net asset
value and dividend cover. We also focused on the accounting
policy for income recognition and its presentation in the
Statement of Comprehensive Income as set out in the
requirements of The Association of Investment Companies
Statement of Recommended Practice (the “AIC SORP”)
as incorrect application could indicate a misstatement in
income recognition.
We tested the accuracy of dividend receipts by agreeing the
dividend rates from investments to independent market data.
To test for occurrence, we confirmed that all dividends
recorded had occurred in the market and traced a sample of
cash payments to bank statements.
To test for completeness, we tested that the appropriate
dividends had been received in the year by reference
to independent data of dividends declared for all listed
investments during the year.
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 confirming reasons behind dividend
distributions.
No material differences were identified.
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.
INDEPENDENTAUDITORS’REPORT
to the Members of Troy Income & Growth Trust plc
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
£1.93m (2021: £2.49m).
How we determined it
1% of net assets
Rationale for benchmark applied
We have applied this benchmark, a generally accepted auditing practice for
investment trust audits, in the absence of indicators that an alternative benchmark
would be appropriate and because we believe this provides an appropriate and
consistent year-on-year basis for our audit.
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% (2021: 75%) of overall materiality, amounting to £1.45m
(2021: £1.86m) 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 £96,950
(2021: £124,000) 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, including those
presented by COVID-19, rising inflation, Russia’s invasion of Ukraine, and the subsequent economic uncertainty;
• 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, their assessment of liquidity as well as their review of the operational resilience of the
Company and oversight of key third-party service providers;
• 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.
Strategic Report Governance Financial Statements Investor Information
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 September 2022 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 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
INDEPENDENTAUDITORS’REPORT
to the Members of Troy Income & Growth Trust plc
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:
• 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, 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 breaches of section 1158 of 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 inappropriate journal entries to increase revenue (investment
income and capital gains) or to increase net asset value. Audit procedures performed by the engagement team included:
• holding discussions with the Administrator, the Manager and the Audit Committee, including consideration of known or
suspected instances of non-compliance with laws and regulation and fraud;
• reviewing relevant committee meeting minutes, including those of the Board and Audit Committee;
• recalculation of numerical aspects of the eligibility conditions of section 1158 of the Corporation Tax Act 2010;
• 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.
Strategic Report Governance Financial Statements Investor Information
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.
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 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 members on 19 January 2016 to audit
the financial statements for the year ended 30 September 2016 and subsequent financial periods. The period of total
uninterrupted engagement is 7 years, covering the years ended 30 September 2016 to 30 September 2022.
Gillian Alexander (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Edinburgh
16 November 2022
INDEPENDENTAUDITORS’REPORT
to the Members of Troy Income & Growth Trust plc
Year ended 30September 2022 Year ended 30September 2021
Note
Revenue
return
£’000
Capital
return
£’000
Tot al
£’000
Revenue
return
£’000
Capital
return
£’000
Tot a l
£’000
Capital
(Losses)/gains on investments held at
fair value
9 – (25,889) (25,889) – 19,651 19,651
Net foreign currency gains/(losses) – 52 52 – (11) (11)
Revenue 2
Income from listed investments 6,666 – 6,666 6,969 – 6,969
6,666 (25,837) (19,171) 6,969 19,640 26,609
Expenses
Investment management fees 3 (465) (864) (1,329) (564) (1,047) (1,611)
Other administrative expenses 4 (686) – (686) (649) – (649)
Finance costs of borrowing 5 (19) (35) (54) (10) (18) (28)
Profit/(loss) before taxation 5,496 (26,736) (21,240) 5,746 18,575 24,321
Taxation 6 (109) – (109) (114) – (114)
Total comprehensive income/(expense) 5,387 (26,736) (21,349) 5,632 18,575 24,207
Earnings per Ordinary share (pence) 8 1.77 (8.80) (7.03) 1.68 5.54 7.22
The total column of this statement represents the Statement of Comprehensive Income, prepared in accordance with UK-
adopted international accounting standards. The supplementary revenue return and capital return columns are both prepared
as explained in the accounting policies on page47. All items in the above statement derive from continuing operations.
No operations were acquired or discontinued during the year.
The Directors are of the opinion that the Company is engaged in a single segment of business, being investment in
predominantly UK equities.
The accompanying notes are an integral part of these financial statements.
STATEMENTOFCOMPREHENSIVEINCOME
Strategic Report Governance Financial Statements Investor Information
Note
As at
30September
2022
£’000
As at
30September
2021
£’000
Non-current assets
Investments in ordinary shares 194,448 244,514
Investments held at fair value through profit or loss 9 194,448 244,514
Current assets
Accrued income and prepayments 890 968
Trade and other receivables 3,665 162
Cash and cash equivalents 4,710 3,951
Total current assets 9,265 5,081
Total assets 203,713 249,595
Current liabilities
Bank loan (5,000) –
Trade and other payables (5,398) (974)
Total current liabilities (10,398) (974)
Net assets 193,315 248,621
Issued capital and reserves attributable to equity holders
Called-up share capital 10 86,878 86,878
Share premium account 11 53,851 53,909
Special reserves 12 9,684 38,890
Capital reserve – unrealised 13 18,854 54,428
Capital reserve – realised 13 17,152 8,424
Revenue reserve 14 6,896 6,092
Total equity 193,315 248,621
Net asset value per Ordinary share (pence) 8 68.48 77.72
The financial statements on pages43 to 61 were approved by the Board of Directors on 16November 2022 and were signed on
its behalf by:
David Warnock
Chairman
The accompanying notes are an integral part of these financial statements.
STATEMENTOFFINANCIALPOSITION
For year ended 30September 2022
Called-up
share
capital
£’000
Share
premium
account
£’000
Special
reserves
£’000
Capital
reserve –
unrealised
£’000
Capital
reserve –
realised
£’000
Revenue
reserve
£’000
Tot a l
equity
£’000
Balance at 1October 2021 86,878 53,909 38,890 54,428 8,424 6,092 248,621
(Loss)/profit and total comprehensive
income/(expense) for the year
– – – (35,574) 8,838 5,387 (21,349)
Equity dividends (note 7) – – (1,444) – – (4,583) (6,027)
Shares bought back into treasury – – (27,872) – – – (27,872)
Shares issued from treasury – – – – – – –
Discount control costs – (58) – – – – (58)
Transfer from capital reserves – – 110 – (110) – –
Balance at 30September 2022 86,878 53,851 9,684 18,854 17,152 6,896 193,315
Balance at 1October 2020 86,878 53,960 60,366 41,678 2,599 6,205 251,686
Profit and total comprehensive
income for the year
– – – 12,750 5,825 5,632 24,207
Equity dividends (note 7) – – (1,598) – – (5,745) (7,343)
Shares bought back into treasury – – (20,315) – – – (20,315)
Shares issued from treasury – – 437 – – – 437
Discount control costs – (51) – – – – (51)
Balance at 30September 2021 86,878 53,909 38,890 54,428 8,424 6,092 248,621
The revenue reserve, special reserves and capital reserve – realised are distributable. The full amount of each of these
reserves is available for distribution.
The capital reserve has been split between realised and unrealised on the Statement of Financial Position and the Statement
of Changes in Equity to distinguish between the element of the reserve that is distributable (realised) and the element of the
reserve that is not distributable (unrealised).
The accompanying notes are an integral part of the financial statements.
STATEMENTOFCHANGESINEQUITY
Strategic Report Governance Financial Statements Investor Information
Year ended
30September 2022
Year ended
30September 2021
£’000 £’000 £’000 £’000
Cash flows from operating activities
Investment income received 6,876 6,858
Administrative expenses paid (2,140) (2,264)
Cash generated from operations (note 19(a)) 4,736 4,594
Finance costs paid (60) (28)
Taxation (179) (116)
Net cash inflows from operating activities 4,497 4,450
Cash flows from investing activities
Purchases of investments (51,123) (31,177)
Sales of investments 73,668 48,995
Capital distributions received from investee companies 113 43
Net cash inflows from investing activities 22,658 17,861
Net cash inflows before financing 27,155 22,311
Cash flows from financing activities
Proceeds from loan 5,000 –
Proceeds of issue of shares – 437
Cost of share buy backs (25,365) (19,948)
Dividends paid (6,027) (7,343)
Costs incurred on issue of shares (56) (51)
Net cash outflows from financing activities (26,448) (26,905)
Net increase/(decrease) in cash and short term deposits (note 19(b)) 707 (4,594)
Cash and cash equivalents at the start of the year 3,951 8,556
Effect of foreign exchange rate changes 52 (11)
Cash and cash equivalents at the end of the year 4,710 3,951
The accompanying notes are an integral part of these financial statements.
CASHFLOWSTATEMENT
1. Accounting Policies
(a) Basis of accounting
The financial statements of the Company have been prepared in accordance with UK-adopted international accounting standards.
The financial statements have been prepared on a going concern basis and under the historical cost convention, as
modified by the revaluation of financial assets and financial liabilities held at fair value through profit and loss.
The financial statements are presented in sterling which is regarded as the functional currency and all values are rounded
to the nearest thousand pounds (£’000) except where otherwise indicated.
The principal accounting policies adopted are set out below. These policies have been applied consistently throughout the
current and prior year.
Where presentational guidance set out in the Statement of Recommended Practice (‘SORP’) ‘Financial Statements of
Investment Trust Companies and Venture Capital Trusts’ (issued in July 2022) is consistent with the requirements of IFRS, the
Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.
In order better to reflect the activities of an investment trust company and in accordance with guidance issued by the
AIC, supplementary information which analyses the Statement of Comprehensive Income between items of a revenue
and capital nature has been presented alongside the Statement of Comprehensive Income. Additionally, the net revenue
of the Company is the measure the Directors believe appropriate in assessing the Company’s compliance with certain
requirements set out in sections 1158 and 1159 of the Corporation Tax Act 2010.
The Directors confirm that none of the following new standards or amendments to existing standards, effective for
accounting periods beginning on or after 1 January 2021, have materially affected the Company’s financial statements:
• Amendments to IAS 39, IFRS 4, IFRS 7, IFRS 9 and IFRS 16, regarding Interest Rate Benchmark Reform.
• Amendments to IFRS 4 regarding extension of IFRS 9 deferral.
The Directors do not anticipate the adoption of the following standards or amendments to existing standards, effective
for accounting periods beginning on or after 1 January 2022 and thereafter, will have a material effect on the Company’s
financial statements:
• Amendments to IAS 1, regarding classification of liabilities and disclosure of accounting policies.
• Amendments to IAS 8, regarding definition of accounting estimates.
• Amendments to IAS 12, regarding deferred tax.
• Amendments to IAS 16, regarding property, plant and equipment.
• Amendments to IAS 37, regarding costs of fulfilling a contract.
• Amendments to IFRS 3, regarding reference to the Conceptual Framework.
• Amendments to IFRS 17, insurance contracts.
(b) Investments – Securities held at Fair Value
Investments are recognised or derecognised on the trade date where a purchase or sale is under a contract whose terms
require delivery within the timeframe established by the market concerned, and are initially measured at fair value.
As the Company’s business is investing in financial assets with a view to profiting from their total return in the form of
interest, dividends or increases in fair value, listed equities and fixed interest securities are designated as fair value
through profit or loss on initial recognition.
NOTESTOTHEFINANCIALSTATEMENTS
Strategic Report Governance Financial Statements Investor Information
All investments designated upon initial recognition as held at fair value through profit or loss are measured at subsequent
reporting dates at their fair value, which is the bid price as at close of business on the Balance Sheet date.
Gains and losses arising from the changes in fair value are included in net profit or loss for the period as a capital item.
Expenses which are incidental to the acquisition and disposal of investments are treated as capital costs.
(c) Income
Dividend income from equity investments including preference shares which have a discretionary dividend is recognised
when the Shareholders’ right to receive payment has been established, normally the ex-dividend date. Underwriting
commission is taken to revenue on a receipts basis.
(d) Expenses
All expenses are accounted for on an accruals basis. In respect of the analysis between revenue and capital items
presented within the Statement of Comprehensive Income, all expenses have been presented as revenue items
except those where a connection with the maintenance or enhancement of the value of the investments held can be
demonstrated. The investment management fee and finance costs have been allocated 35% to revenue and 65% to capital.
(e) Bank borrowings
Interest-bearing bank loans and overdrafts are initially recognised at cost, being the fair value of the consideration
received, net of any issue expenses. After initial recognition, all interest bearing loans and overdrafts are subsequently
measured at amortised cost using the effective interest rate method. Amortised cost is calculated by taking into account
any arrangement costs and any discount or premium on settlement.
(f) Taxation
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit because it excludes
items of income or expense that are taxable or deductible in other years and it further excludes items that are never
taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have been enacted or
substantively enacted by the Balance Sheet date.
The allocation method used to calculate tax relief on expenses presented against capital returns is the ‘marginal basis’.
Under this basis if taxable income is not capable of being offset entirely by expenses presented in revenue then unutilised
expenses arising in capital will be set against income with an amount based on current tax rates charged against income
and credited to capital.
Deferred tax is provided in full on temporary differences which result in an obligation at the Balance Sheet date to pay
more tax, or a right to pay less tax, at a future date at rates expected to apply when they crystallise, based on current tax
rates and law. Temporary differences arise from the inclusion of items of income and expenditure in taxation computations
in periods different from those in which they are included in financial statements. Deferred tax assets are recognised to
the extent that it is regarded as more likely than not that they will be recovered.
(g) Foreign currency
Transactions denominated in foreign currencies are recorded at the actual exchange rate as at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the year end are reported at fair value by using the
rate of exchange prevailing at the year end. The currencies to which the Company was exposed were Swiss francs and
USdollars.
Forward currency contracts are classified as investments held at fair value through profit or loss and are reported at fair
value at the year end by using the forward rate of exchange prevailing at the year end.
Any gain or loss arising from a movement in exchange rates subsequent to the date of the transaction is included as an
exchange gain or loss in the Statement of Comprehensive Income as a revenue or capital item depending on the nature of
the gain or loss.
(h) Cash and cash equivalents
Cash comprises cash in hand and demand deposits. Cash equivalents are short-term, highly liquid investments within three
months of maturity that are readily convertible to known amounts of cash and which are subject to an insignificant risk of
changes in value.
NOTESTOTHEFINANCIALSTATEMENTS
(i) Use of judgements and estimates
The preparation of financial statements requires the Company to make judgements, estimates and assumptions that affect
items reported in the Statement of Financial Position and the Statement of Comprehensive Income and the disclosure
of contingent assets and liabilities at the date of the financial statements. Although these judgements and estimates are
based on the Directors’ best knowledge of current facts, circumstances and, to some extent, future events and actions,
the Company’s actual results may ultimately differ from those estimates. The Directors used their judgement in making the
decision whether to treat special dividends as revenue or capital income. There were two special dividends during the year
which were judged to be of a capital nature. Both of these special dividends were received from Admiral Group. There
were no other accounting judgements or estimates in the current year.
(j) Issue and repurchase of Ordinary shares and associated costs
The proceeds from the issue of new Ordinary shares (including those relating to the sale of shares out of treasury) and the
aggregate cost of repurchasing Ordinary shares (including those to be held in treasury) are taken directly to equity and
dealt with in the Statement of Changes in Equity. Issue costs incurred in respect of shares sold out of treasury are offset
against proceeds received and dealt with in the special reserves. Share issues and repurchase transactions are accounted
for on a trade date basis.
2. Revenue
2022
£’000
2021
£’000
Income from listed investments
UK dividend income
5,783 6,168
Income from overseas investments
883 801
6,666 6,969
The Company received capital special dividends of £113,000 from Admiral Group in the year ended 30 September 2022 (2021
– £43,000), as shown in note 9.
3. Investment management fees
Troy Asset Management Limited (‘TAML’) was appointed as the Manager on 31 July 2009. From 1 January 2022, the investment
management fee was paid at an annual rate of 0.55% of the Company’s net assets up to £250 million and 0.50% on the
Company's net assets over £250 million. Prior to this date, the fee was paid at an annual rate of 0.65% of the Company's net
assets. The fee is calculated monthly and paid quarterly. Juniper Partners Limited was appointed as the Company’s AIFM with
effect on 22 July 2014. The AIFM fee is 0.015% of the Company’s net assets per annum, subject to a minimum fee of £62,000
per annum. From the same date, the portfolio management activities were delegated to TAML. The commercial terms of
the delegation agreement are the same as the previous investment management agreement except that the investment
management fee paid to TAML is reduced by the fees incurred for the services of the AIFM. The fee is allocated 35% to
revenue and 65% to capital.
2022 2021
Revenue
return
£’000
Capital
return
£’000
Tot al
£’000
Revenue
return
£’000
Capital
return
£’000
Tot a l
£’000
Investment management fees paid to TAML 444 823 1,267 543 1,008 1,551
AIFM fee paid to Juniper Partners 21 41 62 21 39 60
Total investment management fees 465 864 1,329 564 1,047 1,611
Strategic Report Governance Financial Statements Investor Information
4. Other administrative expenses
2022
£’000
2021
£’000
Directors’ fees 123 117
Secretarial fees 193 178
Fees payable to auditors
– fees payable to the Company’s auditors for the audit of the annual financial statements† 43 41
Other management expenses 327 313
686 649
† Includes irrecoverable VAT of £7,000 (2021 – £7,000).
The Company had no employees during the year (2021 – nil). No pension contributions were paid for Directors (2021 – £nil).
Further details on Directors’ remuneration can be found in the Directors’ Remuneration Report on pages35 and 36.
5. Finance costs of borrowing
2022 2021
Revenue
return
£’000
Capital
return
£’000
Tot al
£’000
Revenue
return
£’000
Capital
return
£’000
Tot a l
£’000
Bank loan
19 35
54
10 18
28
The Company has a £15 million (2021: nil) revolving loan facility in place with The Royal Bank of Scotland International Limited
which expires in June 2025. At 30 September 2022 £5 million had been drawn down at a rate of 1.2% plus SONIA until
18January 2023 (2021: nil). The terms of the revolving loan, including interest rate, are agreed at each draw down. The facility
can be cancelled at any time without cost to the Company.
Finance costs relate to interest charged on the bank loan from the revolving facility. Finance costs in 2021 relate to the
revolving credit facility with ING Luxembourg S.A. which expired on 24 April 2021.
6. Taxation
2022 2021
Revenue
return
£’000
Capital
return
£’000
Tot al
£’000
Revenue
return
£’000
Capital
return
£’000
Tot a l
£’000
Irrecoverable overseas tax 109 – 109 114 – 114
NOTESTOTHEFINANCIALSTATEMENTS
The following table is a reconciliation of the total taxation charge to the charges or credits which would arise if all ordinary
activities were taxed at the standard UK corporation tax rate of 19.0% (2021 – 19.0%):
2022 2021
Revenue
return
£’000
Capital
return
£’000
Tot al
£’000
Revenue
return
£’000
Capital
return
£’000
Tot a l
£’000
Profit/(loss) on ordinary activities
before taxation
5,496 (26,736) (21,240) 5,746 18,575 24,321
Taxation of return on ordinary activities at
the standard rate of corporation tax
1,045 (5,080) (4,035) 1,092 3,529 4,621
Effects of:
UK dividend income not liable to further tax (972) – (972) (1,071) – (1,071)
Overseas dividend income not liable
to further tax
(168) – (168) (152) – (152)
Capital losses/(profits) not taxable – 4,909 4,909 – (3,732) (3,732)
Excess management expenses and
loan relationships
95 171 266 131 203 334
Overseas withholding tax suffered 109 – 109 114 – 114
Total taxation charge for the year 109 – 109 114 – 114
At 30September 2022, the Company had surplus management expenses and unutilised non-trade relationship deficits of
£16,831,000 (2021 – £15,431,000) with a tax value of £3,198,000 (2021 – £2,932,000) to carry forward. No deferred tax asset has
been recognised in the current or prior year because it is considered too uncertain that there will be suitable taxable profits from
which the future reversal of the deferred tax asset could be deducted.
On 14 October 2022 it was announced that the UK government planned to increase Corporation Tax from 19% to 25% for
financial years beginning on or after 1April 2023. At the reporting date, this increase has not been substantively enacted. As
no deferred tax asset is recognised in respect of unrelieved losses, the potential impact of this change is not expected to be
material.
7. Dividends on equity shares
2022
£’000
2021
£’000
Paid from revenue:
Fourth interim dividend for the year ended 30September 2020 of 0.695p – 2,409
Fourth interim dividend for the year ended 30September 2021 of 0.49p 1,564 –
First and second interim dividends for the year ended 30September 2022 totalling 0.98p
(2021 – 0.98p) per share 3,019 3,336
Total paid from revenue 4,583 5,745
Paid from distributable capital reserves:
Third interim dividend for year ended 30September 2022 of 0.49p (2021 – 0.49p) 1,444 1,598
Tot a l 6,027 7,343
The fourth interim dividend of 0.50p per share, declared on 15September 2022 and paid on 21October 2022, has not been
included as a liability in these financial statements.
Strategic Report Governance Financial Statements Investor Information
We also set out below the total dividend payable in respect of the financial year, which is the basis on which the requirements
of Section 1159 of the Corporation Tax Act 2010 are considered.
2022
£’000
2021
£’000
Paid and payable from revenue:
First and second interim dividends for the year ended 30September 2022 totalling 0.98p
(2021 – 0.98p) per share 3,019 3,336
Fourth interim dividend for the year ended 30September 2022 of 0.50p
(2021 – 0.49p) per share 1,411 1,565
Total paid and payable from revenue 4,430 4,901
Paid from distributable capital reserves:
Third interim dividend for year ended 30September 2022 of 0.49p (2021 – 0.49p) 1,444 1,598
Tot a l 5,874 6,499
The dividend per share information is as follows:
Rate per share xd date Record date Payment date
First interim dividend 0.49p 30 December 2021 31 December 2021 21 January 2022
Second interim dividend
0.49p
7 April 2022 8 April 2022
29 April 2022
Third interim dividend
0.49p 30 June 2022
1 July 2022
22 July 2022
Fourth interim dividend 0.50p 6 October 2022 7 October 2022 21 October 2022
2021/22 1.97p
First interim dividend 0.49p 31 December 2020 4 January 2021 22 January 2021
Second interim dividend 0.49p 1 April 2021 6 April 2021 23 April 2021
Third interim dividend 0.49p 1 July 2021 2 July 2021 23 July 2021
Fourth interim dividend 0.49p 7 October 2021 8 October 2021 22 October 2021
2020/21
1.96p
8. Return and net asset value per share
2022
£’000
2021
£’000
The returns per share are based on the following figures:
Revenue return 5,387 5,632
Capital return (26,736) 18,575
Tot a l (21,349) 24,207
Weighted average number of Ordinary shares 303,874,343 335,250,510
The net asset value per share is based on net assets attributable to Shareholders of £193,315,000 (2021 – £248,621,000) and on
282,284,487 (2021 – 319,888,987) Ordinary shares in issue at the year end.
NOTESTOTHEFINANCIALSTATEMENTS
9. Investments held at fair value through profit or loss
2022
£’000
2021
£’000
Listed on recognised stock exchanges:
United Kingdom 167,033 203,387
Overseas 27,415 41,127
Total investments 194,448 244,514
2022
£’000
2021
£’000
Opening book cost 190,086 200,638
Opening fair value gains on investments held 54,428 41,678
Opening fair value 244,514 242,316
Purchases 53,108 31,274
Sales – proceeds (77,172) (48,684)
Sales – net gains on sales 9,572 6,858
Movement in fair value during the year (35,574) 12,750
Closing fair value 194,448 244,514
Closing book cost 175,594 190,086
Closing fair value gains on investments held 18,854 54,428
Closing fair value 194,448 244,514
All investments are categorised as held at fair value through profit or loss, and were designated as such upon initial recognition.
For an analysis of investments see pages12 to 13. The total transaction costs on purchases was £243,000 (2021 – £132,000) and
on sales £29,000 (2021 – £17,000).
(Losses)/gains on investments held at fair value
2022
£’000
2021
£’000
Net gains on sales 9,572 6,858
Movement in fair value in investment holdings (35,574) 12,750
Capital distributions 113 43
(25,889) 19,651
Strategic Report Governance Financial Statements Investor Information
10. Called-up share capital
Ordinaryshares
of 25p each
Number £’000
Allotted, called up and fully paid
At 30September 2022 282,284,487 70,571
Held in treasury 65,227,500 16,307
347,511,987 86,878
Allotted, called up and fully paid
At 30September 2021 319,888,987 79,972
Held in treasury 27,623,000 6,906
347,511,987 86,878
During the years to 30 September 2022 and 30 September 2021, no new Ordinary shares of 25p each were issued.
During the year to 30 September 2022 there were 37,604,500 Ordinary shares of 25p each repurchased by the Company (being
11.8% of the Company’s issued share capital at the start of the year), at a total cost of £27,872,000 and placed in treasury.
During the year to 30 September 2021 there were 27,364,000 Ordinary shares of 25p each repurchased by the Company
(being 7.9% of the Company’s issued share capital at the start of the year), at a total cost of £20,315,000 and placed in treasury.
During the year to 30 September 2022 no shares were re-issued from treasury.
During the year to 30 September 2021 600,000 shares were re-issued from treasury for proceeds of £437,000.
No shares were purchased for cancellation during the year (2021 – nil) and at the year-end 65,227,500 shares were held in
treasury (2021 – 27,623,000).
The costs of the operation of the discount control mechanism of £58,000 (2021 – £51,000) have been charged against the
premium on shares issued.
11. Share premium account
2022
£’000
2021
£’000
At 1October 53,909 53,960
Discount control costs (note 10) (58) (51)
At 30September 53,851 53,909
NOTESTOTHEFINANCIALSTATEMENTS
12. Special reserves
Distributable
Capital
Reserve
2022
£’000
Special
Reserve
2022
£’000
Tot al
Special
Reserves
2022
£’000
Tot a l
Special
Reserves
2021
£’000
At 1October 1,334 37,556 38,890 60,366
Shares bought back during the year into treasury – (27,872) (27,872) (20,315)
Dividends (1,444) – (1,444) (1,598)
Shares issued during the year from treasury – – – 437
Transfer from Capital Reserve 110 – 110 –
At 30September – 9,684 9,684 38,890
On 29August 2014, the Court of Session in Scotland approved the cancellation of the Share Premium Account and the
creation of a Distributable Capital Reserve from the balance of the Share Premium Account.
The Special Reserve was created on 1October 2010 by a similar court process.
The purpose of the Distributable Capital Reserve and the Special Reserve are to fund market purchases by the Company of
its own shares, to make bonus issues of shares and to make distributions in accordance with the Companies Act 2006.
13. Capital reserve
2022
£’000
2021
£’000
Capital reserve – realised
At 1October 8,424 2,599
Net gains on sales of investments during the year 9,572 6,858
Investment management fee (864) (1,047)
Net foreign currency gains/(losses) 52 (11)
Finance costs of borrowing (35) (18)
Capital distributions received 113 43
Transfer to Special Reserve (110) –
At 30September 17,152 8,424
Capital reserve – unrealised
At 1October 54,428 41,678
Investment (losses)/gains (35,574) 12,750
At 30September 18,854 54,428
14. Revenue reserve
2022
£’000
2021
£’000
At 1October 6,092 6,205
Transfer to/(from) revenue account net of dividends 804 (113)
At 30September 6,896 6,092
Strategic Report Governance Financial Statements Investor Information
15. Risk management, financial assets and liabilities
Risk management
The Company’s objective is to provide Shareholders with an attractive income yield and the prospect of income and capital
growth through investing in a portfolio of predominately UK equities.
In pursuit of the Company’s objective, the Company’s investment policy is to invest in a portfolio of predominantly UK equities.
Equities are selected for their inclusion within the portfolio solely on the basis of the strength of the investment case with the
focus being on long term income growth along with capital preservation.
Asset classes other than equities will be purchased from time to time, will vary as opportunities are identified and will
include convertibles, preference shares, fixed income securities and corporate bonds. Such investments will be made when
prospective returns appear to be superior to those from equity markets or are considered likely to exceed the Company’s
borrowing costs. However, non-equity securities will not constitute the majority of the portfolio. The Company may also use
derivatives for the purpose of efficient portfolio management (including reducing, transferring or eliminating investment risk
in its investments and protection against currency risk), to exploit an investment opportunity and to achieve capital growth.
The management of the portfolio is conducted according to investment guidelines, established by the Board after discussion
with the Manager, which specify the limits within which the Manager is authorised to act.
Financial assets and liabilities
The Company’s financial assets include investments, cash at bank and short-term debtors. Financial liabilities consist of short-
term creditors and bank overdrafts.
The main risks the Company faces from its financial instruments are (i) market risk (comprising interest rate risk, foreign
currency risk and other price risk), (ii) liquidity risk and (iii) credit risk.
(i) Market risk
The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market
prices. This market risk comprises three elements – interest rate risk, foreign currency risk and other price risk.
Interest rate risk
The Company is subject to interest rate risk because the value of fixed interest rate securities is linked to underlying bank
rates or equivalents, and its short-term borrowings and cash resources carry interest at floating rates. The interest rate profile
is managed as part of the overall investment strategy of the Company.
Interest rate movements may affect:
• the fair value of the investments in fixed interest rate securities;
• the level of income receivable on cash deposits; and
• interest payable on the Company’s variable rate borrowings.
The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account
when making investment and borrowing decisions.
NOTESTOTHEFINANCIALSTATEMENTS
Interest rate profile
The interest rate risk profile of the portfolio of financial assets at the date of the Statement of Financial Position was as follows:
As at 30September 2022
Interest
rate
%
Floating
rate
£’000
Assets
Cash – 4,710
Liabilities
Bank loan 3.00 5,000
As at 30September 2021
Interest
rate
%
Floating
rate
£’000
Assets
Cash – 3,951
Liabilities
Bank loan – –
The weighted average interest rate is based on the current yield of each asset, weighted by its market value. The cash assets
consist of cash deposits on call earning interest at prevailing market rates. The bank loan liability consists of the revolving loan
facility with RBSI which is further detailed on page 24. Short-term debtors and creditors have been excluded from the above
tables.
Maturity profile
The maturity profile of the Company’s financial assets and liabilities at the date of the Statement of Financial Position was
asfollows:
Within
1 year
or less
2022
£’000
Within
1 year
or less
2021
£’000
Assets
Cash 4,710 3,951
Liabilities
Bank loan 5,000 –
Interest rate sensitivity
The sensitivity analysis below has been determined based on the exposure to interest rates at the date of the Statement of
Financial Position and the stipulated change taking place at the beginning of the financial year and held constant throughout
the reporting period in the case of instruments that have floating rates.
If interest rates had been 300 basis points higher or lower and all other variables were held constant, the Company’s profit
before tax for the year ended 30September 2022 and net assets would decrease/increase by £158,000 (2021 – increase/
decrease by £20,000 based on 50 basis points). This is mainly attributable to the Company’s exposure to interest rates on its
floating rate cash balances. These figures have been calculated based on cash positions at each year end.
In the opinion of the Directors, the above sensitivity analyses are not representative of the year as a whole, since the level of
exposure changes frequently as part of the interest rate risk management process used to meet the Company’s objectives.
The risk parameters used will also fluctuate depending on the current market perception.
Strategic Report Governance Financial Statements Investor Information
Foreign currency risk
A proportion of the Company’s investment portfolio is invested in overseas securities and the income and capital value can
be affected by movements in exchange rates. Exchange gains or losses may arise as a result of the movement in the exchange
rate between the date of the transaction denominated in a currency other than sterling and its settlement.
An analysis of the Company’s gross currency exposure is detailed below:
30September 2022 30September 2021
Overseas
investments
£’000
Net
monetary
assets
£’000
Overseas
investments
£’000
Net
monetary
assets
£’000
US dollar 22,875 – 33,191 –
Swiss franc 4,540 – 7,936 –
Tot a l 27,415 – 41,127 –
Foreign currency sensitivity
There is no sensitivity analysis included as the Company’s significant foreign currency financial instruments are in the form
of equity investments which have been included within the other price risk sensitivity analysis so as to show the overall level
ofexposure.
Other price risk
Other price risks (i.e. changes in market prices other than those arising from interest rate risk) may affect the value of the
quoted investments.
It is the Board’s policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from
factors specific to a particular sector. The allocation of assets to specific sectors and the stock selection process both act
to reduce market risk. The Manager actively monitors market prices throughout the year and reports to the Board, which
meets regularly in order to review investment strategy. The investments held by the Company are all listed on recognised
investmentexchanges.
Other price sensitivity
If market prices at the year end date had been 10% higher or lower on a sterling basis while all other variables remained
constant, the return attributable to Ordinary Shareholders and equity reserves for the year ended 30September 2022 would
have increased/decreased by £19,445,000 (2021 – increase/decrease of £24,451,000). This is based on the Company’s equity
portfolio held at each year end.
(ii) Liquidity risk
This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.
Liquidity risk is not considered to be significant as the Company’s assets comprise mainly readily realisable securities, which
can be sold to meet funding commitments if necessary. Short-term flexibility is achieved through the use of overdraft facilities.
Liabilities at the date of the Statement of Financial Position are payable within three months.
(iii) Credit risk
This is failure of the counterparty to a transaction to discharge its obligations under that transaction that could result in the
Company suffering a loss.
The risk is not significant, and is managed as follows:
• investment transactions are carried out with a large number of brokers, whose credit-standing is reviewed periodically
by the Manager, and limits are set on the amount that may be due from any one broker. Transactions are ordinarily
undertaken on a delivery versus payment basis whereby the Company’s custodian bank ensures that the counterparty
to any transaction entered into by the Company has delivered on its obligations before any transfer of cash or securities
away from the Company is completed;
NOTESTOTHEFINANCIALSTATEMENTS
• the risk of counterparty exposure due to failed trades causing a loss to the Company is mitigated by the review of failed
trade reports on a monthly basis. In addition, the Administrator carries out a stock reconciliation to the Custodian’s records
on a monthly basis to ensure discrepancies are picked up on a timely basis; and
• cash is held only with reputable banks and financial institutions with high quality external credit ratings. None of the
Company’s financial assets is secured by collateral or other credit enhancements.
Credit risk exposure
In summary, compared to the amounts in the Statement of Financial Position, the maximum exposure to credit risk at
30September was as follows:
2022 2021
Statement of
Financial
Position
£’000
Maximum
exposure
£’000
Statement of
Financial
Position
£’000
Maximum
exposure
£’000
Current assets
Accrued income and prepayments 890 798 968 936
Trade and other receivables 3,665 3,665 162 162
Cash and short term deposits 4,710 4,710 3,951 3,951
9,265 9,173 5,081 5,049
None of the Company’s financial assets is past due or impaired.
Fair value of financial assets and liabilities
The book value of cash at bank included in these financial statements approximates to fair value because of the short-term
maturity. The carrying value of fixed asset investments are stated at their fair values, which have been determined with
reference to quoted market prices. For all other short-term debtors and creditors, their book values approximate to fair value
because of their short-term maturity.
Gearing
The Company is able to gear by obtaining short-term credit facilities.
As detailed on page 24, the Company had a £15 million revolving loan facility, of which £5 million was drawn down at the year-
end. The profile of financing costs is managed as part of overall investment strategy. The employment of gearing magnifies the
impact on net assets of both positive and negative changes in the value of the Company’s portfolio of investments.
16. Capital management policies and procedures
The Company’s capital management objectives are:
• to ensure that the Company will be able to continue as a going concern; and
• to maximise the income and capital return to its equity Shareholders through an appropriate balance of equity capital
anddebt.
The Company’s capital at 30September comprised:
2022
£’000
2021
£’000
Called-up share capital 86,878 86,878
Retained earnings and other reserves 106,437 161,743
193,315 248,621
Strategic Report Governance Financial Statements Investor Information
The Board, with the assistance of the Manager and the AIFM, monitors and reviews the broad structure of the Company’s
capital on an ongoing basis. This review includes:
• the planned level of gearing, which takes account of the Manager’s views on the market;
• the need to buy back equity shares for cancellation or to hold in treasury, which takes account of the difference between
the net asset value per share and the share price (i.e. the level of share price discount or premium);
• the need for new issues of equity shares; and
• the extent to which revenue in excess of that which is required to be distributed should be retained.
The Company’s objectives, policies and processes for managing capital are unchanged from the preceding accounting period.
The Company had net gearing of 0.2% at the year end (2021 – nil).
17. Commitments and contingencies
At 30September 2022 there were no contingent liabilities in respect of outstanding underwriting commitments or uncalled
capital (2021 – £nil).
18. Financial instruments measured at Fair Value
2022 2021
Level 1
£’000
Level 2
£’000
Level 3
£’000
Tot al
£’000
Level 1
£’000
Level 2
£’000
Level 3
£’000
Tot a l
£’000
Financial assets at fair value
through profit or loss
Investments 194,448 – – 194,448 244,514 – – 244,514
Tot a l 194,448 – – 194,448 244,514 – – 244,514
Level 1 reflects financial instruments quoted in an active market.
Level 2 reflects financial instruments the fair value of which is evidenced by comparison with other observable current
market transactions in the same instrument or based on a valuation technique whose variables include only data from
observablemarkets.
Level 3 reflects financial instruments the fair value of which is determined in whole or in part using a valuation technique
based on assumptions that are not supported by prices from observable market transactions in the same instrument and not
based on available observable market data.
There were no transfers of investments between levels during the year ended 30September 2022 (2021 – none).
19. Notes to the Cash Flow Statement
(a) Reconciliation of operating (loss)/profit to operating cash flows
2022
£’000
2021
£’000
(Loss)/profit before taxation (21,240) 24,321
Add interest payable 54 28
Adjustments for:
Losses/(gains) on investments 25,889 (19,651)
Currency (gains)/losses (52) 11
Decrease/(increase) in accrued income and prepayments 200 (106)
Decrease in trade and other payables (115) (9)
4,736 4,594
NOTESTOTHEFINANCIALSTATEMENTS
(b) Analysis of changes in net funds
30September
2021
£’000
Cash
flow
£’000
Exchange
movements
£’000
30September
2022
£’000
Cash at bank 3,951 707 52 4,710
20. Related party transactions
The following are considered to be related parties:
• The Directors of the Company.
All material related party transactions, as set out in International Accounting Standards 24, Related Party Disclosures, have
been disclosed in the Directors’ Report, the Directors’ Remuneration Report and note 4.
Details of the remuneration of all of the Directors can be found on pages35 and 36.
21. Alternative Investment Fund Managers Directive (‘AIFMD’)
In accordance with the AIFMD, information in relation to the Company’s leverage and the remuneration of the Company’s
AIFM, Juniper Partners, is required to be made available to investors. In accordance with the Directive, the AIFM’s
remuneration policy and the numerical remuneration disclosures in respect of the AIFM’s relevant reporting period (year
ending 30April 2022) are available from Juniper Partners on request.
The Company’s maximum and actual leverage levels at 30September 2022 are shown below:
Gross method Commitment method
2022 2021 2022 2021
Maximum limit 200% 200% 200% 200%
Actual 101% 98% 103% 100%
The Company’s investor disclosure document and all additional periodic disclosures required in accordance with the requirements
of the FCA Rules implementing the AIFMD in the UK are made available on the Company’s website (www.tigt.co.uk).
Strategic Report Governance Financial Statements Investor Information
NAV Total Return The increase/(decrease) in net asset value per share plus the dividends paid in the period, which
are assumed to be reinvested at the time that the share price is quoted ex-dividend.
2022 2021
Opening NAV per share 77.72p 72.60p
(Decrease)/increase in NAV per share (9.24)p 5.12p
Closing NAV per share 68.48p 77.72p
% (decrease)/increase in NAV (11.9)% 7.1%
Impact of reinvested dividends 2.0% 3.1%
NAV total return (9.9)% 10.2%
Share Price Total Return The increase/(decrease) in share price plus the dividends paid in the period, which are assumed
to be reinvested at the time that the share price is quoted ex-dividend.
2022 2021
Opening share price 76.60p 72.00p
(Decrease)/increase (9.60)p 4.60p
Closing NAV share price 67.00p 76.60p
% (decrease)/increase in share price (12.5)% 6.4%
Impact of reinvested dividends 2.3% 3.2%
Share price total return (10.2)% 9.6%
Premium/(Discount) The amount by which the share price is higher (premium) or lower (discount) than the net asset
value per share, expressed as a percentage of the net asset value per share.
2022 2021
NAV per share a 68.48p 77.72p
Share price b 67.00p 76.60p
(Discount)/Premium c c=(b-a)/a (2.2)% (1.4)%
Ongoing Charges Management fees and other operating costs incurred in the reporting period, calculated as a
percentage of average net assets in that year. Operating costs exclude costs of buying and selling
investments, interest costs, taxation and the direct costs of buying back or issuing Ordinary shares.
2022
£’000
2021
£’000
Management fee 1,329 1,611
Other operating expenses 686 649
Discount control costs 58 51
Total operating costs 2,073 2,311
Average net assets 231,646 250,950
Ongoing charges ratio 0.89% 0.92%
Dividend Yield The annual dividend expressed as a percentage of the share price.
2022 2021
Dividend per share a 1.97p 1.96p
Share price b 67.00p 76.60p
Dividend yield c c=a/b 2.9% 2.6%
ALTERNATIVEPERFORMANCEMEASURES
Benchmark
A market index which averages the performance
of companies in any given sector, giving a good
indication of any rises or falls in the market.
Convertibles
Fixed income securities which can be converted
into equity shares at a future date.
Discount
The amount by which the market price per share of
an investment trust is lower than the net asset value
per share. The discount is normally expressed as
a percentage of the net asset value per share.
Gearing
Total gearing is the proportion of the Company’s net
assets financed by borrowings. Gearing is used to increase
exposure to securities, with the aim of magnifying the
impact on net assets of rises in the value of the portfolio,
and to augment the investment base from which income is
received. The use of gearing magnifies the impact of both
negative and positive changes in the Company’s net asset
value. A level expressed as 0% indicates there is no gearing.
Gross Assets
Gross assets is the value of investments plus cash.
Leverage
For the purposes of the AIFMD, leverage is any method
which increases the Company’s exposure, including
the borrowing of cash and the use of derivatives.
It is expressed as a percentage ratio between the
Company’s exposure and its net asset value and can be
calculated on a gross and a commitment basis. Under
the gross method, exposure represents the sum of the
Company’s positions after the deduction of sterling
cash balances, without taking account of any hedging
and netting arrangements. Under the commitment
method, exposure is calculated without deduction of
sterling cash balances and after certain hedging and
netting positions are offset against each other.
Net Asset Value (NAV)
The value of total assets less liabilities. Liabilities for
this purpose include current and long-term liabilities.
The net asset value divided by the number of shares
in issue produces the net asset value per share.
Ongoing Charges
Management fees and other operating costs (excluding
costs of buying and selling investments, interest costs,
taxation and the direct costs of buying back or issuing
Ordinary shares), expressed as a percentage of the
average of the end of day daily net assets during the year.
Premium
The amount by which the market price per share
of an investment trust exceeds the net asset value
per share. The premium is normally expressed as
a percentage of the net asset value per share.
Total Assets
Total assets is the value of investments plus cash and debtors.
Total Return
Total return involves reinvesting the net dividend in the
time the share price is quoted xd. The NAV Total Return
involves investing the same net dividend in the NAV of
the Company on the date to which that dividend was
earned, e.g. quarter end, half year or year end date.
GLOSSARYOFTERMSANDDEFINITIONS
Strategic Report Governance Financial Statements Investor Information
Ten Year Financial Record
Year to 30September 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Revenue available for ordinary dividends (£’000) 5,194 5,308 6,039 6,962 8,325 7,851 7,747 7,015 5,632 5,387
Per share
Net revenue return (p) 2.21 2.25 2.42 2.59 2.90 2.73 2.70 2.11 1.68 1.77
Net dividends paid/proposed (p) 2.13 2.23 2.33 2.43 2.56 2.67 2.75 2.78 1.96 1.97
Total return (p) 6.66 6.00 6.94 9.96 4.77 3.02 7.26 (7.93) 7.22 (7.03)
As at 30September
Net asset value per share (p) 60.22 64.05 68.87 76.41 78.64 79.04 83.50 72.60 77.72 68.48
Shareholders’ funds (£m) 145.78 153.39 178.25 215.46 228.69 224.06 245.46 251.69 248.62 193.32
Cumulative Performance
(% of 30September 2012 value)
As at 30September 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
NAV capital return 100.0 108.4 115.3 124.0 137.7 141.1 142.2 150.4 130.6 139.8 122.8
Share price capital return
100.0
108.0 114.7
123.9 137.5
138.4
139.8 150.7
128.6 136.8
119.6
FTSE All-Share Index capitalreturn 100.0
114.8 117.8
111.2
125.2 135.0
137.6 135.4
109.4
135.4 125.5
NAV total return† 100.0 111.6 123.0 136.9 157.1 166.4 173.5 190.2 171.2 188.8 170.1
Share price total return† 100.0 111.2 122.3 136.6 156.8 163.0 170.4 190.4 168.3 184.4 165.5
FTSE All-Share Index totalreturn† 100.0 118.9 126.2 123.3 144.0 161.2 170.7 175.3 146.2 186.9 179.5
† Total return figures are based on reinvestment of net income.
TENYEARRECORD
17 January 2023 Annual General Meeting
20 January 2023 First interim dividend 2022/23 payable
21 April 2023 Second interim dividend 2022/23 payable
May 2023 Interim results announced
May 2023 Interim Report published
21 July 2023 Third interim dividend 2022/23 payable
20 October 2023 Fourth interim dividend 2022/23 payable
FINANCIALCALENDAR
NOTICE IS HEREBY GIVEN that the thirty-fourth Annual
General Meeting of the Members of Troy Income & Growth
Trust plc (the ‘Company’) will be held at the offices of
Juniper Partners Limited, 28 Walker Street, Edinburgh
EH37HR on 17 January 2023 at 4.30 pm to transact the
following business:
To consider and, if thought fit, pass the following as
ordinary resolutions:
1. To receive and adopt the reports of the Directors and
auditors and the audited financial statements for the
year to 30 September 2022.
2. To approve the Directors’ Remuneration Report for the
year to 30 September 2022.
3. To approve the dividend policy of the Company as set
out in the Annual Report.
4. To re-elect Roger White as a Director of the Company.
5. To re-elect David Garman as a Director of the Company.
6 To re-elect Brigid Sutcliffe as a Director of the
Company.
7. To elect Bridget Guerin as a Director of the Company.
8. To re-appoint PricewaterhouseCoopers LLP as auditors
of the Company.
9. To authorise the Directors to determine the
remuneration of the auditors of the Company.
10. That, in substitution for any pre-existing power to
allot or grant rights to subscribe for or to convert
any security into shares in the Company, but without
prejudice to the exercise of any such authority prior
to the date of this resolution, the Directors be and
are hereby generally and unconditionally authorised
in accordance with section 551 of the Companies Act
2006 to exercise all the powers of the Company to
allot shares in the Company (“relevant securities”) up
to an aggregate nominal amount of £23,182,000, such
authority to expire on 31 March 2024 or, if earlier, at the
conclusion of the next Annual General Meeting of the
Company to be held after the passing of this resolution,
unless previously revoked, varied or extended by the
Company in general meeting, save that the Company
may, at any time prior to the expiry of such authority,
make an offer or enter into an agreement which would
or might require relevant securities to be allotted after
the expiry of such authority, and the Directors may
allot relevant securities in pursuance of such an offer or
agreement as if such authority had not expired.
To consider and, if thought fit, pass the following as
special resolutions:
11. That, subject to the passing of resolution 10 in the
notice convening the meeting at which this resolution
is to be proposed (the “notice of meeting”) and in
substitution for all existing powers, the Directors be
and are hereby generally empowered pursuant to
section 570 of the Companies Act 2006 (the “Act”)
to allot equity securities (as defined in section 560 (1)
of the Act) for cash pursuant to the authority under
section 551 of the Act conferred by resolution 10 in the
notice of meeting as if section 561 of the Act did not
apply to any such allotment, provided that this power:
(i) expires on 31 March 2024 or, if earlier, at the
conclusion of the next Annual General Meeting
of the Company, but the Company may make an
offer or agreement which would or might require
equity securities to be allotted after expiry of this
power and the Directors may allot equity securities
in pursuance of that offer or agreement as if that
power had not expired; and
(ii) shall be limited to the allotment of equity securities
for cash up to an aggregate nominal amount of
£6,954,000.
This power applies in relation to the sale of shares
which is an allotment of equity securities that
immediately before the allotment are held by the
Company as treasury shares as if in the opening
paragraph of this resolution the words “subject to the
passing of resolution 10 in the notice convening the
meeting at which this resolution is to be proposed (“the
notice of meeting”)” and “pursuant to the authority
under section 551 of the Act conferred by resolution 10
in the notice of meeting” were omitted.
12. That, in addition to the authority granted in resolution 11
and subject to the passing of resolution 10 in the notice
convening the meeting at which this resolution is to be
proposed (the “notice of meeting”) and in substitution
for all existing powers, the Directors be and are hereby
generally empowered pursuant to section 570 of
the Companies Act 2006 (the “Act”) to allot equity
securities (as defined in section 560 (1) of the Act) for
cash pursuant to the authority under section 551 of the
Act conferred by resolution 10 in the notice of meeting
as if section 561 of the Act did not apply to any such
allotment, provided that this power:
(i) expires on 31 March 2024 or, if earlier, at the
conclusion of the next Annual General Meeting
NOTICEOFANNUALGENERALMEETING
Strategic Report Governance Financial Statements Investor Information
of the Company, but the Company may make an
offer or agreement which would or might require
equity securities to be allotted after expiry of this
power and the Directors may allot equity securities
in pursuance of that offer or agreement as if that
power had not expired; and
(ii) shall be limited to the allotment of equity securities
for cash in connection with the Company’s discount
control mechanism up to an aggregate nominal
amount of £6,954,000.
This power applies in relation to the sale of shares
which is an allotment of equity securities that
immediately before the allotment are held by the
Company as treasury shares as if in the opening
paragraph of this resolution the words “subject to the
passing of resolution 10 in the notice convening the
meeting at which this resolution is to be proposed (“the
notice of meeting”)” and “pursuant to the authority
under section 551 of the Act conferred by resolution 10
in the notice of meeting” were omitted.
13. That, in substitution for any existing authority but
without prejudice to the exercise of any such authority
prior to the date hereof, the Company be 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 fully paid Ordinary shares of 25p each in
the capital of the Company (“shares”) provided that:
(i) the maximum aggregate number of shares hereby
authorised to be purchased is 41,699,854 or, if less,
the number representing 14.99% of the issued
Ordinary share capital of the Company as at the
date of the passing of this resolution (excluding
treasury shares);
(ii) the minimum price which may be paid for a share
shall be 25p (exclusive of expenses);
(iii) the maximum price (exclusive of expenses) which
may be paid for a share shall be an amount being
not more than the higher of (i) 105% of the average
of the middle market quotations (as derived
from the Daily Official List of the London Stock
Exchange) for the shares for the five business days
immediately preceding the date of purchase and
(ii) the higher of the price of the last independent
trade and the highest current independent bid
relating to a share on the trading venue where the
purchase is carried out; and
(iv) unless previously varied, revoked or renewed, the
authority hereby conferred shall expire on 31 March
2024 or, if earlier, at the conclusion of the next
Annual General Meeting of the Company to be
held after the passing of this resolution, save that
the Company may, at any time prior to such expiry,
enter into a contract or contracts to purchase
shares under such authority which would or might
be completed or executed wholly or partly after
the expiration of such authority and may make a
purchase of shares pursuant to any such contract or
contracts as if the authority conferred hereby had
not expired.
14. That a general meeting of the Company other than an
Annual General Meeting may be called on not less than
14 clear days’ notice provided that this authority shall
expire at the conclusion of the next Annual General
Meeting of the Company.
By Order of the Board
Juniper Partners Limited
Secretary
Registered Office
28 Walker Street, Edinburgh EH3 7HR
16 November 2022
NOTICEOFANNUALGENERALMEETING
NOTES
(i) Shareholders are encouraged to vote by proxy and
to submit any questions in advance (by email to the
Company Secretary at cosec@junipartners.com).
(ii) A member is entitled to appoint a proxy or proxies
to exercise all or any of his or her rights to attend,
speak and vote on his or her behalf. A proxy need
not be a member of the Company. A member may
appoint more than one proxy provided each proxy
is appointed to exercise rights attached to different
shares. A member may not appoint more than one
proxy to exercise rights attached to any one share.
If a member wishes to appoint more than one proxy,
he or she should contact the Company’s Registrars
on 0371 384 2501. The lines are open 8.30 am to
5.30 pm Monday to Friday, excluding English public
holidays. The Equiniti overseas helpline number is
+441214157047.
(iii) A form of proxy for use by members is enclosed
with this Annual Report. Completion and return of
the form of proxy will not prevent any member from
attending the Meeting and voting in person. To be
valid, the form of proxy should be lodged, together
with any power of attorney or other authority (if any)
under which it is signed or a notarially certified copy
of such power or authority, at the address stated
thereon, so as to be received not less than 48 hours
(excluding non-working days) before the time of
theMeeting.
(iv) Members may register the appointment of a proxy
or voting instruction for the meeting by logging onto
www.sharevote.co.uk and using the series of numbers
made up of the Voting ID, Task ID and Shareholder
Reference Number printed on the form of proxy. Full
details of the procedure are given on the website. The
proxy appointment and/or voting instructions must be
received by Equiniti not less than 48 hours (excluding
non-working days) before the time of the Meeting.
Please note that any electronic communication sent to
the Registrar that is found to contain a computer virus
will not be accepted. The use of the internet service
in connection with the AGM is governed by Equiniti’s
conditions of use set out on the website,
www.sharevote.co.uk and may be read by logging
ontothe site.
(v) In accordance with Regulation 41 of the
Uncertificated Securities Regulations 2001, to
have the right to attend and vote at the Meeting a
member must first have his or her name entered in
the Company’s register of members at 6.30pm on
13 January 2023 (or, in the event that the Meeting
is adjourned, at 6.30pm on the day which is two
business days before the time of the adjourned
meeting). Changes to entries on that register
after that time shall be disregarded in determining
the rights of any member to attend and vote at
theMeeting.
(vi) CREST members who wish to appoint a proxy
or proxies through the CREST electronic proxy
appointment service may do so by using the
procedures described in the CREST Manual and
by logging on to the website www.euroclear.com.
CREST personal members or other CREST sponsored
members, and those CREST members who have
appointed a voting service provider(s), should refer
to their CREST sponsor or voting service provider(s),
who will be able to take the appropriate action on
theirbehalf.
(vii) In order for a proxy appointment or instruction made
using the CREST service to be valid, the appropriate
CREST message (a ‘CREST Proxy Instruction’)
must be properly authenticated in accordance with
Euroclear UK & Ireland Limited’s specifications,
and must contain the information required for such
instruction, as described in the CREST Manual. The
message, regardless of whether it constitutes the
appointment of a proxy or is an amendment to the
instruction given to a previously appointed proxy,
must, in order to be valid, be transmitted so as to
be received by the Company’s Registrar (ID RA 19)
no later than 48 hours (excluding non-working days)
before the time of the meeting or any adjournment.
For this purpose, the time of receipt will be taken to
be the time (as determined by the timestamp applied
to the message by the CREST Application Host) from
which the Company’s Registrar 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.
(viii) CREST members and, where applicable, their
CREST sponsors or voting service providers should
note that Euroclear UK & Ireland 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 their 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.
Strategic Report Governance Financial Statements Investor Information
(ix) 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.
(x) 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 not less
than 48 hours (excluding non-working days) before the
time of the Meeting in order to be considered valid.
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.
(xi) 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 member 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. The
statement of the rights of members in relation to the
appointment of proxies in notes (ii) and (iii) above do
not apply to Nominated Persons. The rights described
in these notes can be exercised only by members of
the Company.
(xii) No Director has a service contract with the Company
but copies of Directors’ letters of appointment will
be available for inspection at the registered office
of the Company during normal business hours on
any weekday (Saturdays, Sundays and English public
holidays excepted) from the date of this notice and
at the location of the Meeting for at least 15 minutes
prior to the Meeting and during the Meeting.
(xiii) As at close of business on 15 November 2022 (being
the latest practicable date prior to publication of
this document), the Company’s issued share capital
(excluding treasury shares) comprised 278,184,487
Ordinary shares of 25p each. The total number of
voting rights in the Company as at 15 November 2022
is 278,184,487.
(xiv) Any person holding 3% of the total voting rights in
the Company who appoints a person other than the
Chairman as his or her proxy will need to ensure that
both he or she and such third party complies with
their respective disclosure obligations under the UK
Disclosure Guidance and Transparency Rules.
(xv) Any corporation which is a shareholder can
appoint one or more corporate representatives
who may exercise on its behalf all of its powers as
a shareholder provided that they do not do so in
relation to the same shares.
(xvi) The members of the Company may require the
Company to publish, on its website, a statement
setting out any matter relating to the audit of the
Company’s Annual Report, including the Auditors’
Report and the conduct of the audit, which they
intend to raise at the next Meeting of the Company.
The Company will be required to do so once it has
received such requests from either: (a) members
representing at least 5% of the total voting rights
of the Company, or (b) at least 100 members who
have a relevant right to vote and hold shares in
the Company on which there has been paid up an
average sum per member of at least £100. Such
requests must be made in writing and must state the
member’s full name and address, and be sent to: the
Company Secretary, Troy Income & Growth Trust plc,
28 Walker Street, Edinburgh EH3 7HR.
(xvii) Members meeting the threshold requirements set
out in the Companies Act 2006 have the right: (a) to
require the Company to give notice of any resolution
which can properly be, and is to be, moved at the
Meeting pursuant to section 338 of the Companies
Act 2006; and/or (b) to include a matter in the
business to be dealt with at the Meeting, pursuant to
section 338A of the Companies Act 2006.
(xviii) Information regarding the Meeting, including
information required by section 311A of the
Companies Act 2006, is available from the
Company’s website, www.tigt.co.uk.
(xix) Under section 319A of the Companies Act 2006, the
Company must answer any question relating to the
business being dealt with at the Meeting put by a
member attending the Meeting unless:
(a) answering the question 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 undesirable in the interests of the Company
or the good order of the Meeting that the
question be answered.
(xx) Shareholders are advised that, unless otherwise
stated, any telephone number, website or e-mail
address which may be set out in this notice of Annual
General Meeting or in any related documents
(including the form of proxy) is not to be used for the
purposes of serving information or documents on, or
otherwise communicating with, the Company for any
purposes other than those expressly stated.
NOTICEOFANNUALGENERALMEETING
Manager
Troy Asset Management Limited
33 Davies Street
London W1K 4BP
www.taml.co.uk
Secretary
Juniper Partners Limited
28 Walker Street
Edinburgh EH3 7HR
Registration Number: 366565 (Scotland)
Telephone: 0131 378 0500
Registered Office
28 Walker Street
Edinburgh EH3 7HR
Alternative Investment Fund Manager
Juniper Partners Limited
Independent Auditors
PricewaterhouseCoopers LLP
144 Morrison Street
Edinburgh EH3 8EX
Solicitors
Dickson Minto W.S.
Bankers & Custodian
J.P Morgan Chase Bank N.A.
Depositary
J.P Morgan Europe Ltd.
Stockbrokers
Numis Securities Ltd.
Share Price and Net Asset Value
The share price of the Ordinary shares, which are
listed on the main market of the London Stock
Exchange, is quoted in the following newspapers:
Financial Times
The Times
The Daily Telegraph
The Company’s Net Asset Value is calculated daily
and announced to the London Stock Exchange.
Company Registration Number
111955 (Scotland)
Data Protection
The Company is committed to ensuring the privacy of any
personal data provided to it. Details of the privacy policy
can be found on the Company’s website at www.tigt.co.uk
Regulatory Status
As an investment trust pursuant to section
1158 of the Corporation Tax Act 2010, the FCA
rules in relation to non-mainstream investment
products do not apply to theCompany.
Registrars and Transfer Office
In the event of queries regarding your
shares please contact the Registrar:
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Telephone 0371 384 2501
Overseas Helpline +44 121 415 7047
Lines are open 8.30 am to 5.30 pm Monday to
Friday, excluding English public holidays.
Changes of name or address must be notified in
writing to the Registrars at the above address.
Shareview Website
The Registrars provide an on-line service that enables
Shareholders to access details of their shareholdings. A
shareholder wishing to view the information, together with
additional information such as indicative share prices and
details of recent dividends, should visit www.shareview.co.uk.
Shares held in Nominee Names
Where notification has been received in advance, the
Company will provide nominee companies with copies
of shareholder communications for distribution to their
customers. Shareholders who hold their shares in nominee
names may, if appointed as a proxy by the nominee
company, attend and speak at general meetings.
SIPPS and ISAs
The Company’s Ordinary shares are available
for investment in SIPPs and ISAs.
AIC
The Company is a member of the Association
of Investment Companies (AIC).
Website
www.tigt.co.uk
Legal Notice
All references to indices are for comparative purposes
only. All reference to FTSE indices or data used in this
document is © FTSE International Limited (“FTSE”) 2022.
‘FTSE ®’ is a trade mark of the London Stock Exchange
Group companies and is used by FTSE under licence.
CORPORATEINFORMATION
Strategic Report Governance Financial Statements Investor Information
The Company’s shares quality for tax efficient wrapper
products like individual savings accounts (‘ISAs’) and self-
invested personal pensions (‘SIPPs’) as well as may other
investment wrappers that can be used, including those
designated for children.
Platforms, fund supermarkets and
onlinestockbrokers
You can invest using a number of fund platforms and fund
supermarkets. Many offer wrapper products like ISAs and
SIPPs and children’s savings products. A number of real-
time execution only stockbroking services also allow you
to trade online, manage your portfolio and buy UK listed
shares. These services do not offer financial advice and if
you are unsure about investing, we recommend that you
speak to a qualified financial adviser.
Retail distribution/NMPI status
The Company’s shares are ‘excluded securities’ for
the purposes of the rules relating to non-mainstream
pooled investment (‘NMPI’) products. This means
they can be recommended by independent financial
advisers to their ordinary retail clients, subject to normal
suitabilityrequirements.
Independent financial advisers
An increasing number of independent financial
advisers are including investment trusts within their
investment recommendations for clients. To find an
adviser who recommends on investment trusts, visit
www.unbiased.co.uk.
Private client stockbrokers
If you have a large sum to invest, you may want to contact
a private client stockbroker. They can manage your entire
portfolio of shares and will advise you on your investments.
To find a private client stockbroker visit the Wealth
Management Association: www.thewma.co.uk.
Trading Codes
(You may be asked for these when investing)
TIDM code: TIGT
Sedol: 0370866
ISIN: GB0003708665
WAYSTOINVESTINTHECOMPANY
The company’s website can be found at www.tigt.co.uk.
This offers a wealth of information about the company.
Register for monthly updates
Subscribe to monthly email updates that offer information on the following:
• latest prices • performance data • latest factsheet • press releases and articles
• manager videos • portfolio information • research • annual and half yearly reports
EASY ACCESS TO INFORMATION
Enquiries
If you have an enquiry about Troy Income and Growth Trust, please get in touch.
0131 378 0500
l
cosec@junipartners.com
Strategic Report Governance Financial Statements Investor Information
How to contact us
Tel: 0131 378 0500
Email: cosec@junipartners.com
www.tigt.co.uk
Calls to the above may be recorded.
Troy Income & Growth Trust plc
28 Walker Street
Edinburgh
EH3 7HR
RegisteredinScotlandwithregisteredno