Half-yearly Report

For immediate release 11 May 2015 To: City Editors Finsbury Growth & Income Trust PLC Announces Half Year Results for the six months to 31 March 2015 Financial Summary and Key Data Financial Highlights As at As at 31 March 30 % September 2015 2014 Change Share price 590.0p 509.0p +15.9 Net asset value per share 584.6p 507.7p +15.1 Premium of share price to 0.9% 0.3% - net asset value per share Gearing* 3.7% 4.0% - Shareholders' funds Â£629.0m Â£494.9m +27.1 Number of shares in issue 107,590,212 97,480,212 +10.4 Six months One year to to 31 March 30 September 2015 2014 Share price (total return)# +17.4% +8.6% Net asset value per share +17.3% +8.9% (total return)# FTSE All-Share Index (total +5.3% +6.1% return) (Company benchmark)#â€ Year ending Year ended 30 30 September September 2015 2014 First interim dividend 5.5p 5.1p Second interim dividend Yet to be 6.2p declared # Source - Morningstar â€ Source - FTSE International Limited ("FTSE") Â© FTSE 2015* * See glossary Chairman's Statement Performance I have pleasure in reporting that the Company's share price total return of +17.4% and net asset value per share total return of +17.3% have again both substantially outperformed the Company's benchmark, the FTSE All-Share Index, which delivered a total return of +5.3%. The principal contributors to the Company's net asset value performance were London Stock Exchange, Schroders and Sage Group. Further information on the Company's portfolio can be found in our Portfolio Manager's Review. During the period, the Company's shares have consistently traded close to net asset value, beginning the period at a 0.3% premium to the Company's net asset value per share and ending on a 0.9% premium. Share Capital As I reported at the year-end, due to the constant demand for your Company's shares, we took the following action: A new block listing authority was obtained from the UK Listing Authority in January 2015 to enable shares to be issued as cost effectively as possible; a Prospectus was also published in December 2014 in order that the Company can continue to issue shares in accordance with the Prospectus Directive; and shareholder authority to issue further shares equal to 10% of the Company's issued share capital on a non-pre-emptive basis was renewed at the Company's Annual General Meeting held in February 2015. As at 31 March 2015 the Company had 107,590,212 shares of 25p each in issue (31 March 2014: 91,310,212). During the six months under review 10,110,000 new shares were issued raising Â£54.3 million net of expenses. Since the end of the half-year, to the date of this report, a further 2,340,000 new shares have been issued raising Â£13.9 million. As at 11 May 2015, the Company had 109,930,212 shares in issue. The Directors believe that the issuance of those new shares continues to yield the following principal benefits: Improvement of liquidity in the market for the Company's shares; Maintenance of the Company's ability to issue shares tactically, so as to manage the premium to net asset value per share at which the shares trade; Increase in the size of the Company, thereby spreading operating costs over a larger capital base with a consequent reduction in the ongoing charges ratio; and Enhancement of the net asset value per share of existing shares through new share issuance at a premium to the cum income net asset value per share; Dividend The Board has declared a first interim dividend of 5.5p per share, compared to last year's first interim dividend of 5.1p per share, an increase of 7.8%. The dividend was paid on Wednesday, 6 May 2015 to shareholders who were on the register on Tuesday, 7 April 2015. The associated ex dividend date was Thursday, 2 April 2015. Gearing The Company is in the second year of its three-year secured fixed term multicurrency revolving credit facility with Scotiabank Europe PLC (the "facility"). As reported in my statement within the Company's 2014 Annual Report the Company had the ability to draw down a further Â£20 million over the then existing Â£30 million facility. On 18 March 2015 the Board increased the commitment under the Facility Agreement by an amount of Â£20 million to a total of Â£50 million. The amount drawn under the facility, both initially and as increased, lies comfortably within the Company' gearing limit and remains within the constraints of the Company's investment policy. Outlook The FTSE All Share Index is up approximately 4.7% so far this calendar year. Your Board continues to believe that our Portfolio Manager's strategy of investing for the long-term in durable cash generative franchises capable of sustained dividend growth will continue to deliver superior investment returns to shareholders. Anthony Townsend Chairman 11 May 2015 Portfolio Manager's Review Your Company has just enjoyed another half year of competitive absolute and relative NAV performance. This caps several years of strong performance; certainly since the bottom of the last bear market in March 2009. Meanwhile, investors can find plenty to worry about in almost any market or geography they care to turn their attention to. In particular, this report is written before the UK General Election and shareholders will have their own apprehensions about the various possible outcomes. Despite all this we remain exceptionally bullish about the outlook for global equity markets, including the UK, and think it worthwhile rehearsing the bull case below (and relating the arguments to important holdings in the portfolio). Of course there's a risk that we have become complacent, lulled into permanent optimism by a long bull market - shareholders must decide the credibility of the case for themselves. At the very least least we hope it is useful to understand our thinking and why we are invested as we are. The price of energy has recently declined almost 60%, with the decline driven by a major, beneficial supply shock - US horizontal fracking. Wood Mackenzie estimates that 98% of the world's leading oil fields would still generate positive cash flow at an oil price of $40 a barrel, while the most efficient US shale producers have marginal costs of $10-20 per barrel. This suggests the current rally in oil, back to c$55, is temporary, because the price will have to stay below $40 for a meaningful period if capacity really is to be withdrawn. What this means for the rest of us is that, all around the world corporations can look forward to even lower energy costs and consumers to having higher disposable income in their pockets. It is hard to conceive of companies more advantaged by this energy price drop than the major global consumer branded goods owners. Their costs are declining, while their billions of customers are feeling better off. It is no surprise to us that, for instance, Heineken's shares are up 30% in 2015 to date. Brewing and transporting beer is energy-intensive (and has just become a whole lot cheaper, while people are no less thirsty but have more Pesos, Rupees, Dong or Dollars in their pockets to slake their thirsts). Falling inflation - one result of plummeting energy costs - and straitened government balance sheets mean one thing: a continuation of extraordinarily lax monetary policies worldwide. Fiat money will find its way quickly into financial assets, particularly those that offer any certainty of real, inflation-protected returns over time. Blue chip equities are an obvious beneficiary. In January 2015, Merrill Lynch ("ML") put out a "buy" note on Unilever pointing out that its shares offer a dividend yield of 3.5%. The dividend is growing ahead of inflation and is, according to Merrill Lynch's analysts, the second "safest" dividend across the whole of Europe. Meanwhile, ML continued, there are billions of savings across Europe - Euros, Swiss Francs, Krone - that offer negative interest rates. It actually costs you to deposit cash with certain banks. In these circumstances why wouldn't you invest more into Unilever (or Diageo, Heineken, Mondelez etc)? In addition, the intermediaries between institutional and individual investors and the financial markets are likely to benefit from increased volumes of cash flowing across their platforms - for example London Stock Exchange or Hargreaves Lansdown - or into their fund products - Schroders or Rathbone. It's easy to be complacent and sometimes the worst does happen. However, financial history teaches that financial crises are most often crises for fiat currencies and government bonds - not for sound Equity. 2014 saw an explosion in global M&A activity. At c$4 trillion of announced deals the value was up 60% on 2013 and the highest total since the previous peak of 2007. This has continued into 2015, with the value of announced deals up a further 17% on 2014 so far and we expect this to accelerate. The logic for more deals is compelling. Global business requires global corporations. Meanwhile, technology is increasing the payback on deals, allowing more costs to be taken out and the control of more complex entities. In fact it's hard to think of a global industry where there aren't well-founded and compelling rumours of new business combinations. Bid chatter and the actuality of deals will keep equity investors perky. Hargreaves Lansdowne announced last quarter it had increased its IT headcount by a third in order to take advantage of the opportunities offered by new technology to improve its services to its customer base. Almost every company we meet has a similar story to tell - that IT is changing their relationships with their customers. Most often allowing them to offer a more valuable service at a lower price. This theme has helped various portfolio companies report stronger than expected business growth in 2015 key examples include Burberry, Daily Mail, Fidessa, Pearson, Reed and Sage. In conclusion - Technology - fracking, digital, biotech - is pushing inflation down, while increasing opportunities for companies to grow. Exceptionally bullish indeed. Nick Train Director Lindsell Train Limited Portfolio Manager 11 May 2015 Investment Portfolio as at 31 March 2015 Fair value % of Investment Sector Â£'000 investments Unilever Consumer 57,617 8.8 Goods Diageo Consumer 50,290 7.7 Goods Reed Elsevier Consumer 50,254 7.7 Services Pearson Consumer 46,922 7.2 Services Heineken Holdings (A Shares) Consumer 42,867 6.6 * Goods London Stock Exchange Financials 40,974 6.3 Hargreaves Lansdown Financials 38,748 5.9 Schroders Financials 35,520 5.5 Burberry Group Consumer 35,457 5.4 Goods Sage Group Technology 35,329 5.4 Top 10 investments 433,978 66.5 Daily Mail & General Trust Consumer 29,977 4.6 (A Shares) Services A.G. Barr Consumer 26,483 4.0 Goods Rathbone Brothers Financials 25,261 3.9 Fidessa Technology 24,682 3.8 Mondelez International^ Consumer 22,725 3.5 Goods Dr.Pepper Snapple^ Consumer 17,472 2.7 Goods Greene King Consumer 15,353 2.3 Services Kraft Foods^ Consumer 13,143 2.0 Goods Thomson Reuters~ Consumer 11,064 1.7 Services Euromoney Institutional Consumer 10,348 1.6 Investor Services Top 20 investments 630,486 96.6 Young & Co's Brewery Consumer 7,538 1.2 (non-voting) Services Fuller Smith & Turner Consumer 7,077 1.1 Services The Lindsell Train Financials 4,230 0.6 Investment Trust Celtic Consumer 2,128 0.3 Services Frostrow Capital LLP+ Financials 1,060 0.2 Celtic 6% (cumulative - 69 0.0 convertible preference)** Total investments 652,588 100.0 All of the above investments are equities listed in the UK, unless otherwise stated. * Listed in the Netherlands ^ Listed in the United States ~ Listed in Canada + Unquoted partnership interest (includes AIFM capital of Â£320,000) ** Non-equity - Preference Shares Comparison of Sector Weightings with the FTSE All-Share Index as at 31 March 2015 Finsbury Growth Finsbury FTSE & Income Growth All-Share & Income Index (under)/ overweight Sector % % % Consumer Goods 40.7 14.5 26.2 Consumer Services 27.7 12.0 15.7 Financials 22.4 25.8 (3.4) Technology 9.2 1.6 7.6 Oil & Gas - 11.9 (11.9) Industrials - 10.1 (10.1) Health care - 8.9 (8.9) Basic Materials - 6.7 (6.7) Telecommunications - 4.9 (4.9) Utilities - 3.6 (3.6) Total 100.0 100.0 - Income Statement For the six months ended 31 March 2015 (Unaudited) (Unaudited) (Audited) Six months ended 31 March Six months ended 31 March Year ended 30 September 2015 2014 2014 Revenue Capital Total Revenue Capital Total Revenue Capital Total Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Gains on investments - 83,232 83,232 - 35,256 35,256 - 26,961 26,961 designated at fair value through profit or loss Exchange differences - (25) (25) - (11) (11) - (17) (17) Income (note 2) 5,229 - 5,229 3,809 - 3,809 13,570 - 13,570 AIFM and Portfolio (573) (1,163) (1,736) (473) (961) (1,434) (987) (2,005) (2,992) Management fees (note 3) Other expenses (462) - (462) (351) (19) (370) (739) (26) (765) Return on ordinary 4,194 82,044 86,238 2,985 34,265 37,250 11,844 24,913 36,757 activities before finance charges and taxation Finance charges (85) (173) (258) (77) (157) (234) (151) (306) (457) Return on ordinary 4,109 81,871 85,980 2,908 34,108 37,016 11,693 24,607 36,300 activities before taxation Taxation on ordinary (106) - (106) (80) - (80) (226) - (226) activities Return on ordinary 4,003 81,871 85,874 2,828 34,108 36,936 11,467 24,607 36,074 activities after taxation Return per share - 3.8p 77.8p 81.6p 3.2p 39.1p 42.3p 12.6p 27.0p 39.6p basic (note 4) The "Total" column of this statement represents the Company's profit and loss account. The "Revenue" and "Capital" columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies ("AIC"). All items in the above statement derive from continuing operations. The Company had no recognised gains or losses other than those declared in the Income Statement. There is no material difference between the net return on ordinary activities before taxation and the net return on ordinary activities after taxation stated above and their historical cost equivalents. Reconciliation of Movements in Shareholders' Funds Share Capital Share premium redemption Special Capital Revenue (Unaudited) capital account reserve reserve reserve reserve Total Six months ended Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 31 March 2015 At 30 September 24,370 215,304 3,453 12,424 228,842 10,538 494,931 2014 Net return from - - - - 81,871 4,003 85,874 ordinary activities Second interim - - - - - (6,086) (6,086) dividend (6.2p per share) for the year ended 30 September 2014 Issue of shares 2,527 51,877 - - - - 54,404 Cost of share - (108) - - - - (108) issuance At 31 March 2015 26,897 267,073 3,453 12,424 310,713 8,455 629,015 (Unaudited) Six months ended 31 March 2014 At 30 September 20,784 146,465 3,453 12,424 204,235 8,478 395,839 2013 Net return from - - - - 34,108 2,828 36,936 ordinary activities Second interim - - - - - (4,748) (4,748) dividend (5.7p per share) for the year ended 30 September 2014 Issue of shares 2,043 38,952 - - - - 40,995 Cost of share - (110) - - - - (110) issuance At 31 March 2014 22,827 185,307 3,453 12,424 238,343 6,558 468,912 (Audited) Year ended 30 September 2014 At 30 September 20,784 146,465 3,453 12,424 204,235 8,478 395,839 2013 Net return from - - - - 24,607 11,467 36,074 ordinary activities Second interim - - - - - (4,748) (4,748) dividend (5.7p per share) for the year ended 30 September 2013 First interim - - - - - (4,659) (4,659) dividend (5.1p per share) for the year ended 30 September 2014 Issue of shares 3,586 68,949 - - - - 72,535 Cost of share - (110) - - - - (110) issuance Year ended 30 24,370 215,304 3,453 12,424 228,842 10,538 494,931 September 2014 Balance Sheet as at 31 March 2015 (Unaudited) (Unaudited) (Audited) 31 March 31 March 30 September 2015 2014 2014 Â£'000 Â£'000 Â£'000 Fixed assets Investments designated at fair 652,588 486,958 514,798 value through profit or loss Current assets Debtors 2,693 1,215 2,339 Cash at bank 1,660 1,972 2,029 4,353 3,187 4,368 Current liabilities Creditors (1,526) (433) (1,135) Net current assets 2,827 2,754 3,233 Total assets less current 655,415 489,712 518,031 liabilities Creditors: amounts falling due after one year Bank loan (26,400) (20,800) (23,100) Net assets 629,015 468,912 494,931 Capital and reserves Share capital 26,897 22,827 24,370 Share premium account 267,073 185,307 215,304 Capital redemption reserve 3,453 3,453 3,453 Special reserve 12,424 12,424 12,424 Capital reserve 310,713 238,343 228,842 Revenue reserve 8,455 6,558 10,538 Total shareholders' funds 629,015 468,912 494,931 Net asset value per share - 584.6p 513.5p 507.7p basic (note 5) Cash Flow Statement for the six months ended 31 March 2015 (Unaudited) (Unaudited) (Audited) 31 March 31 March 30 September 2015 2014 2014 Â£'000 Â£'000 Â£'000 Net cash inflow from operating 2,518 1,707 9,346 activities (note 7) Net cash outflow from servicing of finance Interest paid (258) (328) (551) Financial investment Purchase of investments (55,021) (42,457) (78,662) Sale of investments 802 26 763 Net cash outflow from financial (54,219) (42,431) (77,899) investment Equity dividends paid (6,086) (4,748) (9,407) Net cash outflow before (58,045) (45,800) (78,511) financing Financing Shares issued 54,509 41,350 71,824 Drawdown of loans 3,300 600 2,900 Cost of share issuance (108) (110) (110) Net cash inflow from financing 57,701 41,840 74,614 Decrease in cash (344) (3,960) (3,897) Reconciliation of net cash flow to movement in net debt Decrease in cash resulting from (344) (3,960) (3,897) cashflows Increase in debt (3,300) (600) (2,900) Exchange movements (25) (11) (17) Movement in net debt (3,669) (4,571) (6,814) Net debt at start of period (21,071) (14,257) (14,257) Net debt at end of period (24,740) (18,828) (21,071) Analysis of net debt (Unaudited) (Unaudited) (Audited) 31 March 31 March 30 September 2015 2014 2014 Â£'000 Â£'000 Â£'000 Cash at bank 1,660 1,972 2,029 Bank loan (26,400) (20,800) (23,100) (24,740) (18,828) (21,071) Notes to the Financial Statements 1. Basis of preparation The condensed financial statements have been prepared under the historical cost convention, except for the measurement at fair value of investments, and in accordance with UK Generally Accepted Accounting Practice (GAAP) and the Statement of Recommended Practice (SORP) for `Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued by the Association of Investment Companies dated January 2009 and the Companies Act 2006. The Financial Statements have been prepared on a going concern basis. The Directors believe this is appropriate as the Company's net assets consist almost entirely of liquid securities which are quoted on recognised stock exchanges. The same accounting policies used for the year ended 30 September 2014 have been applied. 2. Income (Unaudited) (Unaudited) (Audited) Six months Six months Year ended ended ended 31 March 31 March 30 2015 2014 September 2014 Â£'000 Â£'000 Â£'000 Income from investments Franked investment income - dividends 4,216 3,274 11,617 Unfranked investment income - overseas dividends 707 535 1,705 - limited liability partnership 292 - 240 profit-share - limited liability partnership 14 - 8 - priority profit-share on AIFM Capital Contribution Total income 5,229 3,809 13,570 3. AIFM and Portfolio Management fees (Unaudited) (Unaudited) (Audited) Six months Six months Year ended ended ended 31 March 31 March 30 2015 2014 September 2014 Â£'000 Â£'000 Â£'000 AIFM fee 460 367 770 Portfolio management fee 1,276 994 2,100 VAT on AIFM fees* - 73 122 Total fees 1,736 1,434 2,992 * With effect from 22 July 2014, no VAT has been charged on the AIFM fees. 4. Return per share The total return per share is based on the total return attributable to equity shareholders of Â£85,874,000 (six months ended 31 March 2014: return of Â£ 36,936,000; year ended 30 September 2014: return of Â£36,074,000) and on 105,279,252 shares (six months ended 31 March 2014: 87,264,241; year ended 30 September 2014: 91,128,356), being the weighted average number of shares in issue during the period. The revenue return per share is calculated by dividing the net revenue return of Â£4,003,000 (six months ended 31 March 2014: return of Â£2,828,000; year ended 30 September 2014: return of Â£11,467,000) by the weighted average number of shares in issue as above. The capital return per share is calculated by dividing the net capital return attributable to shareholders of Â£81,871,000, (six months ended 31 March 2014: return of Â£34,108,000; year ended 30 September 2014: return of Â£24,607,000) by the weighted average number of shares in issue as above. 5. Net asset value per share The net asset value per share is based on net assets attributable to shares of Â£629,015,000 (31 March 2014: Â£468,912,000 and 30 September 2014: Â£494,931,000) and on 107,590,212 shares in issue (31 March 2014: 91,310,212 and 30 September 2014: 97,480,212). 6. Transaction costs Purchase transaction costs for the six months ended 31 March 2015 were Â£304,000 (six months ended 31 March 2014: Â£251,000; year ended 30 September 2014: Â£ 461,000). These comprise of stamp duty costs of Â£224,000 (31 March 2004: Â£182,000; year ended 30 September 2014: Â£344,000) and commission of Â£80,000 (31 March 2014: Â£ 69,000; year ended 30 September 2014: Â£117,000). Sales transaction costs for the six months ended 31 March 2015 were Â£nil (six months ended 31 March 2014: Â£nil; year ended 30 September 2014: Â£1,000). These comprise solely of commission. These transaction costs are included within the gains on investments within the Income Statement. 7. Reconciliation of net total return before finance costs and taxation to net cash inflow from operating activities (Unaudited) (Unaudited) (Audited) Six months Six months Year ended ended ended 31 March 31 March 30 2015 2014 September 2014 Â£'000 Â£'000 Â£'000 Total return before finance 86,238 37,250 36,757 charges and taxation Less: capital return before (82,044) (34,265) (24,913) finance charges and taxation Net revenue before finance 4,194 2,985 11,844 costs and taxation Increase in accrued income and (470) (236) (266) prepayments Increase in creditors 52 4 39 Taxation - irrecoverable (95) (66) (240) overseas tax paid AIFM and portfolio management (1,163) (961) (2,005) fees charged to capital Other expenses charged to - (19) (26) capital Net cash inflow from operating 2,518 1,707 9,346 activities 8. 2014 accounts The figures and financial information for the year to 30 September 2014 are extracted from the latest published accounts of the Company and do not constitute statutory accounts for the year. Those accounts have been delivered to the Registrar of Companies and included the Report of the Auditors which was unqualified and did not contain a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report, and did not contain a statement under section 498 of the Companies Act 2006. Interim Management Report Principal Risks and Uncertainties A review of the half year, and the outlook for the Company can be found in the Chairman's Statement and in the Portfolio Manager's Review. The principal risks and uncertainties faced by the Company fall into the following broad categories: market price risk; interest rate risk; portfolio performance; operational and regulatory risk; credit risk; liquidity risk; portfolio management key person risk; availability of bank finance; inability to maintain a progressive dividend policy. Information on each of these areas, with the exception of the availability of bank finance and the Board's ability to maintain a progressive dividend policy, is given in the Strategic Report within the Annual Report and Accounts for the year ended 30 September 2014. The risk associated with the availability of bank finance is that the provider or any other lender may no longer be prepared to lend to the Company. Copies of the monthly loan covenant compliance certificates, provided for the lender, are circulated to the Board. Both the Board and Portfolio Manager are kept fully informed of any likelihood of the withdrawal of the loan facility so that repayment can be effected in an orderly fashion if necessary. Negotiations for the renewal of the loan facility are conducted well in advance of the expiry of the existing facility. With regard to the Company's dividend policy, the Board regularly reviews the Company's portfolio and also income forecasts prepared by the AIFM. Regular reports on the Company's income position are also made by the Company's Portfolio Manager at each Board meeting. The Company also maintains a distributable revenue reserve which can be used to help make up any shortfall in income received by the Company. In the view of the Board these principal risks and uncertainties are applicable to the remaining six months of the financial year as they were to the six months under review. Related Party Transactions During the first six months of the current financial year, no transactions with related parties have taken place which have materially affected the financial position or the performance of the Company. Going Concern The Directors, having made relevant enquiries, are satisfied that it is appropriate to prepare financial statements on the going concern basis as the net assets of the Company consist of liquid securities, all of which, with the exception of the partnership interest in Frostrow Capital LLP, are traded on recognised stock exchanges. Directors' Responsibilities The Board of Directors confirms that, to the best of its knowledge: (i) the condensed set of financial statements contained within the Half Year Report has been prepared in accordance with applicable accounting standards; and (ii) the interim management report includes a true and fair review of the information required by the UK Listing Authority and 4.2.7R and 4.2.8R of the Transparency Rules. In order to provide these confirmations, and in preparing these financial statements, the Directors are required to: â€¢ select suitable accounting policies and then apply them consistently; â€¢ make judgments and accounting estimates that are reasonable and prudent; â€¢ state whether applicable accounting policies have been followed, subject to any material departures disclosed and explained in the financial statements; and â€¢ prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and the Directors confirm that they have done so. The Half Year Report has not been reviewed or audited by the Company's auditors. The Half Year Report was approved by the Board on 11 May 2015 and the above responsibility statement was signed on its behalf by: Anthony Townsend Chairman Glossary of Terms AIC Association of Investment Companies. AIFMD The Alternative Investment Fund Manager Directive (the "Directive") is a European Union Directive that entered into force on 22 July 2013. The Directive regulates EU fund managers that manage alternative investment funds (this includes investment trusts). AIFM Rules AIFMD and all applicable rules and regulations implementing AIFMD in the UK, including without prejudice to the generality of the foregoing the Alternative Investment Fund Managers Regulations 2013 (SI2013/1773) and all relevant provisions of the FCA Handbook. Discount or Premium A description of the difference between the share price and the net asset value per share. The size of the discount or premium is calculated by subtracting the share price from the net asset value per share and is usually expressed as a percentage (%) of the net asset value per share. If the share price is higher than the net asset value per share the result is a premium. If the share price is lower than the net asset value per share, the shares are trading at a discount. FTSE Disclaimer "FTSEÂ©" is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under licence. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distributions of FTSE Data is permitted without FTSE's express written consent. Gearing Gearing is calculated by dividing total assets (less cash/cash equivalents) by shareholders' funds, expressed as a percentage (equivalent to AIC definition of net gearing). Leverage The AIFM Directive (the "Directive") has introduced the obligation on the Company and its AIFM in relation to leverage as defined by the Directive. The Directive leverage definition is slightly different to the Association of Investment Companies method of calculating gearing and is as follows; any method by which the AIFM increases the exposure of an AIFM it manages whether through borrowing of cash or securities, or leverage embedded in derivative positions. There are two methods for calculating leverage under the Directive - the Gross Method and the Commitment Method. The process for calculating exposure under each methodology is largely the same, except where certain conditions are met, the Commitment Method enables instruments to be netted off to reflect `netting' or `hedging' arrangements and the entity exposure is effectively reduced. The Board has set the leverage limit for both the Gross basis and the Committment basis at 125%. These limits are monitored by both the Board and the AIFM. Net Asset Value (NAV) The value of the Company's assets, principally investments made in other companies and cash being held, less any liabilities. The NAV is also described as `shareholders' funds' per share. The NAV is often expressed in pence per share after being divided by the number of shares which have been issued. The NAV per share is unlikely to be the same as the share price which is the price at which the Company's shares can be bought or sold by an investor. The share price is determined by the relationship between the demand and supply of the shares. Net Asset Value Total Return The total return on an investment over a specified period assuming dividends paid to shareholders were reinvested at net asset value per share at the time the shares were quoted ex-dividend. This is a way of measuring investment management performance of investment trusts which is not affected by movements in discounts or premiums. Share Price Total Return The change in capital value of a company's shares over a given period, plus dividends paid to shareholders, expressed as a percentage of the opening value. The assumption is that dividends paid to shareholders are re-invested in the shares at the time the shares are quoted ex dividend. Treasury Shares Shares previously issued by a company that have been bought back from shareholders to be held by the Company for potential sale or cancellation at a later date. Such shares are not capable of being voted and carry no rights to dividends. For and on behalf of Frostrow Capital LLP, Secretary 11 May 2015 - ENDS - The following are attached: * Chairman's Statement * Portfolio Manager's Review and Investment Portfolio * Income Statement * Reconciliation of Movements in Shareholders' Funds * Balance Sheet * Cash Flow Statement * Notes to the Interim Accounts *Interim Management Report *Glossary of Terms For further information please contact: Alastair Smith/Victoria Hale, Frostrow Capital LLP 020 3008 4911/020 3170 8732 Jo Stonier, Quill PR 020 7466 5066. Nick Train, Lindsell Train Limited 020 7227 8200

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