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Fins Growth Inc Tst (FGT)

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Friday 29 January, 2010

Fins Growth Inc Tst

Annual Financial Report


29 January 2010

                      London Stock Exchange Announcement

                      Finsbury Growth & Income Trust PLC

             Audited Results for the Year Ended 30 September 2009

The following is an extract from the Company's Annual Report and Accounts for
the year ended 30 September 2009. The Annual Report has been posted to
shareholders. Members of the public may obtain copies from Frostrow Capital
LLP. 25 Southampton Buildings, London WC2A 1AL or from the Company's website
at www.finsburygt.com

The Annual Report is also available for inspection at the Financial Services
Authority's document viewing facility at 25 The North Colonnade, Canary Wharf,
London E14 5HS.

Investment Objective

The Company's investment objective is to achieve capital and income growth and
to provide shareholders with a total return in excess of that of the FTSE
All-Share Index.

Investment Policy

The Company invests principally in the securities of UK quoted companies.
Where possible, a minimum position size of 1% of the Company's gross assets is
held unless the holding concerned is being built or disposed of.

The portfolio is managed by Lindsell Train Limited and will normally comprise
approximately 30 investments. Unless driven by market movements, FTSE 100
companies, including preference shares issued by such companies, will normally
represent between 50% and 100% of the portfolio; at least 70% of the portfolio
will normally be invested in companies within the FTSE 350. The Company does
not and will not invest more than 10% of its gross assets in other listed
investment companies (including listed investment trusts).

Further details of the Company's investment policy are set out in the Report
of the Directors. Details of a proposed change to the Company's investment
policy are set out in the Chairman's Statement.

Capital Structure

At 30 September 2009 the Company had 51,271,673 shares of 25p each in issue
and 1,525,750 shares were held in treasury (2008: 50,950,673 and treasury
1,846,750). During the year 1,330,000 shares were reissued out of treasury and
1,009,000 shares were repurchased to be held in treasury. Following the
year-end and up to 17 December 2009, the latest practicable date before the
printing of this report, 680,000 shares were reissued out of treasury and
1,069,360 shares were repurchased to be held in treasury. As at 17 December
2009, the Company had 50,882,313 shares in issue (excluding those shares held
in treasury).

Gearing

As at 30 September 2009 the Company had a committed one year revolving credit
facility of £15 million with ING Bank N.V. and, as at that date, a total of
£13.5 million was drawn down under this facility. However, this facility
expired on 9 October 2009 and was replaced with a secured one year
multicurrency revolving credit facility of £15 million with Scotiabank Europe
PLC. As at 17 December 2009 a total of £14,450,000 was drawn down from this
facility.

Annual General Meeting - The Annual General Meeting of the Company will be
held at The City of London Club, 19 Old Broad Street London EC2N 1DS at 12
noon on Wednesday, 27 January 2010.


Performance Summary

                                       30 September   30 September
                                           2009
                                                          2008     % Change
 
Share price                               231.0p         202.0p     +14.4
Net asset value per share (including      249.0p         215.5p     +15.5
income)
Net asset value per share (excluding      243.9p         215.5p     +13.2
income)
Dividends per share                        9.5p           9.5p        -
Discount of share price to net asset
value per share (excluding income)
                                           5.3%           6.3%
Gearing (borrowings as a percentage
of shareholders' funds)
                                           10.6%         11.8%
 
Share price total return*                 +22.9%         -33.1%
Net asset value per share total           +24.0%         -31.4%
return*
FTSE All-Share Index (total return)
(company benchmark)
                                          +10.8%         -22.3%
Total expense ratio (excluding the
recovery of VAT)+
                                           0.9%           1.0%


5 Year Performance Summary  30/9/2005 30/9/2006 30/9/2007 30/9/2008 30/9/2009

Share Price                  260.3p    300.3p    307.5p    202.0p    231.0p

Share price total return*    +37.2%    +19.6%     +5.3%    -33.1%    +22.9%
Net asset value per share
(including income)
                             257.8p    302.6p    315.4p    215.5p    249.0p
Net asset value per share
(excluding income)
                             253.8p    298.4p    310.6p    215.5p    243.9p
Net asset value per share
total return*
                             +31.5%    +21.2%     +6.9%    -31.4%    +24.0%
FTSE All-Share Index (total
return)
                             +24.9%    +14.7%    +12.2%    -22.3%    +10.8%
Premium/(discount) of share
price to net asset value
per share (excluding
income)
                              2.6%      0.6%     (1.0)%    (6.3)%    (5.3)%
Gearing (borrowings as a
percentage of shareholders'
funds)                        15.6%     13.4%     15.0%     11.8%     10.6%

Ordinary dividends per        8.0p      8.4p      9.0p      9.5p      9.5p
share
Special dividends per share     -       2.3p        -         -         -


*Source: Morningstar. Includes the 2008 second interim dividend
which had an ex-dividend date of 1 October 2008.

+TER is calculated based on the average net asset value during the
year ended 30 September.


Chairman's Statement

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

If you are in any doubt about any aspect of the proposal described in this
document or as to the action you should take, you should consult your
stockbroker, bank manager, solicitor, accountant or other appropriate
independent adviser.

If you have sold or otherwise transferred all your ordinary shares of 25p each
in Finsbury Growth & Income Trust PLC (the "Company"), please forward this
document to the purchaser or transferee, or to the bank, stockbroker or other
agent through whom the sale or transfer was effected, for transmission to the
purchaser or transferee.

Performance

After a challenging first half of the year to 31 March 2009, markets rallied
strongly in the second half and I am delighted to be able to report that
overall the Company's net asset value total return for the year was 24%. The
share price total return was slightly less at 22.9%. These results compare to
the total return from our benchmark index, the FTSE All-Share index, of 10.8%.
Overall the more buoyant market conditions have provided a welcome contrast to
those experienced in 2008.

The Company's strong outperformance when compared to the benchmark index is
particularly pleasing and was derived principally from good returns from our
major holdings in A.G. Barr, Cadbury, Fidessa, Unilever and Pearson.

Share Capital

The Company has continued to be active in issuing shares from treasury at a
discount of less than 5% and buying back shares for treasury where they were
offered at a discount greater than 5% to the net asset value per share. A
total of 1,009,000 shares were repurchased for treasury during the year in
accordance with the Company's stated policy and 1,330,000 shares were reissued
during the year at a price representing a narrower discount to net asset value
per share than that at which they had been bought into treasury. Following the
year end a further 680,000 shares have been issued from treasury and 1,069,360
shares have been repurchased to be held in treasury leaving a balance of
1,915,110 shares held in treasury at the date of this report.

The Board attaches considerable importance to its discount control mechanism
which is actively used. The average month end discount of share price to the
ex-income net asset value per share during the year was 4%.

Return and Dividend

The Income Statement shows a total return per share of 43.1p consisting of a
revenue return per share of 9.1p and a capital return per share of 34.0p.

Your Board has declared two interim dividends for the year totalling 9.5p per
share (year ended 30 September 2008: 9.5p). The total cost of the two
dividends attributable to the year was £4.826m which compares to a net revenue
available for distribution for the year of £4.639m and therefore £187,000 of
brought forward reserves have been applied in paying the total dividend for
the year. Following payment of the second interim dividend on 6 November 2009
the Company has £2.164m of retained distributable reserves which is equivalent
to approximately 4.2p per share.

The Board is very conscious of the importance of income to our shareholders,
but also considers it vital not to compromise the investment strategy of the
Company. The EU has barred Lloyds Banking Group from paying preference share
dividends before 2012, a ruling that will have an impact on the Company's
income. The result will be an income shortfall from the current rate of
dividend payment which may exceed the availability of the Company's
distributable reserves. However, the extent and duration of the shortfall is
not possible to ascertain today. The Board will review the position at the
time of the interim dividend declaration in March 2010.

Borrowings

Subsequent to the year end the Company arranged a new secured fixed term
committed multicurrency revolving credit facility of £15m with Scotiabank
Europe PLC which is subject to an interest rate linked to the London
Inter-Bank Offered Rate. A total of £14.45m is currently drawn down from this
new facility.

Proposed Change to Investment Policy

The Company's current investment policy is to invest principally in the
securities of UK quoted securities. However, outside the control of our
Investment Manager we already have two investments, namely Thomson Reuters and
Dr Pepper Snapple, equating to approximately 5% of the portfolio, that do not
fulfil this criteria. Under the Listing Rules the Company is required to seek
the approval of shareholders for any material change in its investment policy
and I set out below further information about the proposed change. An ordinary
resolution to approve the change will be proposed at the Company's Annual
General Meeting to be held at 12 noon on Wednesday, 27 January 2010 at The
City of London Club, 19 Old Broad Street, London EC2N 1DS.

Our Investment Manager believes that it would be beneficial to shareholders if
the restriction of investing principally in the UK were amended such that up
to a maximum of 20% of the Company's portfolio can be invested in quoted
companies worldwide. This would enable the Company to retain its membership of
the UK Growth & Income Sector as administered by the Association of Investment
Companies.

The Board strongly supports the investment philosophy and approach of our
Investment Manager Lindsell Train Limited and is of the view that,
particularly in the current difficult market conditions, the Company is more
likely to be able to achieve capital and income growth and to provide
shareholders with a total return in excess of that of the FTSE All-Share Index
if this proposed amendment to the Company's investment policy were made.

VAT

As shareholders will be aware from my previous statements, VAT is no longer
charged on investment management fees following the ruling by the European
Court of Justice in October 2007. All past VAT payments due for reclaim by the
Company have now been received.

Alternative Investment Fund Manager (`AIFM') Directive

The AIFM Directive is draft legislation currently being considered in Europe
which will regulate `alternative investment funds'. As currently drafted it
will adversely affect all investment trusts, including this Company. The Board
therefore actively supports the initiatives being taken by the Association of
Investment Companies to ensure that the Directive is tailored to accommodate
the investment company structure. The Board will keep shareholders informed of
developments concerning the Directive as they arise.

Outlook

Whilst the recovery in markets generally during 2009 has been welcome, the
outlook remains difficult to gauge, both from a capital and an income return
perspective. The UK economy continues to have an uncertain feel about it and
unemployment is expected to continue to rise in the short term. An increase in
inflation in the short term has also been predicted by the Bank of England.
The current financial year will see a general election in the UK, however it
is difficult to see that whoever wins will be able to make meaningful changes
in the short term and the prospect of significant public spending cuts and tax
rises is virtually certain.

Despite this unpromising outlook, your Board remains strongly supportive of
our Investment Manager's strategy of investing for the long term in durable
cash generative franchises with sustainable dividend growth rates. We continue
to believe that this strategy will deliver superior investment returns to
shareholders.

Further information concerning the portfolio, including dividend prospects,
can be found in our Investment Manager's report below.

Anthony Townsend

Chairman

17 December 2009

Investment Manager's Review

The last twelve months have, of course, been a most disagreeable white-knuckle
ride, with every chance that further nauseating loop-de-loops await.

We look back and wonder two things. What lessons have we learned? And, perhaps
more important, which of the investment rules or guidelines, that had served
us well for the previous seven years of our responsibility for your Company's
portfolio, stood up to the intense examination of the bear market and remain
valid?

As to lessons learned - one springs, most painfully, to mind. We will never
again invest in the shares of any bank without paying closer attention to how
it funds its business. I'm afraid that like the boards of several institutions
we were complacent in assuming major banks would always be able to refinance
their short term liabilities. As this report is written our only remaining
exposure to the banking sector is via Lloyds preference shares, a position
held for many years. These have proven a poor allocation of your capital. What
we regarded as one of the least risky assets in the portfolio has turned out
to be one of the worst performers and this disappointment has been compounded
by the recent announcement of a two year suspension of their dividends,
required by the EU (we sold the Lloyds ordinary shares after the period end,
on learning of this dividend hiatus). In our judgement these preference shares
are cheap today, assuming Lloyds is a healing institution, but this situation
must be watched closely.

Turning to our guiding principles, we have growing concerns about one long
term touchstone. We had always believed in the efficacy of investing in shares
offering above average dividend yields. This may still be a winning strategy
in the very long term, but there is something bothersome to us about the
outlook for UK dividends. It is not only that they are being cut at a quicker
rate, reportedly, than before the First World War; it is their unusual
distribution. Nearly half the total dividends by value currently paid by
London-listed companies derive from just six giant companies - BHP, BP, Glaxo,
HSBC, Shell and Vodafone. And of these six, five pay their dividends in
dollars, not sterling - Vodafone the exception. Investing for dividend yield
today, therefore, not only requires one to concentrate on a limited number of
companies, for which you may or may not have any great enthusiasm (and we own
none of the six currently), it also involves involuntary currency risk. As to
that risk, the fact is we agree with a comment we heard recently - that
picking developed world currencies now is like being asked to choose between
horses in a glue factory - they are all knackered. And perhaps sterling is
even more so than any other, in which case receiving one's dividends in US
dollars will be a boon. But nothing beats matching one's long term liabilities
to the currency that will be required to pay for them and all your Company's
constituents pay sterling dividends, with the exception of Thomson Reuters and
Dr Pepper Snapple.

These concerns mean that although dividends still very much matter in our
thinking, we place higher value today on the sustainability of a given
company's dividend, or even better, on the sustainability of its dividend
growth rate, than on the starting level of dividend yield. For instance,
software company Fidessa is a key holding for your Company - not least because
of its 64% capital gain over the last year. Fidessa has a wonderful dividend
record, having increased its annual payments from 3.4p in 1999 to 27p this
year, including a 33% hike in its recent interim coupon. Today Fidessa's
shares offer a starting dividend yield of just 2% - some 35% less than that of
the FTSE All Share itself, although still usefully higher than the current
rate of UK retail price inflation. Nonetheless, we think it would be a mistake
to exchange Fidessa's shares for others with a higher starting yield, but
without the same security and growth potential. The reason can be seen here -
the current value of the investment in Fidessa is more than double the book
cost - meaning that the "dividend yield to book cost", or today's dividend as
a percentage of the average purchase price, is over 4%. That 4%, which should
go higher, as Fidessa increases future dividends, is one measure of the
success of a "growth and income" investment. And, more generally, we think
some of the best dividend prospects in the portfolio are found with companies
more traditionally regarded as "growth" plays, rather than "income" stocks -
for instance, London Stock Exchange, Pearson, Reed Elsevier, Sage, Schroders
and Thomson Reuters.

We retain greater confidence in the following tried and tested investment
rules. Last year's bouleversements confirmed for us the validity of one of the
most forthright and challenging propositions about investment we know - from
fabled US investor Peter Lynch.

"No one can predict the economy, interest rates or the stock market. Dismiss
all such forecasts."

What we find valuable here is not so much the assertion that the so-called
experts - including us - have no real idea what will happen next (sometimes
their predictions are true, sometimes untrue and only hindsight enables you to
establish which is which) and in any case contradict each other, it is the
insistence that investors take decisions or build portfolios on something more
tangible than guesses about an unknowable future.

Something more tangible, for instance, is a disciplined contrarian approach.
Perhaps Warren Buffett puts it best, in his typically homely way.

"Whether we're talking socks or stocks, I like buying quality merchandise when
it is marked down."

Having hoarded cash for years, Buffett committed billions to the equity
markets last Autumn when others were selling in despair. While few executed
with such aplomb, we at least held our nerve and increased your Company's
borrowings and gearing as markets approached their lows - magnifying the
benefits of the subsequent recovery for shareholders. Today, borrowings stand
at £14.45m, for gearing of 11.4%. In addition, we followed Buffett's quip and
invested sartorially with the one new holding we initiated for your Company
last year. This was Burberry. In mid-2007 Burberry shares peaked at £7.20. We
had followed the company for years, but owned none, unable to make sense of
the valuation at those prices. By October 2008, though, they had halved, to
£3.60. At this point we started buying - tentatively. One month later the
shares halved again, hitting a multi-year low of £1.60. We carried on buying,
admittedly flinching slightly as we did so. A year on, the shares are back at
£5.65! Burberry - which does carry a line of natty check socks - is definitely
"quality merchandise". And even if its share price behaves like an elevator
with a lunatic at the controls, you should always look for opportunities to
pick up quality at bargain prices.

Finally, it has been a great relief to us that our favourite investment rule,
the one rule that has never yet failed us, has held fast. This was taught me
by a former boss and I share it willingly here. The rule says that - "if a
company makes products that taste good, buy the shares". Good tasting products
tend to attract loyal customers and loyal customers make for both decent and
reliable profitability and, critically, for long run inflation-proofing - rare
and valuable characteristics.

The portfolio is full of companies whose products taste good - such as A.G.
Barr, Diageo, Dr Pepper, Fullers, Marston's, Unilever and Youngs - and, by and
large, their shares held up well during recent traumas and have made rewarding
longer term investments. Most topically, your Company has a substantial
investment in Cadbury, currently caught up in a bid tussle. We note that
Cadbury shares had outperformed the FTSE All Share Index over 1, 3, 10 and 20
years even before Kraft's approach - a satisfactory showing, for what was
regarded as a dull, but worthy company and testament to the power of
investing, over the long term, in companies whose products "taste good". We
expect Kraft will have to pay up to win control of this exceptional corporate
asset. We certainly have no intention of accepting anything like its sighting
shot.

Nick Train, Lindsell Train Limited

Investment Manager

17 December 2009


Analysis of Portfolio
as at 30 September 2009                                       £'000       %

Listed on a recognised stock exchange                       132,426    95.4
Total listed equities                                       132,426    95.4
Frostrow Capital LLP                                            250     0.2
Total unquoted investments                                      250     0.2
Lloyds Banking Group 9.25% non cum preference                 4,985     3.6
Lloyds Banking Group 9.75% non cum preference                 1,092     0.8
Celtic 6.0% cum preference                                       46     0.0
Total preference shares                                       6,123     4.4
Total investments                                           138,799   100.0


Contribution to Net Asset Value
For the year ended 30 September 2009

                                                         Contribution
                                                      for the year to
                                                         30 September Contribution
                                                                 2009    per share
Investment                                                      £'000     (pence)*
Equities
Barr (A.G.)                                                     5,714         11.3
Cadbury                                                         4,037          8.0
Fidessa                                                         3,244          6.4
Unilever                                                        2,531          5.0
Pearson                                                         2,409          4.7
Thomson Reuters                                                 1,814          3.6
Burberry                                                        1,432          2.8
Sage                                                            1,415          2.8
Fuller Smith & Turner                                             965          1.9
Diageo                                                            752          1.5
Euromoney Institional Investor                                    719          1.4
Dr Pepper Snapple                                                 714          1.4
Schroders                                                         617          1.2
Young & Co's Brewery                                              222          0.4
Lindsell Train Investment Trust                                   207          0.4
London Stock Exchange                                              58          0.1
Marston's                                                          35          0.1
Hargreaves Lansdown                                              (29)        (0.1)
Daily Mail and General Trust                                     (71)        (0.1)
Celtic                                                           (76)        (0.1)
Halma                                                            (84)        (0.2)
Rathbone Brothers                                               (179)        (0.4)
Royal Dutch Shell                                               (211)        (0.4)
Reed Elsevier                                                   (650)        (1.3)
Lloyds Banking Group                                          (3,010)        (5.9)
                                                               22,575         44.5
Preference shares (franked income)
Lloyds Banking Group 9.25% non-cum preference                     814          1.6
(formerly HBOS 9.25%)
Lloyds Banking Group 9.75% non-cum preference                      93          0.2
(formerly HBOS 9.75%)
Celtic 6% Cum Preference                                          (1)          0.0
NatWest 9% preference                                           (386)        (0.8)
                                                                  520          1.0
Unquoted
Frostrow Capital LLP                                              245          0.5
Bank interest & money market interest                               5          0.0
Contribution for the year                                      23,345         46.0
Expenses and finance charges                                  (1,480)        (2.9)
Total contribution for the year                                21,865         43.1

*based on the Company's weighted average number of shares in issue during the
year, being 50,737,975.



Investments
as at 30 September 2009

                                                                                  
                                                                Fair value        % of
Investment                      Sector                               £'000 investments

Barr (A.G.)                     Beverages                           14,418        10.4
Diageo                          Beverages                           14,133        10.2
Unilever                        Food Producers                      14,071        10.1
Cadbury                         Food Producers                      13,301         9.6
Pearson                         Media                                9,128         6.6
Fidessa                         Software & Computer                  7,809         5.6
                                Services
Sage                            Software & Computer                  7,277         5.2
                                Services
Lloyds Banking Group (non cum   Banks                                6,077         4.4
preference)#*
Marston's                       Travel & Leisure                     6,076         4.4
Rathbone Brothers               General Financials                   5,941         4.3
Top 10 investments                                                  98,231        70.8
Reed Elsevier                   Media                                5,723         4.1
Schroders                       General Financials                   5,427         3.9
Dr Pepper Snapple^              Beverages                            4,560         3.3
Thomson Reuters~                Media                                4,118         3.0
Fuller Smith & Turner           Travel & Leisure                     3,591         2.6
Euromoney Institutional         Media                                3,391         2.5
Investor
Lloyds Banking Group            Banks                                3,064         2.2
Young & Co's Brewery            Travel & Leisure                     3,038         2.2
London Stock Exchange           General Financials                   2,683         1.9
Burberry Group                  Personal Goods                       2,528         1.8
Top 20 investments                                                 136,354        98.3
Lindsell Train Investment Trust General Financials                   1,540         1.1
Celtic                          Travel & Leisure                       609         0.4
Frostrow Capital+               General Financials                     250         0.2
Celtic 6% (cum preference)*     Travel & Leisure                        46           -
Total investments                                                  138,799       100.0


All of the above investments are equities listed in the UK, unless otherwise
stated.

# Comprises a holding in Lloyds Banking Group 9.25% non cum preference
equating to 3.6% of investments and in Lloyds Banking Group 9.75% non cum
preference equating to 0.8% of investments.

* Non-equity - Preference Shares.

^ Listed in the United States. The holding arose following the demerger from
Cadbury Schweppes in 2008.

~ Listed in Canada - following the delisting from the London Stock Exchange.

+ Unquoted partnership interest.



+ Sector Analysis of Portfolio

+ as at 30 September 2009

                                                                                Finsbury
                                                                                  Growth
Comparison of sector weightings with the           Finsbury          FTSE       & Income
FTSE All-Share Index                                 Growth     All-Share   (Under)/over
                                                   & Income         Index         weight

Sector                                                    %             %              %

Oil & Gas                                                 -          18.2         (18.2)
Oil & Gas Producers                                       -          17.7         (17.7)
Oil Equipment, Services & Distribution                    -           0.5          (0.5)
Basic Materials                                           -          10.2         (10.2)
Chemicals                                                 -           0.3          (0.3)
Forestry & Paper                                          -           0.1          (0.1)
Industrial Metals                                         -           0.1          (0.1)
Mining                                                    -           9.7          (9.7)
Industrials                                               -           6.9          (6.9)
Construction & Materials                                  -           0.2          (0.2)
Aerospace & Defence                                       -           1.9          (1.9)
General Industrials                                       -           0.6          (0.6)
Electronic & Electrical Equipment                         -           0.3          (0.3)
Industrial Engineering & Transportation                   -           0.7          (0.7)
Support services                                          -           3.2          (3.2)
Consumer Goods                                         45.4          11.6           33.8
Automobile & parts                                        -           0.1          (0.1)
Beverages                                              23.9           2.8           21.1
Food Producers                                         19.7           2.7           17.0
Household Goods                                           -           1.9          (1.9)
Personal Goods                                          1.8           0.3            1.5
Tobacco                                                   -           3.8          (3.8)
Health Care                                               -           7.9          (7.9)
Health Care Equipment & Services                          -           0.4          (0.4)
Pharmaceuticals & Biotechnology                           -           7.5          (7.5)
Consumer Services                                      25.8           9.6           16.2
Food & Drug Retailers                                     -           3.0          (3.0)
General Retailers                                         -           1.7          (1.7)
Media                                                  16.2           2.4           13.8
Travel & Leisure                                        9.6           2.5            7.1
Telecommunications                                        -           6.0          (6.0)
Fixed Line Telecommunications                             -           1.0          (1.0)
Mobile Communications                                     -           5.0          (5.0)
Utilities                                                 -           3.4          (3.4)
Electricity                                               -           1.1          (1.1)
Gas, Water & Multiutilities                               -           2.3          (2.3)
Financials                                             13.6          24.7         (11.1)
Banks                                                   2.2          14.4         (12.2)
Nonlife Insurance                                         -           1.0          (1.0)
Life Insurance                                            -           3.0          (3.0)
Real Estate                                               -           1.6          (1.6)
General Financials                                     11.4           2.0            9.4
Equity Investment Instruments                             -           2.7          (2.7)
Technology                                             10.8           1.5            9.3
Software & Computer Services                           10.8           1.2            9.6
Technology Hardware & Equipment                           -           0.3          (0.3)
Total excluding Preference Shares                      95.6         100.0          (4.4)
Preference shares                                       4.4                          4.4
Total including Preference Shares                     100.0         100.0              -


Report of the Directors Incorporating the
Business Review

The Directors present their report and the financial statements for the year
ended 30 September 2009.

Business Review

Financial reporting requirements direct that the Company is required to
provide a Business Review within the Report of the Directors. The Business
Review must contain a review of the Company's business, the principal risks
and uncertainties it faces and an analysis of its performance during the
financial period and the position at the period end. To aid understanding of
these areas the Board is required to include analysis using appropriate Key
Performance Indicators. The Business Review should be read in conjunction with
the Chairman's Statement on pages 3 and 4, the Investment Manager's Review on
pages 5 and 6 and the analyses on pages 7 to 10.

Status of the Company

During the year under review the Company has continued to conduct its affairs
so as to qualify as an investment company, as defined under Section 833 of the
Companies Act 2006, and an investment trust within the meaning of Section 842
of the Income and Corporation Taxes Act 1988. HM Revenue & Customs approval of
the Company's status as an investment trust has been received for all years up
to and including the year ended 30 September 2008. This is however subject to
review should there be any enquiry under Corporation Tax Self Assessment. The
Directors are of the opinion that the Company has subsequently directed its
affairs so as to enable it to continue to obtain HM Revenue & Customs approval
as an investment trust.

The close company provisions of the Income and Corporation Taxes Act 1988 do
not apply to the Company.

The Company's shares are eligible for inclusion in the stocks and shares
component of an Individual Savings Account.

Investment Objective

The Company's investment objective is to achieve capital and income
growth and to provide shareholders with a total return in excess of that of
the FTSE All-Share Index.

Investment Policy

The Company invests principally in the securities of UK quoted companies.
Where possible, a minimum position size of 1% of the Company's gross assets is
held unless the holding concerned is being built or disposed of.

The portfolio is managed by Lindsell Train Limited (the "Investment Manager")
and will normally comprise approximately 30 investments. Unless driven by
market movements, FTSE 100 companies, including preference shares issued by
such companies, will normally represent between 50% and 100% of the portfolio;
at least 70% of the portfolio will normally be invested in companies within
the FTSE 350.

The Company does not and will not invest more than 10%, in aggregate, of the
value of its gross assets in other closed ended investment companies
(including investment trusts) listed on the London Stock Exchange, except
where the investment companies themselves have stated investment policies to
invest no more than 15% of their gross assets in other closed ended investment
companies (including investment trusts) listed on the London Stock Exchange.
The Company does not and will not invest more than 15%, in aggregate, of the
value of the gross assets of the Company in other closed ended investment
companies (including investment trusts) listed on the London Stock Exchange.

No investment will be made in any company or fund where Lindsell Train Limited
acts as the investment manager without the prior approval of the Board.

The Board has set a maximum level of gearing of 25% of the Company's net
assets.

The Company has the ability to invest a proportion (up to 25% of
its gross assets) in preference shares, bonds and other debt instruments,
although no more than 10% of any one issue may be held. In addition, a maximum
of 10% of the Company's

gross assets can be held in cash, where the Investment Manager believes market
or economic conditions make equity investment unattractive or while seeking
appropriate investment opportunities or to maintain liquidity.

Whilst performance is measured against the FTSE All-Share Index, the Company's
portfolio is constructed and managed without reference to a stock market
index, investments being selected only after extensive research by the
Investment Manager. The Investment Manager uses a bottom-up stock picking
approach and looks to invest in a universe of excellent UK listed businesses
that appear undervalued.

Report of the Directors

Continued

Results and Dividends

The results attributable to shareholders for the year are shown on page 32.
The dividends for the year to 30 September were:

                                                                 2009    2008

                                                                £'000   £'000

First Interim paid of 4.4p per share (2008: 4.4p)               2,211   2,318

Second Interim paid of 5.1p per share (2008: 5.1p)              2,615   2,598

Total                                                           4,826   4,916


Performance and Performance Measurement

While the Board monitors the net asset value as the primary financial
measurement it is aware that share price performance and income return are the
most important factors to the Company's shareholders. Net asset value and
share price performance are of course closely linked and it is the
responsibility of the Investment Manager to seek the best investments and to
manage the portfolio in the most beneficial way to achieve the highest returns
for shareholders. The Company's net asset value per share total return for the
year was 24%. The Company's benchmark, the FTSE All-Share Index (measured on a
total return basis) rose by 10.8% during the same period. The Company's share
price total return for the year was 22.9%. For the year under review, the
Contribution to Net Asset Value table is detailed on page 7.

The Board recognises that income return is also important to shareholders and
the Board therefore endeavours to maintain a progressive dividend policy. The
Company has paid dividends totalling 9.5p per share for the year ended 30
September 2009, this figure being unchanged from the previous year.

The Board reviews overall performance on a continuous basis. The Company's net
asset value per share is announced daily via a regulatory news service and is
available online (see page 54 of this annual report for details).

Key Performance Indicators ("KPIs")

The Board assesses the Company's performance in meeting its investment
objective against the following key performance indicators:

- Net asset value per share total return

- Share price total return

- Income

- Stock contribution analysis

- Share price premium/(discount) to net asset value per share analysis

- Total expense ratio

- Benchmark and peer group performance

- Issue and repurchase of Company's shares As indicated, Lindsell Train
Limited has been appointed by the Board to manage the Company's portfolio and
Frostrow Capital LLP (the "Manager") has been appointed as the Company's
Manager, Administrator and Company Secretary. Each provider is responsible to
the Board which is ultimately responsible to the shareholders for performing
against inter alia the above KPIs within the terms of their respective
agreements by utilising the capabilities of the experienced professionals
within each firm.

Principal Risks and their Mitigation

The Company's assets consist principally of listed equities; its
main area of risk is therefore stock market related. The specific key risks
faced by the Company, together with the mitigation approach adopted, are as
follows (further information on the Company's risk management strategy can be
seen in note 17):

Objective and Strategy - The Company and its Investment Objective become
unattractive to investors

The Board regularly reviews the investment mandate and the long-term
investment strategy in relation to market and economic conditions, and the
operation of the Company's peers, thereby monitoring whether the Company
should continue in its present form. Each month the Board receives a Monthly
Review, which monitors the Company's investment performance (both on an
absolute basis and against the benchmark and peer group) and its compliance
with the investment guidelines. The Company's Manager and Investment Manager
regularly present additional reports and presentations to the Board and their
continuity is regularly considered by the Board.


Report of the Directors

Continued

Level of discount/premium - Share price performance lags NAV performance

The Board undertakes a regular review of the level of discount/premium and
consideration is given to ways in which share price performance may be
enhanced, including the effectiveness of marketing. The Board operates an
active discount control mechanism with the aim of limiting the discount of the
share price to the net asset value per share to 5%. In the event of shares
being re-purchased by the Company, such shares may be held in treasury for
reissue into the market when demand arises. Shareholders should note that it
remains possible for the share price discount to net asset value per share to
be greater than 5% on any one day. This was the case as at 30 September 2009
and is due to the fact that the share price continues to be influenced by
overall supply and demand for the Company's shares in the secondary market.
The average month-end discount of share price to the ex-income net asset value
per share during the year was 4%, a level that has been broadly maintained
since the year end.

Market Price Risk

Market price risk arises mainly from uncertainty about future prices of
financial instruments held. It represents the potential loss the Company might
suffer through holding market positions in the face of price movements.

The Board meets on at least a quarterly basis during the year and at each
meeting they consider the asset allocation and concentration of the portfolio
in order to review the risk associated with particular instruments. The
Investment Manager has responsibility for selecting investments in accordance
with the Company's investment objective and seeks to ensure that individual
stocks meet an acceptable risk-reward profile.

Liquidity Risk

The Company's assets comprise mainly realisable securities, which can be sold
to meet funding requirements where necessary.

Interest Rate Risk

The Company borrows in sterling at floating rates of interest and hence is
exposed to the risk that its cashflow will change due to movements in
prevailing interest rates. The Board imposes borrowing limits to ensure
gearing levels are appropriate to market conditions and reviews these on a
regular basis.

The Company also invests in fixed rate preference shares and fixed interest
investments which are exposed to movements in their fair value arising from
changes in interest rates. These risks are managed alongside market price risk
as described above.

Credit Risk

The Company's principal financial assets are bank balances, debtors and
investments which represent the Company's maximum exposure to credit risk in
relation to financial assets. The credit risk on bank balances is considered
low because the counter-parties are banks with high credit ratings assigned by
international credit agencies. The credit risk in relation to the companies
that comprise the portfolio is monitored closely by the Investment Manager.

Shareholder Profile - Activist shareholders may be attracted onto the
shareholder list, interests may not be consistent with the long-term
objectives of the Company

The Manager provides a shareholder analysis to every Board meeting. The Board,
in conjunction with the Manager and Investment Manager and where appropriate
the Corporate Stockbroker, considers the potential consequences of activist
holdings and any action which may be required to mitigate negative activity.
In addition, the Board operates a discount control mechanism, as detailed
above, in order that the discount of share price to net asset value per share
remains as narrow as is practicable, thus reducing the attractiveness of the
Company to such potential shareholders.

Portfolio Performance - Investment performance may not be meeting the
investment objective or shareholder requirements The Board regularly reviews
investment performance against the benchmark and against the peer group. The
Board also receives reports that show an analysis of performance compared with
other relevant indices. The Investment Manager provides an explanation of
stock selection decisions and an overall rationale for the make-up of the
portfolio. The Investment Manager discusses current and potential investment
holdings with the Board on a regular basis in addition to new initiatives,
which may enhance shareholder returns.

Operational and Regulatory - Compliance with s842, Income and Corporation
Taxes Act 1988

A breach of s842 could lead to the Company being subject to capital
gains tax on the sale of its investments, whilst serious breach of other
regulatory rules may lead to suspension from the Stock Exchange or to a
qualified Audit Report. Other


Report of the Directors

Continued

control failures, either by the Manager, the Investment Manager or any other
of the Company's service providers, may result in operational and/or
reputational problems, erroneous disclosures or loss of assets through fraud,
as well as breaches of regulations.

The Manager and the Investment Manager review the level of compliance with
s842 and other financial regulatory requirements on a daily basis. All
transactions, income and expenditure forecasts are reported to the Board. The
Board regularly considers all risks, the measures in place to control them and
the possibility of any other risks that could arise. These risks are
formalised in the Company's risk assessment register. The Board ensures that
satisfactory assurances are received from service providers. The Manager's and
the Investment Manager's Compliance Officers produce regular reports for
review by the Company's Audit Committee and are available to attend meetings
in person if required.

Investment Management Key Person Risk

There is a risk that the individual responsible for managing the Company's
portfolio may leave his employment or may be prevented from undertaking his
duties.

The Investment Manager has in place an insurance policy covering key
personnel. There is a qualified individual who works with the designated
portfolio manager who could take over if necessary.

Fixed Asset Investments

The fair value of the Company's investments, at 30 September 2009 was
£138,799,000 (2008: £121,586,000) showing a profit since acquisition of
£22,160,000 (2008: loss £1,632,000). Taking these investments at this
valuation, the net assets attributable to each share at 30 September 2009
amounted to 249.0p (2008: 215.5p).

Issue and Repurchase of Shares

At the Annual General Meeting held on 23 January 2009, authority to allot
shares on a non pre-emptive basis was granted for 5,081,867 shares.

The Board continues to believe the use of a discount management policy, to buy
back shares if offered at a discount greater than 5% to the net asset value
per share, and the use of the treasury share facility, whereby shares
repurchased by the Company are held in treasury for reissue into the market
(at a discount less than 5% to the net asset value per share) when demand is
present, are in the best interests of the Company and shareholders. During the
year a total of 1,009,000 shares were repurchased by the Company

and held in treasury. From 1 October 2009 to 17 December 2009, the latest
practicable date before the printing of this Annual Report, a further
1,069,360 shares have been purchased and held as treasury shares.

During the year a total of 1,330,000 shares were reissued out of treasury at a
price representing a narrower discount to net asset value per share than that
at which they had been bought into treasury. Following the year-end and up
until

17 December 2009, a further 680,000 shares were reissued out of treasury also
at a price representing a narrower discount to net asset value per share than
that at which they had been bought into treasury. As at 17 December 2009 a
total of 1,915,110 shares are held in treasury.

The reissue of shares at a discount to the Company's prevailing net asset
value per share will have a dilutive effect on the net asset value per share.

Prospects

A review of the Company's year and of its performance since the year end can
be found in the Chairman's Statement on pages 3 and 4 and in the Investment
Manager's Review on pages 5 and 6. The Board concentrates its attention on the
Company's investment performance and the Investment Manager's investment
approach and on factors that may have an effect on this approach. Marketing
reports are given to the Board at each Board meeting, which include how the
Company is being promoted and details of communications with existing and
potential shareholders. The Board is regularly updated on wider investment
trust industry issues and discussions are held concerning the Company's
development and strategy.

Management

The Company has no employees and most of its day-to-day activities are
delegated to third parties. The Company has appointed Frostrow Capital LLP as
Manager, Administrator and Company Secretary and Lindsell Train Limited as
Investment Manager.

Lindsell Train Limited was appointed Investment Manager to the Company in
December 2000. Lindsell Train has given Nick Train responsibility for managing
the Company's portfolio. Mr Train was previously head of Global Equities at
M&G PLC and head of Pan-European Equities at GT Management PLC. Mr Train has
managed money in the UK equity market since 1983, including the top decile
performer GT Income Fund (1985-1998). Lindsell Train is authorised and
regulated by the Financial Services Authority.

Report of the Directors

Continued

Frostrow Capital LLP is a firm established in 2007 to provide specialist
management, administration, company secretarial and marketing services to
investment companies. Frostrow is authorised and regulated by the Financial
Services Authority.

The Board looks to the Investment Manager to deliver investment performance.
The Manager is responsible for providing company secretarial, administrative,
accounting and marketing services. Details of the appointment of each party
are given below.

The Investment Manager continues to manage the portfolio in accordance with
the investment objective and policy. The Investment Manager is an independent
investment management company and is able to access, through in-depth research
and analysis, the most profitable investments for the Company.

Investment Management Agreement: Under the terms of the Investment Management
Agreement, Lindsell Train Limited provide discretionary investment management
services to the Company for a periodic fee equal to 0.45% per annum of the
Company's market capitalisation. The Investment Management Agreement may be
terminated by either party giving notice of not less than 12 months. The
Investment Manager under the terms of the Agreement provides inter alia the
following services:

- seeking out and evaluating investment opportunities;

- recommending the manner by which monies should be invested, disinvested,
retained or realised;

- advising on how rights conferred by the investments should be exercised;

- analysing the performance of investments made; and

- advising the Company in relation to trends, market movements and
other matters which may affect the investment policy of the Company.

Management, Administrative and Secretarial Services Agreement: Management,
Administrative, Secretarial and other services are provided to the Company by
the Manager.

Under the terms of the Management, Administrative and Secretarial Services
Agreement the Manager receives a periodic fee at a rate of 0.15% per annum of
the Company's market capitalisation plus a fixed fee of £70,000 per annum
calculated monthly and payable monthly in arrears.

The notice period on the Management, Administration and Company Secretarial
Agreement with the Manager is

12 months and may be terminated by either party.

The Manager, under the terms of the Management, Administrative & Secretarial
Services Agreement provides inter alia the following services:

- marketing and shareholder services;

- administrative services to such extent and from such dates as the Board may
determine;

- advice and guidance in respect of corporate governance requirements;

- performance measurement reports;

- maintenance of adequate accounting records and management information;

- preparation and despatch of the audited annual financial
statements, the unaudited interim report and the interim management
statements; and

- attending to general tax affairs where necessary.

Performance Fee: Dependent on the level of performance achieved, the Manager
and Investment Manager are also entitled to the payment of a performance fee.
The calculation basis of the performance fee is by reference to the annual
increase in the Company's market capitalisation, but only after attainment of
an absolute return hurdle, which is the sum of the increase in the Retail
Price Index in the year, plus a fixed return of 6%. The Investment Manager
receives 85% and the Manager receives 15% of the performance fee. The total
fixed, periodic and performance fees payable in any one year to the Investment
Manager and the Manager are capped at 1.25% of the Company's market
capitalisation. Any outperformance, that would have resulted in a higher fee
being paid had there been no cap, is carried forward into the calculation of
future years' fees. Similarly, in the case of underperformance, any
underperformance has to be made up in future years before a performance fee
becomes payable in those years.

Partnership Interest in Frostrow Capital LLP

The Company acquired a 10% interest in the Manager at a cost of £150,000 on 5
September 2007. On 30 October 2008, £75,000 of the amount paid was repaid to
the Company by Frostrow Capital LLP. Also during the year £70,000 was received
in respect of the profit share due from this limited liability partnership
interest. As part of the acquisition, the Company also committed to provide
the Manager with a £250,000 three year

Report of the Directors

Continued

credit facility at an interest rate to be agreed. At the Company's year-end,
and up to the date of this Annual Report, the facility was not utilised by the
Manager.

Investment Manager, Manager and Evaluation and Re-Appointment

The review of the performance of the Investment Manager and the Manager is a
continuous process carried out by the Board with a formal evaluation being
undertaken each year. As part of this process the Board monitors the services
provided by the Investment Manager and the Manager and receives regular
reports and views from the Investment Manager on investment strategy, asset
allocation and stock selection. The Board also receives performance
measurement reports to enable it to determine whether or not the performance
objective set by the Board has been met.

The Board believes the continuing appointment of the Investment Manager and
the Manager, under the terms described on the previous page, is in the
interests of shareholders as a whole. In coming to this decision it also took
into consideration the following additional reasons:

- the quality and depth of experience allocated by the Investment Manager to
the management of the portfolio and the level of past performance of the
portfolio in absolute terms and also by reference to the benchmark index; and

- the quality and depth of experience of the management, administrative,
company secretarial and marketing team that the Manager allocates to the
management of the Company.

Information on Share Capital Rights

- The Company's capital structure and voting rights are
summarised on the inside front cover and page 17 of the report.

- Details of the substantial shareholders in the Company are listed on page 1
of the report.

- The rules concerning the appointment and replacement of Directors are
contained in the Company's Articles of Association and are detailed on pages
23 and 24.

- The giving of powers to issue or buy back the Company's shares requires a
special resolution to be passed by

shareholders. The Board's current powers to buy back shares are stated on page
14 of the report.

- There are: no restrictions concerning the transfer of securities in the
Company; no special rights with regard to control attached to securities; no
restrictions on voting rights; no agreements between holders of securities
regarding their transfer known to the Company; and no agreements which the
Company is partly to that might affect its control following a successful
takeover bid.

- There are no agreements between the Company and its
Directors concerning compensation for loss of office.

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 securities, all of which, with the
exception of the partnership interest in Frostrow Capital LLP, are traded on
recognized

stock exchanges.

Creditors' Payment Policy

Terms of payment are negotiated with service providers when agreeing
settlement details for transactions. While the Company does not follow a
formal code, it is the Company's continuing policy to pay amounts due to
creditors as and when they become due. As at 30 September 2009, the Company
did not have any trade creditors (2008: nil).

Social, Economic and Environmental Matters

The Company's primary objective is to achieve capital and income growth by
investing in the shares of UK companies. The Board recognises that this should
be done in an environmentally responsible and ethical way. As the majority of
the Company's investments are in blue-chip companies, the Board is of the
opinion that investee companies are likely to have considerable regard both
for the welfare of their employees and on environmental matters in relation to
areas where their operations are located.

Charitable and Political Donations

The Company has not in the past and does not intend in the future to make any
charitable or political donations.

Report of the Directors

Continued

Directors

The Directors of the Company, all of whom served throughout the year are shown
below. Further information on the Directors can be found on page 2 of the
report.

Anthony Townsend

John Allard Neil Collins David Hunt Vanessa Renwick

Giles Warman

Directors' Interests


The beneficial interests of the Directors and their families in the Company
were as set out below:

                                    Number of shares held
                                             30 September 30 September
                                                     2009         2008
                                                     
Anthony Townsend                                   95,940       95,940
John Allard*                                       15,758        9,884
Neil Collins                                        3,746        3,746
David Hunt                                         15,000        6,500
Vanessa Renwick                                    12,580       12,580
Giles Warman                                       73,000       73,000


* On 6 October 2009, Mr John Allard purchased a further 189 shares as a result
of an automatic re-investment of a dividend.

Other than those detailed above, there have been no changes to the Directors'
interests in the Company's shares between the end of the year and the date of
this report.

None of the Directors were granted or exercised rights over shares during the
year. None of the Directors has any contract (including service contracts)
with the Company.

Directors' Fees

A report on Directors' Remuneration is set out on pages 28 and 29 of the
report.

Directors' and Officers' Liability Insurance Cover

Directors' and Officers' liability insurance cover was maintained by the Board
during the year ended 30 September 2009. It is intended that this policy will
continue for the year ended 30 September 2010 and subsequent years.

Voting Rights

One vote is attached to each share in issue. Own shares held in treasury do
not carry voting rights. The total voting rights of the Company at the year
end were 51,271,673 shares. The total voting rights of the Company as at the
date of this report are 50,882,313 shares. There are no restrictions on the
transfer of the Company's shares or special rights attached to these shares
regarding control.

Substantial Share Interests

As at 30 November 2009 the Company was aware of the following substantial
interests in the voting rights of the Company:

                                                                     Number of      % of
Fund manager                    Registered holder                       shares    shares

Alliance Trust Savings          Alliance Trust Savings Nominees      6,055,087     11.90
Brewin Dolphin                  Various Brewin Nominee Managed       5,814,691     11.43
                                Accounts
Rathbone                        Various Rathbone Nominee Managed     4,394,163      8.64
                                Accounts
Rensburg Sheppards Investment   Ferlim Nominees, Rensburg Client     4,343,343      8.54
Management                      Nominees
JP Morgan Asset Management      Chase Nominees, Bank of New York     3,077,063      6.05
                                Nominees
Speirs & Jeffery Fund           Various Speirs & Jeffery Nominee     2,225,535      4.37
Management                      Accounts
Legal & General Investment      Various Nominee Accounts             2,086,655      4.10
Management
Charles Stanley                 Rock Nominees                        1,682,712      3.31
Henderson Global Investors      Various Nominee Accounts             1,538,879      3.02


Report of the Directors

Continued

Directors' Indemnities

As at the date of this report, indemnities are in force between the Company
and each of its Directors under which the Company has agreed to indemnify each
Director, to the extent permitted by law, in respect of certain liabilities
incurred as a result of carrying out his role as a Director of the Company.
The Directors are also indemnified against the costs of defending any criminal
or civil proceedings or any claim by the Company or a regulator as they are
incurred provided that where the defence is unsuccessful the Director must
repay those defence costs to the Company. The indemnities are qualifying third
party indemnity provisions for the purposes of the Companies Act 2006.

A copy of each deed of indemnity is available for inspection at the Company's
registered office during normal business hours and will be available for
inspection at the Annual General Meeting.

Auditors

Grant Thornton UK LLP have indicated their willingness to continue to act as
Auditors to the Company and a resolution for their re-appointment will be
proposed at the forthcoming Annual General Meeting.

Audit Information

So far as the Directors are aware, there is no relevant information of which
the Auditors are unaware. The Directors have taken all steps they ought to
have taken to make themselves aware of any relevant audit information and to
establish that the Auditors are aware of such information.

Corporate Governance

A formal statement on Corporate Governance is set out on pages 23 to 27 and
forms part of the Report of the Directors.

Beneficial Owners of Shares - Information Rights

The beneficial owners of shares who have been nominated by the registered
holder of those shares to receive information rights under Section 146 of the
Companies Act 2006 are required to direct all communications to the registered
holder of their shares rather than to the Company's registrar, Capita
Registrars, or to the Company directly.

Notice Period for General Meetings

At last year`s Annual General Meeting, new articles of association were
adopted which included a provision allowing general meetings of the Company to
be called on a minimum notice period provided for in the Companies Act 2006.
For meetings other than annual general meetings this is a period of 14 clear
days.

The provisions in the Companies Act 2006 relating to meetings were amended
with effect from 3 August 2009 as a result of the implementation of the EU
Shareholder Rights Directive (2007/36/EC) in the UK.

One of the amendments made was, to increase the minimum notice period for
listed company General Meetings to 21 clear days, but with an ability for
companies to reduce this period back to 14 clear days (other than for Annual
General Meetings), provided that two conditions are met:

i) that the Company offers facilities for shareholders to vote by electronic
means; and

ii) that there is an annual resolution of shareholders approving the reduction
in the minimum period for notice of General Meetings (other than Annual
General Meetings) from 21 clear days to 14 clear days.

The Board believes that it should have the flexibility to convene general
meetings of the Company (other than annual general meetings) on 14 clear days
notice.

The Board is therefore proposing Resolution 14 as a special resolution to
approve 14 clear days as the minimum period of notice for all General Meetings
of the Company other than Annual General Meetings. The notice period for
Annual General Meetings will remain 21 clear days.

The authority, if given, will lapse at the next Annual General Meeting of the
Company after the passing of this resolution.

Proposed Change to Investment Policy

The Company's current investment policy is to invest principally in the
securities of UK quoted securities. However, outside the control of the
Investment Manager the Company already has two investments, namely Thomson
Reuters and Dr Pepper Snapple, equating to approximately 5% of the portfolio,
that do not fulfil this criteria. Under the Listing Rules the Company is
required to seek the approval of shareholders for any material change in its
investment policy. Therefore an ordinary resolution to approve the following
change to its investment policy will be proposed at the Company's forthcoming
Annual General Meeting.

Report of the Directors

Continued

The Company's Investment Manager believes that it would be beneficial to
shareholders if the restriction of investing principally in the UK were
amended such that up to a maximum of 20% of the Company's portfolio can be
invested in quoted companies worldwide. This would enable the Company to
retain its membership of the UK Growth & Income Sector as administered by the
Association of Investment Companies.

The Board strongly supports the investment philosophy and approach of our
Investment Manager Lindsell Train Limited and is of the view that,
particularly in the current difficult market conditions, the Company is more
likely to be able to achieve capital and income growth and to provide
shareholders with a total return in excess of that of the FTSE All-Share Index
if this proposed amendment to the Company's investment policy were made.

Full details of the Company's current investment policy are set out
on page 11. The proposed revised investment policy is set out below.

Investment Objective

The Company's investment objective is to achieve capital and income
growth and to provide shareholders with a total return in excess of that of
the FTSE All-Share Index.

Investment Policy

The Company invests principally in the securities of UK quoted companies,
although up to a maximum of 20% of the Company's portfolio can be invested in
quoted companies worldwide. Where possible, a minimum position size of 1% of
the Company's gross assets is held unless the holding concerned is being built
or disposed of.

The portfolio is managed by Lindsell Train Limited (the "Investment Manager")
and will normally comprise approximately 30 investments. Unless driven by
market movements, FTSE 100 companies, including preference shares
issued by such companies, will normally represent between 50% and 100% of the
portfolio; at least 70% of the portfolio will normally be invested in
companies within the FTSE 350.

The Company does not and will not invest more than 10%, in aggregate, of the
value of its gross assets in other closed ended investment companies
(including investment trusts) listed on the London Stock Exchange, except
where the investment companies themselves have stated investment policies to
invest no more than 15% of their gross assets in other closed ended investment
companies (including investment trusts) listed on the London Stock Exchange.
The Company will not invest more than 15%, in aggregate, of the value of the
gross assets of the Company in other closed ended investment companies
(including investment trusts) listed on the London Stock Exchange.

No investment will be made in any company or fund where Lindsell Train Limited
acts as the investment manager without the prior approval of the Board.

The Board has set a maximum level of gearing of 25% of its net assets.

The Company has the ability to invest a proportion (up to 25%) of its gross
assets in preference shares, bonds and other debt instruments, although no
more than 10% of any one issue may be held. In addition, a maximum of 10% of
the Company's gross assets can be held in cash, where the Investment Manager
believes market or economic conditions make equity investment unattractive or
while seeking appropriate investment opportunities or to maintain liquidity.

Whilst performance is measured against the FTSE All-Share Index, the Company's
portfolio is constructed and managed without reference to a stock market
index, investments being selected only after extensive research by the
Investment Manager. The Investment Manager uses a bottom-up stock picking
approach and looks to invest in a universe of excellent UK listed businesses
that appear undervalued.


Shareholder Analysis
as at 30 September
                                        2009          2009       2008         2008
                                   Number of   % of issued  Number of  % of issued
                                      shares share capital     shares        share
                                                                           capital

Nominee Companies*                44,193,098         86,19 45,465,771        89.23
Private Individuals                3,125,495          6.10  3,221,564         6.32
Other Institutions, Investment
Funds, Pension Funds and
Companies                          2,725,518          5.32  1,116,218         2.19
Banks and Bank Nominees            1,227,562          2.39  1,147,120         2.26
Total shares in issue (excluding  51,271,673        100.00 50,950,673       100.00
treasury shares)
* Includes Alliance Trust Savings  6,011,268         11.39  5,620,104        11.03
and ISA Clients


Report of the Directors

Continued

Annual General Meeting

The formal notice of Annual General Meeting is set out on pages 47 to 51 of
this Annual Report. Resolutions relating to the following items of special
business will be proposed at the forthcoming Annual General Meeting:

Share Repurchases

At the Annual General Meeting held on 23 January 2009, shareholders approved
the renewal of the authority permitting the Company to repurchase its own
shares.

The Directors wish to renew the authority given by shareholders at the
previous Annual General Meeting. The principal aim of a share buy-back
facility is to enhance shareholder value by acquiring shares at a discount to
net asset value, as and when the Directors consider this to be appropriate.
The purchase of shares, when they are trading at a discount to net asset value
per share, should result in an increase in the net asset value per share for
the remaining shareholders. This authority, if conferred, will only be
exercised if to do so would result in an increase in the net asset value per
share for the remaining shareholders and if it is in the best interests of
shareholders generally. Any purchase of shares will be made within guidelines
established from time to time by the Board. It is proposed to seek shareholder
authority to renew this facility for another year at the Annual General
Meeting.

Under the current Listing Rules, the maximum price that may be paid on the
exercise of this authority must not exceed the higher of (i) 105% of the
average of the middle market quotations for the shares over the five business
days immediately preceding the date of purchase and (ii) the higher of the
last independent trade and the highest current independent bid on the trading
venue where the purchase is carried out. The minimum price which may be paid
is 25p per share. Shares which are purchased under this authority will either
be cancelled or held as treasury shares.

Special Resolution No. 12 in the Notice of Annual General Meeting will renew
the authority to purchase in the market a maximum of 14.99% of shares in issue
on 17 December 2009, being the nearest practicable date prior to the signing
of this Report, (amounting to 7,627,259 shares). Such authority will expire on
the date of the next Annual General Meeting or after a period of 15 months
from the date of passing of the resolution, whichever is earlier. This means
in effect that the authority will have to be renewed at the next Annual
General Meeting or earlier if the authority has been exhausted.

Issue of Shares

Ordinary Resolution No. 9 in the Notice of Annual General

Meeting will renew the authority to allot the unissued share capital up to an
aggregate nominal amount of £1,272,058 (equivalent to 5,088,231 shares, or 10%
of the Company's existing issued share capital on 17 December 2009, being the
nearest practicable date prior to the signing of this Report). Such authority
will expire on the date of the next Annual General Meeting or after a period
of 15 months from the date of the passing of the resolution, whichever is
earlier. This means that the authority will have to be renewed at the next
Annual General Meeting.

When shares are to be allotted for cash, Section 551 of the Companies Act 2006
(the "Act") provides that existing shareholders have pre-emption rights and
that the new shares must be offered first to such shareholders in proportion
to their existing holding of shares. However, shareholders can, by special
resolution, authorise the Directors to allot shares otherwise than by a pro
rata issue to existing shareholders. Special Resolution No. 10 will, if
passed, give the Directors power to allot for cash equity securities up to 10%
of the Company's existing share capital on 17 December 2009 (reduced by any
treasury shares sold by the Company pursuant to Resolution No. 11, as
described below), as if Section 551 of the Act does not apply. This is the
same nominal amount of share capital which the Directors are seeking the
authority to allot pursuant to Resolution No. 9. This authority will also
expire on the date of the next Annual General Meeting or after a period of 15
months, whichever is earlier. This authority will not be used in connection
with a rights issue by the Company.

Under the Companies (Acquisition of Own Shares) (Treasury Shares) Regulations
2003 (as amended) (the "Treasury Share Regulations") the Company is permitted
to buy back and hold shares in treasury and then sell them at a later date for
cash, rather than cancelling them. The Treasury Share Regulations require such
sale to be on a pre-emptive, pro rata, basis to existing shareholders unless
shareholders agree by special resolution to disapply such pre-emption rights.
Accordingly, in addition to giving the Directors power to allot unissued share
capital on a non pre-emptive basis pursuant to Resolution No. 10, Resolution
No. 11, if passed, will give the Directors authority to sell shares held in
treasury on a non pre-emptive basis. Under the Treasury Share Regulations, the
holding of treasury shares was previously restricted to 10% of the Company's
issued share capital, no dividends may be paid on any shares held in treasury
and no voting rights will attach to such shares. However, the Companies (Share
Capital and Acquisition by Company of its Own Shares) Regulations 2009 has
removed the 10% restriction; it has also extended the maximum period for which
authorisation can be given for a

Report of the Directors

Continued

company to purchase its own shares from 18 months to five years. The benefit
of the ability to hold treasury shares is that such shares may be resold. This
should give the Company greater flexibility in managing its share capital, and
improve liquidity in its shares. It is the intention of the Board that any
re-sale of treasury shares would only take place at a narrower discount to the
net asset value per share than that at which they had been bought into
treasury, and in any event at a discount no greater than 5% to the prevailing
net asset value per share, and this is reflected in the text of Resolution No.
11. It is also the intention of the Board that sales from treasury would only
take place when the Board believes that to do so would assist in the provision
of liquidity to the market. The number of treasury shares which may be sold
pursuant to this authority is limited to 10% of the Company's existing share
capital on 17 December 2009 (reduced by any equity securities allotted for
cash on a non-pro rata basis pursuant to Resolution No. 10, as described
above). This authority will also expire on the date of the next Annual General
Meeting or after a period of 15 months, whichever is earlier.

The Directors intend to use the authority given by Resolutions Nos. 9 and 10
to allot shares and disapply pre-emption rights only in circumstances where
this will be clearly beneficial to shareholders as a whole. The issue proceeds
would be available for investment in line with the Company's investment
policy. No issue of shares will be made which would effectively alter the
control of the Company without the prior approval of shareholders in general
meeting.

Electronic Communications

Included with notice of the Annual General Meeting is a letter to shareholders
asking for their individual consent to receive documents, notices and
information either electronically or via the Company's website. Ordinary
Resolution 13 also requests the consent of shareholders to send or supply
documents by electronic means.

Ordinary Resolution 13 and your individual consent will give the Company more
flexibility to supply notices, documents or information in electronic form and
by means of a website pursuant to the FSA's Disclosure Rules and Transparency
Rules. The Company's articles were updated at last year's annual general
meeting to enable the Company to send all documents and notices electronically
rather than just notices of meetings, proxies, and copies of annual reports
and accounts and summary financial statements and to permit the Company to
send documents by means of a website and to ensure the Articles of Association
are consistent with the provisions of the Companies Act 2006.

Shareholders should note that even if Ordinary Resolution 13 is passed no
action will be taken and no documents will be sent electronically until the
consent of shareholders in general meeting has been obtained and until the
Company receives individual consent to electronic communication. However,
provided that Ordinary Resolution 13 is passed at the Annual General Meeting
and provided we have not received a response from you by 28 January 2010, the
Companies Act 2006 allows us to assume that you have agreed that the documents
and information referred to in the consent letter can be sent to you by
posting them on the Company's website.

A shareholder may, if he or she wishes, continue to receive all company
communications in hard copy form. Moreover, a shareholder may, in relation to
a particular communication, request a hard copy form of that communication or,
at any time, revoke his or her general agreement to be provided documentation
in electronic form or by means of a website by delivering written notice or
such revocation to the Company.

General Meetings

Special Resolution No. 14 seeks shareholder approval for the Company to hold
General Meetings (other than the Annual General Meeting) at 14 clear days'
notice.

Change to the Company's Investment Policy

Ordinary Resolution No. 15 seeks shareholder approval for the Company to make
an amendment to its investment policy.

Recommendation

The Board considers that the resolutions relating to the above items of
special business, including the proposed change in investment policy described
in the Chairman's Statement on page 4 and also in the Report of the Directors
on pages 18 and 19 are in the best interests of shareholders as a whole.
Accordingly, the Board unanimously recommends to the shareholders that they
vote in favour of the above resolutions to be proposed at the forthcoming
Annual General Meeting as the Directors intended to do in respect of their own
beneficial holdings totalling 216,213 shares.

By order of the Board

Frostrow Capital LLP Company Secretary

17 December 2009

Statement of Directors' Responsibilities

Company law in the United Kingdom requires the Directors to prepare financial
statements for each financial year. The Directors are responsible for
preparing the financial statements in accordance with applicable law and
regulations. In preparing these financial statements, the Directors have:

- selected suitable accounting policies and applied them consistently;

- made judgements and estimates that are reasonable and prudent;

- followed applicable UK accounting standards; and

- prepared the financial statements on a going concern basis.

The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Company and enable them to ensure that the 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.

The Directors are responsible for ensuring that the Report of the Directors
and other information included in the Annual Report is prepared in accordance
with company law in the United Kingdom. They are also responsible for ensuring
that the Annual Report includes information required by the Listing Rules of
the Financial Services Authority.

The financial statements are published on the Company's website (website
address: www.finsburygt.com) and on the Manager's website (website address:
www.frostrow.com). The maintenance and integrity of these websites, so far as
it relates to the Company, is the responsibility of the Manager. The work
carried out by the Auditors does not involve consideration of the maintenance
and integrity of these websites and, accordingly, the Auditors accept no
responsibility for any changes that have occurred to the financial statements
since they were initially presented on these websites. Visitors to the
websites need to be aware that legislation in the United Kingdom governing the
preparation and dissemination of the financial statements may differ from
legislation in their jurisdiction.

The Directors confirm that to the best of their knowledge the financial
statements, within the Annual Report, have been prepared in accordance with
applicable accounting standards, give a true and fair view of the assets,
liabilities, financial position and the return for the year ended 30 September
2009, and that the Chairman's Statement, Investment Manager's Review and the
Report of the Directors include a fair review of the information required by
4.1 .8R to 4.1.11 R of the FSA's Disclosure and Transparency Rules.

On behalf of the Board

Anthony Townsend 
Chairman
17 December 2009



Corporate Governance

Compliance

The Company is committed to high standards of corporate governance. The Board
is accountable to the Company's shareholders for good governance and this
statement describes how the Company applies the principles identified in the
Combined Code on Corporate Governance (the "Combined Code") issued in June
2008. The Association of Investment Companies has published its own Code on
Corporate Governance ("the AIC Code"), revised in March 2009, which forms a
comprehensive guide to best practice in certain areas of governance where the
specific characteristics of investment trusts suggests alternative approaches
to those set out in the Combined Code that may be preferable.

The Board considers that reporting against the principles and recommendations
of the AIC Code, and by reference to the AIC Guide (which incorporates the
Combined Code), will provide better information to shareholders.

The Company has complied with the recommendations of the AIC Code and the
relevant provisions of Section 1 of the Combined Code throughout the year
ended 30 September 2009 and up to the date of this report as set out below.

The Combined Code includes provisions relating to:

- The role of the chief executive;

- Executive directors' remuneration; and

- The need for an internal audit function.

For the reasons set out in the AIC Guide, and in the preamble to the AIC Code,
the Board considers these provisions are not relevant to the position of
Finsbury Growth & Income Trust PLC, being an externally managed investment
company. The Company has therefore not reported further in respect of these
provisions.

Internal Audit

As the Company delegates to third parties its day-to-day operations and has no
employees, the Board has determined that there are no requirements for an
internal audit function. The Board reviews annually whether a function
equivalent to an internal audit is needed and it will continue to monitor its
systems of internal controls in order to provide assurance that they operate
as intended.

Board Independence, Composition and Tenure

The Board, chaired by Anthony Townsend, currently consists of six
non-executive Directors. The Directors' biographical details, set out on page
2, demonstrate a breadth of

investment, commercial and professional experience. John Allard, Vanessa
Renwick (who both joined the Board in 2000) and Giles Warman (who became a
Director in 1989) have all served in excess of nine years on the Board since
their first election. Nonetheless, the Board considers them to be independent
in character and judgement and does not consider that the criterion of length
of service should necessarily preclude them from being so considered. This
position accords with the recommendation of the AIC Code that a director may
be viewed as being independent notwithstanding service that could be
considerably more than nine years.

Anthony Townsend, who rejoined the Board in 2005, David Hunt, appointed a
Director in 2006 and Neil Collins who became a Director in 2008, are all also
considered by the Board to be independent.

Under the Company's Articles of Association, Messrs Townsend and Hunt retire
by rotation. John Allard, Vanessa Renwick and Giles Warman, allhaving served
on the Board for more than nine years from the date of their first election,
also retire at the Annual General Meeting. All of the above mentioned
Directors, being eligible, offer themselves for re-election.

The Board has considered the position of Mrs Renwick and Messrs Allard, Hunt,
Townsend and Warman, and believes that it would be in the Company's best
interests to propose them for re-election at the forthcoming Annual General
Meeting.

None of the Directors has a service contract with the Company. New Directors
are appointed with the expectation that they will serve for a minimum period
of three years. Directors' appointments are reviewed formally every three
years by the Board. Any Director may resign in writing to the Board at any
time. The Company's Articles of Association provide that one-third of the
Directors must retire by rotation and may offer themselves of re-election at
each Annual General Meeting. The terms of the Directors' appointments also
provide that a Director shall retire and be subject to election at the first
Annual General Meeting after appointment and re-election at least every three
years thereafter. Directors who have served more than nine years on the Board
and those who are not deemed to be independent are required to seek
re-election annually. The terms of their appointment are detailed in a letter
sent to them when they join the Board. These letters are available for
inspection at the offices of the Company's Manager and will be available at
the Annual General Meeting. When a new Director is appointed

Corporate Governance

Continued

to the Board, he/she is provided with all relevant information regarding the
Company and his/her duties and responsibilities as a Director. In addition, a
new Director will also spend time with representatives of the Manager and
Investment Manager in order to learn more about their processes and
procedures. The Board also receives regular briefings from, amongst others,
the Auditors and the Company Secretary regarding any proposed developments or
changes in laws or regulations that could affect the Company and/or the
Directors.

The Board's Responsibilities

The Board is responsible for efficient and effective leadership of the Company
and has reviewed the schedule of matters reserved for its decision. The Board
meets at least on a quarterly basis and at other times as necessary. The Board
is responsible for all aspects of the Company's affairs, including the setting
of parameters for and the monitoring of the investment strategy and the review
of investment performance and investment policy. It also has responsibility
for all corporate strategy issues, dividend policy, share buy-back policy,
gearing, share price and discount/premium monitoring and corporate governance
matters. To enable them to discharge their responsibilities, prior to each
meeting the Directors are provided, in a timely manner, with a comprehensive
set of papers giving detailed information on the Company's transactions,
financial position, performance and income forecast. Representatives of the
Manager and Investment Manager attend each Board meeting, enabling the
Directors to seek clarification on specific issues or to probe further on
matters of concern; a full written report is also received from the Investment
Manager at each quarterly meeting. In light of these reports, the Board gives
direction to the Investment Manager with regard to the Company's investment
objectives and guidelines. Within these established guidelines, the Investment
Manager takes decisions as to the purchase and sale of individual investments.

There is an agreed procedure for Directors, in the furtherance of their
duties, to take independent professional advice if necessary at the Company's
expense. The Directors have access to the advice and services of the Company
Secretary, through its appointed representative, who is responsible to the
Board for ensuring that Board procedures are followed.

Performance Evaluation

The Board carries out an annual evaluation of its performance.

Conflict of Interest

On 1 October 2008 it became a statutory requirement that a Director must avoid
a situation in which he has, or can have, a

direct or indirect interest that conflicts, or possibly may conflict, with the
Company's interests (a "situational conflict"). The Company's Articles of
Association were amended at the last Annual General Meeting to give the
Directors authority to approve such situations, where appropriate.

It is the responsibility of each individual Director to avoid an unauthorised
conflict situation arising. He or she must request authorisation from the
Board as soon as he or she becomes aware of the possibility of a situational
conflict arising.

The Board is responsible for considering Directors' requests for authorisation
of situational conflicts and for deciding whether they should be authorised.
The factors to be considered will include whether the situational conflict
could prevent the Director from performing his or her duties, whether it has,
or could have, any impact on the Company and whether it could be regarded as
likely to affect the judgment and/or actions of the Director in question. When
the Board is deciding whether to authorise a conflict or potential conflict,
only Directors who have no interest in the matter being considered are able to
take the relevant decision, and in taking the decision the Directors must act
in a way they consider, in good faith, will be most likely to promote the
Company's success. The Directors are able to impose limits or conditions when
giving authorisation if they think this is appropriate in the circumstances.

A register of conflicts is maintained by the Company Secretary and is reviewed
at quarterly Board meetings, to ensure that any authorised conflicts remain
appropriate. Directors are required to confirm at these meetings whether there
has been any change to their position.

The Directors must also comply with the statutory rules requiring company
directors to declare any interest in an actual or proposed transaction or
arrangement with the Company.

Committees of the Board

During the year the Board delegated certain responsibilities and functions to
committees. In line with the AIC Code, the Board has disbanded the Nominations
and Remuneration Committees in favour of the full Board adopting the
responsibilities of such committees under the Chairmanship of the Chairman of
the Company, Anthony Townsend. The Audit and Management Engagement Committees
continue in operation and copies of the full Terms of Reference, which clearly
define the responsibilities of each Committee, can be obtained from the
Company Secretary, will be available at the Annual General Meeting and can be
found on the Company's website on www.finsburygt.com and on the website of the

Corporate Governance

Continued

Manager at www.frostrow.com. The Audit Committee is chaired by David Hunt. All
Directors of the Company, including the Chairman of the Company, are members
of this Committee to enable them to be kept fully informed of any issues that
may arise. The Directors believe that Mr Hunt, a Chartered Accountant, has
relevant financial knowledge and experience to enable him to chair this
Committee effectively. The Management Engagement Committee is chaired by the
Chairman of the Company, Anthony Townsend. Again, all Directors of the Company
are members of this Committee to enable them to be kept fully informed of any
issues that may arise.

The table below details the number of Board and Committee meetings attended by
each Director. During the year there were five Board meetings, two Audit
Committee meetings and one meeting of the Management Engagement Committee.

Audit Committee

The Company's Audit Committee meets at least twice per year. The Audit
Committee is responsible for the review of the Annual Report and the Interim
Report, the nature and scope of the external audit and the findings thereof
and the terms of appointment of the Auditors, including their remuneration and
the provision of any non-audit services by them.

The Audit Committee reviews the need for non-audit services and authorises
such on a case by case basis having given consideration to the cost
effectiveness of the services and the independence and objectivity of the
auditors.

The Audit Committee meets representatives of the Manager and the Investment
Manager and their Compliance Officers who report as to the proper conduct of
business in accordance with the regulatory environment in which both the
Company, the Manager and the Investment Manager operate. The Company's
external Auditors also attend this Committee at its request and report on
their work procedures, the quality and effectiveness of the Company's
accounting records and their findings in relation to the Company's statutory
audit.

Management Engagement Committee

The Management Engagement Committee meets at least once per year. The
Management Engagement Committee is responsible for the regular review of the
terms of the management and investment management agreements with, and the
performance of, the Manager and Investment Manager. The Committee last met in
September 2009, at which time it was agreed that no amendments to the
agreements were required. The agreements shall continue to be reviewed on a
periodic basis as necessary.

Meeting Attendance

The number of meetings held during the year of the Board and its Committees,
and each Director's attendance level is shown below:

                                                         Management
Type and number of                                 Audit Engagement
meetings held in the year                Board Committee  Committee

to 30 September 2009                       (5)       (2)        (1)
Anthony Townsend                             5         2          1
John Allard                                  5         2          1
Neil Collins                                 5         2          1
David Hunt                                   5         2          1
Vanessa Renwick                              5         2          1
Giles Warman                                 4         2          1

Other ad hoc meetings of the Board and Committees are held in connection with
specific events as and when necessary. All of the Directors attended the
Annual General Meeting held on 23 January 2009.

Corporate Governance

Continued

Internal Controls

Risk assessment and the review of internal controls are undertaken by the
Board in the context of the Company's overall investment objective. The review
covers the key business, operational, compliance and financial risks facing
the Company. In arriving at its judgement of what risks the Company faces, the
Board has considered the Company's operations in the light of the following
factors:

the nature and extent of risks which it regards as acceptable for the Company
to bear within its overall business objective;

the threat of such risks becoming a reality; and

the Company's ability to reduce the incidence and impact of risk on its
performance.

Against this background, the Board has split the review of risk and
associated controls into five sections reflecting the nature of the risks
being addressed. These sections are as follows:

corporate strategy;

investment activity;

published information, compliance with laws and regulations;

service providers; and

financial activity.

The Company has appointed agents to provide administrative services to the
Company. The Company has obtained from its various service providers
assurances and information relating to their internal systems and controls to
enable the Board to make an appropriate risk and control assessment, including
the following:

details of the control environment in operation;

identification and evaluation of risks and control objectives;

review of communication methods and procedures; and

assessment of the control procedures.

The key procedures which have been established to provide internal financial
controls are as follows:

investment management is provided by Lindsell Train Limited. The Board is
responsible for setting the overall investment policy and monitors the actions
of the Investment Manager at regular Board meeting;

administration, company secretarial and marketing duties for the Company are
performed by Frostrow Capital LLP;

custody of assets is undertaken by The Bank of New York Mellon;

the Board clearly defines the duties and responsibilities of their agents and
advisers. The appointment of agents and advisers to the Company is conducted
by the Board after consideration of the quality of the parties involved; the
Board monitors their ongoing performance and contractual arrangements;

mandates for authorisation of investment transactions and expense payments are
set by the Board; and

the Board reviews financial information produced by the Investment Manager and
the Manager in detail on a regular basis.

All of the Company's management functions are performed by third parties whose
internal controls are reviewed by the Board or on its behalf by Frostrow
Capital LLP.

In accordance with guidance issued to directors of listed companies, the
Directors confirm that they have carried out a review of the effectiveness of
the system of internal financial control during the year, as set out above.

Relations with Shareholders

The Board reviews the shareholder register at each Board meeting. The Company
has regular contact with its institutional shareholders particularly through
the Manager. The Board supports the principle that the Annual General Meeting
be used to communicate with private investors. The full Board attends the
Annual General Meeting under the Chairmanship of the Chairman of the Board.
Details of proxy votes received in respect of each resolution are made
available to shareholders at the meeting and are also published on the
Company's website at www.finsburygt.com. Representatives from the Investment
Manager attend the Annual General Meeting and give a presentation on
investment matters to those present. The Company has adopted a nominee share
code which is set out on page 27.

The Board receives marketing and public relations reports from the Manager to
whom the marketing function has been delegated. The Board reviews and
considers the marketing plans of the Manager on a regular basis.

The Annual and Interim Reports, the Interim Management Statements and a
monthly fact sheet are available to all shareholders. The Board considers the
format of the Annual and Interim Reports so as to ensure they are useful to
all shareholders and others taking an interest in the Company. In
accordance with best practice, the Annual Report, including the Notice of the
Annual General Meeting, is sent to shareholders at least 20 working days
before the Meeting. Separate resolutions are proposed for substantive issues.

Exercise of Voting Powers

The Board has delegated authority to the Investment Manager to vote the shares
held by the Company through its nominee, The Bank of New York (Nominees)
Limited, which accords with current best practice whilst maintaining a primary
focus on financial returns. The Investment Manager may refer to the Board on
any matters of a contentious nature.

Accountability and Audit

The Directors' statement of responsibilities in respect of the financial
statements is set out on page 22. The report of the Company's auditor is set
out on pages 30 and 31. The Board has delegated contractually to external
agencies, including the Manager and the Investment Manager, the management of
the portfolio, custodial services (which includes the safeguarding of the
Company's assets), the day to day marketing, accounting administration,
company secretarial requirements and registration services. Each of these
contracts was entered into after full and proper consideration by the Board of
the quality and cost of the services offered, including
the control systems in operation in so far as they relate to the affairs of
the Company. The Board receives and considers regular reports from the Manager
and ad hoc reports and information are supplied to the Board as required.

Nominee Share Code

Where shares are held in a nominee company name, where the beneficial owner of
the shares is unable to vote in person, the Company nevertheless undertakes:

to provide the nominee company with multiple copies of shareholder
communications, so long as an indication of quantities has been provided in
advance;

to allow investors holding shares through a nominee company to attend general
meetings, provided the correct authority from the nominee company is
available; and

that investors in the Alliance Trust Savings Scheme or ISA are automatically
sent shareholder communications, including details of general meetings,
together with a form of direction to facilitate voting and to seek authority
to attend.

Nominee companies are encouraged to provide the necessary authority
to underlying shareholders to attend the Company's general meetings.



Directors' Remuneration Report
for the year ended 30 September 2009

The Board has prepared this report, in accordance with the requirements of
Section 421 of the Companies Act 2006. An ordinary resolution for the approval
of this report will be put to the members at the forthcoming Annual General
Meeting.

The law requires your Company's auditors to audit certain of the disclosures
provided. Where disclosures have been audited, they are indicated as such. The
auditors' opinion is included in their report on pages 30 and 31 of the
report.

Policy on Directors' Fees

The Board's policy is that the remuneration of Directors should reflect the
experience of the Board as a whole, be fair and comparable to that of other
investment trusts that are similar in size, have a similar capital structure
(Ordinary shares), and have a similar investment objective. It is intended
that this policy will continue for the year ending 30 September 2010 and
subsequent years.

The fees for the Directors are determined within the limits set out in the
Company's Articles of Association, the maximum aggregate amount currently
being £150,000, and they are not eligible for bonuses, pension benefits, share
options, long-term incentive schemes or other benefits.

Directors' Service Contracts

It is the Board's policy that none of the Directors has a service contract.
The terms of their appointment provide that Directors shall retire and be
subject to election at the first annual general meeting after their
appointment, and at least every three years after that. The terms also provide
that a Director may be removed without notice and that compensation will not
be due on leaving office.

Your Company's Performance

The law requires a line graph be included in the Directors' Remuneration
Report showing total shareholder return for each of the financial years in the
relevant period. The graph set out below compares, on a cumulative basis, the
total return (assuming all dividends are reinvested) to shareholders compared
to the total shareholder return on a notional investment made up of shares of
the same kind and number as those by reference to which the FTSE All-Share
Index (the Company's stated benchmark) is calculated.

The Board, while fulfilling the function of a Remuneration Committee, reviews
the level of remuneration on an annual basis by reference to the activities of
the Company and comparison with other companies of a similar structure and
size.


Directors' Emoluments for the Year (audited)

The Directors who served in the year received the following emoluments in the
form of fees:

                                        Fees~ 2010
 
                                 (with effect from
 
                                   1 October 2009) Fees 2009  Fees 2008

Anthony Townsend (Chairman)#               £27,500    £27,500   £23,800
John Allard                                £18,000    £16,000   £16,000
Neil Collins^                              £18,000    £16,000   £12,600
David Hunt*                                £21,000    £19,000   £19,000
Michael Reeve**                                  -          -    £9,100
Vanessa Renwick                            £18,000    £16,000  £ 16,000
Giles Warman                               £18,000    £16,000   £16,000


# Anthony Townsend was appointed Chairman on 30 January 2008. 

^ Neil Collins was appointed a Director on 30 January 2008. 

* Chairman of the Audit Committee.

** Fees in respect of Michael Reeve's services were paid to The Tregeare
Company Ltd. Michael Reeve retired as a Director and Chairman of the Company
on 30 January 2008.

~ These fees were agreed at a Board meeting held on 24 September 2009.


Directors' Remuneration Report

Continued

Approval

The Directors' Remuneration Report was approved by the Board of Directors on
17 December 2009 and signed on its behalf by

Anthony Townsend 
Chairman



Independent auditor's report to the members of

Finsbury Growth & Income Trust PLC

We have audited the financial statements of Finsbury Growth and Income Trust
PLC for the year ended 30 September 2009 which comprise the Income Statement,
the Reconciliation of Movements in Shareholders' Funds, the Balance Sheet, the
Cashflow Statement and the related notes. The financial reporting framework
that has been applied in their preparation is applicable law and United
Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting
Practice).

This report is made solely to the company's members, as a body, in accordance
with Sections 495, 496 and 497 of the Companies Act 2006. Our audit work has
been undertaken so that we might state to the Company's members those matters
we are required to state to them in an auditor's report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company's members as a
body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

As explained more fully in the Directors' Responsibilities Statement set out
on page 22, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit the financial statements in accordance with
applicable law and International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board's (APB's)
Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on
the APB's website at www.frc.org.uk/apb/scope/UKP.

Opinion on financial statements

In our opinion the financial statements:

give a true and fair view of the state of the Company's affairs as at 30
September 2009 and of its return for the year then ended;

have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act
2006.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion:

the part of the Directors' Remuneration Report to be audited has been properly
prepared in accordance with the Companies Act 2006; and

the information given in the Directors' Report for the financial year for
which the financial statements are prepared is consistent with the financial
statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following:

Under the Companies Act 2006 we are required to report to you if, in our
opinion:

adequate accounting records have not been kept, or returns adequate for our
audit have not been received from branches not visited by us; or

the financial statements and the part of the Directors' Remuneration Report to
be audited are not in agreement with the accounting records and returns; or

certain disclosures of directors' remuneration specified by law are not made;
or

we have not received all the information and explanations we require for our
audit.


Independent auditor's report to the members of

Finsbury Growth & Income Trust PLC

Continued

Under the Listing Rules, we are required to review:

the Directors' statement, set out on page 16, in relation to going concern;
and

the part of the Corporate Governance Statement relating to the
Company's compliance with the nine provisions of the June 2008 Combined Code
specified for our review

Julian Bartlett

Senior Statutory Auditor

for and on behalf of Grant Thornton UK LLP Statutory Auditor, Chartered
Accountants 

London

17 December 2009




Income Statement

incorporating the revenue account for the year ended 30 September 2009

                                                   2009                                   2008

                         Revenue     Capital      Total    Revenue       Capital         Total

                     Notes £'000       £'000      £'000      £'000         £'000         £'000
 
Gains/(losses) on
investments
designated at fair
value through profit
or loss
 
                               -      17,942      17,942         -      (51,522)      (51,522)

Exchange difference            -           2           2

Income                   2 5,401           -       5,401     6,363             -         6,363
Investment
management,
management and
performance fees
                         3 (226)       (460)       (686)     (300)         (609)         (909)
Recovery of VAT on
investment
management fee
previously paid
                         6    50         101         151         -             -             -
Other expenses             (410)           -       (410)     (434)             -         (434)
 
Return/(loss) on
ordinary activities
before finance
charges and taxation
                           4,815      17,585      22,400     5,629      (52,131)      (46,502)
Finance charges            (176)       (359)       (535)     (346)         (702)       (1,048)
 
Return/(loss) on
ordinary activities
before taxation            4,639      17,226      21,865     5,283      (52,833)      (47,550)
Taxation on ordinary
activities
                               -           -           -         -             -             -
 
Return/(loss) on
ordinary activities
after taxation             4,639      17,226      21,865     5,283      (52,833)      (47,550)

Return/(loss) per        4  9.1p       34.0p       43.1p     10.1p      (101.2)p       (91.1)p
share

The "Total" column of this statement represents the Company's
Income Statement.

The "Revenue" and "Capital" columns are supplementary to this and
are prepared under guidance published by the Association of Investment
Companies (AIC).

All items in the above statement derive from continuing operations.

The Company had no recognised gains or losses other than those
declared in the Income Statement.




Reconciliation of Movements in Shareholders' Funds
For the year ended 30 September 2009



                         Called-up   Share              Capital
                             share premium
                           capital account   Special redemption  Capital Revenue
                             £'000   £'000   reserve    reserve  reserve reserve     Total
                                               £'000      £'000    £'000   £'000     £'000
                                                                                     
At 30 September 2008        13,199  35,914    12,424      3,453   39,845   4,949   109,784
Net return on ordinary
activities
                                 -       -         -          -   17,226   4,639    21,865
Second interim dividend
(5.1p per share) for
the year ended 30
September 2008
                                 -       -         -          -        - (2,598)   (2,598)
First interim dividend
(4.4p per share) for
the year ended 30
September 2009
                                 -       -         -          -        - (2,211)   (2,211)
Repurchase of shares
into treasury
                                 -       -         -          -  (1,856)       -   (1,856)

Sale of shares from              -       -         -          -    2,675       -     2,675
treasury

Year ended 30 September
2009
                            13,199  35,914    12,424      3,453   57,890   4,779   127,659
 
At 30 September 2007        13,162  35,482    12,424      3,453   97,023   4,511   166,055
Net (loss)/return on
ordinary activities
                            -         -        -         -      (52,833)   5,283  (47,550)
Second interim dividend
(4.8p per share) for
the year ended 30
September 2007
                            -         -        -         -         -     (2,527)   (2,527)
First interim dividend
(4.4p per share) for
the year ended 30
September 2008
                            -         -        -         -         -     (2,318)   (2,318)
Shares issued net of
issue expenses
                            37       432       -         -         -        -          469
Repurchase of shares
into treasury
                            -         -        -         -       (6,081)    -      (6,081)

Sale of shares from         -         -        -         -         1,736    -        1,736
treasury


Year ended 30 September
2008
                          13,199   35,914   12,424     3,453      39,845   4,949   109,784





Balance Sheet
as at 30 September 2009

                                                          2009      2008

                                                         £'000     £'000
 
Fixed assets
Investments designated at fair value through           138,799   121,586
profit or loss
 
Current assets
Debtors                                                  1,022     1,159
Cash at bank                                             1,531       204
                                                         2,553     1,363
Current Liabilities
Creditors                                                (193)     (165)
Bank loan                                             (13,500)  (13,000)
                                                      (13,693)  (13,165)
Net current liabilities                               (11,140)  (11,802)
Total net assets                                       127,659   109,784
 
Capital and reserves
Called-up share capital                                 13,199    13,199
Share premium account                                   35,914    35,914
Capital redemption reserve                               3,453     3,453
Special reserve                                         12,424    12,424
Capital reserve                                         57,890    39,845
Revenue reserve                                          4,779     4,949
 
Equity shareholders' funds                             127,659   109,784
 
Net asset value per share (note 5)                      249.0p    215.5p





Cash Flow Statement
for the year ended 30 September 2009

                                                          2009      2008

                                                         £'000     £'000
 
Net cash inflow from operating activities                4,573     5,548
 
Net cash outflow from servicing of finance               (487)   (1,185)
 
Financial investment
Purchase of investments                                (7,017)   (5,886)
Sale of investments                                      7,746    21,791
 
Net cash inflow from financial investment                  729    15,905
 
Equity dividends paid                                  (4,809)   (4,845)
Net cash inflow before financing                             6    15,423
 
Financing
Shares issued net of issue expenses                          -       469
Repurchase of shares into treasury                     (1,856)   (6,081)
Sale of shares from treasury                             2,675     1,736
Drawdown/(repayment) of loans                              500  (11,850)
 
Net cash inflow/(outflow)/inflow from financing          1,319  (15,726)
 
Increase/(decrease) in cash                              1,325     (303)
 
Reconciliation of net cash flow to movement in net
debt
Increase/(decrease) in cash resulting from cashflows     1,325     (303)
(Increase)/decrease in debt                              (500)    11,850
Exchange movements                                           2         -
 
Movement in net debt                                       827    11,547

Net debt at 1 October 2008                            (12,796)  (24,343)
Net debt at 30 September 2009
 
                                                      (11,969)  (12,796)



Notes to the Financial Statements

1) Accounting Policies

The principal accounting policies, all of which have been applied
consistently throughout the year in the preparation of these financial
statements are set out below:

Basis of preparation

The 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" issued by the Association of Investment Trust
Companies dated January 2009.

Investments

Investments have been designated by the Board as held at fair value through
profit or loss and accordingly are valued at fair value. Fair value for quoted
investments is deemed to be bid market prices, or last traded price, depending
on the convention of the exchange on which they are quoted.

Unquoted investments are valued by the Directors using primary valuation
techniques in accordance with IPEVCA guidelines.

Changes in the fair value of investments held at fair value through profit or
loss, and gains and losses on disposal are recognised in the Income Statement
as "gains or losses on investments held at fair value through profit or loss".

All purchases and sales of investments are accounted for on the trade date
basis.

The Company's policy is to expense transaction costs on acquisition and the
capital column of the Income Statement. The total of such expenses, showing
the total amounts included in disposals and additions are disclosed below, as
recommended by the SORP.

Transaction costs on the acquisition and sale of investments totalled £36,000
and £13,000 respectively (2008: £50,000 and £33,000) and are included in the
gains/(losses) on investments within the Income Statement.

Dividend Payments

Dividends paid by the Company on its shares are recognised in the
financial statements in the period in which they are paid and are shown in the
Reconciliation of Movements in Shareholders' Funds.

Investment Income

Dividends receivable on equity shares are recognised on the
ex-dividend date.

Fixed returns on non-equity shares are recognised on a time
apportionment basis.

Special dividends: In deciding whether a dividend should be regarded as a
capital or revenue receipt, the Company reviews all relevant information as to
the reasons for and sources of the dividend on a case by case basis.

LLP profit share is recognised in the financial statements when the
entitlement to the income is established.

Expenditure and Finance Charges

All the expense and finance costs are accounted for on an accruals basis.
Expenses are charged through the revenue column of the Income Statement except
as follows:

(1) expenses which are incidental to the acquisition or disposal of
an investment are treated as part of the cost or proceeds of that investment
(as explained in 1(b) above);

(2) expenses are taken to capital reserve realised via the capital column of
the Income Statement, where a connection with the maintenance or enhancement
of the value of the investments can be demonstrated. In line with the Board's
expected long term split of returns, in the form of capital gains and income,
from the Company's portfolio, 67% of the investment management fee and finance
costs are taken to the capital reserve;

(3) performance fees are charged 100% to capital.

(a) Taxation

The payment of taxation is deferred or accelerated because of timing
differences between the treatment of certain items for accounting and taxation
purposes. Full provision for deferred taxation is made under the liability
method, without discounting, on all timing differences that have arisen, but
not reversed by the balance sheet date, unless such provision is not permitted
by Financial Reporting Standard 19.

Any tax relief obtained in respect of management and investment
management fees, finance costs and other capital expenses charged or allocated
to the capital column of the Income Statement is reflected in the Capital
reserve - realised and a corresponding amount is charged against the revenue
column of the Income Statement. The tax relief is the amount by which
corporation tax payable is reduced as a result of these capital expenses.

(b) Capital Reserve

The following are taken to this reserve:

Gains and losses on the realisation of investments;

Exchange differences of a capital nature;

Expenses, together with the related taxation effect, allocated to
this reserve in accordance with the above policies; and

- Increase and decrease in the valuation of investments held at the
year end.

Following guidance in the revised SORP, the capital reserve realised and the
capital reserve unrealised are now presented as one reserve on the face of the
Balance Sheet.

(h) Cash at bank

Cash comprises cash in hand and demand deposits.

2. Income

                                            2009  2008
 
                                           £'000 £'000
Income from investments
Franked investment income
- dividends                                5,326 6,237
Unfranked investment income
- Limited Liability Partnership               70    11
profit-share
- fixed interest                               -    65
- money market dividend                        5    44
                                           5,401 6,357
Other income
Bank interest                                  -     6
Total Income                               5,401 6,363



3. Investment Management, Management and Performance Fees

                       Revenue Capital Total Revenue Capital Total
 
                          2009    2009  2009    2008    2008  2008
 
                         £'000   £'000 £'000   £'000   £'000 £'000

Investment management      144     293   437     199     402   601
fee
Management fee              71     145   216      86     176   262
VAT on management fee       11      22    33      15      31    46
 
Total fees                 226     460   686     300     609   909


4. Other Expenses

                             Revenue Capital Total Revenue Capital Total

                                2009    2009  2009    2008    2008  2008

                               £'000   £'000 £'000   £'000   £'000 £'000

Directors' fees                  111       -   111     112       -   112
Fees payable to the
Company's auditor -
statutory annual audit            20       -    20      20       -    20
Fees payable to the
Company's auditor - all
other services                     3       -     3       2       -     2
Printing                          33       -    33      24       -    24
ISA & savings scheme costs        14       -    14      60       -    60
Bank and custody fees             19       -    19      18       -    18
Marketing costs                   43       -    43      39       -    39
Legal and professional fees       10       -    10       -       -     -
Other expenses                   157       -   157     159       -   159
Total expenses                   410       -   410     434       -   434

All of the above expenses include VAT where applicable, with the exception of
the fees paid to the Company's auditor, which are shown net of VAT.

Details of the amounts paid to Directors are included in the Directors'
Remuneration Report on pages 28 and 29.


5. Finance Charges

                                                  Revenue Capital Total Revenue Capital   Total

                                                     2009    2009  2009    2008    2008    2008

                                                    £'000   £'000 £'000   £'000   £'000   £'000
On bank loans wholly
repayable within five
years                                                 176     359   535     346     702   1,048



6.Taxation on Ordinary                                                    
Activities

                                                  Revenue Capital Total Revenue Capital   Total

                                                     2009    2009  2009    2008    2008    2008

                                                    £'000   £'000 £'000   £'000   £'000   £'000

(a) Analysis of charge for the                          -       -     -       -       -       -
year Corporation tax at 28%
(2007: 30%)


                                                  Revenue Capital Total Revenue Capital   Total

                                                     2009    2009  2009    2008    2008    2008

                                                    £'000   £'000 £'000   £'000   £'000   £'000

(b) Factors affecting tax charge for year

Return/(loss) on ordinary activities before
taxation                                            4,639  17,226 21,865  5,283 (52,833)(47,550)
Return/(loss) on ordinary activities
multiplied by Corporation tax of 28%
(2008:28%)
 
(2007:30%)                                          1,299   4,823  6,122  1,479 (14,793)(13,314)

Effects of:

Franked investment income not subject to
corporation tax                                   (1,791)       - (1,791)(1,746)      -  (1,746)

Excess expenses unutilised                            189       -    189    251       -     251

Amounts charged to capital                              -     201    201      -     367     367

Expenses not deductible for tax purposes                3       -      3     16       -      16

Capital loss/(returns) not subject to tax*              - (5,024) (5,024)     -  14,426  14,426
 
Current tax charge for the year (note 6(a))             -       -      -      -       -       -
 

* Gains on investments are not subject to corporation tax within an investment
trust company.

(c) Provision for deferred taxation

No provision for deferred taxation has been made in the current or prior year.

The Company has not recognised a deferred tax asset of £8,962,000 (2008:
£8,572,000) arising as a result of excess management expenses and business
charges. The expenses will only be utilised if the Company generates
sufficient taxable profits in the future.

Deferred tax is not provided on unrealised capital gains or losses arising on
investments because the Company meets and intends to continue meeting the
conditions for approval as an investment trust.

7. Dividends

A first interim dividend of 4.4p per share (2008: 4.4p) was paid on 6 May
2009. The register date was 3 April 2009 and the ex-div date was 1 April 2009.
Cost 2009: £2,211,000 (2008: £2,318,000)

A second interim dividend of 5.1p per share (2008: 5.1p) was paid on 6
November 2009. The register date was 2 October 2009 and the ex-div date was 30
September 2009. Cost 2009: £2,615,000 (2008: £2,598.000)

The second interim dividend of 5.1p (2008:5.1p) has not been included as a
liability in these financial statements as it is only recognised in the
financial year in which it is paid.

The total dividend payable in respect of the financial year which forms the
basis of Section 842 of the Income and Corporation Taxes Act 1988 are set out
below:

Revenue available for distribution by way of dividend for the year -
£4,639,000

2009: First interim dividend of 4.4p per share paid on 6 May 2009 -
(£2,211,000)

2009: second interim dividend of 5.1p paid on 6 November 2009 - (£2,615,000)

Transfer from distributable reserves - £187,000


8. Return/(loss) per Share

                       Revenue Capital Total Revenue  Capital   Total
 
                          2009    2009  2009    2008     2008    2008

Return/(loss) per         9.1p   34.0p 43.1p   10.1p (101.2)p (91.1)p
Share


The total return per share is based on the total loss attributable to equity
shareholders of £21,865,000 (2008: loss £47,550,000), and on 50,737,975 (2008:
52,206,113) shares, being the weighted average number of shares in issue
during the year.

Revenue return per share is based on the net revenue on ordinary activities
after taxation of £4,639,000 (2008: profit £5,283,000).

Capital profit per share is based on net capital loss for the year of
£17,226,000 (2008: loss £52,833,000).


9. Investments

Analysis of portfolio movements                                     2009      2008

                                                                   £'000     £'000

Opening book cost                                                123,218   135,819
Opening investment holding (losses)/gains                        (1,632)    53,223
Valuation at 30 September 2008                                   121,586   189,042
Movements in the year:
Purchases at cost                                                  7,017     5,857
Sales
- proceeds                                                       (7,746)  (21,791)
(Loss)/profit on sales                                           (5,850)     3,333
Net movement in investment holdings gains                         23,792  (54,855)
Valuation at 30 September 2009                                   138,799   121,586
Closing book cost                                                116,639   123,218
Investment holding gains/(losses) at 30 September 2009            22,160   (1,632)
Valuation at 30 September 2009                                   138,799   121,586
Investment holding gains/(losses)
                                                                    2009      2008
                                                                   £'000     £'000
(Losses)/gains based on historical cost                          (5,850)     3,333
Amounts recognised as investment holding gains in                  3,270  (10,760)
previous year
Loss based on carrying values at previous year's                 (2,580)   (7,427)
balance sheet date
Net movement in investment holding gains/(losses) in              20,522  (44,095)
the year
Gains/(loss) on investments during the year                       17,942  (51,522)
10. Debtors
                                                                    2009      2008
                                                                   £'000     £'000
Prepayments and accrued income                                       902     1,159
VAT recoverable on investment management fees                        120         -
previously paid
                                                                   1,022     1,159

11. Creditors

Amounts falling due within one year
                                                                    2009      2008

                                                                   £'000     £'000

Bank loans with ING Bank N.V.*                                    13,500    13,000
Other creditors and accruals                                         193       165
                                                                  13,693    13,165

* Further details on the loan facilities can be found in note 17


12. Share Capital
                                                                    2009      2008

                                                                   £'000     £'000
Authorised:
Shares of 25p                                                     25,000    25,000
Allotted, called up and fully paid:
52,797,423# (2008: 52,797,423) shares of 25p each                 13,199    13,199


# In the year to 30 September 2009 1,330,000 shares were re-issued out of
treasury and 1,009,000 shares were repurchased to be held in treasury. In the
period 1 October 2009 to 17 December 2009 a further 680,000 shares were
re-issued out of treasury, and 1,069,360 have been repurchased to be held in
treasury.

At the year end the Company held 1,525,750 (2008: 1,846,750) shares in
treasury.


13. Capital Reserve

                                                  Capital    Capital
                                                  Reserve    Reserve
                                                          Investment
                                                             Holding
                                                               Gains      Total

                                                    £'000      £'000      £'000

At 1 October 2008                                  41,477    (1,632)     39,845
Transfer on disposal of investments               (3,270)      3,270          -
Net (losses)/gains on investments                 (2,580)     20,522     17,942
Expenses charged to capital                         (718)          -      (718)
Foreign currency exchange difference                    2          -          2
Repurchase of shares into treasury                (1,856)          -    (1,856)
Sale of shares from treasury                        2,675          -      2,675
At 30 September 2009                               35,730    (1,632)     57,890


The Institute of Chartered Accountants in England and Wales has issued
guidance (TECH 01/08) stating that profits arising out of a change in fair
value of assets, recognised in accordance with Accounting Standards, may be
distributed provided the relevant assets can be readily convertible into cash.
Securities listed on a recognised stock exchange are generally regarded as
being readily convertible into cash. However, under the terms of the Company's
Articles of Association, sums within "other capital

reserves" are available for distribution only by way of redemption or purchase
of any of the Company's own shares. In addition, in order to maintain
investment trust status, the Company may only distribute by way of dividend
accumulated revenue profits.

14. Net Asset Value per Share

Net asset value per share is based on net assets of £127,659,000
(2008:£109,784,000) and on 51,271,673 (excluding treasury shares)
(2008:50,950,673) shares in issue at the year end. As at 30 September 2009 the
Company held 1,525,750 shares in treasury (2008: 1,846,750).

15. Contingent Asset

On 31 October 2007 the Association of Investment Companies announced that HM
Revenue and Customs had confirmed to the Investment Management Association
that investment trust management fees should no longer attract Value Added Tax
(VAT). As a result, during the period the Company's previous Manager, Close
Investments Limited (Close), submitted a claim to HM Revenue and Customs for
the repayment of £154,000, which equates to 0.3p per share. This amount is in
respect of VAT previously paid by the Company to Close. In view of the fact
that at the Company's year end, the absolute amount was still subject to
challenge by HMRC, only £120,000 of this amount was recognised during the
year, leaving a contingent asset of £34,000 as at 30 September 2009.
Subsequent to the year end the amount of £154,000 has now been received in
full. Also, during the year an amount of £31,000 in respect of VAT paid to
Lindsell Train during the three month period ended 30 September 2007 was
received.

16. Related Parties

Details of the relationship between the Company and Lindsell Train Limited are
disclosed in the Report of the Directors on pages 14 and 15. During the year
ended 30 September 2009, Lindsell Train Limited received £437,000 (2008:
£601,000) in respect of Investment Management fees, of which £43,000 (2008:
£42,000) was outstanding at the year end. The Company has an investment in The
Lindsell Train Investment Trust Plc with a book cost of £1,000,000 (2008:
£1,000,000) and a fair value of £1,540,000 (2008: £1,370,000) as at 30
September 2009. The Lindsell Train Investment Trust Plc is managed by the
Company's Investment Manager.

17. Risk Management

As an investment trust, the Company invests in equities and other investments
for the long term so as to secure its investment objective as stated on page
11. In pursuit of its investment objective, the Company is exposed to a
variety of risks that could result in either a reduction in the Company's net
assets or a reduction in the revenue profits available for distribution.

The Company's financial instruments comprise equity and fixed interest
investments, cash balances, borrowings and debtors and creditors that arise
directly from its operations.

The principal risks inherent in managing the Company's financial instruments
are market risk, liquidity risk and credit risk. These risks and the
Directors' approach to the management of them are set out in the Report of
Directors on pages 12 to 14.

Market Risk

Market risk comprises three types of risk: market price risk, interest rate
risk and currency risk.

Market price risk

As an investment company, performance is dependent on the performance of the
underlying companies and securities in which it invests. The market price of
investee companies' shares is subject to their performance, supply and demand
for the shares and investor sentiment regarding the company or the sector.
Consequently market price risk is one of the most significant risks to which
the Company is exposed.

Market price risk arises mainly from uncertainty about future prices of
financial instruments held. It represents the potential loss the Company might
suffer through holding market positions in the face of price movements.

At 30 September 2009, the fair value of the Company's assets exposed to market
price risk was £1 38,799,000 (2008: £1 21,586,000) (see page 8). The Board
meets on at least a quarterly basis during the year and at each meeting they
consider the asset allocation and concentration of the portfolio in order to
minimise the risk associated with particular instruments. The Investment
Manager has the responsibility for selecting investments in accordance with
the Company's investment objective and seeks to ensure that individual stocks
meet an acceptable risk-reward profile.

If the fair value of the Company's investments at the balance sheet date
increased or decreased by 10%, while all other variables remained constant,
the capital return and net assets attributable to shareholders for the year
ended 30 September 2009 would have increased or decreased by £13,880,000 or
27.1p per share (2008: £12,159,000 or 23.9p per share).

No derivatives or hedging instruments are utilised to manage market price
risk.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a
financial instrument will fluctuate because of changes in market interest
rates.

Interest rate movement may affect:

- the interest payable on the Company's variable rate borrowings

- the level of income receivable from variable interest securities and cash at
bank and on deposit

- the fair value of investments of fixed rate securities

The Company's main exposure to interest rate risk during the year ended 30
September 2009 was through its credit facility with ING Bank N.V. Borrowings
varied throughout the year as part of the Board's endorsed policy. Borrowings
at the year end amounted to £13,500,000 (2008: £13,000,000).

During the year, the Company's unsecured revolving credit facility comprised a
£15,000,000 364 day revolving credit facility. At 30 September 2009 a total of
£ 13,500,000 was drawn down from this facility (2008: £ 13,000,000) at an
interest rate of 2.14%.

If the above level of borrowing was maintained for a year a 1%
increase/decrease in LIBOR would decrease/increase the revenue return by
£45,000, would decrease/increase the capital return by £90,000, and would
decrease/increase the net assets by £135,000 (2008: decrease/increase the
revenue return by £43,000, decrease/increase the capital return by £87,000 and
decrease/increase the net assets by £ 130,000).

The weighted average interest rate on borrowings under the committed revolving
credit facilities provided by ING Bank N.V was 5.03% (2008: 6.34%).

At the year-end, the Company's financial assets and liabilities exposed to
interest rate risk were as follows:

                                                                           2009     2008
                                                                         Within   Within
                                                                       one year one year

                                                                          £'000    £'000
Exposure to floating interest rates:
 
Cash at bank
                                                                          1,531      204
Creditors: amount falling due within one year - borrowings 
on the loan facility                                                     13,500   13,000

Exposure to fixed interest rates:
 
Investments designated at fair value through profit or loss              #6,123    7,991
Total exposure to interest rates                                         21,154   21,195


# Comprises holdings in Lloyds Banking Group 9.25% and 9.75% non cum
preference and Celtic 6% cum preference as set out on page 8.


Currency risk

The financial statements are presented in sterling, which is the functional
currency and presentational currency of the Company. At 30 September 2009, all
of the Company's investments, with the exception of two, were priced in
sterling. These Canadian and U.S. investments represent only 6.3% of the
portfolio (see page 8).

Credit Risk

Credit risk is the Company's exposure to financial loss from the failure of a
counterparty to deliver securities or cash for acquisition or disposals of
investments which could result in the Company suffering a financial loss.
Credit risk is managed as follows:

- investment transactions are carried out only with brokers whose
creditworthiness is reviewed by the Investment Manager. Transactions are
ordinarily undertaken on a delivery versus payment basis whereby the Company's
custodian bank ensures that the counterparty to any transactions entered into
by the Company has delivered its obligation before any transfer of cash or
securities away from the Company is completed.

Any failing trades in the market are closely monitored by both the Investment
Manager and the Manager.

Cash is only held at banks that have been identified by the Board as reputable
and of high credit quality. Bank of New York Mellon has a credit rating of Aaa
(Moodys) and AA (S&P).

During the year none of the Company's financial assets or liabilities were
secured by collateral.

As at 30 September 2009, the exposure to credit risk was £8,676,000
(2008: £9,354,000), comprising:

                                                                      2009   2008

                                                                     £'000  £'000
Fixed assets:
Non-equity investments (preference shares)                           6,123  7,991
Current assets:
Other receivables (amounts due from brokers, dividends and interest  1,022  1,159
receivable)
Cash at bank                                                         1,531    204

Total exposure to credit risk                                        8,676  9,354


The exposure to credit risk calculation is based on the Company's credit risk
exposure as at 30 September and may not be representative of the year as a
whole.

Liquidity Risk

This is the risk that the Company will encounter difficulty in meeting
obligations associated with financial liabilities.

Liquidity risk is not significant as the majority of the Company's assets are
investments in quoted equities and other quoted securities that are readily
realisable.

Fair value of financial assets and financial liabilities

Financial assets and financial liabilities are either carried in the balance
sheet at their fair value or at a reasonable approximation of fair value.

Capital management objectives, policies and procedures The Company's capital
management objectives are:

- to ensure that it is able to continue as a going concern; and

- to achieve capital and income growth and to provide shareholders with a
total return in excess of that of the FTSE All-share Index;

through an appropriate balance of equity capital and debt.

The Board, with the assistance of the Investment Manager and Manager,
regularly monitors and reviews the broad structure of the Company's capital on
an ongoing basis. These reviews include:

- the level of gearing, set at a maximum of 25% of net assets, which takes
account of the Company's position and the views of the Board and the
Investment Manager on the market; and

- the extent to which revenue reserves should be retained.

The Company's objectives, policies and procedures for managing capital are
unchanged from last year. The Company is subject to externally imposed capital
requirements;

- as a public company, the Company has a minimum share capital of £50,000; and

- in order to be able to pay dividends out of profits available for
distribution, the Company has to be able to meet one of the two capital
restriction tests imposed on investment companies by company law.

These requirements are unchanged since last year and the Company has complied
with them at all times.

18. Reconciliation of Net Return/(Loss) Before Finance Charges and Taxation to
Net Cash Inflow from Operating Activities

                                                                     2009      2008

                                                                    £'000     £'000

Total return/(loss) before finance charges and taxation            22,400  (46,502)
Less: capital (return)/loss before finance charges and           (17,585)    52,131
taxation
Net revenue before finance charges and taxation                     4,815     5,629
Decrease in accrued income and prepayments                            271       346
(Increase)/decrease in debtors                                      (134)       248
Decrease in creditors                                                (20)      (66)
Investment management, management and performance fees              (359)     (609)
charged to capital
Net cash inflow from operating activities                           4,573     5,548



19. Analysis of Changes in Net Debt

                                                At 1                             At
                                             October                   30 September
                                                2008                           2009
 
                                                                 Exchange
                                                       Cashflow  Movement
                                               £'000      £'000    £'000      £'000

Cash at bank                                     204      1,325        2      1,531
Debt falling due within 1 year              (13,000)      (500)        -   (13,500)
Net debt                                    (12,796)        825        2   (11,969)



20. Substantial Interests

         The Company holds interests in 3.0% or more of any
 
         class of capital in the following entities:
                                                                            % of issued
                                                                           share capital
                                                                             or Limited
                                                                             Liability
                                                                    Fair
                                                         Shares    value
Company or Limited Liability Partnership                   held    £'000      interest
                                                           

Barr (A.G.)                                           1,780,000   14,418        4.6%
Frostrow Capital LLP (unquoted)                               -      250       10.0%
Lindsell Train Investment Trust*                         10,000    1,540        5.0%
Marston's                                             6,244,565    6,076        3.7%

 
*Also managed by Lindsell Train Limited who receive an Investment Management
fee of 0.65% per annum of the company's adjusted market capitalisation.

Notice of the Annual General Meeting

Notice is hereby given that the Annual General Meeting of Finsbury Growth &
Income Trust PLC will be held at The City of London Club, 19 Old Broad Street,
London EC2N 1DS on Wednesday, 27 January 2010 at 12 noon, for the following
purposes:


Ordinary Business

1. To receive and consider the audited accounts and the Report of the
   Directors for the year ended 30 September 2009.

2. To re-elect John Allard as a Director of the Company.

3. To re-elect David Hunt as a Director of the Company.

4. To re-elect Vanessa Renwick as a Director of the Company.

5. To re-elect Anthony Townsend as a Director of the Company.

6. To re-elect Giles Warman as a Director of the Company.

7. To approve the Directors' Remuneration Report.

8. To reappoint Grant Thornton UK LLP as auditors of the Company and to
   authorise the Directors to determine their remuneration.

Special Business

To consider, and if thought fit, pass the following resolutions of which
resolutions 10, 11, 12 and 14 are proposed as special resolutions:

Authority to Allot Shares

9. THAT in substitution of all existing authorities the Directors be and are
hereby generally and unconditionally authorised in accordance with Section 551
of the Companies Act 2006 (the `Act') to exercise all powers of the Company to
allot relevant securities (within the meaning of Section 551 of the Act) up to
a maximum aggregate nominal amount of £1,272,058 being 10% of the issued share
capital at 17 December 2009 and representing 5,088,231 shares of 25p each in
the Company (or, if changed, the number representing 10% of the issued share
capital of the Company at the date at which this resolution is passed)
provided that this authority share expire at the conclusion of the Annual
General Meeting of the Company to be held in 2011 or 15 months from the date
of passing this resolution, whichever is the earlier, unless previously
revoked, varied or renewed, by the Company in general meeting and provided
that the Company shall be entitled to make, prior to the expiry of such
authority, an offer or agreement which would or might require relevant
securities to be allotted after such expiry and the Directors may allot
relevant securities pursuant to such offer or agreement as if the authority
conferred hereby had not expired.

Disapplication of Pre-emption Rights

10. THAT in substitution of all existing powers (but in addition to
any power conferred on them by resolution 11 set out in the notice convening
the Annual General Meeting at which this resolution is proposed ("Notice of
Annual General Meeting")) the Directors be and are hereby generally empowered
pursuant to Section 570 of the Companies Act 2006 (the "Act") to allot equity
securities (within the meaning of Section 560 of the Act) for cash pursuant to
the authority conferred on them by resolution 9 set out in the Notice of
Annual General Meeting or otherwise as if Section 561(1) of the Act did not
apply to any such allotment:

(a) pursuant to an offer of equity securities open for acceptance for a period
fixed by the Directors where the equity securities respectively attributable
to the interests of holders of shares of 25p each in the Company ("Shares")
are proportionate (as nearly as may be) to the respective numbers of Shares
held by them but subject to such exclusions or other arrangements in
connection with the issue as the Directors may consider necessary, appropriate
or expedient to deal with equity securities representing fractional
entitlements or to deal with legal or practical problems arising in any
overseas territory, the requirements of any regulatory body or stock exchange,
or any other matter whatsoever; and

Notice of the Annual General Meeting

Continued

(b) provided that (otherwise than pursuant to sub-paragraph (a) above) this
power shall be limited to the allotment of equity securities up to an
aggregate nominal value of £1,272,058, being 10% of the issued share capital
of the Company as at 17 December 2009 and representing 5,088,231 Shares or, if
changed, the number representing 10% of the issued share capital of the
Company at the date of the meeting at which this resolution is passed, and
provided further that (i) the number of equity securities to which this power
applies shall be reduced from time to time by the number of treasury shares
which are sold pursuant to any power conferred on the Directors by resolution
11 set out in the Notice of Annual General Meeting and (ii) no allotment of
equity securities shall be made under this power which would result in Shares
being issued at a price which is less than the net asset value per Share as at
the latest practicable date before such allotment of equity securities as
determined by the Directors in their reasonable discretion,
and such power shall expire at the conclusion of the next Annual General
Meeting of the Company after the passing of this resolution or 15 months from
the date of passing this resolution, whichever is earlier, unless previously
revoked, varied or renewed by the Company in general meeting and provided that
the Company shall be entitled to make, prior to the expiry of such authority,
an offer or agreement which would or might otherwise require equity securities
to be allotted after such expiry and the Directors may allot equity securities
pursuant to such offer or agreement as if the power conferred hereby had not
expired.

11. THAT in substitution of all existing powers (but in addition to any power
conferred on them by resolution 10 set out in the Notice of Annual General
Meeting) the Directors be and are hereby generally empowered pursuant to
Section 570 of the Companies Act 2006 (the "Act") to sell relevant shares
(within the meaning of Section 560 of the Act) if, immediately before the
sale, such shares are held by the Company as treasury shares (as defined in
Section 724 of the Act ("treasury shares")), for cash as if Section 561(1) of
the Act did not apply to any such sale provided that:

(a) where any treasury shares are sold pursuant to this power at a discount to
the then prevailing net asset value of ordinary shares of 25p each in the
Company ("Shares"), such discount must be (i) lower than the discount to the
net asset value per Share at which the Company acquired the Shares which it
then holds in treasury and (ii) not greater than 5% to the prevailing net
asset value per Share at the latest practicable time before such sale (and for
this purpose the Directors shall be entitled to determine in their reasonable
discretion the discount to their net asset value at which such Shares were
acquired by the Company and the net asset value per Share at the latest
practicable time before such Shares are sold pursuant to this power); and

(b) this power shall be limited to the sale of relevant shares having an
aggregate nominal value of £1,272,058, being 10% of the issued share capital
of the Company as at 17 December 2009 and representing 5,088,231 Shares or, if
changed, the number representing 10% of the issued share capital of the
Company at the date of the meeting at which this resolution is passed, and
provided further that the number of relevant shares to which power applies
shall be reduced from time to time by the number of Shares which are allotted
for cash as if Section 561(1) of the Act did not apply pursuant to the power
conferred on the Directors by resolution 10 set out in the Notice of Annual
General Meeting,

and such power shall expire at the conclusion of the next Annual General
Meeting of the Company after the passing of this resolution or 15 months from
the date of passing this resolution, whichever is earlier, unless previously
revoked, varied or renewed by the Company in general meeting and provided that
the Company shall be entitled to make, prior to the expiry of such authority,
an offer or agreement which would or might otherwise require treasury shares
to be sold after such expiry and the Directors may sell treasury shares
pursuant to such offer or agreement as if the power conferred hereby had not
expired.

Notice of the Annual General Meeting

Continued

Authority to Repurchase Shares

12. THAT the Company be and is hereby generally and unconditionally authorised
in accordance with Section 701 of the Companies Act 2006 (the "Act") to make
one or more market purchases (within the meaning of Section 693(4) of the Act)
of ordinary shares of 25 pence each in the capital of the Company ("Shares")
provided that:

(i) the maximum aggregate number of Shares authorised to be purchased is
7,627,259 or, if changed, the number representing 14.99% of the issued share
capital of the Company at the date of the meeting at which this resolution is
proposed;

(ii) the minimum price (exclusive of expenses) which may be paid for a Share
is 25 pence;

(iii) the maximum price (exclusive of expenses) which may be paid for a Share
is an amount equal to the greater of (i) 105% of the average of the middle
market quotations for a Share as derived from the Daily Official List of the
London Stock Exchange for the five business days immediately preceding the day
on which that Share is purchased and (ii) the higher of the last independent
trade in shares and the highest then current independent bid for shares on the
London Stock Exchange as stipulated in Article 5(1) of Regulation No.
2233/2003 of the European Commission (Commission Regulation of 22 December
2003 implementing the Market Abuse Directive as regards exemption for buyback
programmes and stabilisation of financial instruments);

(iv) this authority shall expire at the conclusion of the Annual General
Meeting of the Company to be held in 2011 or, if earlier, on the expiry of 15
months from the date of the passing of this resolution unless such authority
is renewed prior to such time; and

(v) the Company may make a contract to purchase Shares under this authority
before the expiry of the authority which will or may be executed wholly or
partly after the expiration of such authority, and may make a purchase of
Shares in pursuance of any such contract.

Electronic Communication

13. THAT the Company be authorised, subject to and in accordance with the
provisions of the Companies Act 2006 and the articles of association of the
Company (as from time to time amended or varied) to send, convey or supply all
types of notices, documents or information to the members by means of
electronic equipment (such term is defined in the Financial Services
Authority's Disclosure and Transparency Rules) for the processing (including,
without limitation, by means of digital compression) storage and transmission
of data, employing wires, radio optical technologies, or any other
electromagnetic means, including without limitation, by making such notices,
documents or information available on a website.

General Meetings

14. THAT as permitted by the EU Shareholders' Rights Directive (2007/36/EC)
any General Meeting of the Company (other than the Annual General Meeting of
the Company) shall be called by notice of at least 14 clear days in accordance
with the provisions of the Articles of Association of the Company provided
that the authority shall expire on the conclusion of the next Annual General
Meeting of the Company, or, if earlier, on the expiry 15 months from the date
of the passing of the resolution.

Change to Investment Policy

16. THAT the proposed revised investment policy set out on pages 19 and 20 of
the Company's annual report and accounts dated 17 December 2009, a copy of
which marked "A" and signed for the purpose of identification by the Chairman
of the Meeting is produced to the Meeting, be and it is hereby approved and
adopted with immediate effect as the Company's investment policy in place of
the Company's existing investment policy.

By order of the Board, Frostrow Capital LLP, Company
Secretary

Registered Office: 50 Lothian Road, Festival Square,
Edinburgh EH3 9BY

17 December 2009

Notes

1.Members are entitled to appoint a proxy to exercise all or any of their
rights to attend and to speak and vote on their behalf at the meeting. A
shareholder may appoint more than one proxy in relation to the meeting
provided that each proxy is appointed to exercise the rights attached to a
different share or shares held by that shareholder. A proxy need not be a
shareholder of the Company. A proxy form which may be used to make such
appointment and give proxy instructions accompanies this notice.

2.A vote withheld is not a vote in law, which means that the vote
will not be counted in the calculation of votes for or against the
resolutions. If no voting indication is given, a proxy may vote or abstain
from voting at his/her discretion. A proxy may vote (or abstain from voting)
as he or she thinks fit in relation to any other matter which is put before
the meeting.

3.To be valid any proxy form or other instrument appointing a proxy must be
completed and signed and received by post or (during normal business hours
only) by hand at Capita Registrars, PXS, 34 Beckenham Road, Beckenham, Kent
BR3 4TU no later than 12 noon on 25 January 2010.

4.In the case of a member which is a company, the instrument
appointing a proxy must be executed under its seal or signed on its behalf by
a duly authorised officer or attorney or other person authorised to sign. Any
power of attorney or other authority under which the instrument is signed (or
a certified copy of it) must be included with the instrument.

5.The return of a completed proxy form, other such instrument or any CREST
Proxy Instruction (as described below) will not prevent a shareholder
attending the meeting and voting in person if he/she wishes to do so.

6.Any person to whom this notice is sent who is a person nominated under
Section 146 of the Companies Act 2006 to enjoy information rights (a
"Nominated Person") may, under an agreement between him/her and the
shareholder by whom he/she was nominated, have a right to be appointed (or
have someone else appointed) as a proxy for the meeting. If a Nominated Person
has no such proxy appointment right or does not wish to exercise it, he/she
may, under any such agreement, have a right to give instructions to the
shareholder as to the exercise of voting rights.

7.The statement of the rights of shareholders in relation to the appointment
of proxies in paragraph 1 above does not apply to Nominated Persons. The
rights described in that paragraph can only be exercised by shareholders of
the Company.

8.Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001,
only shareholders registered on the register of members of the Company (the
"Register of Members") at 5.30 p.m. on 25 January 2010 (or, in the event of
any adjournment, on the date which is two days before the time of the
adjourned meeting) will be entitled to attend and vote or be represented at
the meeting in respect of shares registered in their name at that time.
Changes to the Register of Members after that time will be disregarded in
determining the rights of any person to attend and vote at the meeting.

9. As at 17 December 2009 (being the last business day prior to the
publication of this notice) the Company's issued share capital consists of
50,882,313 ordinary shares, carrying one vote each. Therefore, the total
voting rights in the Company as at 17 December 2009 are 50,882,313.

10.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. CREST Personal Members or other CREST sponsored
members, and those CREST members who have appointed a service provider(s),
should refer to their CREST sponsor or voting service provider(s), who will be
able to take the appropriate action on their behalf.

11.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 the
specifications of Euroclear UK and Ireland Limited ("CRESTCo"), 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 issuer's agent (ID RA10) no later than 48 hours before the
time appointed for holding the meeting. 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 issuer's agent is able
to retrieve the message by enquiry to CREST in the manner prescribed by CREST.
After this time any change of instructions to proxies appointed through CREST
should be communicated to the appointee through other means.

12.CREST members and, where applicable, their CREST sponsors or voting service
providers, should note that CRESTCo 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, to procure that his CREST sponsor or voting service
provider(s) take(s)) such action as shall be necessary to ensure that a
message is transmitted by means of the CREST system by any particular time. In
this connection, CREST members and, where applicable, their CREST sponsors or
voting system providers are referred, in particular, to those sections of the
CREST Manual concerning practical limitations of the CREST system and timings.

13.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.

14. In the case of joint holders, where more than one of the joint
holders purports to appoint a proxy, only the appointment submitted by the
most senior holder will be accepted. Seniority is determined by the order in
which the names of the joint holders appear in the Register of Members in
respect of the joint holding (the first named being the most senior).

15.Members who wish to change their proxy instructions should submit a new
proxy appointment using the methods set out above. Note that the cut-off time
for receipt of proxy appointments (see above) also applies in relation to
amended instructions; any amended proxy appointment received after the
relevant cut-off time will be disregarded.

Notes (continued)

16.Members who have appointed a proxy using the hard-copy proxy form and who
wish to change the instructions using another hard-copy form, should contact
Capita Registrars on 0871 664 0300 (calls cost 10p per minute plus network
extras).

17.If a member submits more than one valid proxy appointment, the appointment
received last before the latest time for the receipt of proxies will take
precedence.

18. In order to revoke a proxy instruction, members will need to inform the
Company. Members should send a signed hard copy notice clearly stating their
intention to revoke a proxy appointment to Capita Registrars, PXS, 34
Beckenham Road, Beckenham, Kent BR3 4TU.

In the case of a member which is a company, the revocation notice must be
executed under its common seal or signed on its behalf by an officer of the
company or an attorney for the company. Any power of attorney or any other
authority under which the revocation notice is signed (or a duly certified
copy of such power of attorney) must be included with the revocation notice.
If a member attempts to revoke its proxy appointment but the revocation is
received after the time for receipt of proxy appointments (see above) then,
subject to paragraph 4, the proxy appointment will remain valid.

19.In order to facilitate voting by corporate representatives at the meeting,
arrangements will be put in place at the meeting so that (i) if a corporate
shareholder has appointed the chairman of the meeting as its corporate
representative to vote on a poll in accordance with the directions of all of
the other corporate representatives for that shareholder at the meeting, then
on a poll those corporate representatives will give voting directions to the
chairman and the chairman will vote (or withhold a vote) as corporate
representative in accordance with those directions; and (ii) if more than one
corporate representative for the same corporate shareholder attends the
meeting but the corporate shareholder has not appointed the chairman of the
meeting as its corporate representative, a designated corporate representative
will be nominated, from those corporate representatives who attend, who will
vote on a poll and the other corporate representatives will give voting
directions to that designated corporate representative. Corporate shareholders
are referred to the guidance issued by the Institute of Chartered Secretaries
and Administrators on proxies and corporate representatives (www.icsa.org.uk)
for further details of this procedure. The guidance includes a sample form of
appointment letter if the chairman is being appointed as described in (i)
above.
Location of the Annual General Meeting

to be held at The City of London Club, 19 Old Broad Street, London EC2N 1DS on
Wednesday, 27 January 2010 at 12 noon.

Glossary of Terms

Discount or Premium

A description of the situation when the share price is lower or higher than
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 this situation
is called a premium. If the share price is lower than the net asset value,
shares are trading at a discount.

Gearing

The term used to describe the process of borrowing money for investment
purposes in the expectation that the returns on the investments purchased
using the borrowings exceed the finance costs associated with those
borrowings.

Net Asset Value (NAV)

The value of the Company's assets, principally investments made in
other companies and cash being held, minus any liabilities for which the
Company is responsible, e.g. money owed to other people. The NAV is also
described as `shareholders' funds'. The NAV is often expressed in pence per
share after being divided by the number of shares 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 theoretical total return on shareholders' funds per share, including the
assumed £100 original investment at the beginning of the period specified,
reflecting the change in net asset value assuming that dividends paid to
shareholders were reinvested at net asset value per share at the time the
shares were quoted ex-dividend. A way of measuring investment management
performance of investment trusts which is not affected by movements in
discounts or premiums.

Total Assets

Total assets give an indication of the total value of all the Company's
investments before deducting any borrowings used for gearing/investment
purposes.

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.

Total Expense Ratio

The total operating expenses incurred by a company, including any charged to
capital, excluding performance fees and exceptional items, as a percentage of
average total shareholders' funds.

Alliance Trust Savings Limited

Savings Plan

The Company participates in the Alliance Trust Savings Limited Investment
Trust Savings Plan, which facilitates both regular monthly investments and
occasional lump sum investments in the Company's shares. Shareholders who
would like information on the Savings Plan should call Alliance Trust Savings
Limited on 01382 573737. Calls to this number are recorded for monitoring
purposes and are charged at local rates, non-BT line charges may vary.

Individual Savings Accounts (" ISA")

ISAs are a tax-efficient method of investment, introduced by the Government.
Investors will have the opportunity to invest in the Company up to £7,200 in
the tax year 2009/2010 and up to £10,200 in subsequent tax years when they
subscribe to a Stocks and Shares ISA. Between 6 October 2009 and 5 April 2010,
an additional £3,000 may be invested in an ISA, for the tax year 2009/2010,
provided that the ISA holder will be aged 50 years or over not later than 5
April 2010.

Capita Registrars - Share Dealing Service

A quick and easy share dealing service is available to
existing shareholders through the Company's Registrar, Capita Registrars, to
either buy or sell shares. An online and telephone dealing facility provides
an easy to access and simple to use service.


Type of trade           Online                          Telephone
Share certificates      1% of the value of the deal     1.55 of the value of the deal
                        (Minimum £20.00, max £75.00     (Minimum £25,00, max £102.50


There is no need to pre-register and there are no complicated forms to fill
in. The online and telephone dealing service allows you to trade `real time'
at a known price which will be given to you at the time you give your
instruction.

To deal online or by telephone all you need is your surname, shareholder
reference number, full postcode and your date of birth. Your shareholder
reference number can be found on your latest statement or certificate where it
will appear as either a `folio number' or `investor code'. Please have the
appropriate documents to hand when you log on or call, as this information
will be needed before you can buy or sell shares.

For further information on this service please contact:

www.capitadeal.com (online dealing) or 0871 664 0446† (telephone dealing)

† Calls cost 10p per minute plus network extras and may be recorded for
training purposes. Lines are open from 8.30 a.m. to 5.30 p.m. Monday to
Friday.

Risk Warnings

Past performance is no guarantee of future performance.

The value of your investment and any income from it may go down as well as up
and you may not get back the amount invested. This is because the share price
is determined by the changing conditions in the relevant stockmarkets in which
the Company invests and by the supply and demand for the Company's shares.

As the shares in an investment trust are traded on a stockmarket, the share
price will fluctuate in accordance with supply and demand and may not reflect
the underlying net asset value of the shares; where the share price is less
than the underlying value of the assets, the difference is known as the
`discount'. For these reasons, investors may not get back the original amount
invested.

Although the Company's financial statements are denominated in
sterling, it may invest in stocks and shares that are denominated in
currencies other than sterling and to the extent they do so, they may be
affected by movements in exchange rates. As a result, the value of your
investment may rise or fall with movements in exchange rates.

Investors should note that tax rates and reliefs may change at any
time in the future.

The value of ISA tax advantages will depend on personal circumstances. The
favourable tax treatment of ISAs may not be maintained.

Company Information

Directors
Anthony Townsend (Chairman)
John Allard
Neil Collins
David Hunt, FCA 
Vanessa Renwick 
Giles Warman

Registered Office
50 Lothian Road, Festival Square, 
Edinburgh EH3 9BY

Company Registration Number
13958 (Registered in Scotland)

The Company is an investment company as defined under Section 833 of the
Companies Act 2006.

Website
www.finsburygt.com

Investment Manager
Lindsell Train Limited
2 Queen Anne's Gate Buildings, Dartmouth Street, 
London SW1H 9BP
Website: www.lindselltrain.com

Authorised and regulated by the Financial Services Authority.

Manager, Administrator and Company Secretary

Frostrow Capital LLP
25 Southampton Buildings, 
London WC2A 1AL
Telephone: 020 3008 4910 
E-Mail: info@frostrow.com 
Website: www.frostrow.com

Authorised and regulated by the Financial Services Authority.

If you have an enquiry about the Company or if you would like to receive a
copy of the Company's fact sheet by e-mail, please contact Frostrow Capital
using the above e-mail address.

Auditors
Grant Thornton UK LLP 
30 Finsbury Square, 
London EC2P 2YU

Registrars
Capita Registrars
Northern House, Woodsome Park,
Fenay Bridge, Huddersfield,
West Yorkshire HD8 0LA
Telephone (in UK): 0871 664 0300†
Telephone (from overseas): +44 (0) 20 8639 3399 
Facsimile: +44 (0) 1484 600911
E-mail: ssd@capitaregistrars.com
Website: www.capitaregistrars.com

Please contact the Registrars if you have a query about a certificated holding
in the Company's shares.

† calls cost 10p per minute plus network extras and may be recorded for
training purposes. Lines are open from 8.30 a.m. to 5.30 p.m. Monday to
Friday.

Stockbrokers
Winterflood Investment Trusts

The Atrium Building, Cannon Bridge, 
25 Dowgate Hill
London EC4R 2GA

Alliance Trust Savings Limited
PO Box 164,
8 West Marketgait,
Dundee DD1 9YP
Customer Services: 01382 573737* 
E-Mail: contact@alliancetrust.co.uk

* calls to this number are recorded for monitoring purposes and will be
charged at local rates, non-BT line charges may vary.

Please contact Alliance Trust Savings Limited if you have a query concerning
an Alliance Trust Savings Scheme, First Steps Plan or ISA account.

Share Price Listings

The price of your shares can be found in various publications including the
Financial Times, and in The Daily Telegraph, The Times, The Scotsman and The
Herald.

The Company's net asset value per share is announced daily and is available,
together with the share price, on the TrustNet website at www.trustnet.com

Identification Codes

Shares:           SEDOL:           0781606
                  ISIN:            GB0007816068
                  BLOOMBERG:       FGTLN
                  EPIC:            FG