BlackRock Income and Growth Investment Trust continues to seek out companies that can generate cash flow from strong business models


BlackRock Income and Growth Investment Trust plc (LON:BRIG) has announced its annual results for the year ended 31 October 2020.

For more information on this Trust and how to access the opportunities presented by the income and growth sector, please visit:


As at 
31 October 
As at 
31 October 

Net asset value per ordinary share (pence)161.70 201.30 -19.7 
– with dividends reinvested1-16.7 
Ordinary share price (mid-market) (pence)162.50 198.00 -17.9 
– with dividends reinvested1-14.8 
FTSE All-Share Index (with dividends reinvested)26036.60 7419.67 -18.6 
Net assets (£’000)336,401 46,214 -21.2 
Premium/(discount) to net asset value10.5% (1.6)% 
======== ======== 

For the year 
31 October 
For the year 
31 October 

Revenue earnings per ordinary share (pence)5.43 7.37 -26.3 
Net revenue profit on ordinary activities after tax (£’000)1,234 1,729 -28.6 
Dividends per ordinary share
Interim2.60p 2.60p – 
Final4.60p 4.60p – 
————– ————– ————– 
Total dividends paid and payable7.20p 7.20p – 
======== ======== ======== 

1     Alternative Performance Measures, see Glossary in the Annual Report and Financial Statements.
2     The Benchmark Index.
3     The change in net assets reflects the market movements during the year and the purchase and reissue of the Company’s own shares and dividends paid.


In my half-year report to shareholders on the period to the 30 April I commented that the six-month period had been an extraordinary one for businesses, households and economies. The second half of the period covered by this report has been no less tumultuous, although perhaps less so for stock markets. We can but hope that the optimism of markets is reflected in improved experiences for us all as we move through 2021.

During the year the Company’s Net Asset Value per share (NAV) returned -16.7%. By comparison, the Company’s benchmark, the FTSE All-Share Index, returned -18.6%. At the share price level, the Company returned -14.8% over the period. As at 28 January 2021, since the year end the Company’s NAV and share price have increased by 17.1% and 10.2%, respectively (all percentages are in Sterling with dividends reinvested).

Despite the obvious challenges of the pandemic and a global economic backdrop which remains uncertain and unpredictable, we nevertheless believe there are grounds for optimism. Governments and central banks across the globe have responded to the economic impact of the COVID-19 pandemic with unprecedented fiscal and monetary stimulus, and we have seen many markets rally in response. In addition, the diagnosis and treatment of the virus has developed significantly since the initial outbreak. Vaccinations have begun to be administered here in the UK and programmes are expected to begin in other countries before long and markets have responded positively to this news.

The portfolio was somewhat defensively positioned as the pandemic took hold and it is pleasing to see that this has been reflected in an outperformance versus the benchmark index return in the period under review, albeit in the context of negative returns.

The impact of the ongoing Brexit trade negotiations also weighed heavily on UK market sentiment during the period and UK assets remained broadly out of favour, and in many cases significantly undervalued. The agreement of a deal on trade between the UK and the EU has no doubt diminished the uncertain headwind present in recent years. Increased investor confidence could result in a rally in those UK assets which have suffered the most during the protracted negotiation process as investors now start to recognise the value opportunities available in the UK market.

A more detailed commentary on what has been a very challenging twelve months and the portfolio managers’ views on the outlook for the forthcoming year are given in their report below.

As we reported at the half-year, throughout the COVID-19 outbreak the Board has been working closely with our Manager, BlackRock, and the Company’s key suppliers to minimise the risk the virus poses to the health and wellbeing of all those working on the management and administration of the Company. We have received regular updates on the portfolio, and I am pleased to report that the Company’s operations have continued not to be adversely affected and that established business continuity plans have been operating effectively.

The Company’s revenue earnings per share for the year to 31 October 2020 amounted to 5.43 pence compared with 7.37 pence for the previous year. An interim dividend of 2.60 pence per share (2019: 2.60 pence) was paid to shareholders on 1 September 2020.

The Directors are mindful of shareholders’ desire for income in addition to capital growth and are proposing a final dividend per share of 4.60 pence (2019: 4.60 pence) giving total dividends for the year of 7.20 pence per share. This maintains the dividend at the same level as the prior year (2019: 7.20 pence per share). Subject to approval at the Annual General Meeting, the final dividend will be paid on 17 March 2021 to shareholders on the Company’s register at the close of business on 12 February 2021 (ex-dividend date is 11 February 2021).

The Directors recognise the importance to investors that the Company’s share price should not trade at a significant discount to NAV, and therefore, in normal market conditions, may use the Company’s share buy back, sale of shares from treasury and share issuance powers to seek to ensure that the share price does not differ excessively from the underlying NAV. The existing authority to buy back up to 14.99% of the Company’s issued share capital (excluding treasury shares) will expire at the conclusion of the 2021 Annual General Meeting and a resolution will be put to shareholders to renew the authority at that meeting. Currently, ordinary shares representing up to 33% of the Company’s issued ordinary share capital can be allotted as new ordinary shares or sold from treasury. It is proposed to renew the authority at the forthcoming Annual General Meeting.

During the year, a total of 458,275 ordinary shares were purchased at an average price of 161.92 pence per share, for a total consideration (including costs) of £742,000. Of these 458,275 ordinary shares, 340,775 ordinary shares were cancelled and 117,500 shares were placed in treasury for potential reissue, thereby saving the associated costs of an issue of new shares if demand arises. 11,800 such ordinary shares were reissued from treasury at an average price of 178.00 pence for a total consideration of £21,000. The average discount for the year to 31 October 2020 was 4.8% and the premium at the year-end was 0.5% which resulted in a share price return of -14.8% over the financial year. As at 28 January 2021, the discount was 5.4%.

The Company operates a flexible gearing policy which depends on prevailing market conditions and is subject to a maximum level of 20% of net assets at the time of investment. Net gearing during the financial year did not exceed the level as at 31 October 2020 when it stood at 7.2%. The Company has in place a borrowing facility of up to £4 million, provided by ING Luxembourg S.A. At the year end and at the date of this report the Company has drawn down fully on the facility.

Having carefully considered the composition of the Board and the need to ensure that a suitable balance of skills, knowledge, experience and independence is maintained, the Board recently undertook a process to identify a new Director. As a result, I am delighted to welcome Win Robbins to the Board.

Win brings a great deal of investment trust experience and asset management expertise, spanning both active and fixed income investment management, strategy and marketing. We believe she will both complement and enhance the composition of the existing Board and we very much look forward to working with her.

Win was appointed on 15 December 2020. Her appointment is subject to election by shareholders at the next AGM. Win will also serve on the Company’s Audit, Nomination and Management Engagement Committees. Further information on Win’s background and experience can be found in the Annual Report and Financial Statements.

At the date of this report the Board currently consists of five independent Non-executive Directors. However, following 18 years of diligent service on the Board, Mr George Luckraft has indicated that he wishes to step down from the Board at the forthcoming AGM. The Board would like to take this opportunity to thank George for his invaluable contribution to the ongoing success of the Company and for the benefit of his expertise and insight into the UK market, which has served the Board and the Company well during his tenure.

In accordance with best practice and good corporate governance, the Directors continue to submit themselves for annual re-election. The Board has a succession plan in place and will continue to appraise regularly its composition to ensure that a suitable balance of skills, knowledge, experience, independence and diversity is achieved to enable the Board to discharge its duties effectively. Further information on the Board’s policy on director tenure and succession planning can be found in the Directors’ Report in the Annual Report and Financial Statements.

As mentioned in the Half-yearly Financial Report to 30 April 2020, the Board has reviewed whether it is desirable to permit the Investment Manager to invest in non-UK listed securities to a limited extent. This will allow them to access opportunities in sectors which are not otherwise available to them because they are either dominated by companies listed outside of the UK, or because specific companies representing the most attractive investment opportunity in a particular theme are listed abroad.

We anticipate that these would be predominately US or European listed companies. The investment managers believe this additional flexibility will diversify the Company’s sources of revenue and enhance total return and their experience in another of their mandates is that non-UK listed holdings have contributed positively to the total return.

Subject to shareholder approval at the forthcoming AGM, the Board will authorise the Investment Manager to invest up to 20% of the Company’s gross assets in non-UK listed securities, effective from the conclusion of the AGM. To facilitate this the Company will lay before shareholders a revised investment policy, increasing the proportion of the Company’s assets that may be invested in non-benchmark securities (i) in respect of non-benchmark securities listed or admitted to trading in the UK, to 10% of gross asset value; and (ii) in respect of all non-benchmark securities, to 20% of gross asset value. The Company is also proposing amendments to clarfiy the operation of the existing weighting limits applicable to investments that fall within the Index, without amending those limits.

The Board does not intend that this will represent a material change to the overall investment objective, nor should it change the main source of revenues or profits made collectively by companies in the portfolio. It is rather an adjustment designed to enable your portfolio managers to enhance shareholder returns within the same portfolio risk profile. The proposed new investment policy is set out in full in the Annual Report and Financial Statements. The Board believes this action is in shareholders’ best interests and encourages you to support the proposals.

The revised UK Code of Corporate Governance (the UK Code) published in 2018 requires enhanced disclosure setting out how we, as Directors, have fulfilled our duties in taking into account the wider interests of stakeholders in promoting the success of the Company.

The Board takes its governance responsibilities very seriously and follows the provisions of the UK Code as closely as possible. As part of this reporting, and given the environmental, social and governance (ESG) issues that are faced by many on companies within the Company’s benchmark index, we have provided a detailed report on these matters in the Strategic Report and in the Annual Report and Financial Statements. We have also provided more information on our Investment Manager’s approach to shareholder engagement and voting activities.

The Association of Investment Companies (AIC) has also published updates to its Code of Corporate Governance (the AIC Code) which were endorsed by the Financial Reporting Council (FRC) as being appropriate for investment companies. The 2019 AIC Code applies to accounting periods beginning on or after 1 January 2019 and the Board has fully adopted the recommendations of the 2019 AIC Code.

In light of the circumstances created by the COVID-19 pandemic, the Board is proposing to make amendments to the Articles to enable the Company to hold general meetings (wholly or partially) by electronic means and to give additional powers in respect of postponing or adjourning meetings in appropriate circumstances. The amendments are being proposed in response to restrictions on social interactions which have made it impossible for shareholders to attend physical general meetings. The Board also notes that the Government is seeking to implement legal changes to the AGM rules to allow virtual meetings, and our proposed amendments are to ensure that your Company is prepared for these changes, once implemented.

The Board’s objective is to make it easier for shareholders to participate in general meetings through introducing electronic access for those not able to travel, and also to ensure appropriate security measures are in place for the protection and wellbeing of shareholders. I should make it clear that these powers would only be used if the specific circumstances or applicable law and regulation required it and the Board’s intention is to always hold a physical AGM provided it is both safe and practical to do so. The safety of all of the Company’s stakeholders must of course remain paramount.

The principal changes proposed to be introduced in the Articles, and their effect, are set out in more detail in the Directors’ report in the Annual Report and Financial Statements.

The Company’s Annual General Meeting will be held on Wednesday, 10 March 2021 at 12.00 noon at the offices of BlackRock at 12 Throgmorton Avenue, London, EC2N 2DL. Details of the business of the meeting are set out in the Notice of Annual General Meeting in the Annual Report and Financial Statements.

The Board is mindful that, in a response to the COVID-19 pandemic, the Stay at Home Measures were passed into law in England and Wales, with immediate effect, in statutory instruments (2020/350 in England and 2020/353 in Wales) made pursuant to the Public Health (Control of Disease) Act 1984. Under these restrictions, public gatherings of more than two people are not at present permitted.

Accordingly, the Annual General Meeting will be run as a closed-meeting and it will not be possible for shareholders to attend any further general meetings in person until these restrictions are lifted. Shareholders are therefore encouraged to submit their votes by proxy. The only attendees who will be permitted entry to AGMs under the current legislation will be those who will need to be present to form the quorum to allow the business to be conducted. Further information will be made available in due course through the Company’s website at and regulatory news service announcements to the London Stock Exchange.

As many shareholders look forward to hearing the views of the Investment Managers, the AGM will be followed by a webinar, which will include a presentation and will be followed by a live question and answer session. Shareholders are invited to join the webinar and address any questions they have either by submitting questions during the webinar or in advance by writing to the Company Secretary at Details on how to register for this event can be found on the Company’s website.

Notwithstanding these difficult circumstances, the Board looks forward to offering opportunities for shareholders to meet the Investment Managers and the Board at some safer stage in the future.

At the time of writing the full extent of the economic and social impacts caused by the pandemic, and the duration of the measures being applied to limit the virus, remain unclear. Equally, the longer-term impacts on how we live our lives, how businesses and public services operate and how governments will seek to regain equilibrium in their finances are very hard to predict.

Infection levels have been rising in many countries across the globe in recent months. However, several vaccines have either been approved and begun being deployed or are in the final stages of testing. Efficacy levels are high, providing some hope for a return to some form of normality, although the challenge of distributing and administering a vaccine to the majority of the population should not be underestimated. The UK market responded positively to this development, with many of the sectors hit hardest by the lockdown measures rallying strongly.

In the short-term your portfolio managers believe that the recent spikes in volatility and generally bearish global sentiment have created opportunities for active managers, which they have been selectively pursuing.

Further ahead, whatever the future environment does look like there will be companies that succeed and thrive and deliver good returns to investors. Your Investment Managers are focused on identifying and positioning the portfolio for such opportunities.

As you will read in their report below, your investment managers’ fundamental strategy has not changed albeit they are cautious and measured with regard to the near-term outlook for the companies within the portfolio given the impact of COVID-19 and the lack of clarity around the shape and duration of any recovery. They continue to seek out companies that can generate cash flow from strong business models and have favourable industry characteristics or scope for management driven self-help. The focus remains on bottom-up stock selection, assembling a portfolio of individual companies which, taken as a whole, should prove capable of delivering attractive returns and supporting dividend growth into the future.

Your Board remains fully supportive of this approach and we have every confidence in the ability of our Investment Managers to continue to deliver on the Company’s investment objective as we move into 2021.

29 January 2021


Over the year to 31 October 2020, the Company saw a NAV return of -16.7% and a share price return of -14.8%, outperforming the FTSE All-Share Index which returned -18.6% over the same period. All returns are in Sterling terms with dividends reinvested.

The first quarter of the Company’s financial year saw the UK equity market close 2019 on a positive tone as Boris Johnson’s Conservative Party secured a convincing majority in the December General Election. Sterling spiked in the immediate aftermath but retraced some of its gains as concerns re-emerged around the potential for a ‘hard’ Brexit. Modest easing in trade tensions between the US and China boosted global equities at the expense of bond markets and drove commodity prices higher.

The optimism we saw at the end of 2019 quickly faded in the new year as the COVID-19 pandemic swept through economies and stock markets: equities fell significantly, the magnitude and rapidity of which matched the declines seen in 2008. Volatility spiked across asset classes and financial markets’ infrastructure came under extreme pressure. Companies faced revenue declines unlike any seen before as authorities instigated lockdowns on non-essential activity.

In response, we saw unprecedented policy action from governments and central banks globally. Using the 2008 playbook, central banks initially cut interest rates; the Bank of England cut the Bank Rate to 0.1% and the US cut interest rates to 0.25%. This was followed by significant liquidity support for financial markets and large economic packages to support employment and corporate liquidity. In the US, authorities approved a $2tn fiscal package (equating to 10% of Gross Domestic Product (GDP)) and in the UK more than £350bn (15% of GDP) has been extended. Stock markets responded favourably to continued efforts from policy makers to stave off the worst impacts and global equities delivered the strongest second quarter for returns since 2009 as many economies across the world began to ease restrictions; however, volatility remained heightened as fears of a resurgence of the pandemic continued to circulate. UK indices made good progress, led by small-and mid-caps but lagged the recovery in the US market where companies in the technology sector continued to drive returns. Dividend cuts and suspensions became commonplace amongst UK companies, in some cases demanded via regulatory intervention.

The COVID-19 pandemic has remained the principal focus for stock markets globally as regional differences in terms of spread and severity became apparent. Hopes have been raised by the progress of several vaccines, only to suffer a set-back as another wave took its toll on local activity, particularly in Europe. Volatility remains high; political uncertainty in the US including the lack of agreement around US fiscal stimulus while US-Sino tensions persist. Domestic politics have also impacted UK equities as the Brexit transition period neared its conclusion, heightening tensions around ongoing negotiations with the EU. Monetary and fiscal policy also remains in the headlines as the UK government announces further mitigation around the pandemic’s impacts and the potential for negative interest rates from the Bank of England.

The UK market has weakened this year, with the FTSE All-Share Index returning -18.6% to the end of October 2020. Utilities, Basic Materials and Technology outperformed, whilst Oil and Gas, Telecommunications and Financials underperformed.

From a sector perspective the Company’s underweight exposure to Oil and Gas was the top contributor to returns, as well as stock selection in Consumer Goods. On the negative side, stock selection in Financials and Basic Materials detracted from performance.

Financials, particularly banks and life insurers, were generally weak in the market drawdown, a function of their economic sensitivity, limited ability to cut costs quickly and significant financial gearing. The banking sector was further impacted by the intervention of the regulator, the Prudential Regulation Authority (PRA), requesting banks to cancel their dividends. Insurers have been allowed greater discretion regarding their distributions, though most have chosen to suspend or cancel dividends until the economic backdrop becomes clearer. Against this backdrop, the Company’s underweight position in HSBC was a significant contributor to performance though largely offset by the Company’s overweight positions in Standard Chartered and Lloyds Banking Group. Not owning Experian also detracted from relative performance. Being underweight Royal Dutch Shell compared with the benchmark weighting also contributed to relative performance after shares were very weak, driven by the weakness in the oil price and the company having its first dividend cut since the Second World War. BHP also contributed to returns. Mining stocks generally outperformed. Mines were able to stay open during the COVID-19 pandemic, and we saw strong demand from China as the country reopened after the first wave of the pandemic.

We came into 2020 with relatively defensive portfolios as we saw a decoupling between valuations and earnings growth. 2019 had proved to be a strong year with market returns of nearly 20% despite anaemic earnings growth. This caused us to be more cautious in the weeks leading up to the crisis such that we significantly reduced the cyclicality and gearing of the portfolio. Over the reporting year, the Company sold positions in Ascential, Barclays, HSBC, Moneysupermarket, Prudential and Weir Group where we felt the shares were discounting an overly optimistic view of their medium-term prospects. We also removed companies where we felt the investment thesis was likely to be significantly altered as a result of the economic dislocation caused by COVID-19. Hence we sold positions in ‘turnarounds’ like WPP and Euromoney where our thesis of self-help driven earnings recovery relied on a reasonably stable economic environment. Clearly, this was no longer the case. We sold positions where there was significant financial gearing and recent earnings disappointments such as Aviva, Bellway, easyJet and St James’ Place. We sold Forterra as well as Trainline which is exposed to the likely muted recovery in rail travel at the same time as the industry’s structure and profitability is challenged. Finally, we sold positions where the shares had met or exceeded our price expectations such as London Stock Exchange.

In part these sales were also motivated by the significant opportunities we saw elsewhere. The extreme market sell-off has provided us with the opportunity to improve the quality of the portfolio and to recycle capital into businesses where we see stronger capital and dividend prospects in the medium-term. When assessing the relative merit of new positions, we look for several elements. We need to be confident that the business has a resilient balance sheet and sufficient liquidity to enable it to withstand a significant recession and support investment through it. We look for companies with long-term growth paths supported by clear competitive advantages. Finally, we seek franchises where we believe the prospects of the business could be enhanced by the dislocation caused by the crisis either through market share gains, or new markets opening up. Hence, the Company was particularly busy in March and April, buying initial positions in a number of companies such as Next, Berkeley Group, SSP, Burberry Group, Rio Tinto and Intermediate Capital Group. Market volatility and crises do offer opportunities for long-term investors. We also increased the existing holdings in Reckitt Benckiser and AstraZeneca. In Reckitt Benckiser’s case, we believe new management have instigated a strong plan to accelerate growth over the next three years while COVID-19 provides a near-term tailwind. Similarly, our position in AstraZeneca was increased given our rising confidence in their earnings growth prospects following significant research and development success. Over the year we have also participated in a number of capital raises, including Hiscox and Whitbread.

We also purchased Direct Line Group in anticipation of the company returning to the dividend list given the resilience of its motor insurance franchise and strong capital position. We bought Electrocomponents in October, also anticipating its return to the dividend list. The business has a strong track record of taking market share in highly fragmented markets. It also has a strong balance sheet and underlying cash generation gives the potential for significant growth opportunities. Additionally, we believe its end markets are well positioned to recover post COVID-19. We increased our position in RELX where price weakness as a result of the COVID-19 impact on their exhibitions business presented an opportunity. The company continues to boast long-term structural growth drivers in its information services businesses.

In September we purchased THG Holdings (The Hut Group) in their initial public offering, a British e-commerce company which sells consumer goods direct via its proprietary e-commerce platform. We anticipate strong growth from its e-commerce solutions business. The company’s track record in successfully building its own beauty and nutrition brands and high-profile recent contract wins give us confidence in this solution. The company is well-invested, and we expect to see strong top line growth to drive strong margins and cash flow.

One of the advantages we enjoy at BlackRock is our access to its fantastic research platform with over 200 investors across the world. We have the ability to incorporate the research and idea generation from our colleagues to complement both our research on UK companies, as well as to generate investment opportunities outside the UK market. We believe that the opportunity to invest internationally is a positive one for the Company. By doing so, we are able to access investment opportunities that are unavailable in the UK which can be accretive both to the Company’s income generation and capital growth.

In July, with permission from the Board to invest up to 5% of the Company’s gross assets overseas, we purchased a holding in Mastercard, a market leader in the fast-growing payments industry. We also purchased Maxim Integrated which is being acquired by Analog Devices. The combination will be a market-leading provider of analog chips to a range of attractive markets including industrial automation, 5G telecom infrastructure, electrification and increased digitisation of autos in addition to data centre infrastructure. This should provide long-term organic growth with a high drop-through to profits and cash flow.

Our general approach to gearing is that we aim to run the Company with a modest and consistent level of gearing to enhance income generation and capital growth. However, this year we saw opportunities to use gearing more actively. Having started the period with relatively high gearing, concerns over market valuations following the market’s strong, re-rating driven, performance at the end of 2019 prompted us to reduce gearing, which was fortunately timed just as COVID-19 hit markets. As the market fell sharply during March 2020, we gradually increased the gearing in the Company, and are now back to more historically normal levels of between 5-10%.

We have addressed this in greater detail in “The outlook for UK dividends” in the Annual Report and Financial Statements. What we would note though, is that the Company has fared better than the market as we have either not owned or been underweight the areas of the market that have seen the largest cuts. Conversely, we have been overweight the more resilient parts of the market. We view the dividend outlook for the UK market with renewed optimism as we expect dividends, in aggregate, to be more resilient and to grow faster in future. Additionally, the Company’s revenue reserve will provide further support to the Company’s dividend outlook.

The word unprecedented is often overused, but this year has been truly extraordinary. From an operational perspective, as the pandemic hit, an internal operation took place within BlackRock as we adapted smoothly to new working conditions. We are incredibly grateful to the teams of people who worked tirelessly to ensure a seamless transition.

The speed with which the situation has evolved this year made it very challenging for companies leading to new opportunities and threats within the portfolio and wider market. We have had more company meetings this year than at any point in our recent history on the UK team. In 2020 the UK team had 1,729 company meetings. We have also benefitted from being able to meet with corporates via virtual conferences. Initially the focus of company meetings was to understand how company management teams were adapting to the initial lockdowns; the liquidity position as well as the likelihood of breaching debt covenants and the consequences of doing so. As the year has continued, we have pivoted to focus on understanding how consumer and corporate behaviour is changing and how businesses are positioned for reopening, furlough schemes ending, as well as the possibility of returning to the dividend list.

There have been some large binary events this year. Starting with COVID-19, at the time of writing, we are in the third lockdown in the UK, with national lockdowns imposed across Europe, as well as rising cases in developed markets, including the US. This is impacting economic activity once more and we think this is likely to persist throughout the winter. On a more positive note, though, we now have vaccines. This news showed the market towards the end of 2020, and particularly those industries hardest hit by COVID-19, that there is light at the end of the tunnel, and that a return to ‘normal life’ as we used to know it, could be within our reach at some point in 2021. In the meantime, we anticipate governments and central banks will continue to provide fiscal and monetary support. We would also note that corporate balance sheets have, in many cases, increased their levels of debt to withstand the liquidity shocks. Whilst economies will recover in 2021, some companies’ earnings and cash returns will take longer to recover under the burden of higher levels of borrowing.

Although Joe Biden’s win was largely expected in the US presidential election, the Republicans have fared better in Congress and the Senate remains finely balanced. The passageway of legislation through the House and Senate is still likely to be tough, with significant change subject to the historical checks and balances of US politics. It is, as yet, unclear how Sino-US tensions will evolve from here, but we do not anticipate a material change.

We would also note that UK valuations are extreme and even on an industry-adjusted basis remain at multi decade lows vs other international markets. We do believe that once the market has certainty, we could see this divergence narrow, supporting our view that now is a great time to invest in the UK market.

We continue to use the scale and breadth of the platform at BlackRock to leverage significant resources across stock analytics, market insights and data science. We know, from our experience in 2008/2009, how important these resources and support are and the opportunities it enables us to find. We seek to ensure the Company continues to build on the support it has demonstrated amidst the volatility this year to deliver strong capital and dividend growth over the long-term.

29 January 2021

For more information on this Trust and how to access the opportunities presented by the income and growth sector, please visit:


1 + AstraZeneca (2019: 2nd)
Sector: Pharmaceuticals & Biotechnology
Market value: £2,767,000
Percentage of portfolio: 7.1% (2019: 5.3%)

AstraZeneca is an Anglo-Swedish multinational pharmaceutical company with its headquarters in the UK. It is a science-led biopharmaceutical business with a portfolio of products for major disease areas including cancer, cardiovascular infection, neuroscience and respiratory.

2 + Unilever (2019: 5th)
Sector: Food Producers
Market value: £2,267,000
Percentage of portfolio: 5.8% (2019: 3.9%)

Unilever is a global supplier of food, home and personal care products with more than 400 brands focused on health and well-being.

3 + Reckitt Benckiser (2019: 17th)
Sector: Household Goods & Home Construction
Market value: £1,959,000
Percentage of portfolio: 5.0% (2019: 2.5%)

Reckitt Benckiser is a global leader in consumer health, hygiene and home products. Its products are sold in 200 companies and its 19 most profitable brands are responsible for 70% of net revenues.

4 = RELX (2019: 4th)
Sector: Media
Market value: £1,953,000
Percentage of portfolio: 5.0% (2019: 4.3%)

RELX is a global provider of professional information solutions that includes publication of scientific, medical, technical and legal journals. It also has the world’s leading exhibitions, conference and events business.

5 + British American Tobacco (2019: 6th)
Sector: Tobacco
Market value: £1,807,000
Percentage of portfolio: 4.6% (2019: 3.6%)

British American Tobacco is one of the world’s leading tobacco groups, with more than 200 brands in the portfolio selling in approximately 180 markets worldwide.

6 + Rio Tinto (2019: N/A)
Sector: Mining
Market value: £1,512,000
Percentage of portfolio: 3.9% (2019: N/A)

Rio Tinto is a metals and mining company operating in about 36 countries around the world, producing iron ore, copper, diamonds, gold and uranium.

7 = Tesco (2019: 7th)
Sector: Food & Drug Retailers
Market value: £1,237,000
Percentage of portfolio: 3.2% (2019: 3.6%)

Tesco is a British multinational groceries and general merchandise retailer. It is the third largest retailer in the world, measured by gross revenues. It has shops across Asia and Europe and is the market leader of groceries in the UK, Ireland, Hungary and Thailand.

8 + 3i Group (2019: N/A)
Sector: Financial Services
Market value: £1,162,000
Percentage of portfolio: 3.0% (2019: N/A)

3i Group is a private equity and venture capital company based in London. 3i invests in mid-market buyouts, growth capital and infrastructure. Sectors invested in are business and financial services, consumer, industrials and energy, and healthcare.

9 – Royal Dutch Shell ‘B’ (2019: 1st)
Sector: Oil & Gas Producers
Market value: £1,141,000
Percentage of portfolio: 2.9% (2019: 6.2%)

Royal Dutch Shell is a global oil and gas company. The company operates in both Upstream and Downstream industries. The Upstream division is engaged in searching for and recovering crude oil and natural gas, the liquefaction and transportation of gas. The Downstream division is engaged in manufacturing, distribution and marketing activities for oil products and chemicals.

10 – National Grid (2019: 8th)
Sector: Gas, Water & Multiutilities
Market value: £1,119,000
Percentage of portfolio: 2.9% (2019: 3.4%)

National Grid is one of the world’s largest investor-owned energy companies, committed to delivering electricity and gas safely, reliably and efficiently to the customers and communities they serve. It plays a vital role in connecting the millions of people to the energy they use, through regulated businesses in the UK and the US, with principal operations in electricity and gas transmission and distribution.

All percentages reflect the value of the holding as a percentage of total investments as at 31 October 2020.

Together, the ten largest investments represent 43.4% of total investments (ten largest investments as at 31 October 2019: 41.4%).



% of investments by market value
1Financial Services11.04.7
2Pharmaceuticals & Biotechnology8.59.2
3Support Services8.45.8
4Household Goods & Home Construction7.84.0
6Food Producers5.81.1
9Gas, Water & Multiutilities5.32.6
11Oil & Gas Producers4.35.9
12Food & Drug Retailers3.22.4
13Non-Life Insurance3.21.2
14Travel & Leisure2.94.4
15General Retailers2.93.2
16Health Care Equipment & Services2.81.0
17Electronic & Electrical Equipment2.71.0
18Life Insurance2.32.9
19Industrial Engineering1.61.2
20Personal Goods1.33.0
21General Industrials0.91.6
22Technology Hardware & Equipment0.90.1
23Real Estate Investment Trusts0.82.5
24Mobile Telecommunications0.71.6

Sources: BlackRock and Datastream.


Number of investments
% of investments
by market value
£1m to £2m1138.8
£2m to £3m212.9

Source: BlackRock.



% of 
Financial Services
3i Group1,162 3.0 
John Laing Group1,062 2.7 
Premier Asset Management Group631 1.6 
Intermediate Capital Group498 1.3 
Mastercard469 1.2 
M&G461 1.2 
————– ————– 
======== ======== 
Pharmaceuticals & Biotechnology
AstraZeneca2,767 7.1 
GlaxoSmithKline567 1.4 
————– ————– 
3,334 8.5 
======== ======== 
Support Services
Ferguson951 2.4 
Grafton712 1.8 
Rentokil Initial649 1.7 
Serco517 1.3 
HomeServe459 1.2 
————– ————– 
3,288 8.4 
======== ======== 
Household Goods & Home Construction
Reckitt Benckiser1,959 5.0 
Taylor Wimpey724 1.9 
Berkeley Group358 0.9 
————– ————– 
3,041 7.8 
======== ======== 
RELX1,953 5.0 
Rightmove695 1.8 
————– ————– 
2,648 6.8 
======== ======== 
Food Producers
Unilever2,267 5.8 
————– ————– 
2,267 5.8 
======== ======== 
Rio Tinto1,512 3.9 
BHP680 1.7 
————– ————– 
2,192 5.6 
======== ======== 
Lloyds Banking Group1,093 2.8 
Standard Chartered956 2.5 
————– ————– 
2,049 5.3 
======== ======== 
Gas, Water & Multiutilities
National Grid1,119 2.9 
United Utilities Group924 2.4 
————– ————– 
2,043 5.3 
======== ======== 
British American Tobacco1,807 4.6 
————– ————– 
1,807 4.6 
======== ======== 
Oil & Gas Producers
Royal Dutch Shell ‘B’1,141 2.9 
BP Group560 1.4 
————– ————– 
1,701 4.3 
======== ======== 
Food & Drug Retailers
Tesco1,237 3.2 
————– ————– 
1,237 3.2 
======== ======== 
Non-Life Insurance
Hiscox629 1.6 
Direct Line Group605 1.6 
————– ————– 
1,234 3.2 
======== ======== 
Travel & Leisure
Whitbread723 1.8 
SSP227 0.6 
Fuller Smith & Turner – A Shares185 0.5 
Patisserie Holdings*– – 
————– ————– 
1,135 2.9 
======== ======== 
General Retailers
Next877 2.2 
WH Smith254 0.7 
————– ————– 
1,131 2.9 
======== ======== 
Health Care Equipment & Services
Smith & Nephew1,092 2.8 
————– ————– 
1,092 2.8 
======== ======== 
Electronic & Electrical Equipment
Oxford Instruments587 1.5 
Electrocomponents467 1.2 
————– ————– 
1,054 2.7 
======== ======== 
Life Insurance
Phoenix Group885 2.3 
————– ————– 
885 2.3 
======== ======== 
Industrial Engineering
Bodycote631 1.6 
————– ————– 
631 1.6 
======== ======== 
Personal Goods
Burberry Group521 1.3 
————– ————– 
521 1.3 
======== ======== 
General Industrials
THG Holdings354 0.9 
————– ————– 
354 0.9 
======== ======== 
Technology Hardware & Equipment
Maxim Integrated345 0.9 
————– ————– 
345 0.9 
======== ======== 
Real Estate Investment Trusts
Big Yellow Group291 0.8 
————– ————– 
291 0.8 
======== ======== 
Mobile Telecommunications
Vodafone285 0.7 
————– ————– 
285 0.7 
======== ======== 
Fevertree Drinks168 0.4 
————– ————– 
168 0.4 
======== ======== 
Total investments39,016 100.0 
======== ======== 

*     Suspended investment held at fair value.

All investments are in ordinary shares unless otherwise stated. The total number of investments held at 31 October 2020 was 48 (31 October 2019: 48).

As at 31 October 2020, the Company did not hold any equity interests comprising more than 3% of any company’s share capital.


The Directors present the Strategic Report of the Company for the year ended 31 October 2020.

The Company’s objective is to provide growth in capital and income over the long-term through investment in a diversified portfolio of principally UK listed equities.

BlackRock Income and Growth Investment Trust plc is an investment trust company that has a premium listing on the London Stock Exchange. Its principal activity is portfolio investment. Investment trusts, like unit trusts and Open-ended Investment Companies (OEICs), are pooled investment vehicles which allow exposure to a diversified range of assets through a single investment thus spreading, although not eliminating, investment risk.

Investment trusts, unlike unit trusts and OEICs, have the ability to borrow for investment purposes and to manage dividend distributions through revenue reserves. They also enjoy, unlike unit trusts and OEICs, the benefit of continuous dealing during market hours.

The Company is an Alternative Investment Fund in accordance with the Alternative Investment Fund Managers Directive (AIFMD). BlackRock Fund Managers Limited (the Manager) is the Company’s Alternative Investment Fund Manager. The management of the investment portfolio and the administration of the Company have been contractually delegated to the Manager. The Manager, operating under guidelines determined by the Board, has direct responsibility for decisions relating to the running of the Company and is accountable to the Board for the investment, financial and operating performance of the Company.

The Company delegates fund accounting services to BlackRock Investment Management (UK) Limited (BIM (UK) or the Investment Manager), which in turn sub-delegates these services to the Fund Accountant, The Bank of New York Mellon (International) Limited and also sub-delegates registration services to the Registrar, Computershare Investor Services PLC. Other service providers include the Depositary, also performed by The Bank of New York Mellon (International) Limited. Details of the contractual terms with these service providers are set out in the Directors’ Report in the Annual Report and Financial Statements.

The Company invests in accordance with the investment objective. The Board is collectively responsible to shareholders for the long-term success of the Company and is its governing body. There is a clear division of responsibility between the Board and the Manager. Matters reserved for the Board include setting the Company’s strategy, including its investment objective and policy, setting limits on gearing, setting the dividend, capital structure, governance, and appointing and monitoring the performance of service providers, including the Manager.

The Company’s business model follows that of an externally managed investment trust, therefore the Company does not have any employees and outsources its activities to third party service providers, including the Manager which is the principal service provider.

The Company’s policy is that the portfolio will usually consist of approximately 30-60 securities and is invested primarily in UK securities, which include the shares of companies listed, domiciled or carrying out the majority of their business in the UK.

The Company may hold a maximum of 10% of the issued ordinary share capital of any company. No more than 15% of the gross asset value of the Company may be invested in the securities of any one issuer, calculated at the time of any relevant investment. Cash or non-benchmark stocks may not exceed 10% of the net asset value of the Company. Each stock held is subject to a lower limit of 0% and an upper limit of plus 4 percentage points against its weighting in the FTSE All-Share Index on an ongoing basis, subject to an absolute sector weighting upper limit of 20% of the Company’s net assets at any time.

The Company may deal in derivatives, including options, futures, contracts for difference and derivatives not traded on or under the rules of a recognised or designated investment exchange for the purpose of efficient portfolio management. Derivatives and exchange traded funds may be dealt in only with the prior consent of the Board.

The performance of the Company is measured by reference to the FTSE All-Share Index (the Index) on a total return basis. The Company achieves an appropriate spread of risk by investing in a diversified portfolio of securities.

No material change can be made to the investment policy without the approval of shareholders by ordinary resolution.

During the period the Board authorised the Investment Manager to invest up to 5% of gross assets in non-UK listed securities. This change was done within the scope of the existing investment policy.

In assembling the Company’s portfolio, a relatively concentrated approach to investment is adopted to ensure that the fund manager’s best ideas contribute significantly to returns. We believe that it is the role of the portfolio overall to achieve a premium level of yield rather than every individual company within it. This gives increased flexibility to invest where returns are most attractive. This relatively concentrated approach results in a portfolio which differs substantially from the Index and in any individual year, the returns will vary, sometimes significantly, from those of the Index. Over longer periods the objective is to achieve returns greater than the Index.

The foundation of the portfolio, approximately 70% by value, is in high free cash flow companies that can sustain cash generation and pay a growing yield whilst aiming to deliver a double-digit total return. Additionally, the investment managers seek to identify and invest 20% by value of the portfolio in ‘growth’ companies that have significant barriers to entry and scalable business models that enable them to grow consistently. Turnaround companies are also sought, at around 10% by value, which represent those companies that are out of favour by the market, facing temporary challenges with high yields/very low valuations, but with recovery potential. The return from this segment is expected to contribute meaningfully to returns over time.

ESG factors can be useful and relevant indicators for investment purposes and can help portfolio managers with their decision making through identifying potentially negative events or corporate behaviour. This results in the expectation that there will be an outperformance bias towards better governed companies in the long-run.

The investment managers work closely with BlackRock’s Investment Stewardship team (BIS) to assess the governance quality of companies and investigate any potential issues, risks or opportunities.

Specific to corporate governance, the investment management team leverages local expertise (BIS and investors) in its proprietary, risk-based approach. Financial statement integrity is central to the analysis, where BIS applies a range of systematic measures to highlight companies’ accounting ratios in its assessment of balance sheet and earnings quality risks. For other categories under the corporate governance umbrella (e.g. audit quality, board accountability, executive pay and ownership and control), BIS flags risks based on internal research, including regulatory filings announcements and public news feeds. Governance (G) data from MSCI ESG Research Manager and other data sources may also be employed for supporting consideration. Environmental (E) and Social (S) factors are primarily assessed using MSCI data, examining whether specific E&S exposure exists, and if so, to determine how well such exposure is being managed. Further information on the Investment Manager’s approach to ESG and Socially Responsible Investing can be found in the Annual Report and Financial Statements.

The Investment Managers’ research team monitors differing levels of risk throughout the process and believes that avoiding major downside events can generate significant outperformance over the long-term. Inputs from BlackRock’s Risk & Quantitative Analysis Team (RQA) are an integral part of the investment process. RQA analyse market and portfolio risk factors including stress tests, correlations, factor returns, cross-sectional volatility and attributions. BlackRock’s evaluation procedures and financial analysis of the companies within the portfolio also take into account environmental, social and governance matters and other business issues. The Company invests primarily on financial grounds to meet its stated objectives.

The appropriate use of gearing can add value and the Company may, from time to time, use borrowings to achieve this. The Board is responsible for the level of gearing in the Company and reviews the position at every meeting. Gearing, including borrowings and gearing through the use of derivatives (which requires prior Board approval), when aggregated with underwriting participations, will not exceed 20% of the net asset value at the time of investment, drawdown or participation. There are no derivative positions at 31 October 2020. Any borrowing, except for short-term liquidity purposes, is used for investment purposes or to fund the purchase of the Company’s own shares. The Company has a two-year unsecured Sterling revolving credit facility of £4 million, provided by ING Luxembourg S.A. The facility was renewed for a further two years via an Amendment to Agreement executed in October 2020 and expires in October 2022. At the date of this report the new facility is fully drawn down.

Details of the Company’s performance for the year are given in the Chairman’s Statement. The Investment Manager’s report includes a review of the main developments during the year, together with information on investment activity within the Company’s portfolio.

The Company’s revenue earnings for the year amounted to 5.43p per share (2019: 7.37p per share). The total net loss for the year, after taxation, was £7,450,000 (2019: profit of £3,256,000) of which the net revenue profit amounted to £1,234,000 (2019: £1,729,000) and the net capital loss amounted to £8,684,000 (2019: net capital profit of £1,527,000). Details of dividends paid and declared in respect of the year are set out in the Chairman’s Statement.

A number of performance indicators (KPIs) are used to monitor and assess the Company’s success in achieving its objectives and to measure its progress and performance.

The principal KPIs are described below:

The performance of the portfolio together with the performance of the Company’s net asset value and share price are reviewed at each Board meeting and compared to the return of the Company’s benchmark, the FTSE All-Share Index.

At each meeting the Board monitors the level of the Company’s premium or discount to NAV and considers strategies for managing any premium or discount. Further details of the discount policy are provided in the Annual Report and Financial Statements. In the year to 31 October 2020, the Company’s share price to NAV traded in the range of a discount of 17.5% to a premium of 8.9%, both on a cum income basis. The Company bought back a total of 458,275 ordinary shares during the year at an average discount of 7.7% and at an average price of 161.92p per share. The total consideration (including costs) was £742,000. 11,800 ordinary shares were reissued from treasury at an average price of 178.00p for a total consideraion of £21,000.

Ongoing charges represent the Company’s management fee and all other recurring operating expenses, excluding finance costs, VAT refunded, transaction costs and taxation, expressed as a percentage of average net assets.

The Board reviews the ongoing charges and monitors the expenses incurred by the Company at each meeting. The Board also compares the level of ongoing charges against those of its peers.

The Board also regularly reviews the Company’s performance attribution analysis to understand how performance was achieved. This provides an understanding of how components such as sector exposure, stock selection and asset allocation impact performance.

The table below provides performance information for the current and prior year. Further details are also provided in the Investment Manager’s Report.


Year ended 
31 October 
Year ended 
31 October 
NAV per share1161.70p 201.30p 
Share price2162.50p 198.00p 
Net asset value total return3, 6-16.7% +7.4% 
Share price total return3, 6-14.8% +12.2% 
Change in Benchmark Index4-18.6% +6.8% 
Premium/(discount) to net asset value60.5% (1.6)%
Revenue earnings per share5.43p 7.37p 
Dividends per share7.20p 7.20p 
Ongoing charges5, 61.19% 1.07% 
======== ======== 

1     Calculated in accordance with AIC guidelines.
2     Mid-market share price.
3     This measures the Company’s share price and NAV total return, which assumes dividends paid by the Company have been reinvested.
4     FTSE All-Share Index (total return).
5     Ongoing charges represent the management fee and all other operating expenses, excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain non-recurring items as a % of average daily net assets.
6     Alternative Performance Measures, see Glossary in the Annual Report and Financial Statements.

Whilst the principal objective is to achieve growth in capital and income relative to the benchmark, the Board also monitors performance relative to a range of competitor funds, particularly those also within the AIC UK Equity Income sector.

The Company is exposed to a variety of risks and uncertainties. The Board has in place a robust process to identify, assess and monitor the principal and emerging risks of the Company, including those that they consider would threaten its business model, future performance, solvency or liquidity. The COVID-19 pandemic has given rise to unprecedented challenges for businesses across the globe and the Board has taken into consideration the risks posed to the Company by the crisis and incorporated these into the Company’s risk register. Emerging risks are considered by the Board as they come into view and are incorporated into the existing review of the Company’s risk register. Additionally, the Investment Manager considers emerging risks in numerous forums and the Risk and Quantitative Analysis team produces an annual risk survey. Any material risks of relevance to the Company identified through the annual risk survey will be communicated to the Board.

A core element of this process is the Company’s risk register which identifies the risks facing the Company and assesses the likelihood and potential impact of each risk and the controls established for mitigation. A residual risk rating is then calculated for each risk. The risk register is regularly reviewed and the risks reassessed. The risk environment in which the Company operates is also monitored and regularly appraised. New risks are also added to the register as they are identified which ensures that the document continues to be an effective risk management tool.

The risk register, its method of preparation and the operation of key controls in the Investment Manager’s and third-party service providers systems of internal control are reviewed on a regular basis by the Audit Committee. In order to gain a more comprehensive understanding of the Investment Manager’s and other third-party service providers’ risk management processes and how these apply to the Company’s business, the Audit Committee periodically receives presentations from BlackRock’s Internal Audit and Risk & Quantitative Analysis functions. The Audit Committee also reviews Service Organisation Control (SOC 1) reports from the Company’s service providers.

As required by the UK Corporate Governance Code (2018 Code), the Board has undertaken a robust assessment of the principal and emerging risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. The principal risks have been described in the table below, together with an explanation of how they are managed and mitigated. The Board will continue to assess these risks on an ongoing basis.

The current risk register includes a range of risks which are categorised under the following headings:

·        investment performance;
·        income/dividend;
·        gearing;
·        legal and regulatory compliance;
·        operational;
·        market; and
·        financial.

Principal Risk Mitigation/Control 
Investment Performance Risk
The Board is responsible for:

·        setting the investment strategy to fulfil the Company’s objective; and
·        monitoring the performance of the Investment Manager and the implementation of the investment strategy.

An inappropriate investment strategy may lead to:

·        poor performance compared to the Benchmark Index and the Company’s peer group;
·        a widening discount to NAV;
·        a reduction or permanent loss of capital; and
·        dissatisfied shareholders and reputational damage.

To manage this risk the Board:

·        regularly reviews investment performance;
·        regularly reviews the Company’s investment mandate and long-term strategy;
·        is required to provide prior consent to the use of derivatives and exchange traded funds;
·        has set investment restrictions and guidelines which the Investment Manager monitors and regularly reports on;
·        reviews changes in gearing and the rationale for the composition of the investment portfolio;
·        monitors the maintenance of an adequate spread of investments in order to minimise the risks associated with factors specific to particular sectors, based on the diversification requirements inherent in the investment policy; and
·        monitors the discount to NAV and use of the granted buy back powers.
The amount of dividends and future dividend growth will depend on the Company’s underlying portfolio and the dividends paid by the underlying investee companies.

Changes in the composition of the portfolio and any change in the tax treatment of the dividends or interest received by the Company may alter the level of dividends received by shareholders.

The Board monitors this risk through the receipt of detailed income forecasts and considers the level of income at each meeting. The Company also has a revenue reserve and powers to pay dividends from capital which could potentially be used to support the Company’s dividend if required.
The Company’s investment strategy may involve the use of gearing to enhance investment returns.

Gearing may be generated through borrowing money or increasing levels of market exposure through the use of derivatives. The Company currently has an unsecured revolving credit facility with ING Luxembourg S.A. The use of gearing exposes the Company to the risks associated with borrowing.

To manage this risk the Board has limited gearing, including borrowings and gearing through the use of derivatives, to 20% of NAV at the time of investment, drawdown or participation.

The Investment Manager will only use gearing when confident that market conditions and opportunities exist to enhance investment returns.
Legal, Regulatory and Tax Compliance
The Company has been approved by HM Revenue & Customs as an investment trust, subject to meeting the relevant eligibility conditions and operating as an investment trust in accordance with Sections 1158 and 1159 of the Corporation Tax Act 2010. As such, the Company is exempt from capital gains tax on the profits realised from the sale of its investments. Any breach of the relevant eligibility conditions could lead to the Company losing investment trust status and being subject to corporation tax on capital gains realised within the Company’s portfolio.

The Company is required to comply with the provisions of the Companies Act 2006, the Alternative Investment Fund Managers Directive, the Market Abuse Regulation, the UK Listing Rules and the FCA’s Disclosure Guidance & Transparency Rules.

Any serious breach could result in the Company and/or the Directors being fined or the subject of criminal proceedings or the suspension of the Company’s shares which would in turn lead to a breach of the Corporation Tax Act 2010.

Compliance with the accounting rules affecting investment trusts are regularly monitored.

The Investment Manager monitors investment movements, the level and type of forecast income and expenditure and the amount of proposed dividends, if any, to ensure that the provisions of Chapter 4 of Part 24 of the Corporation Tax Act 2010 are not breached. The results are reported to the Board at each meeting. The Board is aware of the risk of potential changes in law and taxation post Brexit and will continue to monitor this closely.

The Company Secretary and the Company’s professional advisers provide regular reports to the Board in respect of compliance with all applicable rules and regulation.

Following authorisation under the Alternative Investment Fund Managers’ Directive (AIFMD), the Company and its appointed Alternative Investment Fund Manager (AIFM and/or Manager) are subject to the risks that the requirements of this Directive are not correctly complied with. The Board and the Manager also monitor changes in government policy and legislation which may have an impact on the Company.

The Market Abuse Regulation came into force across the EU on 3 July 2016. The Board has taken steps to ensure that individual Directors (and their Persons Closely Associated) are aware of their obligations under the regulation and has updated internal processes, where necessary, to ensure the risk of non-compliance is effectively mitigated.
In common with most other investment trust companies, the Company has no employees. The Company therefore relies upon the services provided by third parties and is dependent on the control systems of BlackRock (the Investment Manager and AIFM), and of The Bank of New York Mellon (International) Limited (the Depositary and Fund Accountant), which ensures safe custody of the Company’s assets and maintains the Company’s accounting records. The Company’s share register is maintained by the Registrar, Computershare.

Failure by any service provider to carry out its obligations to the Company could have a material adverse effect on the Company’s performance. Disruption to the accounting, payment systems or custody records, as a result of a cyber-attack or otherwise, could impact the monitoring and reporting of the Company’s financial position.

The security of the Company’s assets, dealing procedures, accounting records and maintenance of regulatory and legal requirements, depend on the effective operation of these systems.

Due diligence is undertaken before contracts are entered into with third party service providers. Thereafter, the performance of the provider is subject to regular review and reports to the Board.

The Bank of New York Mellon’s and BlackRock’s internal control processes are regularly tested and monitored throughout the year and are evidenced through their Service Organisation Control (SOC 1) reports, which are subject to review by an Independent Service Assurance Auditor. The SOC 1 reports provide assurance in respect of the effective operation of internal controls. These reports are regularly reviewed by the Audit Committee.

The Company’s assets are subject to a strict liability regime and in the event of a loss of assets, the Depositary must return assets of an identical type or the corresponding amount, unless able to demonstrate the loss was a result of an event beyond its reasonable control.

The Board reviews the overall performance of the Manager, Investment Manager and all other third-party service providers on a regular basis and compliance with the Investment Management Agreement regularly. The Board also considers the business continuity arrangements of the Company’s key service providers.

The Board considers succession arrangements for key employees of the Investment Manager and the Board also considers the business continuity arrangements of the Company’s key service providers on an ongoing basis and reviews these as part of its review of the Company’s risk register. In respect of the unprecedented and emerging risks posed by the COVID-19 pandemic in terms of the ability of service providers to function effectively, the Board has received reports from key service providers setting out the measures that they have put in place to address the crisis, in addition to their existing business continuity framework. Having considered these arrangements and reviewed service levels since the crisis has evolved, the Board is confident that a good level of service has and will be maintained.

The Board also receives regular reports from BlackRock’s internal audit function.
Market risk arises from volatility in the prices of the Company’s investments. It represents the potential loss the Company might suffer through realising investments at a time of negative market movements.

There is also the potential for the Company to suffer loss through holding investments in a period of negative market movements.

The Board considers the diversification of the portfolio, asset allocation, stock selection, and levels of gearing on a regular basis and has set investment restrictions and guidelines which are monitored and reported on by the Investment Manager.

The Board monitors the implementation and results of the investment process with the Investment Manager.

The Board also recognises the benefits of a closed-end fund structure in extremely volatile markets such as those experienced with the COVID-19 pandemic. Unlike open-ended counterparts, closed-end funds are not obliged to sell-down portfolio holdings at low valuations to meet liquidity requirements for redemptions. During times of elevated volatility and market stress, the ability of a closed-end fund structure to remain invested for the long-term enables the Portfolio Managers to adhere to disciplined fundamental analysis from a bottom-up perspective.
The Company’s investment activities expose it to a variety of financial risks that include interest rate risk.

Details of these risks are disclosed in note 16 to the financial statements, together with a summary of the policies for managing these risks.

In accordance with the provisions of the UK Corporate Governance Code, the Directors have assessed the prospects of the Company over a longer period than the 12 months referred to by the ‘Going Concern’ guidelines. The Board is aware of the uncertainty surrounding the potential duration of the COVID-19 pandemic, its impact on the global economy and the prospects for many of the Company’s portfolio holdings. Notwithstanding this crisis, and given the factors stated below, the Board expects the Company to continue to meet its liabilities as they fall due for the foreseeable future and has therefore conducted this review for a period of five years. This period has been selected as it is aligned to the Company’s objective of achieving long-term growth in capital and income. The Board also believes that the Company and its key third party service providers have in place appropriate business continuity plans and will be able to maintain service levels through the COVID-19 pandemic.

The Board conducted this review for the period up to the AGM in 2026, being a five-year period from the date that this annual report will be approved by Shareholders. This period has been selected as it is aligned to the Company’s objective of achieving long-term growth in capital and income. In making this assessment the Board has considered the following factors:

·        the Company’s principal risks as set out above;
·        the ongoing relevance of the Company’s investment objective in the current environment; and
·        the level of demand for the Company’s shares.

The Company is required to undertake a continuation vote in 2023 and has also reviewed the potential impact that this may have on the Company’s viability. Particular consideration has been given to the following:

·        good communication with major shareholders. At the present time there has been no indication that the continuation vote will not be successful; and
·        at the close of business on 28 January 2021, the Company’s shares were trading at a discount to NAV of 5.4%.

Having considered the above factors, the Board believes that the scheduled continuation vote does not have a detrimental impact on the Company’s viability.

The Board has also considered a number of financial metrics in its assessment, including:

·        the level of ongoing charges, both current and historical;
·        the level at which the shares trade relative to NAV;
·        the level of income generated;
·        future income forecasts; and
·        the liquidity of the portfolio.

The Board has concluded that the Company would be able to meet its ongoing operating costs and net current liabilities as they fall due as a consequence of:

·        a liquid portfolio; and
·        overheads which comprise a small percentage of net assets.

Therefore, the Board has concluded that even in exceptionally stressed operating conditions, the Company would comfortably be able to meet its ongoing operating costs as they fall due.

However, investment companies may face other challenges. These include regulatory changes, changes to the tax treatment of investment trusts, a significant decrease in size due to substantial share buy-back activity, which may result in the Company no longer being of sufficient market capitalisation to represent a viable investment proposition or no longer being able to continue in operation.

The Board has considered the potential impact on the Company of the UK’s decision to leave the European Union (the ‘EU’) following a referendum held on 23 June 2016 (‘Brexit’). The result has led to political and economic instability and volatility in the financial markets of the United Kingdom and more broadly across Europe. This has also led to weakening in consumer, corporate and financial confidence in such markets as the UK finalises the terms of its exit from the EU.

On 31 January 2020 the United Kingdom (the “UK”) formally withdrew and ceased being a member of the EU. Following this, the UK entered into a transition period which lasted for the remainder of 2020, during which period the UK was subject to applicable EU laws and regulations. The transition period expired on 31 December 2020 and EU law no longer applies in the UK. On 30 December 2020, the UK and the EU signed an EU-UK Trade and Cooperation Agreement (“UK/EU Trade Agreement”), which applies from 1 January 2021 and sets out the foundation of the economic and legal framework for trade between the UK and the EU.

The UK’s exit from the EU is expected to result in additional trade costs and disruptions in this trading relationship. While the UK/EU Trade Agreement provides for the free trade of goods, it provides only general commitments on market access in services together with a “most favoured nation” provision which is subject to many exceptions. Furthermore, there is the possibility that either party may impose tariffs on trade in the future in the event that regulatory standards between the EU and the UK diverge. The terms of the future relationship may cause continued uncertainty in the global financial markets, and adversely affect the performance of the Company. Volatility resulting from this uncertainty may mean that the returns of the Company’s investments are affected by market movements, the potential decline in the value of Sterling or Euro, and the potential downgrading of UK sovereign credit rating.

The Board has also considered the impact of potential changes in law, regulation and taxation and the matter of foreign exchange risk. They have determined that although there are a number of potential risks associated with the Brexit process and the legal, fiscal and regulatory landscape thereafter, they do not believe that this represents a material threat to the Company’s strategy and business model, nor do they believe that the Investment Manager would be materially impeded in achieving the Company’s investment objective. The longer-term process of implementing the political, economic and legal framework relating to the relationship between the UK and the EU is likely to lead to continuing uncertainty and periods of exacerbated volatility in both the UK and in wider European markets.

Based on the results of their analysis, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment.

The Board’s main focus is the achievement of income and capital growth. The future performance of the Company is dependent upon the success of the investment strategy.

The outlook for the Company is discussed in the Chairman’s Statement and in the Investment Manager’s Report.

As an investment trust, the Company has no direct social or community responsibilities.

However, the Company believes that it is in shareholders’ interests to consider environmental, social and governance factors and human rights issues when selecting and retaining investments. Details of the Company’s policy on socially responsible investment are set out in the Annual Report and Financial Statements.

As an investment vehicle the Company does not provide goods or services in the normal course of business, and does not have customers. Accordingly, the Directors consider that the Company is not required to make any slavery or human trafficking statement under the Modern Slavery Act 2015. In any event, the Board considers the Company’s supply chain, dealing predominantly with professional advisers and service providers in the financial services industry, to be low risk in relation to this matter.

The Directors of the Company on 31 October 2020, all of whom held office throughout the year, are set out in the Governance Structure and Directors’ biographies in the Annual Report and Financial Statements.

The Board recognises the importance of having a range of experienced Directors with the right skills and knowledge to enable it to fulfil its obligations. As at 31 October 2020, the Board consisted of four male Directors. Following the appointment of Win Robbins on 15 December 2020 the Board will consist of four men and one woman. This will fall to three men and one woman following Mr Luckraft’s retirement at the forthcoming AGM, resulting in 25% female board representation. The Company does not have any employees.

New regulations (The Companies (Miscellaneous Reporting) Regulations 2018) require directors to explain more fully how they have discharged their duties under Section 172(1) of the Companies Act 2006 in promoting the success of their companies for the benefit of members as a whole. This enhanced disclosure covers how the Board has engaged with and understands the views of stakeholders and how stakeholders’ needs have been taken into account, the outcome of this engagement and the impact that it has had on the Board’s decisions.

As the Company is an externally managed investment company and does not have any employees or customers, the Board consider the main stakeholders in the Company to be the shareholders, key service providers (being the Manager and Investment Manager, the Custodian, Depositary, Registrar and Broker) and investee companies. The reasons for this determination, and the Board’s overarching approach to engagement, are set out in the table below.


Continued shareholder support and engagement are critical to the continued existence of the Company and the successful delivery of its long-term strategy. The Board is focused on fostering good working relationships with shareholders and on understanding the views of shareholders in order to incorporate them into the Board’s strategy and objectives in delivering long-term growth and income.
Manager and Investment Manager
The Board’s main working relationship is with the Manager, who is responsible for the Company’s portfolio management (including asset allocation, stock and sector selection) and risk management, as well as ancillary functions such as administration, secretarial, accounting and marketing services. The Manager has sub-delegated portfolio management to the Investment Manager. Successful management of shareholders’ assets by the Investment Manager is critical for the Company successfully to deliver its investment strategy and meet its objective. The Company is also reliant on the Manager as AIFM to provide support in meeting relevant regulatory obligations under the AIFMD and other relevant legislation.
Other key service providers

In order for the Company to function as an investment trust with a listing on the premium segment of the official list of the FCA and trade on the London Stock Exchange’s (LSE) main market for listed securities, the Board relies on a diverse range of advisors for support in meeting relevant obligations and safeguarding the Company’s assets. For this reason the Board considers the Company’s Custodian, Depositary, Registrar and Broker to be stakeholders. The Board maintains regular contact with its key external providers and receives regular reporting from them through the Board and committee meetings, as well as outside of the regular meeting cycle.
Investee companies

Portfolio holdings are ultimately shareholders’ assets, and the Board recognises the importance of good stewardship and communication with investee companies in meeting the Company’s investment objective and strategy. The Board monitors the Investment Manager’s stewardship arrangements and receives regular feedback from the Investment Manager in respect of meetings with the management of portfolio companies.

A summary of the key areas of engagement undertaken by the Board with its key stakeholders in the year under review and how Directors have acted upon this to promote the long-term success of the Company are set out in the table below.

Area of EngagementIssueEngagementImpact
Investment mandate and objectiveThe Board is committed to promoting the role and success of the Company in delivering on its investment mandate to shareholders over the long-term. Consideration of sustainable investment is a key part of the investment process and must be factored in when making investment decisions. The Board also has responsibility to shareholders to ensure that the Company’s portfolio of assets is invested in line with the stated investment objective and in a way that ensures an appropriate balance between spread of risk and portfolio returns.The Board believes that responsible investment and sustainability are important to the longer term delivery of growth in capital and income and has worked very closely with the Manager throughout the year regularly to review the Company’s performance, investment strategy and underlying policies and to understand how ESG considerations are integrated into the investment process.

The Manager’s approach to the consideration of ESG factors in respect of the Company’s portfolio, as well as its engagement with investee companies to encourage the adoption of sustainable business practices which support long-term value creation, are kept under review by the Board. The Manager reports to the Board in respect of its consideration of ESG factors and how these are integrated into the investment process. A summary of BlackRock’s approach to ESG and sustainability is set out in the Annual Report and Financial Statements.
The portfolio activities undertaken by the Investment Manager can be found in the Investment Manager’s Report.
Discount StrategyThe Board believes that strong performance and an attractive dividend yield enhances demand for the Company’s shares, which will help to narrow the Company’s discount of share price to NAV over time.The Manager reports total return performance statistics to the Board on a regular basis, along with the portfolio yield and the impact of dividends paid on brought forward distributable reserves.

The Board reviews the Company’s discount/premium to NAV on a regular basis and holds regular discussions with the Manager and the Company’s broker regarding the discount/premium level.

The Manager provides the Board with feedback and key performance statistics regarding the success of the Company’s marketing initiatives which include messaging to highlight the dividends.

The Board also reviews feedback from shareholders in respect of the level of dividend.
The average discount for the year to 31 October 2020 was 4.8%. During the year the Company’s share price has traded at a maximum discount of 17.5% and a maximum premium of 8.9%.
Service levels of third party providersThe Board acknowledges the importance of ensuring that the Company’s principal suppliers are providing a suitable level of service: including the Manager in respect of investment performance and delivering on the Company’s investment mandate; the Custodian and Depositary in respect of their duties towards safeguarding the Company’s assets; the Registrar in its maintenance of the Company’s share register and dealing with investor queries and the Company’s Brokers in respect of the provision of advice and acting as a market maker for the Company’s shares.The Manager reports to the Board on the Company’s performance on a regular basis. The Board carries out a robust annual evaluation of the Manager’s performance, their commitment and available resources.

The Board performs an annual review of the service levels of all third party service providers and concludes on their suitability to continue in their role.

The Board receives regular updates from the AIFM, Depositary, Registrar and Brokers.

In light of the challenges presented by the COVID-19 pandemic to the operation of business across the globe, the Board has worked closely with the Manager to gain comfort that relevant business continuity plans are operating effectively for all of the Company’s service providers.
Performance evaluations were performed on a timely basis and the Board concluded that all third party service providers, including the Manager, Custodian, Depositary and Fund Administrator were operating effectively and providing a good level of service.

The Board has received updates in respect of business continuity planning from the Manager, Custodian, Depositary, Fund Administrator, Brokers and Registrar, and is confident that arrangements are in place to ensure that a good level of service will continue to be provided despite the impact of the COVID-19 pandemic.
Board compositionThe Board is committed to ensuring that its own composition brings an appropriate balance of knowledge, experience, diversity and skills, and that it is compliant with best corporate governance practice under the UK Code of Corporate Governance, including guidance on tenure and the composition of the Board’s committees.Over recent years the Board undertook a review of succession planning arrangements and identified the need for action given that, if no action were taken, a majority of Board Directors would have had tenure in excess of nine years. The Board, discharging the duties of a Nomination Committee agreed the selection criteria and the method of selection, recruitment and appointment. Board diversity, including gender, was taken into account when establishing the criteria.

All Directors are subject to a formal evaluation process on an annual basis (more details and the conclusions in respect of the 2020 evaluation process are given in the Annual Report and Financial Statements). All Directors stand for re-election by shareholders annually. Shareholders may attend the AGM and raise any queries in respect of Board composition or individual Directors in person, or may contact the Company Secretary or the Chairman using the details provided in the Annual Report and Financial Statements if they wish to raise any issues.
The Board announced on 25 October 2019 that Mr Graeme Proudfoot would join the Board with effect from 1 November 2019 and would succeed Mr Cartwright as Chairman of the Board at the conclusion of the AGM held in March 2020. In December 2020 the Board announced the appointment of a new Director, Mrs Robbins. Mr Luckraft, a long serving Director, also advised the Board that he would stand down as a Director from the conclusion of this year’s AGM. The Board recognises the benefits of diversity and a structured process of ongoing refreshment and will continue to consider regularly its composition.

The Directors are not aware of any issues that have been raised directly by shareholders in respect of Board composition in 2020. Details for the proxy voting results in favour and against individual Directors’ re-election at the 2020 AGM are given on the Company’s website at
ShareholdersContinued shareholder support and engagement are critical to the continued existence of the Company and the successful delivery of its long-term strategy.The Board is committed to maintaining open channels of communication and to engage with shareholders. Notwithstanding the challenges posed by the COVID-19 pandemic, in normal operating circumstances the Company welcomes and encourages attendance and participation from shareholders at its Annual General Meetings. Shareholders therefore have the opportunity to meet the Directors and Investment Manager and to address questions to them directly.

The Annual Report and Half-Yearly Financial Report are available on the BlackRock website and are also circulated to shareholders either in printed copy or via electronic communications. In addition, regular updates on performance, monthly factsheets, the daily NAV and other information are also published on the website at

The Board also works closely with the Investment Manager to develop the Company’s marketing strategy, with the aim of ensuring effective communication with shareholders in respect of the investment mandate and objective. Unlike trading companies, one-to-one shareholder meetings usually take the form of a meeting with the portfolio managers as opposed to members of the Board. As well as attending regular investor meetings the portfolio managers hold regular discussions with wealth management desks and offices to build on the case for, and understanding of, long-term investment opportunities in the UK market.

The Investment Manager also coordinates public relations activity, including meetings between the portfolio managers and relevant industry publications to set out their vision for the portfolio strategy and outlook for the UK equity market. The Investment Manager releases monthly portfolio updates to the market to ensure that investors are kept up to date in respect of performance and other portfolio developments, and maintains a website on behalf of the Company that contains relevant information in respect of the Company’s investment mandate and objective. If shareholders wish to raise issues or concerns with the Board, they are welcome to do so at any time. The Chairman is available to meet directly with shareholders periodically to understand their views on governance and the Company’s performance. He may be contacted via the Company Secretary whose details are given in the Annual Report and Financial Statements.
The Board values any feedback and questions from shareholders ahead of and during Annual General Meetings in order to gain an understanding of their views and will take action when and as appropriate. Feedback and questions will also help the Company evolve its reporting, aiming to make reports more transparent and understandable.

Feedback from all substantive meetings between the Investment Manager and shareholders will be shared with the Board. The Directors will also receive updates from the Company’s broker on any feedback from shareholders, as well as share trading activity, share price performance and an update from the Investment Manager.

The portfolio managers attended 1,729 professional investor meetings in respect of the Company during the year under review.

Environmental, social and governance (ESG) issues can present both opportunities and threats to long-term investment performance. The securities within the Company’s investment remit may involve significant additional risk due to the political volatility and ESG concerns facing many of the companies in the Company’s investment universe. These ethical and sustainability issues are a key focus of the Board, and your Board is committed to a diligent oversight of the activities of the Manager in these areas. The Board believes effective engagement with management is, in most cases, the most effective way of driving meaningful change in the behaviour of investee company management. This is particularly true for the Company’s Manager given the extent of BlackRock’s shareholder engagement. As well as the influence afforded by its sheer scale, the Board believes that BlackRock is well placed as Manager to fulfil these requirements due to the integration of ESG into its investment processes, the emphasis it places on sustainability, its collaborative approach in its investment stewardship activities and its position in the industry as one of the largest suppliers of sustainable investment products in the global market. More information on BlackRock’s approach to sustainability is set out below.

Company Secretary
29 January 2021

The following report has been prepared by the Company’s Manager and sets out its approach to responsible investing.

Responsible ownership: BlackRock’s approach to sustainable investing

Responsible ownership – BlackRock’s approach

As a fiduciary to its clients, BlackRock has built its business to protect and grow the value of clients’ assets. From BlackRock’s perspective, business-relevant sustainability issues can contribute to a company’s long-term financial performance, and thus further incorporating these considerations into the investment research, portfolio construction, and stewardship process can enhance long-term risk adjusted returns. By expanding access to data, insights and learning on material ESG risks and opportunities in investment processes across BlackRock’s diverse platform, BlackRock believes that the investment process is greatly enhanced. The Company’s portfolio managers work closely with BlackRock’s Investment Stewardship team to assess the governance quality of companies and sustainable business practices, and investigate any potential issues, risks or opportunities. The portfolio managers use ESG information when conducting research and due diligence on new investments and again when monitoring investments in the portfolio.

BlackRock’s approach to sustainable investing

Considerations about sustainability have been at the centre of BlackRock’s investment approach for many years and the firm offers more than 200 sustainable products and solutions. BlackRock believes that climate change is now a defining factor in companies’ long-term prospects, and that it will have a significant and lasting impact on economic growth and prosperity. BlackRock believes that climate risk now equates to investment risk, and this will drive a profound reassessment of risk and asset values as investors seek to react to the impact of climate policy changes. This in turn is likely to drive a significant reallocation of capital away from traditional carbon intensive industries over the next decade.

In January 2020, with this transition in mind, BlackRock announced that it would accelerate its sustainable investing efforts and make a number of enhancements to its investment management and risk processes, including the following:

•  Heightening scrutiny on sectors and issuers with a high ESG risk, such as thermal coal producers, due to the investment risk they present to client portfolios;

•  Putting ESG analysis at the heart of Aladdin (BlackRock’s proprietary trading platform) and using proprietary tools to help analyse ESG risk; and

•  Placing oversight of ESG risk with BlackRock’s Risk and Quantitative Analysis group (RQA), to ensure that ESG risk is given increased weighting as a risk factor and is analysed with the same weight given to traditional measures such as credit or liquidity risk.

Investment Stewardship

BlackRock also places a strong emphasis on sustainability in its stewardship activities and has engaged with companies on sustainability-related questions for a number of years. This year we made an explicit ask that companies align their disclosures to the Task Force on Climate-related Financial Disclosures (TCFD) framework and the Sustainability Accounting Standards Board (SASB) standards. This includes each company’s plan for operating under a scenario where the Paris Agreement’s goal of limiting global warming to less than two degress is fully realised, as expressed  by the TCFD guidelines. To this end, BlackRock joined Climate Action 100+, a natural progression in our work to advance sustainable business practices aligned with TCFD. BlackRock has aligned its engagement and stewardship priorities to UN Sustainable Development Goals (including Gender Equality and Affordable and Clean Energy). BlackRock is committed to voting against management to the extent that they have not demonstated sufficient progress on sustainability issues. 

BlackRock is committed to transparency in terms of disclosure on its engagement with companies and voting rationales. During the twelve months to 31 December 2020, BlackRock voted against or withheld votes from 5,130 directors at 2,809 different companies driven by concerns regarding director independence, executive compensation, insufficient progress on board diversity, and overcommitted directors reflecting our intensified focus on sustainability risks. More details about BlackRock’s investment stewardship process can be found on BlackRock’s website at In terms of its own reporting, BlackRock believes that the SASB provides a clear set of standards for reporting sustainability information across a wide range of issues, from labour practices to data privacy to business ethics. For evaluating and reporting climate-related risks, as well as the related governance issues that are essential to managing them, the TCFD provides a valuable framework.

BlackRock recognise that reporting to these standards requires significant time, analysis, and effort. BlackRock’s own SASB-aligned disclosure is available on its website at, and BlackRock is committed to publishing a detailed TCFD-aligned report in 2021 on its 2020 activities. More information on BlackRock’s policies on Corporate Sustainability can be found on BlackRock’s website at


BlackRock Fund Managers Limited (BFM) provides management and administration services to the Company under a contract which is terminable on six months’ notice. BFM has (with the Company’s consent) delegated certain portfolio and risk management services, and other ancillary services, to BlackRock Investment Management (UK) Limited (BIM (UK)). Further details of the investment management contract are disclosed in the Directors’ Report in the Annual Report and Financial Statements.

The investment management fee is levied quarterly, based on 0.60% per annum of the Company’s market capitalisation. The investment management fee due for the year ended 31 October 2020 amounted to £237,000 (2019: £268,000). At the year end, £111,000 was outstanding in respect of the management fee (2019: £202,000).

The Company holds an investment in the BlackRock Institutional Cash Series plc – Sterling Liquid Environmentally Aware Fund of £1,575,000 (2019: £1,481,000) which for the year ended 31 October 2020 and 31 October 2019 has been presented in the financial statements as a cash equivalent.

In addition to the above services, BlackRock has provided the Company with marketing services. The total fees paid or payable for these services for the year ended 31 October 2020 amounted to £18,000 including VAT (2019: £13,000). Marketing fees of £12,000 including VAT were outstanding at 31 October 2020 (2019: £11,000).

The ultimate holding company of the Manager and the Investment Manager is BlackRock, Inc. a company incorporated in Delaware USA. During the period, PNC Financial Services Group, Inc. (“PNC”) was a substantial shareholder in BlackRock, Inc. PNC did not provide any services to the Company during the financial year ended 31 October 2019 and the period up to 11 May 2020. On 11 May 2020, PNC announced its intent to sell its investment in BlackRock, Inc. through a registered offering and related buy-back by BlackRock, Inc.

The Board currently consists of four non-executive Directors, all of whom are considered to be independent of the Company’s Manager. None of the Directors has a service contract with the Company. For the year ended 31 October 2020, the Chairman received an annual fee of £29,750 (2019: £28,750), the Chairman of the Audit Committee received an annual fee of £24,000 (2019: £23,250) and each of the other Directors received an annual fee of £20,500 (2019: £19,750). Subject to shareholder approval at the forthcoming AGM, Directors’ fees will be increased with effect from 1 November 2019, as set out in the Remuneration Policy in the Annual Report.

Disclosures of the Directors’ interests in the ordinary shares of the Company and fees and expenses payable to the Directors are set out in the Directors’ Remuneration Report in the Annual Report and Financial Statements. At 31 October 2020, £8,000 (2019: £7,000) was outstanding to Directors in respect of their annual fees.

As at 31 October 2020 and 2019, the Directors’ interests in the Company’s ordinary shares were as follows:

31 October 202031 October 2019
Graeme Proudfoot (Chairman)20,000N/A
Nicholas Gold20,00020,000
George Luckraftnilnil
Charles Worsley1987,5931987,5931
Jonathan CartwrightN/A 20,000 

1  Including a non-beneficial interest in 655,500 ordinary shares.

All of the holdings of the Directors are beneficial. No changes to these holdings had been notified up to the date of this report.

The information in the table above has been audited.


The Directors are responsible for preparing the Annual Report and Financial Statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice, including FRS 102 The Financial Reporting Standard applicable in the UK and Ireland.

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company as at the end of each financial year and of the profit or loss of the Company for that year.

In preparing these financial statements, the Directors are required to:

·        present fairly the financial position, financial performance and cash flows of the Company;
·        select suitable accounting policies and apply them consistently;
·        present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
·        make judgements and estimates that are reasonable and prudent;
·        state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
·        prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that 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 also responsible for preparing the Strategic Report, the Directors’ Report, the Directors’ Remuneration Report, the Corporate Governance Statement and the Report of the Audit Committee in accordance with the Companies Act 2006 and applicable regulations, including the requirements of the Listing Rules and the Disclosure Guidance and Transparency Rules.

The Directors have delegated responsibility to the Manager for the maintenance and integrity of the Company’s corporate and financial information included on the BlackRock website.

Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the Directors, whose names are listed in the Annual Report and Financial Statements, confirm to the best of their knowledge that:

·        the financial statements, prepared in accordance with applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
·        the Strategic Report contained in the Annual Report and Financial Statements includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

The 2018 UK Corporate Governance Code requires Directors to ensure that the Annual Report and Financial Statements are fair, balanced and understandable. In order to reach a conclusion on this matter, the Board has requested that the Audit Committee advise on whether it considers that the Annual Report and Financial Statements fulfils these requirements. The process by which the Audit Committee has reached these conclusions is set out in the Audit Committee’s report in the Annual Report and Financial Statements. As a result, the Board has concluded that the Annual Report and Financial Statements for the year ended 31 October 2020, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company’s position and performance, business model and strategy.


29 January 2021

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