Report & Accounts for the year ended 31 December 2017

An investment company within the meaning of Section 833 of the Companies Act 2006
Registered in England and Wales, Company Registration No. 12901
Registered Office: Exchange House, Primrose Street, London EC2A 2NY




Foreign & Colonial Investment Trust PLC

Exchange House, Primrose Street, London EC2A 2NY
Telephone +44 (0)20 7628 8000 Facsimile +44 (0)20 7628 8188
www.foreignandcolonial.com





19 March 2018

FOREIGN AND COLONIAL INVESTMENT TRUST PLC

LEI: 213800W6B18ZHTNG7371



Report and Accounts for the year ended 31 December 2017 (including the Notice of Meeting) and
Form of Proxy

Copies of the above documents have been submitted to the National Storage Mechanism and will
shortly be available for inspection at
www.hemscott.com/nsm.do

The report and accounts can also be downloaded from the website www.foreignandcolonial.com




Name of contact and telephone number for enquiries:
Hugh Potter
For and on behalf of F&C Investment Business Limited, Secretary
Telephone: 020 7628 8000

---

Foreign & Colonial
Investment Trust PLC
REPORT AND ACCOUNTS 31 DECEMBER 2017REPORT AND ACCOUNTS
31 DECEMBER 2017
Foreign & Colonial
Investment Trust PLC
Contents
Company Overview 2
Financial highlights 2017 3
Foreign & Colonial 4
Chairman’s Statement 6
Strategic Report 10
Policy Summary 12
Key Performance Indicators 15
Principal Risks and Future Prospects 16
Fund Manager’s Review 18
Twenty largest holdings 24
Directors 28
Directors’ Report 30
Corporate Governance Statement 35
Management and Advisers 37
Report of the Management
Engagement Committee 38
Report of the Nomination Committee 42
Remuneration Report 43
Report of the Audit Committee 45
Statement of Directors’ Responsibilities 49
Independent Auditors’ Report 50
Income Statement 56
Statement of Changes in Equity 57
Balance Sheet 58
Statement of Cash Flows 59
Notes on the Accounts 60
1. General information 60
2. Significant accounting policies 60
3. Income 64
4. Management fees 65
5. Other expenses 66
6. Finance costs 66
7. Taxation on ordinary activities 67
8. Net return per share 67
9. Dividends 68
10. Investments and derivative financial instruments 69
11. Substantial interests 70
12. Debtors 71
13. Creditors: amounts falling due within one year 71
14. Creditors: amounts falling due within one year 71
15. Creditors: amounts falling due after more than one year 71
16. Creditors: amounts falling due after more than one year 72
17. Share capital 72
18. Capital redemption reserve 72
19. Other reserves 73
20. Net asset value per ordinary share 73
21. Reconciliation of net return before taxation to cash flows from operating activities 74
22. Contingencies and capital commitments 74
23. Related party transactions 76
24. Going Concern 76
25. Financial Risk Management 76
26. Alternative Investment Fund Managers Directive (“AIFMD”) 81
27. Securities financing transactions (“SFT”) 81
Ten Year Record 82
Analysis of Ordinary Shareholders 83
Notice of Annual General Meeting 84
Information for Shareholders 88
How to Invest 89
Alternative Performance Measures 90
Glossary of Terms 91

ii | Foreign & Colonial Investment Trust PLC

Report and Accounts 2017 | 1
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
Overview
Company Overview 2
Financial Highlights 2017 3
Our 150th Year 4
Chairman’s Statement 6
Strategic Report
Business Model 10
Policy Summary 12
Key Performance Indicators 15
Principal Risks and Future Prospects 16
Fund Manager’s Review 18
Twenty Largest Holdings 24
Governance Report
Directors 28
Directors’ Report 30
Corporate Governance Statement 35
Management and Advisers 37
Report of the Management Engagement Committee 38
Report of the Nomination Committee 42
Remuneration Report 43
Report of the Audit Committee 45
Statement of Directors’ Responsibilities 49
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the action you should
take, you are recommended to seek your own independent financial advice from your stockbroker, bank manager, solicitor, accountant or
other independent financial adviser authorised under the Financial Services and Markets Act 2000 if you are in the United Kingdom or, if not,
from another appropriately authorised financial adviser. If you have sold or otherwise transferred all your ordinary shares in Foreign & Colonial
Investment Trust PLC please forward this document, together with the accompanying documents, immediately to the purchaser or transferee
or to the stockbroker, bank or agent through whom the sale or transfer was effected for transmission to the purchaser or transferee. If you
have sold or otherwise transferred only part of your holding of shares, you should retain these documents.
Contents
Independent Auditors’ Report 50
Financial Report
Income Statement 56
Statement of Changes in Equity 57
Balance Sheet 58
Statement of Cash Flows 59
Notes on the Accounts 60
Ten Year Record 82
Analysis of Ordinary Shareholders 83
Notice of Annual General Meeting 84
Other Information
Information for Shareholders 88
How to Invest 89
Alternative Performance Measures 90
Glossary of Terms 91

2 | Foreign & Colonial Investment Trust PLC
[Securing a high total return from investment in smaller companies worldwide]
Financial Highlights
Potential investors are reminded that the value of investments and the income from them may go down as well as up and investors may
not receive back the full amount invested. Tax benefits may vary as a result of statutory changes and their value will depend on individual
circumstances.
Total return increases
.
New investments
.
Investment growth
Realisation
.
841.78
pence
11
£0.98
million
5.3x
return
Our objective is to secure long-term growth in capital and income
through a policy of investing primarily in an internationally diversified
portfolio of publicly listed equities, as well as unlisted securities and
private equity, with the use of gearing.
Founded in 1868 as the first ever investment trust, Foreign &
Colonial continually evolves; keeping pace with new investment
opportunities and maintaining its relevance in today’s world.
Our approach is designed to provide investors with the
performance benefits of having concentrated individual investment
portfolios together with the diversification benefits of lower risk and
lower volatility that derive from being managed as part of a larger
combined portfolio. Offering investors a globally diversified portfolio,
Foreign & Colonial aims to be at the core of an investor’s portfolio.
Foreign & Colonial is suitable for retail investors in the UK,
professionally advised private clients and institutional investors
who seek growth in capital and income from investment in global
markets and who understand and are willing to accept the risks, as
well as the rewards, of exposure to equities.
Visit our website at foreignandcolonial.com
The Company is registered in England and Wales with company registration
number 12901 Legal Entity Identifier: 213800W6B18ZHTNG7371
Company Overview
DIVIDEND
HERO

Report and Accounts 2017 | 3
OVERVIEW
Company Overview
NET ASSET VALUE PER
SHARE UP TO 841.78P
841.78p
A TOTAL RETURN
OF 12.3% (DEBT AT
NOMINAL VALUE)
12.3%
23.1%
ANNUAL DIVIDEND
PER SHARE UP 23.1%
TO 8.00P
CONSECUTIVE
ANNUAL DIVIDEND
INCREASE
44th
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
OVERVIEW
Financial highlights
2017
Annual dividend
(4)

per share up 5.6%
to 10.4p, our 47th
consecutive annual
increase
10.4p
Discount
(3)
of 4.3%,
our lowest year end
level for over 10
years
4.3%
Share price total
return
(1)
of 21.0%,
ahead of the market
benchmark of 13.8%
21.0%
A net asset value
(2)

total return of
16.9% (debt at
market value)
16.9%
Delivering long-term growth in capital and income
In the last ten years Foreign & Colonial has turned a £1,000 investment, with dividends reinvested,
into £2,561.
Our discount has narrowed in recent years enhancing shareholder returns.
The dividend has increased every year for the past 47 years and over the last ten years is up 77.8%
or 5.9% compound per annum, compared with inflation of 26.5% or 2.4% compound per annum.
Potential investors are reminded that the value of investments and the income from dividends may go down as well as up and
investors may not receive back the full amount invested. Tax benefits may vary as a result of statutory changes and their value will
depend on individual circumstances.
(1) Total return. See Alternative Performance Measures on page 90
(2) Net asset value per share with debt at market value. See Alternative Performance Measures on page 90
(3) Discount – see Alternative Performance Measures on page 90
(4) The final dividend for 2017 is subject to shareholder approval at the Annual General Meeting
Net asset value
(2)
per share at 31 December – pence
0p
100p
200p
300p
400p
500p
600p
700p
2017201620152014201320122011201020092008
Source: F&C
Mid-market price per share at 31 December – pence
0p
100p
200p
300p
400p
500p
600p
700p
2017201620152014201320122011201020092008
Source: F&C
Share price discount
(3)
to net asset value
(2)
at
31 December – %
0%
2%
4%
6%
8%
10%
12%
2017201620152014201320122011201020092008
Source: F&C
Dividends
(4)
– pence per share
0p
2p
4p
6p
8p
10p
12p
2017201620152014201320122011201020092008
Source: F&C

Foreign & Colonial
Investment Trust
celebrates its 150th
birthday in 2018
The world’s first investment trust, Foreign & Colonial Investment
Trust celebrates its 150th birthday in 2018. Founded in 1868
initially as a trust, Foreign & Colonial was established with the
purpose of bringing stock market investing to those of moderate
means. That principle has stood the test of time for 15 decades,
through world wars, recessions and financial crises. Foreign &
Colonial represented a step-change in the way individuals could
access the stock market, paving the way for the development of
pooled savings vehicles like unit trusts and OEICS.
foreign & colonial investment trust plc
4 | Foreign & Colonial Investment Trust PLC

Report and Accounts 2017 | 5
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
to fulfil his vision, by providing a diversified investment vehicle
with a global focus that meets the needs of the smaller investor.
While our approach and underlying investments have changed over
the years Foreign & Colonial has remained focused on shareholder
returns and has evolved to meet investor needs over generations.
Ask The Fund Manager
Foreign & Colonial’s Fund Manager has changed less than a
dozen times over its 150 year history. There have only been
three over the past 40 years. Paul Niven took over from
Jeremy Tigue in 2014, who had managed the portfolio
for 17 years. Paul joined F&C in 1996. Here he gives
some thoughts on Foreign & Colonial.
What do you think is so special about Foreign &
Colonial?
The Company’s most important attributes include its
150 year heritage, its scale and the sheer number
of its underlying investors. Foreign & Colonial is
one of the most widely held investment products
in the UK, with over 100,000 direct investors.
Because it’s overwhelmingly held by private
investors, it’s still fulfilling Philip Rose’s 150-year-
old vision of an investment product for the
investor of moderate means.
How has Foreign & Colonial managed to stay
relevant over the past 150 years?
Foreign & Colonial started out with a focus on
emerging market bonds with investments spanning
Europe, the Middle East, New Zealand, South America and
North America at a time when Canada and the US were still
considered “emerging markets”. Over time, the portfolio has
evolved and expanded to include, at certain points in its history,
corporate bonds, equities and private equity. We have always cast
our nets widely to look for new investment opportunities. We’ve
gone from investing in the Amazon 150 years ago to investing in
Amazon.com today.
The Company has continued to evolve...how do you see its
future development?
It is more global than at any point in recent history. About 95%
of the portfolio is invested overseas. We have the flexibility
and resource to scan the entire global market across a whole
range of opportunities, spanning regions, market capitalisations,
investment styles and asset classes.
Inevitably we face challenges today that are very similar to those
faced by our predecessors, from world conflicts to financial crises.
We’re certainly not uniquely placed in history with regard to
uncertainty, our longevity though helps us put these challenges
into perspective. Looking ahead, I believe that the best growth
prospects lie in equities for the foreseeable future.
If you could meet the founder, Philip Rose, what would
you want to ask him?
Looking at his original vision, it would be interesting to know
how he would feel about Foreign & Colonial today compared to
inception in 1868. I think he would agree that we are continuing
Did you know?
• Foreign & Colonial was set up in 1868 by young lawyer
Philip Rose alongside barrister Samuel Laing, and Samuel
Laing’s business partner James Thompson Mackenzie, who
was also Deputy Chairman of the East Bengal Railway
• With the backing of influential politician Lord Westbury,
Foreign & Colonial was launched on Thursday 19 March
1868
• Today, it has total assets of £4.0 billion across a range of
globally diversified holdings
• Foreign & Colonial has paid a dividend every year over
its 150-year history, and has grown its payout ahead of
inflation every year without fail since 1970
Paul Niven,
Fund Manager
Visit our anniversary website at:
fcit150.co.uk
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
OVERVIEW
CHAIRMAN’S STATEMENT
OVERVIEW

6 | Foreign & Colonial Investment Trust PLC
Chairman’s StatementSimon Fraser, Chairman
100
120
140
160
180
20072008201220172009201020132014201520162011
Consumer Prices Index
Foreign & Colonial annual dividend per share
Foreign and Colonial NAV and share price performance vs
Market benchmark
(1)
over 10 years
150-year milestone
Before reporting on our results for last year, we should perhaps
take a moment to reflect on the last 150 years. It is remarkable to
think that the original purpose of Foreign & Colonial Investment
Trust has remained relevant throughout its long history. Providing
exposure to a globally diversified portfolio of private and listed
securities in one place, with access to all aspects of portfolio
construction including portfolio allocation, stockpicking, manager
selection and risk management at a reasonable cost, the investment
trust that launched an industry 150 years ago is as relevant today as
it ever was.
Chairman’s Statement
As we begin to mark Foreign & Colonial’s 150th anniversary and
the launch of the investment trust industry, I am very pleased to
report another year of strong gains with a total shareholder return
of 21.0%.
Foreign and Colonial annual dividend per share vs Consumer
Prices Index over 10 years
Source: F&C & Thomson Reuters EikonSource: F&C & Thomson Reuters Eikon
(1) See Glossary of terms on pages 91 and 93 for explanations of “Benchmark” and “Market benchmark”
Simon Fraser, Chairman
Market Benchmark
(1)
Foreign & Colonial – Share price total return
Foreign & Colonial – NAV Total Return
50
100
150
200
250
300
20072008201220172009201020132014201520162011
Performance
2017 was a good year. Our Net Asset Value (“NAV”) total return with
debt at market value rose by 16.9% and our total shareholder return
was 21.0%. We benefited from a rise in global stock markets with
many indices reaching new record highs over the year. The 21.0%
rise in our total shareholder return over the year significantly exceeded
the 13.8% return of our benchmark, the FTSE All-World Index.
Many of our investment portfolios delivered returns in excess of their
market benchmarks and we benefited from exposure to technology
related stocks and the outperformance of Europe, Japan and

Report and Accounts 2017 | 7
CHAIRMAN'S STATEMENT
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
Emerging Markets. In another year of strongly rising equity markets
gearing was also helpful to performance. Returns on our private
equity investments were lower than on our listed equities but have
been higher over the longer term. The majority of our private equity
portfolio was invested over ten years ago and is therefore quite mature.
I am pleased to say that this means our fund of fund programme is
returning cash to us (£77.8m net in 2017).
Delivering long-term growth in capital and income
We look to deliver sustainable long-term growth in capital and income
and I am pleased to say that over ten years our share price total return
is 156.1%. This is equivalent to 9.9% per annum. Over twenty years it
is 453.4%, which equates to 8.9% per annum.
Dividend growth has also been strong, with an annualised rise of 5.9%
in payments over the past decade and 7.4% over the past twenty
years. Foreign & Colonial has paid a dividend every year for 150 years.
Earnings and Dividends
We continued to see good growth in income during the year helping
to bring our Net Revenue Return per share up to 11.7 pence from
10.6 pence last year. While sterling had gained slightly against
a number of major currencies by the end of the year, average
exchange rate levels over the period were still down on 2016 and
this was estimated to add to our income by £3m (£6m in 2016).
Special dividends treated as income were £2.7m for the year, £1.7m
lower than last year.
Shareholders will be asked to approve a final dividend of 2.7 pence
per share payable on 1 May 2018. This will bring the total dividend
for the year to 10.4 pence, a rise of 5.6%, which compares with the
3.0% rise in the Consumer Prices Index, and will be the 47th year of
rising dividends. The 2017 dividends are fully covered by earnings
and after payment of the final dividend the Revenue Reserves will
significantly exceed one year’s worth of dividends.
The Board remains confident that our investment portfolio will
generate revenue increases higher than inflation over the long term
and our intention is to continue to deliver sustainable real rises in
dividend per share to shareholders.
Efficiency
Control of costs continues to be a focus of the Board. Annualised
costs are calculated as a proportion of net assets in accordance with
two recognised yardsticks: the AIC’s “Ongoing Charges”, and the
EU’s new “Total Cost” measure introduced under PRIIPs
(1)
. These
are set out on page 15. Ongoing Charges for 2017, which take
account of expected future costs, have remained level at around
0.8% of net assets for the last three years. This calculation includes
approximately 0.3% attributable to fees incurred within investee
funds. Total Costs, as measured under the EU rules for the first time,
include costs such as interest and transaction charges as well as
the charges within investee funds and therefore show a higher figure
(1) See Glossary of terms on page 93.
of 1.06%. The Board and Manager will keep the Company’s costs
under continuous review.
Discount
The Board has long been committed to effective discount control
that provides benefits for shareholders in terms of reducing volatility
and enhancing returns.The Company’s discount to NAV started the
year at 7.4% but, due to improved investor demand, narrowed to
4.3% by the end of the period further enhancing shareholder returns.
The average discount level of 6.7% for theyear was the lowest seen
for over twenty years.
The number of shares bought back by your Company in 2017 fell to
a low level of 4.4m shares. The shares have recently been trading,
and bought back, within a 5% discount level, which represents
significant progress since adjusting our policy towards a 7.5%
average attainment level in May 2015.
The Board will continue to use buybacks for the benefit of
shareholders in pursuit of a sustainably low deviation between the
price and NAV per share in normal market conditions. No reference
will therefore be made in future to a specific attainment level for
the Company’s discount. The policy and the levels within which it
operates will continue to be reviewed with the aim of achieving our
long-held aspiration of seeing the Company’s shares trading at or
close to NAV.
Key Information Document
In the context of investment performance, I should draw your attention
to the EU’s PRIIPs regulations which came into effect in January of this
year. Their purpose is to improve the functioning of financial markets
and increase customer protection. One aspect is the responsibility of
our management company to produce a Key Information Document.
Retail investors must now be directed to this before buying or
selling shares in the Company. The document has been prepared
according to a prescriptive methodology under the regulation such
that the investment performance scenarios, based on recent past
performance, may indicate future returns for shareholders that are too
optimistic. This affects investment trusts generally and concerns have
been expressed within the industry. It is to be hoped that these issues
will be quickly resolved but, in the meantime, we will continue to
remind shareholders to heed the maxim that past performance should
not be taken as a guide to the future.
The Board
As part of the Board’s succession plans, we are very pleased that
Beatrice Hollond agreed to join the Board in September. She brings
to us her significant experience in asset management and as a non-
executive director, including investment trusts.
“F&C Investment Trust”
Our anniversary year provides a natural reflection point to ensure
your Company continues its contribution and relevance in the
modern world. As part of this, our marketing will increasingly take

8 | Foreign & Colonial Investment Trust PLC
place under the Company’s commonly used name “F&C Investment
Trust”; the name with which Foreign & Colonial has always been
synonymous. At the AGM shareholders will be asked to approve an
amendment to the articles of association to enable the Directors to
change the Company’s corporate name to “F&C Investment Trust
PLC” in the year ahead.
Your Company, your future
While we look forward to celebrating our 150th anniversary in a
number of ways our greatest focus is, as always, on the future of the
Company and the part that it continues to play within the investment
sector as a whole. Despite the growth in the industry, there is still
much work to be done in helping people to understand the benefits
of saving and investing for the longer term given that there is now
a much greater need for individuals to take control of their future
financial wellbeing. State and private pensions will simply not be able
to provide a comfortable retirement. The fact that life-expectancy is
so much longer, combined with the rapid rise in the cost of care in
old age means that people will also have to plan their savings for their
future requirements much more carefully. Consequently, we will be
focusing considerable effort during our anniversary year on supporting
broader financial education across schools and universities.
Forward-looking statements
This document may contain forward-looking statements with respect to the financial condition, results of operations and business of the
Company. Such statements involve risk and uncertainty because they relate to future events and circumstances that could cause actual
results to differ materially from those expressed or implied by forward-looking statements. The forward-looking statements are based on the
Directors’ current view and on information known to them at the date of this document. Nothing should be construed as a profit forecast.
‘The investment trust that
launched an industry 150
years ago is as relevant
today as it ever was.’
More than ever before the financial services industry needs to create
simple to use, transparent investment products that help everybody
in our society invest for the long term and secure their financial
future. Your Company meets that need by being structured to
provide a clear investment choice, particularly for smaller investors
to have as a core holding of their investment portfolio. Indeed, we
are confident that your Company will remain an appropriate choice
for any longer-term investor, however small or large, for many years
to come. In 2018 we face another period of political and economic
uncertainty as well as market volatilty, but we still strongly believe
that the best long-term investment approach is to hold a globally
diversified portfolio of publicly listed and private equities such as
Foreign & Colonial.
Simon Fraser
Chairman
6 March 2018

Report and Accounts 2017 | 9
CHAIRMAN'S STATEMENT
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
‘Over ten years our share price
total return is 156.1%. This is
equivalent to 9.9% per annum.
Over twenty years it is 453.4%,
which equates to 8.9% per
annum.’

10 | Foreign & Colonial Investment Trust PLC
Strategic Report Strategic Report
We provide our shareholders with long-term growth in capital and income.
We do this by investing mainly in public and private equity markets, using
borrowings to enhance returns and by controlling costs. Our investments
are held in a number of portfolios that are individually concentrated, but are
managed as a whole to provide global diversification, lower volatility and lower
risk. This strategy produces investment out-performance over the longer term.
Business model
The Directors have a duty to promote the success of the Company.
As an investment company with no employees, we believe that
the optimum basis for doing this and achieving our objective is a
strong working relationship with our appointed Manager, FCIB, a
subsidiary of F&C. Within policies set and overseen by the Board of
Directors, the Manager has been given overall responsibility for the
management of the Company’s assets, asset allocation, gearing,
stock and sector selection and risk. As part of this, they have the
flexibility to blend their expertise with those of other fund managers
by delegating the management of some investment portfolios
externally. These include the North America publicly listed equities
portfolios and the Private Equity funds of funds portfolios, while a
wide range of externally managed investment funds are held within
our Global Multi-Manager portfolio. Engagement on environmental,
social and governance (“ESG”) matters are also undertaken by F&C.
To provide a breadth of sources of return, the individual investment
portfolios are managed on a global or regional basis. While we invest
in equities, we retain complete investment flexibility to invest in other
types of securities or assets depending on the return prospects
and in consideration of the implications for the broader portfolio.
Furthermore, as a closed-ended listed investment company we
are not constrained by asset sales to meet redemptions. Our share
capital structure gives us the flexibility to take a longer term view and
stay invested while taking advantage of illiquidity throughout normal
and volatile market conditions. Having the ability to borrow to invest
gives us a significant advantage over a number of other investment
fund structures.
The Board remains responsible for decisions over corporate strategy;
corporate governance; risk and control assessment; setting policies
detailed on pages 12 and 13; setting limits on gearing and
asset allocation; monitoring investment performance; and setting
and monitoring marketing budgets.
ESG impact
As the Company has no employees and no premises, the Board
has concluded that the direct impact of its activities is minimal.
The Company’s indirect impact occurs through the large range of
organisations and businesses in which it invests. The Company
aims to mitigate their impact through the implementation of
F&C’s Responsible Ownership policy, which encourages investee
companies to focus on ESG matters.
F&C’s statement of compliance with the UK Stewardship
Code has been reviewed and endorsed by the Board, which
encourages and supports F&C on its voting policy and its stance
towards ESG issues. The statement is available on F&C’s website
at http://www.bmogam.com/corporate/about-us/responsible/.
Our ESG policies are aligned towards the delivery of sustainable
investment performance over the longer term and are set out on
page 13.
Manager evaluation
Investment performance and responsible ownership are
fundamental to delivering sustainable long-term growth in capital
and income for our shareholders and therefore an important
responsibility of the Directors is exercising a robust annual
evaluation of the Manager’s performance. This is an essential
part of the strong governance that is carried out by the Board of
Directors, all of whom are independent and non-executive.
The process for the evaluation of the Manager for 2017 and the
basis on which the decision to reappoint them for another year
are set out on page 38. FCIB’s fee as Manager is based on
the market capitalisation of the Company, thus fully aligning their
interests with shareholders through share price performance.

Report and Accounts 2017 | 11
STRATEGIC REPORT
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
Report and Accounts 2017 | 11
Fund Manager and the specialist management teams
As Fund Manager on behalf of FCIB, Paul Niven is responsible
for developing and implementing the investment strategy with the
Board and for the day-to-day management of the total portfolio
covering the entire range of individual investment portfolio
strategies. His role covers tactical decisions over the allocation
of assets between the different investment portfolios as well as
decisions over levels and timing of gearing within the prescribed
range. He has responsibility for overall portfolio composition but
delegates stock selection decisions. The underlying specialist
portfolio management teams are responsible and accountable to
him and ultimately to the Board for their investment performance.
Shareholder communication and marketing
We foster good working relationships with our key stakeholders;
our Manager, as described above, and our shareholders. With
approximately 90% of our shareholder register in the hands of
around 100,000 retail investors, and savings or execution-only
platforms representing an increasingly significant and growing
element of the shareholder base, we remain focused with our
Manager on the optimal delivery of the Company’s investment
proposition. All available channels are used including the internet
and social media as well as the F&C Savings Plans, which remain
a cost effective and flexible way to invest in the Company.
Managing risks and opportunities
We look to make good use of our corporate structure and the
investment opportunities that lead to long-term growth in capital
and income for our shareholders. Like all businesses, these
opportunities do not come without risks and uncertainties and
so the performance of the Manager is monitored at each Board
meeting on a number of levels. In addition to managing the
investments, the ancillary functions of administration, secretarial,
accounting and marketing services are all carried out by the
Manager. They provide reports on the investment portfolios;
the wider portfolio structure; risks; compliance with borrowing
covenants; income, dividend and expense forecasts; errors;
internal control procedures; marketing; shareholder issues,
including the Company’s share price discount to net asset value;
and accounting and regulatory updates. The performance of
each individual investment portfolio is reviewed through a series
of presentations given by each specialist management team
throughout the year.
Shareholders can assess our financial performance from the
Key Performance Indicators that are set out on page 15 and,
on page 16, can see what the Directors consider to be the
In 2017 F&C engaged with
239 companies held by
Foreign & Colonial over 35
countries and had voted
in respect of Foreign &
Colonial’s holdings at 356
company meetings on a
range of ESG issues.
Principal Risks that we face. The risk of not achieving the
Company’s objective, or of consistently under-performing the
Company’s benchmark or competitors, may arise from any or
all of inappropriate asset allocation, poor market conditions,
ineffective or expensive gearing, poor cost control, loss of
assets and service provider governance issues. In addition
to continually monitoring the Manager’s performance, their
commitment and available resources and their systems and
controls, the Directors also review the services provided by other
principal suppliers. These include the Custodian and Depositary
in their duties towards the safeguarding of the assets.
The policies applied in running the Company are set out in
detail on the following page, whilst the Fund Manager’s review
of activity in the year can be found on page 18. In the light
of the Company’s strategy, investment processes and control
environment (relating to both the oversight of the Company’s
service providers and the effectiveness of the risk mitigation
activities), the Board has set out on page 17 its reasonable
expectation that the Company will continue in operation for the
next ten years.
STRATEGIC REPORT
GOVERNANCE REPORT
CHAIRMAN’S STATEMENT

12 | Foreign & Colonial Investment Trust PLC
Policy Summary
Investment Policy
The Company invests globally. Risk diversification is achieved
through geographic asset allocation and industry sector and stock
selection across a wide range of markets. Within the general policy
of maintaining a diversified portfolio, there are no specific geographic
or industry sector exposure limits for the publicly listed equities. The
Board has placed a limit of 5% of the value of the total portfolio on
unlisted securities, at the time of acquisition and excluding private
equity investments. Any unlisted investment requires specific Board
approval with the exception of new private equity investments,
responsibility for which has been delegated to F&C. Shareholder
approval would be sought in the event that the Board considers that
the long-term exposure to Private Equity investments should exceed
a figure of 20%.
Under the Company’s articles of association, with limited exceptions,
no single investment may be made by the Company which exceeds
10% of the value of the total portfolio at the time of acquisition. Under
the Listing Rules, no more than 10% of the total assets may be
invested in other listed closed-ended investment companies, unless
such investment companies have themselves published investment
policies to invest no more than 15% of their total assets in other
closed-ended investment companies, in which case the limit is 15%.
The Board has placed a limit of 5% of the value of the total portfolio
on investment funds managed by F&C at the time of acquisition, and
any such investment requires specific Board approval.
The Company will typically remain fully invested in equities, but is
not prohibited from investing in other types of securities or assets.
Derivatives may be used for the purpose of income enhancement
and portfolio management covering tactical asset allocation and risk
mitigation including protection against currency risks within strict limits.
Borrowing Policy
The Company has the flexibility to borrow over the longer term
and to use short-term borrowings by way of loans and overdrafts.
Borrowings, which can be taken out either in Sterling or foreign
currency, would normally be expected to fall within a range of 0–20%
of shareholders’ funds.
Dividend Policy
The Company’s revenue account is managed with the objective
of continuing its record of delivering a rising income stream in real
terms for shareholders. Prudent use of revenue reserves established
over many decades is made whenever necessary to help meet any
revenue shortfall. Dividends can also be paid from capital reserves
although the Board has no current need or intention of doing so.
Policy Summary
In determining dividend payments, the Board takes account of
timely income forecasts, brought forward distributable reserves,
prevailing inflation rates, the Company’s dividend payment record
and Corporation Tax rules governing investment trust status. Liquidity
is not considered an issue as the Company has sufficient liquid
resources to fund any envisaged level of dividend payment. Risks to
the dividend policy include: worldwide financial and political instability
leading to significant deterioration in the level of income received
by the Company; and unforeseen and significant changes to the
Company’s regulatory environment.
Taxation Policies
The Board is fully committed to complying with applicable legislation
and statutory guidelines, including the UK’s Criminal Finance Act
2017, designed to prevent tax evasion in the jurisdictions in which
the Company operates. The policy is based upon a risk assessment
undertaken by the Board and professional advice is sought as and
when deemed necessary.
The Company complies at all times with Section 1158 of the
Corporation Tax Act 2010 ("Section 1158") such that it does not
suffer UK Corporation Tax on capital gains; ensures that it submits
correct taxation returns annually to HMRC and settles promptly any
taxation due; and ensures that it claims back in a timely manner, where
possible, all taxes suffered in excess of taxation treaty rates on non-UK
dividend receipts.
Marketing Policy
F&C promotes investment in the Company’s shares, which are
suitable for retail distribution in the UK as well as professionally
advised private clients and institutional investors. The Board works
closely with F&C to ensure optimal delivery of the Company’s
investment proposition through all available channels including the
internet and social media. The F&C Savings Plans remain a cost
effective and flexible way to invest in the Company.
Discount Policy
The Board uses buybacks for the benefit of shareholders where they
see value and, importantly, in pursuit of a sustainably low deviation
between the price and NAV per share in normal market conditions.
No reference will therefore be made in future to a specific attainment
level for the Company’s discount. The policy and the levels within
which it operates will continue to be reviewed with the aim of
achieving the long-held aspiration of seeing the Company’s shares
trading at or close to NAV. In the event that the share price moves to
a premium, the Board will utilise its shareholder authority to sell shares
held in treasury or to issue new shares.

Report and Accounts 2017 | 13
STRATEGIC REPORT
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
In setting the Company’s ESG policies, the Board has considered the requirements of Section 172 of the Companies Act
2006 (regarding promoting the success of the Company for the benefit of stakeholders) and the EU Non-Financial Reporting
Directive (EU/2014/95). The Board anticipates that its disclosures on ESG matters will evolve in future years.
Responsible ownership
As an investment vehicle, all the Company’s activities are
outsourced to third parties. As such, it does not have any
physical assets, property, employees or operations of its own.
Neither does it provide goods nor services in the normal course
of business and does not have customers. In consequence,
it does not directly generate any greenhouse gas or other
emissions or pollution and it is not required to make any
statement under the Modern Slavery Act 2015.
The Board supports F&C in its belief that good governance
creates value. F&C takes a particular interest in corporate
governance and sustainable business practices, and continues
to work on systematically incorporating environmental, social
and governance factors into its investment processes. This is
based on the view that companies with strong management
focus on these areas have the potential to reduce risks facing
their business and deliver sustainable performance over the
longer term. Engagement with companies on significant
regulatory and ESG matters, so as to reduce risk, improve
performance, encourage best practice and underpin long-
term investor value forms an important part of F&C’s approach
towards responsible investment.
With regard to possible tax evasion by investee companies,
the Board believes that it is best in the first instance to engage
proactively with companies to ensure high standards of corporate
governance rather than exclude investment opportunities on the
basis of tax practices. F&C will therefore engage with the boards
of investee companies in an effort to ensure that their tax policies
are both prudent and sustainable. Investee company boards
are expected to disclose to shareholders that they are providing
appropriate oversight over their tax policies.
F&C’s Corporate Governance Guidelines set out expectations
of the boards of investee companies in terms of good corporate
governance. This includes the affirmation of responsibility
for reviewing internal business ethics systems, and ensuring
that there is an effective mechanism for the internal reporting
of wrongdoing, whether within the investee company itself,
or involving other parties, such as suppliers, customers,
contractors or business partners. Under legislation, which
is developing globally, there will be scope for more rigorous
enforcement of anti-corruption and anti-bribery.
In addition to this, the Board applies a strict anti-bribery and
anti-corruption policy insofar as it applies to any directors or
employee of F&C or of any other organisation with which the
Company conducts business. The Board also ensures that
adequate procedures are in place, and followed, in respect of
third party appointments, acceptance of gifts and hospitality and
similar matters.
Voting on portfolio investments
The Board expects to be informed by the Manager of any
sensitive voting issues involving the Company’s investments. In
the absence of explicit instructions from the Board, the Manager
is empowered to exercise discretion in the use of the Company’s
voting rights. All shareholdings are voted at all listed company
meetings worldwide where practicable in accordance with F&C’s
own corporate governance policy, which is to seek to maximise
shareholder value by constructive use of votes at company
meetings and by endeavouring to use its influence as an investor
with a principled approach to corporate governance.
In 2017 F&C engaged with 239 companies held by Foreign &
Colonial over 35 countries and had voted in respect of Foreign
& Colonial’s holdings at 356 company meetings on a range of
issues. In addition to corporate culture and business ethics,
key engagement themes in 2017 focused on management of
climate change and natural resource scarcity, as well as on
labour standards, governance and remuneration – the latter
having been particularly pertinent in the UK where shareholders
voted on binding resolutions to corporate pay policies.
Information on F&C’s engagement and voting at company
meetings and where to find their statement of compliance with
The UK Stewardship Code can be found on page 10.
Board diversity
The Board is composed solely of non-executive Directors
and has 37.5% female representation. The Board’s approach
to the appointment of non-executive directors is based on its
belief in the benefits of having a diverse range of experience,
skills, length of service and backgrounds, including gender.
The Board complies with the UK Corporate Governance
Code in appointing appropriately diverse, independent
non-executive directors who set the operational and moral
standards of the Company. The Board will always appoint the
best person for the job and will not discriminate on the grounds of
gender, race, ethnicity, religion, sexual orientation, age or physical
ability. Further details on the operation of this policy are given in
the Nomination Committee Report on page 42.
Environmental, Social and Governance (ESG) Policies

14 | Foreign & Colonial Investment Trust PLC
Strategic Report
‘ The 21.0% rise in our total
shareholder return over the year
significantly exceeded the 13.8%
return of our benchmark.
’

Report and Accounts 2017 | 15
STRATEGIC REPORT
Key Performance Indicators
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
Performance: Total returns
(1)

1 Year
%
3 Years
%
5 Years
%
10 Years
%
The Board’s policy is to secure long-term
growth in capital and income
Foreign & Colonial share price21.063.2125.3156.1
This compares the Company’s share price and
NAV total return against those produced by the
constituents of the Market benchmark and our
peer group, and against inflation.
The Market benchmark takes into account the
change in January 2013 from a composite
benchmark (40% FTSE All-Share/60% FTSE WI
World Index ex UK) to the FTSE All-World Index
as the new Benchmark.
Foreign & Colonial NAV (with debt at market value)16.955.8108.6129.3
Market benchmark
(2)
13.853.5106.7143.8
AIC Global Sector Median share price (investment companies)
(3)
21.155.3113.8142.5
AIC Global Sector Median NAV (investment companies)
(3)
17.152.198.4123.5
IA Global Sector Median (open-ended funds)
(3)
13.245.390.3102.2
Consumer Prices Index3.04.87.526.5
Source: F&C, Morningstar UK Limited and Thomson Reuters Eikon
Dividend: Dividend Growth per annum
1 Year %3 Years %5 Years %10 Years %
The Board’s long-term policy is to deliver a rising dividend stream In real
terms.
Foreign & Colonial dividend5.63.84.15.9
This shows the Company’s compound annual dividend growth rate and
compares it to the Consumer Prices Index.
Consumer Prices Index3.01.61.52.4
Source: F&C and Thomson Reuters Eikon
Discount: Share price discount to NAV
Year ended:31 Dec
2017 %
31 Dec
2016 %
The Board’s discount policy aspiration is to see the Shares trading at or close to NAV per share.
Discount at 31 December4.37.4
A “Discount” arises when the share price is lower than the NAV per share (with debt at market value). A
high discount may indicate the need for shares to be bought back.
Average discount in year6.79.7
Source: F&C
Efficiency: Costs
Year to:31 Dec
2017 %
31 Dec
2016 %
31 Dec
2015 %
31 Dec
2014 %
31 Dec
2013 %
The Board’s policy is to control the costs of running
the Company
Ongoing charges
(1)
0.790.790.800.870.86
This data measures the running costs as a percentage of the
average net assets in the year. Total Costs are inclusive of
interest expense and transaction charges.
Total Costs
(1)
1.06n/an/an/an/a
Source: F&C
The Board assesses the efficacy of its strategy by comparing the
Company’s long-term performance against the following four key measures
(Performance, Dividend, Discount and Efficiency). Detailed commentary
on these measures can be found in the Chairman’s Statement and Fund
Manager’s Review.
(1) See Alternative Performance Measures on page 90 for explanation
(2) See Glossary of terms on pages 91 and 93 for explanations of “Benchmark” and “Market benchmark”
(3) These are considered by the Board to be the most relevant and reliable industry-standard peer group performance measures.
Key Performance Indicators

16 | Foreign & Colonial Investment Trust PLC
Principal Risks and Future Prospects
Principal RisksMitigationActions taken in the year
Inappropriate business strategy in relation to
investor needs leading to significant pressure on
the share price.
The Board assesses investor needs through targeted research and marketing, the effectiveness
of which is kept under continuous review. Overall business strategy is formally discussed
annually with the Manager and is monitored by the Board throughout the year against their own
objectives. A discount control mechanism has operated over many years.
The Company’s discount is a KPI measured by the Board on an ongoing basis.
In continuing to apply the discount control mechanism, the Board bought back fewer shares
than in 2016. Marketing campaigns continued throughout the year, including promotion across
financial and other relevant websites and publications.
Unfavourable markets or inappropriate asset
allocation, sector and stock selection, currency
exposure and use of gearing and derivatives may
give rise to investment under-performance as
well as impacting capacity to pay dividends to
investors. Political risk factors could also impact
performance.
Underlying investment strategies, performance, gearing and income forecasts are reviewed with
the Fund Manager at each Board meeting. Cash, borrowing and derivative limits, as well as
dividend paying capacity, are monitored. F&C’s Performance and Risk Oversight team provides
independent oversight on investment risk management for the directly managed portfolios.
The portfolio is diversified and the Company’s structure enables it to take a long-term view of
countries, markets and currencies. The Company has a Revenue Reserve which can be used to
pay growing dividends in years when income receipts fall as a result of poor market conditions.
The performance of the Company relative to its Market Benchmark, its peers and
inflation is a KPI measured by the Board on an ongoing basis.
The Board continuously measures the Manager’s investment performance against the Key
Performance Indicators set out on page 15 and is satisfied that the Manager’s long-term
performance remains in line with expectations.
Failure of F&C as the Company’s main service
provider to continue to operate effectively,
including the loss of key staff, and within
regulations.
The Board regularly reviews the strength of the Manager’s investment management and client services
resources and meets their risk management team to review internal control and risk reports. The
Manager’s appointment can be terminated at six months’ notice. A business continuity plan is in
place. The Manager structures its recruitment and remuneration packages in order to retain key staff
and works closely with the Board on any significant management changes.
Performance KPIs and Manager errors are monitored by the Board for indications of
continuity or other Manager issues.
The Board has reviewed F&C’s controls and risk management structure as part of its annual
assessment. The Board met senior management as part of the reappointment process
described on page 38. The viability, systems and staffing capabilities of the Manager were
fully reviewed by the Board and a decision was taken to continue with the Manager’s services.
Thorough review and challenge of the Manager were provided through the Audit Committee, the
Management Engagement Committee and the Board.
Errors, fraud or control failures at service
providers or loss of data through business
continuity failure or cyber attacks could damage
reputation or investors’ interests or result in loss.
Cyber risks remain heightened.
The Board receives regular control reports from F&C covering risk and compliance, including
oversight of third party service providers. The Board has access to F&C’s Head of Business Risk
and BMO’s Group Information Security Officer, International and requires any significant issues
directly relevant to the Company to be reported immediately. The Depositary is specifically liable
for loss of any of the Company’s securities and cash held in custody.
The Board additionally monitors efficiency of service providers’ processes through
efficiency KPIs.
The Audit Committee regularly reviews the Company’s risk management framework with the
assistance of the Manager. Supervision of third party service providers has been maintained by
F&C and includes assurances regarding IT security and increasing cyber-threats. The Board
received a presentation during the year from the Custodian on its own cyber-security controls.
The Depositary maintained oversight of custody of investments and cash and its regular reports
to the Board indicated no matters of concern. The Board has engaged with the Manager and
Registrar to ensure that the new General Data Protection Regulations will be properly and fully
implemented for the safeguarding of all personal data held by the Company.
Unchanged throughout the year
under review
Each year the Board carries out a comprehensive robust assessment of the
principal risks and uncertainties that could threaten Foreign & Colonial’s success.
The consequences for its business model, liquidity, future prospects and viability
form an integral part of this assessment.
The principal risks, both perceived and observed, together with
their mitigations are set out in the table below. The Board’s
processes for monitoring them are set out on pages 46 and
47 and in note 25 on the accounts. The risks are unchanged
from those reported in the prior year. The principal risks identified
Principal Risks and Future Prospects
as most relevant to the assessment of the Company’s future
prospects and viability were those relating to potential investment
portfolio under-performance and its effect on share price discount
and dividends, as well as threats to security over the Company’s
assets.
Unchanged throughout the year
under review
Unchanged throughout the year
under review
Unchanged throughout the year
under review

Report and Accounts 2017 | 17
STRATEGIC REPORT
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
Principal RisksMitigationActions taken in the year
Inappropriate business strategy in relation to
investor needs leading to significant pressure on
the share price.
The Board assesses investor needs through targeted research and marketing, the effectiveness
of which is kept under continuous review. Overall business strategy is formally discussed
annually with the Manager and is monitored by the Board throughout the year against their own
objectives. A discount control mechanism has operated over many years.
The Company’s discount is a KPI measured by the Board on an ongoing basis.
In continuing to apply the discount control mechanism, the Board bought back fewer shares
than in 2016. Marketing campaigns continued throughout the year, including promotion across
financial and other relevant websites and publications.
Unfavourable markets or inappropriate asset
allocation, sector and stock selection, currency
exposure and use of gearing and derivatives may
give rise to investment under-performance as
well as impacting capacity to pay dividends to
investors. Political risk factors could also impact
performance.
Underlying investment strategies, performance, gearing and income forecasts are reviewed with
the Fund Manager at each Board meeting. Cash, borrowing and derivative limits, as well as
dividend paying capacity, are monitored. F&C’s Performance and Risk Oversight team provides
independent oversight on investment risk management for the directly managed portfolios.
The portfolio is diversified and the Company’s structure enables it to take a long-term view of
countries, markets and currencies. The Company has a Revenue Reserve which can be used to
pay growing dividends in years when income receipts fall as a result of poor market conditions.
The performance of the Company relative to its Market Benchmark, its peers and
inflation is a KPI measured by the Board on an ongoing basis.
The Board continuously measures the Manager’s investment performance against the Key
Performance Indicators set out on page 15 and is satisfied that the Manager’s long-term
performance remains in line with expectations.
Failure of F&C as the Company’s main service
provider to continue to operate effectively,
including the loss of key staff, and within
regulations.
The Board regularly reviews the strength of the Manager’s investment management and client services
resources and meets their risk management team to review internal control and risk reports. The
Manager’s appointment can be terminated at six months’ notice. A business continuity plan is in
place. The Manager structures its recruitment and remuneration packages in order to retain key staff
and works closely with the Board on any significant management changes.
Performance KPIs and Manager errors are monitored by the Board for indications of
continuity or other Manager issues.
The Board has reviewed F&C’s controls and risk management structure as part of its annual
assessment. The Board met senior management as part of the reappointment process
described on page 38. The viability, systems and staffing capabilities of the Manager were
fully reviewed by the Board and a decision was taken to continue with the Manager’s services.
Thorough review and challenge of the Manager were provided through the Audit Committee, the
Management Engagement Committee and the Board.
Errors, fraud or control failures at service
providers or loss of data through business
continuity failure or cyber attacks could damage
reputation or investors’ interests or result in loss.
Cyber risks remain heightened.
The Board receives regular control reports from F&C covering risk and compliance, including
oversight of third party service providers. The Board has access to F&C’s Head of Business Risk
and BMO’s Group Information Security Officer, International and requires any significant issues
directly relevant to the Company to be reported immediately. The Depositary is specifically liable
for loss of any of the Company’s securities and cash held in custody.
The Board additionally monitors efficiency of service providers’ processes through
efficiency KPIs.
The Audit Committee regularly reviews the Company’s risk management framework with the
assistance of the Manager. Supervision of third party service providers has been maintained by
F&C and includes assurances regarding IT security and increasing cyber-threats. The Board
received a presentation during the year from the Custodian on its own cyber-security controls.
The Depositary maintained oversight of custody of investments and cash and its regular reports
to the Board indicated no matters of concern. The Board has engaged with the Manager and
Registrar to ensure that the new General Data Protection Regulations will be properly and fully
implemented for the safeguarding of all personal data held by the Company.
Through a series of connected stress tests
based on historical information, but forward-
looking over the ten years commencing
1 January 2018, the Board assessed the
effects of:
• Potential illiquidity of the Company’s
portfolio during substantial market falls
when needing to fund private equity
commitments.
• Substantial falls in investment values on
the ability to maintain loan covenants and
to repay and re-negotiate funding.
• Significant falls in income on the ability to
continue paying steadily-rising dividends and
maintaining adequate revenue reserves.
• Constraints on the Board’s ability to
control the discount including those
concerning the funding of buybacks
during periods of high volatility in the
share price.
Based on its assessment and evaluation
of the Company’s future prospects, the
Board has a reasonable expectation that
the Company will be able to continue in
operation and meet its liabilities as they
fall due over the coming ten years; the
Company’s business model, strategy
and the embedded characteristics listed
below have helped define and maintain
the stability of Foreign & Colonial over
many decades. The Board expects this to
continue over many more years to come.
• The Company has a long-term
investment strategy under which it
invests mainly in readily realisable,
publicly listed securities and which
restricts the level of borrowings.
• The Company’s business model and
strategy are not time limited and, as
a global investment trust, are unlikely
to be adversely impacted as a direct
result of Brexit and other political
uncertainties.
• The Company is inherently structured
for long-term outperformance, rather
than short-term opportunities, with ten
years considered as a sensible time-
frame for measuring and assessing
long-term investment performance.
• The Company is able to take advantage
of its closed-ended investment trust
structure.
• The Company has the ability to
hold a proportion of long-term less
liquid private equity investments with
ten years typically being the period
over which commitments are made
and realisations are expected to be
received.
• The Company has put in place long-
term borrowing arrangements and has
the ability to secure additional finance in
excess of ten years.
• There is rigid monitoring of the
headroom under the Company’s bank
borrowing financial covenants.
• Regular and robust review of revenue
and expenditure forecasts is undertaken
throughout the year against a backdrop
of large revenue and capital reserves.
• The Company retains title to all assets
held by the Custodian which are
subject to further safeguards imposed
on the Depositary.
• The Company maintains a business
continuity plan.
Ten Year Horizon
In concluding that ten years is a reasonable
period over which to assess future prospects
of the Company, the Board considers that
this approximates the periods relating to:
• its private equity commitments;
• its borrowings, repayable by June 2031;
and
• the Corporate Governance rules relating
to the Directors’ tenure.
The Board also took into consideration the
perceived viability of its principal service
providers, potential effects of anticipated
regulatory changes and the potential threat
from competition.
The Board’s conclusions are set out under
the Ten Year Horizon.

18 | Foreign & Colonial Investment Trust PLC
Paul Niven, Fund ManagerFund Manager’s Review
Investment performance in 2017
Our NAV total return of 16.9% compared favourably to the
benchmark total return of 13.8%. Shareholder returns were further
enhanced by a reduction in our share price discount to NAV, which
ended the year at 4.3% to give a shareholder total return of 21.0%.
We maintained a higher weighting than our benchmark index in
each of the highly performing areas of Europe, Japan and Emerging
Markets, which added to our overall return. Returns from Europe
were boosted by strength in the euro, which gained by 4.1% against
sterling. In contrast, the US equity market delivered another year of
strong gains in local currency terms, but the weak US dollar relative
to sterling detracted from sterling based returns. Our year-end
allocations and underlying geographic exposures are shown in the
table opposite.
Significant steps have been taken in recent years to increase our
global exposure on the portfolio and we ended the year with less
than 6% in UK listed corporates. Many large UK listed companies
are, of course, internationally focused in terms of operations,
revenues and profits, but the UK equity market benchmark again
produced returns which generally lagged those of overseas markets;
a gain of 11.8%. Our return of 10.5% lagged the benchmark, with
a negative impact from our overweight position on media stocks
(through Daily Mail) and underperformance from selected stocks
(Barclays) in the banking sector.
North America made up 47.7% of the underlying geographic
exposure of our investments, though still below the benchmark
weighting of 54.2%. The gain of 25.3% in sterling terms from our
growth oriented manager, T Rowe Price, was amongst the highest
return from all of our investment portfolios. Our overall return in
Sterling from the US portfolios was 14.9% against the benchmark
11.3%. Much of this return can be attributed to the area of focus of
investment opportunities from this manager and a high weighting
in technology and healthcare stocks in the US. Performance from
stocks such as Amazon, Facebook and Alphabet (which gained
by between 33% and 56% in local terms over the year) as well as
Tencent (115% in US$) and Alibaba (96% in US$) on this part of the
portfolio contributed meaningfully to returns and enabled T Rowe
Price to deliver exceptional gains, also exceeding those available
from growth oriented market indices.
Our other main allocation in North America is value focused and
managed through Barrow Hanley. While value strategies generally
had a poor year, Barrow Hanley produced creditable results
against value based indices. Nevertheless, a return of only 6.0% in
sterling terms, relatively anaemic performance from this area and
a general focus on financials and more lowly valued opportunities
in healthcare, energy and technology sectors served to illustrate
the gulf in performance over the year between highly rated stocks
with fast growing fundamentals and more lowly valued but slower
growing companies.
The European portfolio delivered good relative returns over the year,
with a gain of 19.3% in sterling terms. Early concerns over elections
in France and the Netherlands receded and there were clear signs
of improvement in the economic growth trajectory for the Eurozone
as the year progressed. By mid-year the corporate sector in Europe
was reporting the strongest earnings season in a decade and our
strategy benefited from strong stock selection and underweight
positions in oil and gas, telecoms and retailers. We raised exposure
to cheaper domestic companies to benefit from improving growth
prospects and reduced exposure to more expensive quality
companies.
Japan also posted good returns, with our return of 15.7% exceeding
the market return of 14.4% in 2017.
2017 was the best year for global Emerging Markets investors
since 2009 in US dollar terms. Emerging Markets also delivered the
strongest regional returns in 2017. Our exposure produced a healthy
return of 25.6% in sterling terms, which was broadly in line with
market indices. The portfolio manager performed well in the first half
but gave back relative performance as the year progressed. Within
this portfolio we have a focus on strong free cash flow generation
and quality opportunities from companies with high exposure to
domestic emerging markets growth.
2017 was another very good year. We comfortably exceeded
benchmark returns and all of our investment portfolios produced
a pleasing level of absolute returns with Europe, Japan and
Emerging Market areas providing the strongest returns in sterling
terms on a regional basis.
Fund Manager’s Review

Report and Accounts 2017 | 19
STRATEGIC REPORT
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
Contributors to total returns in 2017
%
Portfolio return15.8
Management fees(0.4)
Interest and other expenses(0.3)
Buy-backs0.1
Change of value of debt(0.1)
Gearing/other1.8
Net Asset Value total return16.9
Decrease in discount4.1
Share price total return21.0
FTSE All-World total return13.8
Source: F&C
0%5%10%15%20%25%30%
Telecommunications (1.1%)
Utilities (1.5%)
Basic Materials (4.4%)
Oil & Gas (4.8%)
Healthcare (10.1%)
Consumer Goods (11.4%)
Industrials (12.3%)
Technology (12.4%)
Consumer Services (16.9%)
Financials (25.1%)
Underlying Classification of Listed Investment Portfolio
as at 31 December 2017
Source: F&C
Currency movements vs Sterling in 2017
Source: F&C
Foreign & Colonial share price 2017
Source: F&C
Weighting, stock selection and performance over one year in each investment portfolio strategy and underlying geographic
exposure versus Index at 31 December 2017
Investment Portfolio Strategy
Our portfolio
strategy
weighting
%
Underlying
geographic
exposure
(1)
%
Benchmark
weighting
%
Our strategy
performance
in Sterling
%
Index
performance
in Sterling
%
UK4.35.86.110.511.8
North America33.847.754.214.911.3
Europe ex UK13.219.915.119.317.2
Japan8.510.68.615.714.4
Emerging Markets11.113.211.825.625.8
Developed Pacific–2.94.2–15.9
Global Strategies
(2)
22.815.813.8
Private Equity6.35.9
(1) Represents the geographic exposure of the portfolio, including underlying exposures in private equity and fund holdings
(2) The Global Strategies consist of Global Income, Global Multi-Manager and Global Smaller Companies. Source: F&C
Dec 2017Sept 2017June 2017Mar 2017Dec 2016
Currency
strengthening
against Sterling
Currency
weakening
against Sterling
85
90
95
100
105
110
115
US DollarEuroJapanese Yen
540
560
580
600
620
640
660
Dec 2017June 2017Mar 2017Sept 2017Dec 2016
pence per share

20 | Foreign & Colonial Investment Trust PLC
Our combined Global Strategies performed well over the year. This
section of the portfolio contains a multi-manager component, an
allocation to smaller companies and an income focused strategy. Our
Global Multi-Manager team seek performance from fund selection
and strong performance from a number of our underlying holdings
globally contributed to the good performance. The Global Smaller
Companies exposure also performed strongly with stock selection
contributing meaningfully to returns with a gain of 17.9%. Despite
a more challenging year for stocks with high dividend yields, our
Global Income portfolio still delivered returns ahead of the market.
This was a creditable result as this income focused area of the
portfolio continues to produce a meaningful yield pick-up relative to
the market without significant sectoral or country risks to the broader
market.
Our private equity exposure produced returns of 5.9%. This was
the lowest return of our investment portfolio strategies in 2017 and
significantly lagged those from listed equity markets. This investment
portfolio contains a mix of historic holdings in private equity fund
of funds managed by specialists Harbourvest and Pantheon, as
well as a much smaller portion of more recent direct fund and co-
investments that are selected by F&C. We also have a holding in
Syncona, which is transforming into a life sciences company. Having
purchased this holding in late 2016, we saw a greater than 51% gain
in value in 2017. Value began to be realised from within Syncona’s
portfolio as their largest holding, Nightstar, underwent a successful
IPO in the US and clinical trials on some other holdings gave rise to
optimism on future commercial opportunities.
Portfolio activity
After significant progress in recent years, there was more limited
activity in terms of allocation between investment portfolio strategies
in 2017. We made £29.8m of new commitments to Private Equity
investments but, with £77.8m ofnet cashflow returned from existing
investments and the strong relative performance of listed equities
the overall allocation had fallen to 6.3% of the overall portfolio by the
end of the period. Our UK equity exposure was cut further to multi-
decade lows while Emerging Markets exposure was increased. We
now have more than twice as much invested in Emerging Markets
listed companies than those in the UK.
Revenue returns
2017 was also a good year for our revenue account and we remain
focused on balancing our investment approach towards delivering
growth in both capital and income for shareholders. Our gross
revenue from investments grew by 11% over the year to £77.9m
and although we benefited from £2.7m of special dividends, this was
down from the £4.4m received in 2016. Some weakness in average
levels of sterling year on year was a modest positive of £3m (2016:
£6m) for our income. We now have more than 80% of our revenues
derived from overseas listed corporates and therefore movements
in sterling will have a greater impact on both capital and revenue
returns going forward.
Gearing and buybacks
In a year of strong market gains, our gearing was a positive
contributor to returns in the year, adding approximately 1.8% to
our NAV. A decline in the value of our US dollar and Japanese Yen
denominated loans, caused by strengthening in sterling against
these currencies, was beneficial.Our gearing was 7.2% of net assets
at the end of the year and we held £102.5m in seven year US dollar
and Yen loans which mature in 2019. In addition, we have £64m of
2022 euro denominated loans and £25m/£50m of 2028 and 2031
debt. In addition to these longer dated borrowings we have access
to a shorter term revolving credit facility which was drawn by £50m
at year end. This facility provides certainty of access to up to £200m
of short-term borrowings and was renegotiated over the year to
mature in 2019.
In aggregate, our total borrowings at the end of 2017 were £291.9m
and we paid an average blended rate of less than 3% across all of
our debt. Our borrowing rates remain amongst the lowest seen in
the history of your Company and we are mindful that the cost of
credit is still low by any historic standard. We will continue to adopt a
diversified approach to the structuring and maturity of our debt whilst
recognising that current opportunities to borrow longer term are
Our investments are held
in a number of portfolios
that are individually
concentrated, but are
managed as a whole to
provide global diversification
and lower risk.

Report and Accounts 2017 | 21
STRATEGIC REPORT
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
Investment portfolio strategies attribution in Sterling
1 year %3 years %5 years %
RegionReturn Index return Return Index return Return Index return
UK10.511.835.531.859.457.5
North America14.911.363.857.2159.9141.2
Europe ex UK19.317.248.548.792.588.2
Japan15.714.478.365.1127.9111.9
Emerging Markets25.625.847.451.344.651.4
Global Strategies
(1)
15.813.853.353.4
Private Equity5.950.391.3
The Company’s Benchmark is the FTSE All-World Index whereas for the purposes of this table the relevant regional sub-indices are used for comparison, except in the case of Emerging
Markets where the MSCI Emerging Markets Index is used.
(1) The Global Strategies consist of Global Income, Global Multi-Manager and Global Smaller Companies and have been in existence for less than five years.
Source: F&C
Private Equity portfolio
Original
commitment
Cumulative
commitment
drawn down
Commitment
outstanding
Cumulative
cash
returned
Value of
holding
€’000s€’000s€’000s€000s€’000s
Total Euro
denominated portfolio
2017 312,500 280,89831,602383,17060,176
2016312,500274,46038,040347,09580,922
US$’000sUS$’000sUS$’000sUS$’000sUS$’000s
Total US Dollar
denominated portfolio
2017626,168581,14045,028635,562221,481
2016597,050554,03843,012565,611240,821
£’000s £’000s £’000s£’000s£’000s
Total Sterling
denominated portfolio
2017 16,000 8,1017,899–8,152
20169,000 4788,522 –452

Commitment
outstanding
31 December
2017
£’000s
Value of
holding
31 December
2017
£’000s
Total Private Equity portfolio
(1)
Brought forward75,802264,423
Committed in 2017
(2)
29,780–
Cash drawn in 2017
(2)
(34,141)34,141
Cash returned in 2017
(2)
–(85,339)
Valuation movements
(3)
–25,345
Exchange movements(2,087)(13,276)
Total Private Equity portfolio
(3)
Carried forward69,354225,294
(1) At exchange rates ruling at 31 December 2016
(2) At actual exchange rates in 2017
(3) At exchange rates ruling at 31 December 2017
Source: F&C

22 | Foreign & Colonial Investment Trust PLC
There is of course one notable outlier in Europe – and that is the UK.
Negotiations around its withdrawal from the European Union (EU)
are proving difficult and whatever the outcome, the country faces a
challenging period of readjustment to life outside the single market.
More immediately, the pound is still weak but to date it hasn’t done
much to enhance the UK’s trading position. It has, however, reduced
real incomes and squeezed consumption while investment is held
back by uncertainty.
In Emerging Markets, China’s trend growth rate is slowing. The
labour supply has peaked and is set to decline and productivity has
been falling – following the path previously trodden by other Asian
‘growth miracle’ stories. We don’t believe that a hard landing is in
store for China but it seems reasonable to assume that lower growth
is likely to be sustained in the next few years.
In the last few years the markets have been led by a few rapidly
growing technology related businesses such as Amazon, Alphabet
and Apple in the US and Alibaba, Tencent and Baidu in China. These
companies have been able to consistently apply new technologies
to disrupt existing business models and grow on the back of it. We
have benefited from the market’s focus on these companies through
our growth portfolios, particularly in the US. Looking forward there
is no doubt that the market rally is extended, that the interest rate
environment is changing gradually and the valuations in these growth
stocks requires them to continue to see their earnings grow rapidly
from here. Having said that though, the equity market as a whole
is reasonably well underpinned by global economic growth and
corporate earnings which will also benefit from tax cuts in the US
and does not look expensive compared to other asset classes.
It is difficult to forecast exactly when some of these trends will
change in a meaningful way, particularly against a very uncertain
geo-political backdrop, but when they do leadership in the market
may well shift to the cheaper names in the more traditional sectors.
This is why, more than ever, we feel long-term capital growth
with limited volatility can be best be achieved through a properly
diversified portfolio of equities that diversifies by sector, geography
and investment style.
Paul Niven
Fund Manager
6 March 2018
attractive at present. In a year in which buybacks fell to a low level
their contribution to the total return was minimal.
Market outlook
The global economy entered 2017 with modest positive momentum.
Importantly, recent quarters have seen the recovery gain breadth
such that a synchronised upturn in corporate earnings across major
regions was delivered for the first time since 2010. This improvement
in corporate earnings, combined with low inflation and interest rates,
has supported equity markets after a period of patchy performance
and general rise in market valuations. It is encouraging to note
that growth globally is not restricted to a particular region or single
economic powerhouse.
The bullish earnings and growth backdrop looks set to continue into
2018. There is little, at present, to suggest a material slowdown in
the overall growth trajectory in the global economy. Indeed, financial
indicators are suggestive of strong momentum continuing for the
next twelve months, reflecting still supportive monetary and credit
conditions. Barring some shock, it now looks more likely than not
that the US economic cycle will extend to the longest on record,
into 2019.
Despite this constructive backdrop it appears highly unlikely that we
will return to any semblance of historic normality in terms of interest
rate levels and it also appears that growth and productivity levels
will remain relatively subdued. Demographics along with changing
corporate dynamics leads to the conclusion that, while we are in a
short-term upswing for inflation and interest rates, the next peak in
these variables will be at historically low levels. This is important as
the recent backdrop has been a strong positive influence on stock
markets. The spread between winners and losers has widened,
valuations have expanded toward historic highs as inflation and rates
have been kept low while corporates have taken an ever larger share
of overall output.
Even in a world of synchronised growth, the improvement of
Europe’s economies stands out. The reasons behind the upturn are
self-evident. Europe is at the end of a period of fiscal austerity and
this alongside massive monetary expansion is feeding through into a
sustained economic upswing. Spain’s problems in Catalonia, Italy’s
forthcoming 2018 election and key wage negotiations in Germany
loom on the horizon but we do not foresee these derailing Europe’s
cyclical upturn.

Report and Accounts 2017 | 23
STRATEGIC REPORT
“Our private equity portfolio
materially outperformed
listed stock markets again
in 2014.”
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
‘ Barring some shock, it now looks
more likely than not that the US
economic cycle will extend to the
longest on record, into 2019.’

24 | Foreign & Colonial Investment Trust PLC
Twenty largest holdingsTwenty largest holdings
1. Amazon.com (1)
US listed e-commerce and cloud computing company. Largest listed
internet retailer in the world based on market capitalisation
1.53% Total investments
£60.3m Value
3. Alphabet (4)
US listed parent company of Google. Google’s primary business
is focused on internet related services and products including its
internet search engine
1.09% Total investments
£42.7m Value
5. Facebook (10)
US listed operator of social media sites and social networking
services
0.91% Total investments
£35.6m Value
7. Pantheon Europe V A LP Fund
(1)
(3)
Unlisted private equity fund of funds investing into Europe, with the
largest exposure being the UK
0.79% Total investments
£30.9m Value
9. BP (6)
UK listed oil and gas company operating in all areas of the oil and
gas industry including exploration and production and refining
activities
0.75% Total investments
£29.6m Value
2. Microsoft (5)
US listed technology company focused on software products. The
company also designs and sells hardware devices
1.36% Total investments
£53.6m Value
4. Unitedhealth (2)
US listed company offering health care products and insurance
services. Largest healthcare company in the world by revenue
1.04% Total investments
£41.0m Value
6. Utilico Emerging Markets (7)
UK listed closed-ended investment company investing into utility and
infrastructure industries in Emerging Markets
0.84% Total investments
£33.1m Value
8. Anthem (25)
US listed health insurance company

0.77% Total investments
£30.3m Value
10. J P Morgan Chase (15)
US listed banking and financial services company with a significant
asset management and custody business
0.72% Total investments
£28.1m Value
The value of the twenty largest holdings represents 16.20% (2016: 16.32%) of the Company’s total investments.
The figures in brackets denote the position within the portfolio at the previous year end.
The value of convertible securities in the total portfolio at 31 December 2017 was £896,000 or 0.0% of total assets less current liabilities (2016: £239,000 or 0.0% of total assets
less current liabilities).
(1) Unquoted private equity limited partnership investment held at estimated fair value with no fixed capital and no distributable income in the ordinary course of business.

Report and Accounts 2017 | 25
STRATEGIC REPORT
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
Twenty largest holdings (continued)
11. Apple (26)
US listed technology company predominantly involved in the design,
development and sale of consumer electronics and software
0.71% Total investments
£27.8m Value
13. Citigroup (29)
US listed banking and financial services company which provides
consumer and corporate services
0.65% Total investments
£25.4m Value
15. Conventum Lyrical Fund (18)
US equity fund with a fundamental value based approach

0.63% Total investments
£24.9m Value
17. State Street (19)
US listed financial services company whose primary business is
asset management and custody services
0.63% Total investments
£24.6m Value
19. Intesa Sanpaolo (107)
Italian listed banking group offering retail and corporate banking
services and wealth management
0.60% Total investments
£23.7m Value
12. Royal Dutch Shell (44)
UK (and Dutch) listed oil and gas company operating in all areas of
the oil and gas industry including exploration and production and
refining activities
0.70% Total investments
£27.3m Value
14. Alibaba (105)
US listed Chinese company whose business predominantly covers
e-commerce, retail, internet and technology services
0.64% Total investments
£25.0m Value
16. Artemis US Extended Alpha Fund (17)
US equity fund combining a traditional portfolio of best ideas with
selective shorting of stocks
0.63% Total investments
£24.6m Value
18. Priceline (13)
US listed company that, through its websites, acts as an
intermediary for travel related purchases 
0.62% Total investments
£24.3m Value
20. British American Tobacco (110)
UK listed tobacco group. Largest listed tobacco company in the
world 
0.59% Total investments
£23.3m Value
The Company’s full list of investments exceeds 450 and is published monthly on the website
at foreignandcolonial.com. Copies are also available on request from the Secretary.
By order of the Board, Simon Fraser, Chairman, 6 March 2018

26 | Foreign & Colonial Investment Trust PLC
Dividend growth has been strong,
with an annualised rise of 5.9% in
payments over the past decade and
7.4% over the past twenty years.

Report and Accounts 2017 | 27
STRATEGIC REPORT
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
The fully covered dividend proposed for 2017
represents a rise of 5.6%, which compares with
the 3.0% rise in the Consumer Prices Index and
will be the 47th year of rising dividends.

28 | Foreign & Colonial Investment Trust PLC
Directors
Simon Fraser
(2)

Chairman
Appointed to the Board in September 2009,
appointed Chairman in May 2010 and is
Chairman of the Nomination Committee and
the Management Engagement Committee.
He is also chairman of the Investor Forum, an
investor led organisation established for the
purpose of improving long-term returns from
investment through collective shareholder
engagement. Most of his career was at
Fidelity International, where he started as
an analyst and spent a number of years in
Japan, latterly as Chief Investment Officer for
the Asia/Pacific region. He returned to the
UK in 1999 to take up the position of Chief
Investment Officer for Fidelity International,
a position he held until 2005. He is also
chairman of The Merchants Trust PLC,
Fidelity Funds (Luxembourg) and McInroy and
Wood.
Shared directorships with other Directors:
The Investor Forum with Nicholas Moakes
Sarah Arkle
(1)
Appointed to the Board in March 2011. She
was Vice Chairman of Threadneedle where
she was Chief Investment Officer for ten years
until her retirement at the end of December
2010. She was instrumental in establishing
Threadneedle’s investment process and
recruiting a number of the firm’s senior
fund managers. In 1983 Sarah moved from
stockbroker WI Carr to become a Far East
Equity Manager and subsequently became a
Director at Allied Dunbar Asset Management,
which became part of Threadneedle in
May 1994. She is a non-executive director
of Janus Henderson Group PLC and is
chairman of JPMorgan Emerging Markets
Investment Trust PLC.
Shared directorships with other Directors:
None
Sir Roger Bone KCMG
(1) (2)
Senior Independent Director
Appointed to the Board in March 2008. He
was president of Boeing UK from 2005 to
2014. In earlier years he served as British
Ambassador to Brazil from 1999 to 2004
and to Sweden from 1995 to 1999. He was
an Assistant Under-Secretary of State in the
Foreign and Commonwealth Office between
1991 and 1995, head of the Economic
Relations Department there from 1989 to
1991 and Political Counsellor at the British
Embassy in Washington DC from 1985 to
1989. He was a visiting fellow at Harvard
University in 1984/85 and served as a
private secretary to the Foreign Secretary
between 1982 and 1984. He was one of the
Prime Minister’s honorary ambassadors for
British business from 2010 to 2015. He is
a non-executive director of ITM Power plc,
and is also chairman of Over-c-ltd, a small
high tech company in the telecoms sector.
Shared directorships with other Directors:
None
Beatrice Hollond
(1)
Appointed to the Board on 1 September
2017. Beatrice spent 16 years at Credit Suisse
Asset Management in Global Fixed Income
and began her career as an equity analyst at
Morgan Grenfell Asset Management. She is a
member of the Board of Brown Advisory and
holds non-executive directorships at Telecoms
Plus PLC, M&G Group Limited and Templeton
Emerging Markets Investment Trust. Beatrice is
chairman at Millbank Investment Management
Limited, chairman at Keystone Investment Trust
PLC and non-executive director and chairman
of the Audit Committee at Henderson Smaller
Companies Investment Trust PLC.
Shared directorships with other Directors:
None
Directors

Report and Accounts 2017 | 29
GOVERNANCE REPORT
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
Francesca Ecsery
(2)
Joined the Board on 1 August 2013.
Francesca has extensive expertise in
marketing, with over 23 years of experience in
senior director roles, with both blue chip and
start-up companies. She has worked across
a broad range of consumer industries and
previously held the role of Global Business
Development Director at Cheapflights Media.
She also held senior executive roles with STA
travel, the Thomas Cook Group and Thorn
EMI plc and is currently a non-executive
director of Share Plc, Marshall Motor Holdings
plc and VISTA Ltd.
Shared directorships with other Directors:
None
Jeffrey Hewitt
(1)
Chairman of the Audit Committee
Appointed in September 2010 and as
Chairman of the Audit Committee in
November 2011. He was the Group
Finance Director of Electrocomponents plc
from 1996 to 2005 and Deputy Chairman
from 2000 to 2005. Prior to that, he was
the Finance Director of Unitech plc from
1991 to 1996. Between 1981 and 1991
he held directorships successively with
Carrington Viyella, Vantona Viyella and
Coats Viyella (where he was Group Strategy
Director). He started his career with Arthur
Andersen where he qualified as a chartered
accountant, following which he spent
seven years with The Boston Consulting
Group. He is also a non-executive director
of Cenkos Securities plc and chairman of
Electrocomponents Pension Trustees.
Shared directorships with other Directors:
None
Edward Knapp
(1)
Appointed to the Board in July 2016,
Edward brings a combination of general
management and operational experience
worldwide, with expertise in the digital
transformation of large scale organisations,
Risk, Strategy and Cyber Security. He is
currently a Managing Director at HSBC,
where he is a Chief Operating Officer and
Global Head of Business Management
within the Technology function. Prior to that,
he was a Chief Operating Officer and Head
of Business Management at Barclays Bank
within the Global Risk Function. Until 2012
he was at McKinsey & Company, providing
extensive board and executive-level advisory
to clients worldwide, focusing on banking
operations, strategy, value creation and risk
management and technology.
Shared directorships with other Directors:
None
Nicholas Moakes
(2)
Appointed to the Board In March 2011. He
is a Managing Partner and Chief Investment
Officer of the Investment Division at The
Wellcome Trust and a non-executive director
of the Investor Forum. He was Head of the
Asia Pacific investment team and Co-Head of
Emerging Markets at BlackRock Investment
Management until 2007. He has 25 years’
experience of global equity markets and
extensive experience of investing in private
equity. Prior to joining BlackRock in 1997 he
lived in Hong Kong for nine years, and is a
Chinese speaker. He started his career in the
Diplomatic Service, where he specialised in
Hong Kong and China. He is a non-executive
director of Jupiter Emerging & Frontier
Income Trust PLC.
Shared directorships with other Directors:
The Investor Forum with Simon Fraser
(1) Members of the Audit Committee
(2) Members of the Nomination Committee
All the Directors are members of the Management
Engagement Committee

30 | Foreign & Colonial Investment Trust PLC
Directors’ Report
Statement regarding Report and Accounts
The Directors consider that, following advice from the Audit
Committee, the Report and Accounts, taken as a whole, is fair,
balancedand understandable and provides the information
necessary for shareholders to assess the Company’s position and
performance, business model and strategy. The Audit Committee
had reviewed the draft Report and Accounts for the purpose of this
assessment having also put in place an arm’s length process to
provide additional comfort to the Directors in making this statement.
The market outlook for the Company can be found on page 22.
Principal Risks can be found on page 16 with further information
in note 25 to the Accounts. There are no instances where the
Company is required to make disclosures in respect of Listing Rule
9.8.4R.
Results and dividends
The results for the year are set out in the attached accounts. The
three interim dividends totalling 7.70 pence per share, together with
the final dividend of 2.70 pence per share, which will be paid on
1 May 2018 to shareholders registered on 3 April 2018 subject to
approval at the AGM (Resolution 3), will bring the total dividend for
the year to 10.40 pence per share. This represents an increase of
5.6% over the comparable 9.85 pence per share paid in respect of
the previous year.
Company status
The Company is a public limited company and an investment
company as defined by section 833 of the Companies Act
2006. The Company is registered in England and Wales with
company registration number 12901 and is subject to the UK
Listing Authority’s Listing Rules, UK and European legislation and
regulations including company law, financial reporting standards,
taxation law and its own articles of association.
Taxation
As set out in note 7 on the Accounts, the Company is exempt from
UK Corporation Tax on its worldwide dividend income and from
UK Corporation Tax on any capital gains arising from the portfolio
of investments, provided it complies at all times with Section 1158
of the Corporation Tax Act 2010. Dividends received from investee
companies domiciled outside the UK are subject to taxation in those
countries in accordance with relevant double taxation treaties.
The Company has received approval from HMRC as an investment
trust under Section 1158 and has since continued to comply with
the eligibility conditions and ongoing requirements of that section.
Accounting and going concern
The Financial Statements, starting on page 56, comply with
current UK Financial Reporting Standards, supplemented by the
Statement of Recommended Practice “Financial Statements of
Investment Trust Companies and Venture Capital Trusts” (“SORP”).
The significant accounting policies of the Company are set out in
note 2 on the accounts. The unqualified auditors’ opinion on the
Financial Statements appears on page 50. Shareholders will be
asked to approve the adoption of the Report and Accounts at the
AGM (Resolution 1).
As discussed in note 24 on the Accounts, the Directors believe that,
in light of the controls and monitoring processes that are in place,
the Company has adequate resources to continue in operational
existence for at least twelve months from the date of approval of
the financial statements. In considering this, the Directors took
into account the diversified portfolio of readily realisable securities
which can be used to meet short-term funding commitments, and
the ability of the Company to meet all of its liabilities and ongoing
expenses. Accordingly, it is reasonable for the financial statements to
continue to be prepared on a going concern basis. The Company’s
longer term viability is considered in the “Ten Year Horizon”
Statement on page 17.
Statement as to disclosure of information to the auditors
Each of the Directors confirms that, to the best of his or her
knowledge and belief, there is no information relevant to the
preparation of the Report and Accounts of which Ernst & Young LLP
(“EY” or the “auditors”) is unaware and he or she has taken all the
steps a Director might reasonably be expected to have taken to be
aware of relevant audit information and to establish that EY is aware
of that information.
The Directors submit the Report and Accounts of the Company for the year
ended 31 December 2017. The Corporate Governance Statement; the
Reports of the Management Engagement, Nomination and Audit Committees;
and the Remuneration Report all form part of this Directors’ Report.
Directors’ Report

Report and Accounts 2017 | 31
GOVERNANCE REPORT
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
Reappointment of auditors
EY have indicated their willingness to continue in office as auditors
to the Company and a resolution proposing their reappointment and
authorising the Audit Committee to determine their remuneration for
the ensuing year will be put to shareholders at the AGM (Resolutions
12 and 13). Further information in relation to the reappointment can
be found on page 48.
Capital structure
At the annual general meeting held on 25 April 2017, shareholders
authorised the Board to buy back up to 14.99% of the Company’s
ordinary shares either to be held in treasury or to be cancelled. A
total of 4,392,150 shares were bought back all of which were placed
in treasury. The shares bought back represented 0.8% of the shares
in issue (calculated exclusive of any shares held in treasury) at 31
December 2016. The share buybacks enhanced the NAV per share
by 0.2 pence. The purchases were made at prices ranging between
542.3 pence and 647.1 pence and the aggregate consideration
paid for the shares, including stamp duty and commissions, was
£25,661,000. As at 31 December 2017 there were 561,819,016
ordinary shares of 25 pence each (“ordinary shares”) in issue of
which 19,638,304 were held in treasury. Therefore the total number
of voting rights in the Company at that date was 542,180,712. No
shares have been bought back between the date of the year end
and 1 March 2018.
All ordinary shares rank equally for dividends and distributions and
carry one vote each. There are no restrictions concerning the transfer
of securities in the Company, no special rights with regard to control
attached to securities, no agreements between holders of securities
regarding their transfer known to the Company and no agreement
which the Company is party to that affects its control following a
takeover bid. Details of the capital structure can be found in note
17 on the accounts. The revenue profits of the Company (including
accumulated revenue reserves), together with the realised capital
profits of the Company, are available for distribution by way of
dividends to the holders of the ordinary shares. Upon a winding-up,
after meeting the liabilities of the Company, the surplus assets would
be distributed to shareholders pro rata to their holdings of ordinary
shares. Full details are set out in the Company’s articles of association.
Voting rights and proportional voting
At 1 March 2018 the Company’s 561,819,016 ordinary shares in
issue less the 19,638,304 shares held in treasury represented a
total of 542,180,712 voting rights. As at 31 December 2017 and
since that date no notifications of significant voting rights have
been received under the Financial Conduct Authority’s Disclosure
Guidance and Transparency Rules.
Approximately 45% of the Company’s share capital is held on
behalf of non-discretionary clients through the F&C savings plans.
For those planholders who do not return their voting directions, the
nominee company will vote their shares in proportion to those who
do (“proportional voting”). Implementation of this arrangement
is subject to a minimum threshold of 5% of the shares held in the
savings plans being voted. A maximum limit of 610,000 shares that
any one individual investor can vote, being approximately 5% of the
minimum threshold, also applies. Any shares voted by an investor in
excess of the maximum limit remain valid, but do not form part of the
proportional voting basis. Planholders have the right to exclude their
shares from the proportional voting arrangement.
Borrowings
The Company has a number of borrowing facilities and has in issue
fixed rate senior unsecured private placement notes. There is also a
multi-currency overdraft facility with JPMorgan Chase Bank and the
Company also has a perpetual debenture stock. Further reference is
made on page 20 and in notes 13, 15 and 16 on the accounts.
Remuneration report
At the annual general meeting held on 25 April 2017, shareholders
approved the Directors’ remuneration policy. It is intended that this
policy will continue for the three year period ending at the annual
general meeting in 2020, when shareholders will next be asked
for their approval. The policy can be found on page 43. The
Remuneration Report, which can be found on pages 43 to 44,
provides detailed information on the remuneration arrangements for
the Directors. Shareholders will be asked to approve the report at the
AGM. (Resolution 2).
Director re-elections
The names of the Directors of the Company, along with their
biographical details, are set out on pages 28 to 29 and are
incorporated into this report by reference. All the Directors held
office throughout the year under review with the exception of Mrs
Beatrice Hollond who was appointed to the Board on 1 September
2017. Mrs Hollond will stand for election by shareholders at the
AGM (Resolution 4). All the other Directors will stand for re-election
by shareholders at the meeting in accordance with the requirements
of the UK Corporate Governance Code (Resolutions 5 to 11). Sir
Roger Bone has served as a Director for more than nine years. The
Nomination Committee has considered each Director and the Board
has concurred with the Nomination Committee’s assessment that
each Director is independent, continues to make a valuable and
effective contribution and remains committed in the role.
Directors’ interests and indemnification
There were no contracts of significance to which the Company was
a party and in which a Director is, or was, materially interested during
the year. There are no agreements between the Company and its
Directors concerning compensation for loss of office.
The Company has granted a deed of indemnity to the Directors
in respect of liabilities that may attach to them in their capacity as

32 | Foreign & Colonial Investment Trust PLC
Decreased in
the year under review
will be able to meet the Directors informally over refreshments
afterwards.
Authority to allot shares and sell shares from treasury
(Resolutions 14 and 15)
By law, directors are not permitted to allot new shares (or to grant
rights over shares) unless authorised to do so by shareholders.
In addition, directors require specific authority from shareholders
before allotting new shares (or granting rights over shares) for cash
or selling shares out of treasury, without first offering them to existing
shareholders in proportion to their holdings.
Resolution 14 gives the Directors the necessary authority to allot
securities up to an aggregate nominal amount of £6.7m, (27.1m
ordinary shares), being equivalent to approximately 5% of the
Company’s current issued share capital (calculated exclusive of any
shares held by the Company in treasury) as at 1 March 2018, being
the latest practicable date before the publication of the notice of
the AGM. The authority and power expires at the conclusion of the
annual general meeting in 2019 or on 30 June 2019, whichever is
the earlier.
Resolution 15 empowers the Directors to allot such securities for
cash, other than to existing shareholders on a pro rata basis and
also to sell treasury shares without first offering them to existing
shareholders in proportion to their holdings up to an aggregate
nominal amount also of £6.7m (representing approximately 5% of
the issued ordinary share capital of the Company at 1 March 2018,
calculated exclusive of any shares held in treasury).
These authorities and powers provide the Directors with a degree of
flexibility to increase the assets of the Company by the issue of new
shares or the sale of treasury shares, in accordance with the policies
set out on page 12 or should any other favourable opportunities
arise to the advantage of shareholders.
The Directors anticipate that they will mainly use them to satisfy
demand from participants in the F&C Savings Plans when they
believe it is advantageous to such participants and the Company’s
shareholders to do so. Under no circumstances would the Directors
use them to issue shares or sell treasury shares at a price which
would result in a dilution of NAV per ordinary share.
Authority for the Company to purchase its own shares
(Resolution 16)
At the annual general meeting held in 2017 the Company was
authorised to purchase approximately 14.99% of its own shares
for cancellation or to be held in treasury. The number of shares
remaining under that authority as at 31 December 2017 was
79,332,118 shares or 14.63% of the issued share capital exclusive
of the number of shares held in treasury. Resolution 16 will authorise
the renewal of such authority enabling the Company to purchase
Directors of the Company. This covers any liabilities that may arise
to a third party for negligence, default or breach of trust or duty. This
deed of indemnity is a qualifying third-party provision (as defined
by section 234 of the Companies Act 2006) and has been in force
throughout the period under review and remains in place as at the
date of this report. It is available for inspection at the Company’s
registered office during normal business hours and at the AGM. The
Company also maintains directors’ and officers’ liability insurance.
Safe custody of assets
The Company’s listed investments are held in safe custody by
JPMorgan Chase Bank (the “Custodian”). Operational matters
with the Custodian are carried out on the Company’s behalf by the
Manager via F&C in accordance with the provisions of the investment
management agreement. The Custodian is paid a variable fee
dependent on the number of trades transacted and location of the
securities held.
Depositary
JPMorgan Europe Limited (the “Depositary”) acts as the Company’s
Depositary in accordance with the Alternative Investment Fund
Managers Directive (“AIFMD”). The Depositary’s responsibilities,
which are set out in an Investor Disclosure Document on the
Company’s website, include: cash monitoring; ensuring the proper
segregation and safe keeping of the Company’s financial instruments
that are held by the Custodian; and monitoring the Company’s
compliance with investment and leverage limits requirements. The
Depositary receives for its services a fee of one basis point per
annum on the first £1 billion of the Company’s net assets and 0.25
basis points per annum on net assets in excess of that amount,
payable monthly in arrears.
Although the Depositary has delegated the safekeeping of all assets
held within the Company’s investment portfolio to the Custodian, in
the event of loss of those assets that constitute financial instruments
under the AIFMD, the Depositary will be obliged to return to
the Company financial instruments of an identical type, or the
corresponding amount of money, unless it can demonstrate that the
loss has arisen as a result of an external event beyond its reasonable
control, the consequences of which would have been unavoidable
despite all reasonable efforts to the contrary.
Management fees
Information on the management fees payable by the Company is set
out in the Report of the Management Engagement Committee.
AGM
The AGM will be held at The Brewery, 52 Chiswell Street, London,
EC1Y 4SD on Monday, 23 April 2018 at 12 noon. The Notice of
Meeting appears on pages 84 to 87 and includes a map of the
venue. The Fund Manager will give a presentation and there will be
an opportunity to ask questions during the meeting. Shareholders

Report and Accounts 2017 | 33
GOVERNANCE REPORT
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
in the market up to a maximum of 81,270,000 ordinary shares
(equivalent to approximately 14.99% of the issued share capital
exclusive of treasury shares) and the minimum and maximum prices
at which they may be bought exclusive of expenses, reflecting
requirements of the Companies Act 2006 and the Listing Rules.
The Directors will continue to use this authority in accordance
with the policy set out on page 12. Under the Companies Act
2006, the Company is allowed to hold its own shares in treasury
following a buyback, instead of having to cancel them. This gives the
Company the ability to reissue treasury shares quickly and cost-
effectively (including pursuant to the authority under Resolution 15,
see above) and provides the Company with additional flexibility in the
management of its capital base. Such shares may be resold for cash
but all rights attaching to them, including voting rights and any right
to receive dividends are suspended whilst they are in the treasury.
If the Board exercises the authority conferred by Resolution 16,
the Company will have the option of either holding in treasury or of
cancelling any of its shares purchased pursuant to this authority and
will decide at the time of purchase which option to pursue. Purchases
of ordinary shares under the authority will be financed out of realised
revenue and/or capital reserves and funded from the Company’s own
cash resources or, if appropriate, from short-term borrowings. The
authority to purchase ordinary shares will continue until the annual
general meeting in 2019 or on 30 June 2019, whichever is the earlier.
The Board intends to seek a renewal of such authority at subsequent
annual general meetings.
Change of Company name (Resolution 17)
The Directors intend to promote the Company increasingly using
the abbreviated name, F&C Investment Trust, a name that has long
been synonymous with the name Foreign & Colonial Investment
Trust. Resolution 17 will also seek to adopt articles of association in
substitution for the existing articles of association. New article 107
will enable the Directors to change the Company’s corporate name
to “F&C Investment Trust PLC” in the year ahead. A copy of the
proposed new articles of association will be available for inspection
at the Company’s registered office during usual business hours on
any weekday (Saturdays, Sundays and Bank holidays excluded) until
the date of the AGM and also on the date and at the place of the
AGM from 15 minutes before the commencement of the AGM until
it’s conclusion.
Form of proxy for AGM voting
If you are a registered shareholder you will find enclosed a form of
proxy for use at the AGM. You will also have the option of lodging
your proxy vote using the Internet. For shares held through CREST,
proxy appointments may be submitted via the CREST proxy voting
system. Please either complete, sign and return the form of proxy in
the envelope provided as soon as possible in accordance with the
instructions or, alternatively, lodge your proxy vote via the Internet
or the CREST proxy voting system, whether or not you intend to be
present at the AGM. This will not preclude you from attending and
voting in person if you so wish.
All proxy appointments should in any event be returned or lodged so
as to be received not later than 48 hours before the time appointed
for holding the AGM.
Form of direction and proportional voting
If you are an investor in any of the F&C Savings Plans, you will have
received a form of direction for use at the AGM and you will also
have the option of lodging your voting directions using the Internet.
F&C operates a proportional voting arrangement, which is explained
on page 31.
All voting directions should be made as soon as possible in
accordance with the instructions on the form of direction and, in any
event, not later than 12 noon on 16 April 2018, so that the nominee
company can submit a form of proxy before the 48 hour period
begins.
Voting recommendation
Your Board considers that the resolutions to be proposed at the
AGM are in the best interests of shareholders as a whole. The
Board therefore recommends that shareholders vote in favour of
each resolution, as the Directors intend to do in respect of their own
beneficial holdings.
By order of the Board
for and on behalf of
F&C Investment Business Limited
Secretary
6 March 2018

34 | Foreign & Colonial Investment Trust PLC
‘ We are confident that your Company
will remain an appropriate choice for
any long-term investor for many years
to come.’

Report and Accounts 2017 | 35
GOVERNANCE REPORT
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
Corporate Governance Statement
Introduction
The Board has considered and supports the principles and
recommendations of the UK Corporate Governance Code (the
“UK Code”) published in 2016 and the AIC Code of Corporate
Governance (the “AIC Code”). The Board believes that the Company
has complied with the provisions of the UK Code except as detailed
below and is also adhering to the principles and recommendations of
the AIC Code during the period under review and up to the date of
this report except as set out below. The UK Code includes provisions
relating to:
• the role of the Chief Executive;
• executive directors’ remuneration; and
• the need for an internal audit function.
For the reasons set out in the AIC Corporate Governance Guide for
Investment Companies the Board considers these three provisions
as not being relevant to the position of the Company, being an
externally managed investment company. In particular, all of the
Company’s day to day management and administrative functions
have been delegated to the Manager. As a result, the Company has
no executive directors, employees or internal operations. Therefore,
with the exception of the need for an internal audit function, which is
addressed on page 46, the Company has not reported further in
respects of these provisions.
Copies of the codes can be found on their respective websites:
www.frc.org.uk and www.theaic.co.uk.
AIFMD
The Company is defined as an Alternative Investment Fund (“AIF”)
under the AIFMD issued by the European Parliament, and which
has been implemented into UK law. This requires that all AIFs must
appoint a Depositary and an Alternative Investment Fund Manager
(“AIFM”). The Board remains fully responsible for all aspects of the
Company’s strategy, operations and compliance with regulations.
The Manager is the Company’s AIFM.
Articles of association
The Company’s articles of association may only be amended by
special resolution at a general meeting of shareholders.
The Board
The Board’s responsibilities are outlined on page 49. More
specifically, the Board is responsible for the effective stewardship of
the Company’s affairs and reviews the schedule of matters reserved
for its decision. These are categorised under strategy, policy, finance,
risk, investment restrictions, performance, marketing, appointments,
the Board and public documents. It has responsibility for all corporate
strategic issues, policies (set out on pages 12 and 13) and
corporate governance matters which are all reviewed regularly.
In order to enable them to discharge their responsibilities, all
Directors have full and timely access to relevant information. At each
meeting the Board reviews the Company’s investment performance
and considers financial analyses and other reports of an operational
nature. The Board monitors compliance with the Company’s
objectives and is responsible for setting investment and gearing
limits within which the Fund Manager has discretion to act, and
thus supervises the management of the investment portfolio which
is contractually delegated to the Manager. The Board has the right
of veto over the appointment of sub-managers recommended by
the Fund Manager. The Board has responsibility for the approval of
all investments in in-house funds managed or advised by F&C and
any unlisted investments with the exception of new private equity
investments, responsibility for which has been delegated to F&C.
The following table sets out the Directors’ meeting attendance in
2017. The Board held a separate meeting in September 2017 to
consider strategic issues and also met regularly in private session
during the year, without any representation from the Manager.
Directors’ attendance in 2017
Board
Audit
Committee
Nomination
Committee
Management
Engagement
Committee
No. of meetings8411
Simon Fraser
(1)
8411
Sarah Arkle84n/a1
Sir Roger Bone8411
Stephen Burley
(2)
31n/a1
Francesca Ecsery
(3)
8n/an/a1
Jeffrey Hewitt84n/a1
Beatrice Hollond
(4)
31n/an/a
Edward Knapp84n/a1
Nicholas Moakes8n/a11
(1) Attends but is not a member of the Audit Committee
(2) Retired as a Director on 25 April 2017
(3) Joined the Nomination Committee on 24 January 2017
(4) Joined the Board on 1 September 2017 and the Audit Committee on
30 October 2017
Each Director has signed a terms of appointment letter with the
Company, in each case including one month’s notice of termination
by either party. These are available for inspection at the Company’s
Corporate Governance Statement

36 | Foreign & Colonial Investment Trust PLC
registered office during normal business hours and are also available
at annual general meetings.
Directors are able to seek independent professional advice at the
Company’s expense in relation to their duties. No such advice was
taken during the year under review. The Board has direct access
to company secretarial advice and services of the Manager which,
through the Company Secretary, is responsible for ensuring that
Board and Committee procedures are followed and applicable
regulations are complied with. The proceedings at all Board and
other meetings are fully recorded through a process that allows
any Director’s concerns to be recorded in the minutes. The Board
has the power to appoint or remove the Company Secretary
in accordance with the terms of the investment management
agreement. The powers of the Board relating to the buying back or
issuance of the Company’s shares are explained on pages 12,
32 and 33.
Appointments
Under the articles of association of the Company, the number of
Directors on the Board may be no more than fifteen. Directors may
be appointed by the Company by ordinary resolution or by the
Board. All new appointments by the Board are subject to election
by shareholders at the next annual general meeting and institutional
shareholders are given the opportunity to meet any newly appointed
Director if they wish. An induction process is in place for new
appointees and all Directors are encouraged to attend relevant
training courses and seminars. All the other Directors stand for re-
election by shareholders annually.
Board effectiveness
The 2017 annual appraisal of the Board, the committees and the
individual Directors has been carried out by the Chairman. This built
on the objectives identified from the previous year’s appraisal for
which the Chairman was supported by independent consultants, the
Board Advisory Partnership LLP. The process included confidential
unattributable one-to-one interviews between the Chairman and
each Director. The appraisal of the Chairman was covered as
part of the process and led separately by the Senior Independent
Director. The Chairman’s report on progress against the objectives
was submitted to the Board in February 2018 and new objectives
set. These include the delivery of the promotional campaign as part
of the celebrations for the Company’s 150th anniversary year; the
maintenance of the high profile achieved as part of that campaign
into the future; and stepping up the succession plans for the
changes that will be needed for the Board over the next two to three
years. The appraisal determined that the Board was effective as was
the Chairman’s leadership of the Board.
Removal of Directors
The Company may by special resolution remove any Director before
the expiration of their term of office and may by ordinary resolution
appoint another person who is willing to act to be a Director in their
place. The provisions under which a Director would automatically
cease to be a Director are set out in the articles of association.
Independence of Directors
The Board, which is composed solely of independent non-executive
Directors, regularly reviews the independence of the individual
Directors. All the Directors have been assessed by the Board as
remaining independent of F&C and of the Company itself; none has a
past or current connection with F&C and each remains independent
in character and judgement with no relationships or circumstances
relating to the Company that are likely to affect that judgement. That
includes Sir Roger Bone who has served for over nine years. Those
Directors serving more than six years are subject to more rigorous
review before being proposed for re-election.
Conflicts of interest
A company director has a statutory obligation to avoid a situation
in which he or she has, or potentially could have, a direct or
indirect interest that conflicts with the interests of the company (a
“situational conflict”). The Board therefore has procedures in place
for the authorisation and review of situational conflicts relating to the
Directors. Limits can be imposed as appropriate.
Other than the formal authorisation of the Directors’ other
directorships as situational conflicts, no authorisations have been
sought. These authorisations were reviewed in January 2018,
and each Director abstained from voting in respect of their own
directorships. Aside from situational conflicts, the Directors must
also comply with the statutory rules requiring company directors
to declare any interest in an actual or proposed transaction or
arrangement with the Company.
Committees
The Board has established an Audit Committee, Management
Engagement Committee and Nomination Committee. The role and
responsibilities of these committees are set out in their respective
reports. As the Board has no executive Directors and no employees,
and is composed solely of non-executives, it does not have a
Remuneration Committee. Detailed information on the remuneration
arrangements for the Directors of the Company can be found in the
Remuneration Report on pages 43 to 44 and in note 5 on the
Accounts.
Relations with shareholders
Shareholder communication is given a high priority. In addition to the
annual and half-yearly reports that are available to shareholders, monthly
fact sheets and general information are available on the Company’s
website at foreignandcolonial.com. A regular dialogue is maintained
with the Company’s institutional shareholders and with private client
asset managers. Shareholders wishing to communicate with the
Chairman, the Senior Independent Director or any other member of the
Board may do so by writing to the Company, for the attention of the
Company Secretary, at the address set out on page 37.
All shareholders have the opportunity to meet and question the
Board at the AGM.
By order of the Board
for and on behalf of
F&C Investment Business Limited
Secretary
6 March 2018

Report and Accounts 2017 | 37
GOVERNANCE REPORT
Management and Advisers
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
The Management Company
Foreign & Colonial Investment Trust PLC
(“Foreign & Colonial” or the “Company”)
is managed by F&C Investment Business
Limited (“FCIB” or the “Manager”), a wholly-
owned subsidiary of F&C Asset Management
plc (“F&C”) which is ultimately owned by
Bank of Montreal (“BMO”). FCIB is appointed
under an investment management agreement
with Foreign & Colonial, setting out its
responsibilities for investment management,
administration and marketing. As Manager, it
is authorised and regulated in the UK by the
Financial Conduct Authority.
The Manager also acts as the Alternative
Investment Fund Manager under the AIFMD.
Paul Niven Appointed Fund Manager (the
“Fund Manager”) of Foreign & Colonial in
July 2014. Head of Multi-Asset Investment
and chair of F&C’s asset allocation
committee. He has extensive experience in
managing large diversified investment funds.
He joined F&C in 1996.
Hugh Potter Represents the Manager as
Company Secretary and is responsible for
Foreign & Colonial’s statutory compliance.
He joined F&C in 1982.
Marrack Tonkin Head of Investment Trusts
with responsibility for F&C’s relationship with
Foreign & Colonial. He joined F&C in 1989.
.
Sub-managers to F&C (North America
large and medium cap portfolio)
Barrow, Hanley, Mewhinney & Strauss, LLC
– appointed July 2005
T. Rowe Price International Ltd – appointed
February 2006
Private Equity Managers
HarbourVest Partners LLC – appointed 2003
Pantheon Ventures Limited – appointed 2003
Secretary and Company’s Registered
Office
F&C Investment Business Limited,
Exchange House, Primrose Street, London
EC2A 2NY
Telephone: 020 7628 8000
Facsimile: 020 7628 8188
Website: fandc.com
Email: info@fandc.com
Independent Auditors
Ernst & Young LLP,
25 Churchill Place, London E14 5EY
Custodian
JPMorgan Chase Bank,
25 Bank Street, Canary Wharf,
London E14 5JP
Depositary
JPMorgan Europe Limited,
25 Bank Street, Canary Wharf, London
E14 5JP
Share Registrars
Computershare Investor Services PLC,
The Pavilions, Bridgwater Road,
Bristol BS99 6ZZ
Telephone: 0800 923 1506
Facsimile: 0870 703 6143
Authorised and regulated in the UK by the
Financial Conduct Authority.
New Zealand Share Registrars
Computershare Investor Services Limited,
Private Bag 92119, Auckland 1142.
Level 2, 159 Hurstmere Road, Takapuna,
Auckland 0622, New Zealand
Telephone: +64 9 488 8700
Facsimile: +64 9 488 8787
Solicitors
Norton Rose Fulbright LLP, 3 More London
Riverside, London SE1 2AQ
Stockbrokers
JPMorgan Cazenove, 25 Bank Street,
Canary Wharf, London E14 5JP
Management and Advisers

38 | Foreign & Colonial Investment Trust PLC
Report of the Management
Engagement Committee
Role of the Committee
The primary role of the Management Engagement Committee is
to review the investment management agreement and monitor
the performance of the Manager for the investment, secretarial,
financial, administration, marketing and support services that it
provides under that agreement. It also reviews the terms of the
agreement including the level and structure of fees payable, the
length of notice period and best practice provisions generally. All
of the Committee’s responsibilities have been carried out over the
course of 2017 and 2018 to date.
Composition of the Committee
All the Directors are members of the Committee. Its terms of reference
can be found on the website at foreignandcolonial.com.
Manager evaluation process
The Committee met once during the year and again in January
2018 for the purpose of the formal evaluation of the Manager’s
performance (including the contribution from F&C more widely).
Its performance is considered by the Board at every meeting,
with a formal evaluation by the Committee each year. For the
purposes of its ongoing monitoring, the Board receives detailed
reports and views from the Fund Manager on investment
policy, asset allocation, gearing and risk, together with quarterly
presentations on the F&C managed portfolio strategies. Quarterly
updates are received from the US sub-managers. The Board also
receives comprehensive performance measurement schedules,
provided by Thomson Reuters Eikon and F&C. These enable it
to assess: the success or failure of the management of the total
portfolio against the performance objectives set by the Board;
the sources of positive and negative contribution to the portfolio
in terms of gearing, asset allocation and stock selection; and the
performance of each investment portfolio against its local index,
where applicable, and the risk/return characteristics. Portfolio
performance information, which is relevant in monitoring F&C,
the sub-managers and the Private Equity managers, is set out on
pages 18 to 22.
Manager reappointment
The annual evaluation that took place in January 2018 included
presentations from the Fund Manager and F&C’s Head of
Investment Trusts. This focused primarily on the objectives set
by the Board and F&C’s contribution towards achieving those
objectives particularly in regard to investment strategy and
marketing. As part of the evaluation, the CEO and CIO of BMO
Global Asset Management and the Head of Distribution, BMO
Global Asset Management presented to the Board on the strength
of these businesses and the resources and opportunities for F&C
as part of BMO and their continued support for its investment trust
business. With regard to performance, the Shareholder return
outperformed the benchmark over one, three, five and ten years.
The Committee met in closed session following the presentations
and concluded that in their opinion the continuing appointment
of FCIB as Manager on the terms agreed was in the interests of
shareholders as a whole. The Board ratified this recommendation.
The Manager’s fee
An important responsibility of the Committee is that relating to
the management fee. The Manager receives an annual fee, which
for the year under review was equal to 0.365% of the market
capitalisation of the Company. The fee is calculated and paid
monthly and is subject to a deduction for amounts earned from
investments in other investment vehicles managed by F&C. The
amount paid was £11.8m, an increase of 24% from £9.5m last
year reflecting the increase of the Company’s average market
capitalisation during the year. Note 4 on the Accounts provides
detailed information in relation to the management fee.
Whilst the funds held in the Global Multi-Manager portfolio levy
management fees, no fees are paid to the Manager for the
selection of the funds. No additional fees (beyond the annual
fees detailed above) are paid to the Manager for any future
commitments made to Private Equity. The Manager and certain
individuals employed by the Manager are, however, entitled to
participate in a performance fee arrangement in the form of carried
interest over secondary or co-investments made within the Private
Equity programme.
Review of the Manager’s fee
The fee paid to the Manager is reviewed by the Committee every
three years and is next due for review in December 2018. At
the last review in December 2015, presentations were given by
both F&C and an independent consultant, which had provided
an in-depth analysis of fees prevailing in the market place and
trends both within the investment trust industry and more widely.
The review also considered the effect of the ad valorem structure
and hence the impact of exchange rate movements and share
buybacks. The findings of the independent consultant were that
the existing structure and fee level were both sensible and aligned
in the key areas. Although market capitalisation as the basis for
the fee calculation was uncommon, this was now appearing more
and more in new issues and the basis had worked well for Foreign
& Colonial in terms of its simplicity; clarity; discount tightening;
and alignment. This was consistent with F&C’s own assessment.

Report and Accounts 2017 | 39
GOVERNANCE REPORT
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
In summary, the Company was meeting the key criteria for an
appropriate management fee structure, which were regarded as:
• Competitive
• Simple
• Sufficiently incentivised
The Committee also took into consideration that the Company had
broadened its investment capabilities by allocating additional assets
to F&C’s Multi-Manager team at no additional direct management
cost as well as services from other areas within the business. There
also remained scope to reduce management costs from externally
managed assets by utilising existing resource within F&C under new
arrangements for the management of private equity investments.
The Committee had concluded that on the basis of the review there
was no immediate need for the Company to change the rate of the
fee payable to the Manager but to continue to monitor developments
and made a recommendation to the Board to that effect. The Board
subsequently endorsed the Committee’s recommendation.
Third Party Managers’ fees
F&C incurs investment management fees from the sub-managers
appointed to manage the North America portfolio. The Company
reimburses F&C for these fees, which in 2017 amounted to £3.3m
(2016: £2.7m) (see note 4 on the accounts).
The fees paid to Private Equity managers in respect of the Private
Equity funds of funds amounted to £4.5m for 2017 (2016: £4.6m)
all of which was incurred indirectly through the funds. Some of the
funds have arrangements whereby these Private Equity managers
share in the profits once certain “hurdle” rates of return to investors
have been achieved. These arrangements are varied and complex,
but are on normal commercial terms within the private equity
funds of funds industry. Fees payable by the underlying funds are
negotiated by each manager. The arrangements also vary from fund
to fund, but management fees of 2% per annum and a 20% carried
interest, once an agreed hurdle rate of return for investors has been
achieved, would be normal.
Use of the “F&C” name
The Company owns the name “Foreign & Colonial” and F&C owns
the name “F&C”. For many years the Company has had rights to
use the “F&C” name in accordance with provisions set out in the
management agreement. Over the years the Company has not
exercised those rights to any meaningful degree but henceforth will
increasingly use the “F&C” name for marketing purposes. In time,
and subject to shareholder approval at the AGM, the Board will also
change the corporate name to “F&C Investment Trust PLC”. The
Board has therefore reviewed the terms under which it can use the
“F&C” name and on 1 March 2018 entered into a separate trade
mark licence agreement with F&C which supersedes the provisions
within the management agreement over future use. The licence
agreement is royalty free subject to there being no material change
to the Company’s management arrangements with F&C within the
next 15 years.
Committee evaluation
The activities of the Committee were considered as part of the
Board appraisal process completed in accordance with standard
governance arrangements as summarised on page 36. The
conclusion from the process was that the Committee was operating
effectively, with the right balance of membership and skills.
Simon Fraser
Management Engagement Committee Chairman
6 March 2018

40 | Foreign & Colonial Investment Trust PLC
Statement of Directors’ Responsibilities
London’s Smithfield Market opened
in November of 1868.

Report and Accounts 2017 | 41
GOVERNANCE REPORT
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
Statement of Directors’ Responsibilities
Foreign & Colonial was launched in
March 1868 and has paid a dividend
every year since.

42 | Foreign & Colonial Investment Trust PLC
Report of the Nomination Committee
Role of the Committee
The primary role of the Nomination Committee is to review and
make recommendations with regard to Board structure, size and
composition, the balance of knowledge, experience, skill ranges
and diversity and consider succession planning and tenure policy.
All of the Committee’s responsibilities have been carried out over
the course of 2017 and 2018 to date. The Committee met on one
occasion during the year and specifically considered, monitored and
reviewed the following matters:
• The structure and size of the Board and its composition
particularly in terms of succession planning and the experience
and skills of the individual Directors and diversity across the
Board as a whole;
• tenure policy;
• the criteria for future Board appointments and the methods of
recruitment, selection and appointment;
• the appointment of new Directors and the reappointment
of those Directors standing for re-election at annual general
meetings;
• the need for any changes in committee membership;
• the attendance and time commitment of the Directors in fulfilling
their duties, including the extent of their other directorships;
• the question of each Director’s independence prior to publication
of the Report and Accounts; and
• the authorisation of each Director’s situational conflicts of
interests in accordance with the provisions of the Companies Act
2006 and the policy and procedures established by the Board in
relation to these provisions.
Composition of the Committee
Committee membership is listed on pages 28 and 29
and its terms of reference can be found on the website at
foreignandcolonial.com.
Succession planning
One new non-executive Director appointment was made to the
Board in 2017, Mrs Beatrice Hollond. She replaced Mr Stephen
Burley, who retired immediately following the 2017 annual general
meeting. This appointment was made using an independent
search platform, Nurole Ltd. Following candidate interviews with
the Committee members, the other Board members were invited
to meet Mrs Hollond who was then formally invited to join the
Board. The appointment was made on 1 September 2017. The
final decision with regard to new appointments always rests with
the Board. The services provided by the platform were for the sole
purpose of recruiting the new Director; no other business relationship
exists with that agency.
As part of the Board’s annual objectives, succession planning will be
stepped up in 2018 in order to put in place the processes that will be
needed for the Board to make the necessary changes over the next
two to three years.
Diversity and tenure
In carrying out its responsibilities, the Committee applies the
policies of the Board with regard to its belief in the benefits of
having a diverse range of experience, skills and backgrounds. The
appointment of Beatrice Hollond was made in accordance with
these policies. The Board’s diversity policy is set out on page 13.
The Board is also of the view that length of service will not
necessarily compromise the independence or contribution of
directors of an investment trust company, where continuity and
experience can add significantly to the strength of the board. In
normal circumstances the Directors are expected to serve for a
nine-year term, but this may be adjusted for reasons of flexibility
and continuity.
Committee evaluation
The activities of the Committee were considered as part of the
Board appraisal process completed in accordance with standard
governance arrangements as summarised on page 36. The
conclusion from the process was that the Committee was operating
effectively, with the right balance of membership, experience and
skills.
Simon Fraser
Nomination Committee Chairman
6 March 2018
Report of the Nomination Committee

Report and Accounts 2017 | 43
GOVERNANCE REPORT
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
Remuneration Report
Directors’ Remuneration Policy
The Board’s policy is to set Directors’ remuneration at a level
commensurate with the skills and experience necessary for the effective
stewardship of the Company and the expected contribution of the
Board as a whole in continuing to achieve the Company objective. Time
committed to the Company’s business and the specific responsibilities of
the Chairman, Senior Independent Director, Directors and the chairmen
and members of the various committees of the Board and their retention
are taken into account. The policy aims to be fair and reasonable in
relation to comparable investment trusts and other similar sized financial
companies. This includes provision for the Company’s reimbursement of
all reasonable travel and associated expenses incurred by the Directors
in attending Board and committee meetings, including those treated as
a benefit in kind subject to tax and national insurance. The policy was
approved by shareholders in April 2017 with 93.3% voting in favour. The
Board has not received any views from shareholders in respect of the
levels of Directors’ remuneration. It is intended that the policy will continue
for the three year period ending at the annual general meeting in 2020.
The Company’s articles of association limit the aggregate fees payable
to the Board to a total of £500,000 per annum. Within that limit, it is
the responsibility of the Board as a whole to determine and approve
the Directors’ fees, following a recommendation from the Chairman
and, in his case, from the Senior Independent Director. The fees are
fixed and are payable in cash, quarterly in arrears. Directors are not
eligible for bonuses, pension benefits, share options, long-term incentive
schemes or other benefits. The Board considers the level of Directors’
fees annually. Towards the end of the year the Chairman carried out
a review of fee rates in accordance with the policy. The Board agreed
with his recommendation that commencing 1 January 2018, the basic
fee should be £36,000 representing an increase of 2.9% since the
last increase on 1 January 2017. The Board also agreed to the Senior
Independent Director’s recommendation that an increase be made to
the Chairman’s fee commensurate with the increase in the basic fee;
an increase to £72,000. The Board also agreed to the Chairman’s
recommendation that an additional £1,000 be paid to the Chairman of
the Audit Committee bringing the fee for that role to £12,000.
The Board is composed solely of non-executive Directors, none of
whom has a service contract with the Company, and therefore no
remuneration committee has been appointed. Each new Director
is provided with a letter of appointment. There is no provision for
compensation for loss of office. The letters of appointment are
available for inspection at the Company’s registered office during
business hours and will be available for 15 minutes before and
throughout the forthcoming AGM, at which all Directors will stand
for re-election or election in the case of Beatrice Hollond. The fees
for specific responsibilities are set out in the table below. No fees are
payable for membership of the Management Engagement Committee.
Annual fees for Board Responsibilities
2018
£’000s
2017
£’000s
Board
Chairman72.070.0
Senior Independent Director42.341.3
Director36.035.0
Audit Committee
Chairman12.011.0
Members5.05.0
Nomination Committee
Chairman3.03.0
Members3.03.0
Directors’ shareholdings
The interests of the Directors in the Company’s ordinary shares at the
beginning and end of the financial year are shown below:
Directors’ share interests (audited)
At 31 December
20172016
Simon Fraser37,00436,897
Sarah Arkle10,00010,000
Sir Roger Bone61,37158,349
Francesca Ecsery8,4238,314
Jeffrey Hewitt22,34620,980
Beatrice Hollondniln/a
Edward Knapp7,5757,338
Nicholas Moakes77,40776,115
The Company’s register of Directors’ interests contains full details of Directors’
shareholdings.
Since the year end, the following Directors have acquired further
ordinary shares: Simon Fraser 28, Edward Knapp 45, Sir Roger Bone
556, Jeffrey Hewitt 244, Francesca Ecsery 33 and Nicholas Moakes
324. There have been no changes in any of the other Directors’
shareholdings detailed above. No Director held any interests in the
issued stock or shares of the Company other than as stated above.
There is no requirement for the Directors to hold shares in the Company.
Remuneration Report

44 | Foreign & Colonial Investment Trust PLC
Actual expenditure
2017
£’000s
2016
£’000s
%
Change
Aggregate Directors’ Remuneration349.3339.92.8
Aggregate Dividends paid to Shareholders
(1)
55,26053,6283.0
Aggregate cost of ordinary shares repurchased25,66157,613(55.5)
(1) As buybacks reduce the number of shares in issue that are entitled to a dividend
payment, the increase in the aggregate amount paid is lower in percentage terms than
the 5.6% increase in the total dividend per share paid to shareholders for the year.
Company performance
The Board is responsible for the Company’s investment strategy and
performance, whilst the management of the investment portfolio is
delegated to the Manager. An explanation of the performance of
the Company for the year ended 31 December 2017 is given in the
Chairman’s Statement and Fund Manager’s Review.
A comparison of the Company’s performance over the required nine
year period is set out on the graph below. This shows the total return
(assuming all dividends are reinvested) to ordinary shareholders
against the Company’s Benchmark.
Annual statement
On behalf of the Board and in accordance with Part 2 of Schedule 8
of the Large and Medium-sized Companies and Groups (Accounts
and Reports)(Amendment) regulations 2013, it is confirmed that the
above Remuneration Report summarises, as applicable, for the year
to 31 December 2017:
• The major decisions on Directors’ remuneration;
• Any substantial changes relating to Directors’ remuneration
made during the year; and
• The context in which the changes occurred and decisions have
been taken.
On behalf of the Board
Simon Fraser
Chairman
6 March 2018
As at 1 March 2018 the Fund Manager held 134,960 ordinary shares
in the Company.
Implementation Report
An ordinary resolution for the approval of the Directors’ Annual Report
on Remuneration will be put to shareholders at the forthcoming AGM.
At the Company’s last annual general meeting, shareholders approved
the Remuneration Report in respect of the year ended 31 December
2016. 94.1% of votes were cast in favour of the resolution.
Directors’ emoluments for the year
The Directors who served during the year received the following
amounts for services as non-executive Directors and can expect
to receive the fees indicated for 2018 as well as reimbursement for
expenses necessarily incurred.
Fees for services to the Company (audited)
Fees
£’000s
(audited)
Taxable
Benefits
(1)

£’000s
(audited)
Total
£’000s
(audited)
Anticipated
Fees
(2)

£’000s
Director2017201620172016201720162018
Simon Fraser
(3)
73.071.00.20.473.271.475.0
Sarah Arkle40.039.00.30.740.339.741.0
Sir Roger Bone
(4)
49.344.60.20.749.545.350.3
Francesca Ecsery
(5)
37.734.00.20.737.934.739.0
Jeffrey Hewitt46.044.01.31.847.345.848.0
Beatrice Hollond
(6)
12.6n/a0.0n/a12.6n/a41.0
Edward Knapp
(7)
40.015.80.10.440.116.241.0
Nicholas Moakes38.037.00.10.738.137.739.0
Stephen Burley
(8)
12.739.00.00.712.739.70.0
Christopher Keljik
(9)
n/a15.5n/a0.0n/a15.50.0
Total349.3339.92.46.1351.7346.0374.3
(1) Comprises amounts reimbursed for expenses incurred in carrying out business for
the Company, which have been grossed up to include PAYE and NI contributions.
Due to timing differences in the payment process, the 2017 benefits in kind figure
for Jeffrey Hewitt includes £482 of expenses and related tax incurred in 2016.
(2) Fees expected to be payable to the Directors during the course of the year
ending 31 December 2018. Taxable benefits are also anticipated but are not
currently quantifiable
(3) Highest paid Director
(4) Appointed Senior Independent Director on 26 April 2016
(5) Appointed to the Nomination Committee on 24 January 2017
(6) Appointed to the Board on 1 September 2017 and to the Audit Committee
on 30 October 2017
(7) Appointed 25 July 2016
(8) Retired 25 April 2017
(9) Retired 26 April 2016
The information in the table above for the years 2016 and 2017 has
been audited. The amounts paid by the Company to the Directors
were for services as non-executive Directors.
The table in the next column is shown to enable shareholders
to assess the relative importance of spend on remuneration. It
compares the remuneration, excluding taxable benefits, against the
shareholder distributions of dividends and share buybacks.
FTSE All-World Total Return
100
150
200
250
300
350
Foreign & Colonial Share Price Total Return
2008201220172009201020132014201520162011
Shareholder total return vs Benchmark total return
over nine years

Report and Accounts 2017 | 45
GOVERNANCE REPORT
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
Report of the Audit Committee
I am pleased to present to you the Report of the Audit Committee for the year
ended 31 December 2017. The Report and Accounts have been reviewed
particularly in respect of the new requirements relating to the Strategic Report.
The Committee has also reviewed the Manager’s preparations for new regulations
including MiFID II and related disclosures. Our focus on cyber-security measures
has been maintained.
Role of the Committee
The primary responsibilities of the Audit Committee are to ensure the
integrity of the financial reporting and statements of the Company,
and to oversee: the preparation and audit of the annual accounts;
preparation of the half yearly accounts and the internal control and risk
management processes. The Committee met four times during the
year with F&C’s Head of Investment Trusts, Head of Trust Accounting,
Head of Business Risk and the Fund Manager in attendance. EY
have attended all meetings and have met in private session with
the Committee. The Board Chairman was invited to, and regularly
attended, Committee meetings.
Specifically, the Committee considered, monitored and reviewed the
following matters:
• The audited annual results statement and annual report and
accounts and the unaudited half-yearly report and accounts,
including advice to the Board as to whether the annual
report and accounts taken as a whole are fair, balanced and
understandable;
• The accounting policies of the Company;
• The Principal Risks faced by the Company and the effectiveness
of the Company’s internal control and risk management
environment, including consideration of the assumptions
underlying the Board’s Future Prospects statement on viability;
• The effectiveness of the external audit process and the current
independence and objectivity of EY;
• The appointment, remuneration and terms of engagement of the
auditor;
• The policy on the engagement of the external auditor to supply
non-audit services and approval of any such services;
• The need for the Company to have its own internal audit
function;
• The ISAE/AAF and SSAE16 reports or their equivalent from F&C,
the Custodian, Depositary, the Private Equity managers and the
sub-managers and a due diligence report from the Company’s
Share Registrars;
• The performance of the Company’s third party service providers
and administrators, other than F&C, and the fees charged in
respect of those services;
• Bank counterparty monitoring and F&C’s dealing efficiency and
associated costs;
• The Company’s trademarks and intellectual property rights; and
• The Committee’s Terms of Reference for approval by the Board.
Comprehensive papers relating to each of these matters were
prepared for discussion. These were debated by the Committee and
any recommendations were fully considered if there was a judgement
to be applied in arriving at conclusions. Recommendations were then
made to the Board as appropriate.
The Board retains ultimate responsibility for all aspects relating to
external financial statements and other significant published financial
information as is noted in the Statement of Directors’ Responsibilities
on page 49. On broader control policy issues, the Committee
has reviewed, and is satisfied with F&C’s Anti-Fraud, Bribery and
Corruption Strategy and Policy and with the “whistleblowing” policy
that has been put in place by F&C under which its staff may, in
confidence, raise concerns about possible improprieties in financial
reporting or other matters. The necessary arrangements are in place
for communication by F&C to this Committee where matters might
impact the Company with appropriate follow up action. In 2017 there
were no such concerns raised with the Committee. The Committee
has also considered and agreed the processes relating to new
regulations particularly MiFID II and the Criminal Finances Act 2017.
Report of the Audit Committee

46 | Foreign & Colonial Investment Trust PLC
Composition of the Committee
The Board recognises the requirement for the Committee as a whole
to have competence relevant to the sector in which the Company
operates and at least one member with recent and relevant
experience. The Committee comprises five independent non-
executive Directors. I, Jeffrey Hewitt, am Chairman of the Committee
and a Chartered Accountant and was for many years Group Finance
Director of Electrocomponents plc, as well as currently or having
recently been audit committee chairman of other listed companies.
The other members of the Committee have a combination of
financial, investment and business experience through the senior
posts held throughout their careers. Several have wide experience
of the investment trust sector including Beatrice Hollond who joined
the Committee during the year. Details of the members can be found
on pages 28 and 29 and the updated Committee’s terms of
reference can be found on the website at foreignandcolonial.com.
Management of risk
F&C’s Business Risk Department provides regular control report
updates to the Committee covering risk and compliance whilst any
significant issues of direct relevance to the Company are required to
be reported to the Committee and Board immediately.
A key risk “radar” summary is produced by F&C in consultation with
the Board to identify the risks to which the Company is exposed, the
controls in place and the actions being taken to mitigate them. The
Board has a robust process for considering the resulting risk matrix at
each of its meetings and dynamically reviews the significance of the
risks and the reasons for any changes. The process evolved during the
year to align with BMO’s rigorous risk profiling activity.
The Company’s Principal Risks are set out on page 16 with
additional information given in note 25on the Accounts. The
Committee noted the robustness of the Board’s review of Principal
Risks and participated as Board members themselves. The integration
of these risks into the analyses underpinning the “Ten Year Horizon”
Statement on viability on page 17 was fully considered and the
Committee concluded that the Board’s statement was soundly based.
The period of ten years was also agreed as remaining appropriate for
the reasons given in the statement, whilst recognising that the period
remains longer than that used by many other companies.
Internal controls
The Board has overall responsibility for the Company’s systems of
internal controls, for reviewing their effectiveness and ensuring that
risk management and control processes are embedded in the day-
to-day operations, which are managed by F&C. The Committee has
reviewed and reported to the Board on these controls, which aim
to ensure that the assets of the Company are safeguarded, proper
accounting records are maintained and the financial information used
within the business and for publication is reliable. Control of the risks
identified, covering financial, operational, compliance and overall
risk management, is exercised by the Committee through regular
reports provided by F&C. The reports cover investment performance,
performance attribution, compliance with agreed and regulatory
investment restrictions, financial analyses, revenue estimates,
performance of the third party administrators of the F&C savings plans
and on other relevant management issues.
The systems of internal controls are designed to manage rather
than eliminate risk of failure to achieve business objectives and
can only provide reasonable, but not absolute, assurance against
material misstatement, or loss or fraud. Further to the review by
the Committee, the Board has assessed the effectiveness of the
Company’s internal controls. The assessment included a review of the
F&C risk management infrastructure and the report on policies and
procedures in operation and tests for the year to 31 October 2017
(the “ISAE/AAF Report”) and subsequent confirmation from F&C
that there had been no material changes to the control environment
in the period to 1 March 2018. This had been prepared by F&C
for all its investment trust clients to the International Standard on
Assurance Engagement (ISAE) No. 3402 and to the standards of the
Institute of Chartered Accountants in England and Wales Technical
Release AAF (01/06). The ISAE/AAF Report from independent
reporting accountants KPMG sets out F&C’s control policies and
procedures with respect to the management of clients’ investments
and maintenance of their financial records. The effectiveness of
these controls is monitored by F&C’s Group Audit and Compliance
Committee, which receives regular reports from its Internal Audit
department. Procedures are also in place to capture and evaluate
any failings and weaknesses within F&C’s control environment and
those extending to any outsourced service providers to ensure that
action would be taken to remedy any significant issues. Any errors or
breaches relating to the Company are reported at each Committee
and Board meeting by F&C. No failings or weaknesses material to the
overall control environment and financial statements were identified
in the year. The Committee also reviewed the control reports of the
Custodian, the Depositary, T. Rowe Price and Barrow Hanley, Private
Equity managers and the Share Registrar’s due diligence report and
were satisfied that there were no material exceptions.
Through the reviews noted above and by direct enquiry of F&C and
other relevant parties, the Committee and the Board have satisfied
themselves that there were no material control failures or exceptions
affecting the Company’s operations during the year nor to the date of
this Report.
Based on the processes and controls in place within F&C, the
Committee has concluded and the Board has concurred that there is no
current need for the Company to have a separate internal audit function.
External audit process and significant issues considered by
the Committee
In carrying out its responsibilities, the Committee has considered the
planning arrangements, scope, materiality levels and conclusions of
the external audit for 2017. The table on page 47 describes the
significant judgements and issues considered by the Committee in
conjunction with EY in relation to the financial statements for the year
and how these issues were addressed. The Committee also included
in their review the areas of judgements, estimates and assumptions
referred to in note 2(c)(xii) on the Accounts and welcomes this
increase in transparency on such issues. Likewise, the Committee
reviewed the disclosure and description of Alternative Performance

Report and Accounts 2017 | 47
GOVERNANCE REPORT
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
that they had no reason not to issue an unqualified audit opinion in
respect of the Report and Accounts. The Committee established that
there were no material issues or findings arising which needed to be
brought to the attention of the Board.
The increased focus on the Strategic Report by investors and
regulators is welcomed by the Committee. The Committee has
carefully considered the disclosures made in the Report and
Accounts particularly in relation to the EU Non-Financial Reporting
Directive (EU/2014/95). It is aware that this area of Non-Financial
Reporting matters will evolve further in coming years.
The Committee also noted that an independent, objective and skilled
third party had read the Report and Accounts and commented
on fairness, balance and comprehension. The Committee
recommended to the Board that the Report and Accounts were in
their view, fair, balanced and understandable in accordance with
accounting standards, regulatory requirements and best practice.
The Independent Auditors’ Report which sets out the unqualified
audit opinion, the scope of the audit and the areas of focus, in
Measures provided on page 90 and is satisfied that the disclosure
is fair and relevant.
Procedures for investment valuation and recognition of income
were the main areas of audit focus and testing. For the long-held
Pantheon and HarbourVest unlisted Private Equity investments in
particular, the Committee questioned the fund-of-fund managers on
their processes in meetings during the year. The year-end valuation
is an estimate based on the September valuations extrapolated
to the year-end by adjusting for cash flows and any known events
(as described in notes 2(c)(ii) and 25(d) on the Accounts). The
Committee reviewed prior year experience on the validity of this
estimation process by comparing the estimated value with the actual
audited values (which become known in May/June of the following
year). The variances were not material. The process for valuing the
more recent direct private equity valuations was reviewed and agreed
by the Committee as being appropriate.
The Committee met in February 2018 to discuss the final draft of
the Report and Accounts, with representatives of EY and F&C in
attendance. EY submitted their Year-End Report and confirmed
Significant Judgements and Issues considered by the Committee in 2017
MatterAction
Investment Portfolio Valuation
The Company’s portfolio of
investments comprises highly liquid
securities quoted on recognised
stock exchanges, held directly or
through quoted open-ended funds,
together with illiquid Private Equity
funds of funds. The Private Equity
vehicles, which are subject to signed
agreements covering long-term
commitments and funding, hold a
diversity of unquoted investments
whose values are subjective
The Committee reviewed annual audited internal control reports from F&C, the sub-managers and
Private Equity managers. These reports indicated that the relevant systems and controls surrounding
daily pricing, cash and holdings reconciliations, security valuation and Private Equity funding had
operated satisfactorily. In addition, with regard to Private Equity vehicles, the Committee: discussed
controls directly with the managers; reviewed the managers estimated valuations in detail at six
monthly intervals; and performed a thorough review and comparison of each Private Equity fund’s 31
December 2016 or most recent audited value versus the managers estimated valuation adopted by
the Company in its own reporting. The review indicated that the Private Equity managers’ estimated
valuations could continue to be relied upon as being at fair value in accordance with the Company’s
accounting policy.
The process for valuing the more recent direct private equity valuations was reviewed and agreed by
the Committee.
Misappropriation of Assets
Misappropriation of the Company’s
investments or cash balances could
have a material impact on its net asset
value per share.
The Committee reviewed the annual audited internal control reports of F&C and the Custodian.
Neither of these reports indicated any failures of controls over the existence and safe custody of the
Company’s investments and cash balances. The Committee reviews regularly the list of banks which
the Manager and sub-managers are authorised to place cash and deposits with. The Company’s
Depositary reported quarterly on the safe custody of the Company’s investments and the operation
of controls over the movement of cash in settlement of investment transactions. Through these
reports the Committee is satisfied that the assets remained protected throughout the year.
Income Recognition
Incomplete controls over, or inaccurate
recognition of, income could result in
the Company misstating its revenue
receipts and associated tax, with
consequences for overall performance,
payment of dividends to shareholders,
and compliance with taxation rules.
The Committee’s review of F&C’s annual audited controls report indicated that there were
no control failures in the year. The Committee reviewed and approved at the interim and final
accounts reporting meetings, all dividend receipts deemed to be capital (special) in nature by
virtue of their payment out of investee company restructuring rather than ordinary business
operations. In addition, the Committee reviewed that all special dividends had been correctly
treated in accordance with the Company’s accounting policy.
Investment income was tested and reported on by F&C.

48 | Foreign & Colonial Investment Trust PLC
service likely to exceed £5,000 is agreed by the Committee prior to
the commencement of the services and are accompanied by terms
regarding liability, cost and responsibilities. EY have not provided or
charged for any non-audit services during the year.
VAT case
As previously reported, PwC had continued to act for the Company
on a contingent fee basis in respect of a long running case for the
reclaim of VAT. The Supreme Court judgment on this case was finally
issued in April 2017, in favour of HMRC and as such no fee became
payable to PwC. No further action by the Company is intended.
Regulatory compliance
The Committee confirms that the Company is in compliance with the
requirements of the Statutory Audit Services for Large Companies
Market Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee Responsibilities) Order 2014. This
order relates to the frequency and governance of tenders for the
appointment of the external auditor and the setting of the policy on
the provision of non-audit services.
Committee evaluation
The activities of the Committee were considered as part of the
Board appraisal process completed in accordance with standard
governance arrangements as noted on page 36. A full evaluation
was undertaken on the effectiveness, roles and responsibilities
of the Committee in accordance with the Financial Reporting
Council’s current guidance. The evaluation found that the Committee
functioned well, with the right balance of membership and skills.
Jeffrey Hewitt
Audit Committee Chairman
6 March 2018
compliance with applicable auditing standards, can be found on
pages 50 to 55.
Auditor, assessment, independence and appointment
The Committee reviews the reappointment of the auditor every year
and has been satisfied with the effectiveness of EY’s performance
on this, their second audit of the Company’s accounts. EY have
confirmed that they are independent of the Company and have
complied with relevant auditing standards. In evaluating EY, the
Committee has taken into consideration the standing skills and
experience of the firm and the audit team. From direct observation
and indirect enquiry of management, the Committee is satisfied
that EY will continue to provide effective independent challenge in
carrying out their responsibilities. The Committee also considered
the evaluation of EY’s audit performance through the Audit Quality
Review. Their audit fee amounted to £87,000, excluding VAT (2016:
£72,000) of which £10,000 was a supplementary fee in relation to
prior year audit work completed in February 2017.
The Committee considers the appointment of the external auditor
annually and the need for putting the audit out to tender for reasons
of quality or independence. As the Company is required to carry out
a tender every ten years, the next one will be conducted no later
than 2026.
Non-audit services
The Committee regards the continued independence of the external
auditors to be a matter of the highest priority. The Company’s policy
with regard to the provision of non-audit services by the external
auditor ensures that no engagement will be permitted if:
• the provision of the services would contravene any regulation or
ethical standard;
• the auditors are not considered to be expert providers of the
non-audit services;
• the provision of such services by the auditor creates a conflict of
interest for either the Board or the Manager; and
• the services are considered to be likely to inhibit the auditor’s
independence or objectivity as auditors.
In particular, the Committee has a policy that the accumulated costs
of all non-audit services sought from the auditors in any one year
should not exceed 30% of the likely audit fees for that year and
not exceed 70% cumulatively over three years and any individual

Report and Accounts 2017 | 49
GOVERNANCE REPORT
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Report and Accounts
in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements
for each financial year. Under that law the Directors have prepared
the financial statements in accordance with United Kingdom
Accounting Standards, comprising FRS 102 “The Financial Reporting
Standard applicable in the UK and Republic of 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 and of the profit or loss of
the Company for that period. In preparing these financial statements,
the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and accounting 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 respectively; 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 confirm that they have complied with the above
requirements in preparing the financial statements. Further details
can be found in notes 2 and 24 on the accounts.
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.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors Report,
Directors Remuneration Report and Statement of Corporate
Governance that comply with that law and those regulations.
The Report and Accounts is published on the
foreignandcolonial.com website, which is maintained by F&C. The
Directors are responsible for the maintenance and integrity of the
Company’s website. The work undertaken by the auditors does not
involve consideration of the maintenance and integrity of the website
and, accordingly, the auditors accept no responsibility for any
changes that have occurred to the financial statements since they
were initially presented on the website. Visitors to the website need
to be aware that legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
Each of the Directors listed on pages 28 and 29 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 of the Company;
• the Strategic Report 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.
• in the opinion of the Directors the annual report and
financial statements, taken as a whole, are fair, balanced
and understandable and provide the information necessary
for shareholders to assess the Company’s position and
performance, business model and strategy.
On behalf of the Board
Simon Fraser
Chairman
6 March 2018

50 | Foreign & Colonial Investment Trust PLC
Independent Auditors’ Report
Independent auditor’s report to
the members of Foreign & Colonial
Investment Trust PLC
Opinion
We have audited the financial statements of Foreign & Colonial
Investment Trust PLC (the Company) for the year ended 31 December
2017 which comprise the Income Statement, Statement of Changes in
Equity, Balance Sheet, Statement of Cash Flows and the related Notes
on the Accounts 1 to 26. The financial reporting framework that has
been applied in their preparation is applicable law and United Kingdom
Accounting Standards including FRS 102 ‘The Financial Reporting
Standard applicable in the UK and Republic of Ireland’ (United
Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
• Give a true and fair view of the Company’s affairs as at
31 December 2017 and of its profit for the year then ended.
• Have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice.
• Have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards
on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements Section of our
report below. We are independent of the Company in accordance
with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the FRC’s Ethical Standard
as applied to public interest entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Use of our report
This report is made solely to the company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company’s members as a body, for
our audit work, for this report, or for the opinions we have formed.
Conclusions relating to principal risks, going concern and
viability statement
We have nothing to report in respect of the following information in the
annual report, in relation to which the ISAs(UK) require us to report to
you whether we have anything material to add or draw attention to:
• The disclosures in the annual report set out on page 16 that
describe the principal risks and explain how they are being
managed or mitigated.
• The directors’ confirmation set out on page 16 in the annual
report that they have carried out a robust assessment of the
principal risks facing the entity, including those that would threaten
its business model, future performance, solvency or liquidity.
• The directors’ statement set out on page 16 in the financial
statements about whether they considered it appropriate to adopt
the going concern basis of accounting in preparing them, and their
identification of any material uncertainties to the entity’s ability to
continue to do so over a period of at least twelve months from the
date of approval of the financial statements.
• Whether the directors’ statement in relation to going concern
required under the Listing Rules in accordance with Listing Rule
9.8.6R(3) is materially inconsistent with our knowledge obtained
in the audit.
• The directors’ explanation set out on page 17 in the annual
report as to how they have assessed the prospects of the entity,
over what period they have done so and why they consider that
period to be appropriate, and their statement as to whether
they have a reasonable expectation that the entity will be able to
continue in operation and meet its liabilities as they fall due over
the period of their assessment, including any related disclosures
drawing attention to any necessary qualifications or assumptions.
Overview of our audit approach
Key audit matters
• Valuation of unquoted investments and resulting impact
on the Income Statement
• Incomplete or inaccurate recognition of investment income
• Valuation and existence of the quoted investment portfolio
Materiality
• Overall materiality of £36.7m which represents 1% of
net assets at 31 December 2017.
Key audit matters
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the financial statements of
the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) that we identified.
These matters included those which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit; and
directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements as a
whole, and in our opinion thereon, and we do not provide a separate
opinion on these matters.

Report and Accounts 2017 | 51
INDEPENDENT AUDITORS’ REPORT
STRATEGIC REPORT
GOVERNANCE REPORT
AUDITORS’ REPORT
FINANCIAL REPORT
NOTICE OF MEETING
OTHER INFORMATION
CHAIRMAN’S STATEMENT
OVERVIEW
The Key Audit Matters discussed below are consistent with those identified in the Independent Auditors Report for the year ended
31 December 2016.
RiskOur response to the risk
Key observations
communicated to the
Audit Committee
Valuation of unquoted investments
and resulting impact on the Income
Statement
The Company holds investments in Private
Equity (PE) through funds or partnerships
which are managed by HarbourVest
Partners LLC (HarbourVest), Pantheon
Ventures (UK) LLP (Pantheon) and F&C
Investment Business Limited (FCIB)
(together ‘the PE Managers’). For the year
ended 31 December 2017 the PE portfolio
totalled £226.7m (2016: £266.1m) which
represented 5.8% (2016: 7.7%) of the
Company’s total investment portfolio (See
Note 10).
The Net Asset Value (NAV) of the PE funds
is based on estimates and unaudited NAV
statements. The Investment Trust Accounting
team at FCIB apply various controls to the
valuation process which are subject to
oversight by the Board. Controls over the
valuation process include: the reconciliation
of cash movements to the NAV statements
received, reading internal control reports from
the PE Managers, reading audited financial
statements as well as the portfolio reports
for the underlying PE fund investments and
performing a reasonableness analysis of
variances between prior years reported and
audited NAVs.
We focus on the valuation of unquoted
investments because there is the risk
that inaccurate judgments made in the
assessment of fair value, could materially
misstate the value of the investment
portfolio in the Balance Sheet, the
unrealised gains or losses in the Income
Statement and the NAV per share.
For the unquoted investments, realised
profits are calculated as the difference
between distribution proceeds less return
of capital.
Specifically in relation to our procedures on
management override, we considered the
risk that FCIB or the Board may influence
the unquoted investment valuations in order
to meet market expectations of the overall
NAV of the Company.
We obtained an understanding of the Company’s and PE
Managers’ processes and controls for the valuation of the
unquoted investments by performing walkthrough procedures and
inspecting the PE Managers’ internal control reports.
We obtained an understanding of the governance structure and
protocols surrounding the valuation process from the Investment
Trust Accounting team at FCIB. This included the primary controls of
reconciling cash movements in monthly reported NAVs to underlying
notices of calls and distributions and bank statements, reading internal
control reports of the PE Managers and performing a reasonableness
analysis of variances between reported and audited NAVs.
We observed the oversight at Board level through reading minutes
and board packs from Audit Committee and Board meetings
throughout the year.
We held meetings with the PE Managers’ to discuss and challenge:
• The annual performance of the funds in which the Company held an
investment at 31 December 2017.
• The reasons for the variances noted between estimated and actual
NAVs for the year ended 31 December 2016.
• Whether, based on any recently available information there should be
any adjustments required to the estimated 31 December 2017 NAVs.
We compared the Company’s valuation methodology to the
requirements of United Kingdom Accounting Standards (United
Kingdom Generally Accepted Accounting Practice), including FRS
102 ‘The Financial Reporting Standard applicable in the UK and
Republic of Ireland’ (FRS 102).
We agreed the NAV of the PE funds per the Company to the
estimated 31 December 2017 NAV statements which we received
directly from the PE Managers.
As the 31 December 2017 NAVs received were ‘estimated’ NAVs
we considered the reasonableness of the fair value adjustments
made to the 30 September 2017 reported NAV by the PE
Managers, and challenged any unusual variances.
We recalculated the unrealised profits on the revaluation of
unquoted investments impacting the Income Statement.
For a sample of unquoted investments we confirmed the realised
gains or losses to the notices received from the relevant PE Manager.
We recalculated investments in foreign currencies using third party
exchange rates to gain assurance over the reasonableness of
currency rates used.
We agreed the total committed capital directly to the Limited
Partnership Agreements of the PE funds and the ‘drawn-down
capital’ to independent confirmations received from the PE Managers.
To test for the risk of management override we tested a sample of
manual journal entries posted in relation to unquoted investments
during the year to relevant support.
The results of
our procedures
identified no material
misstatement in the
valuation or existence
of the quoted
investment portfolio.
Based on the work
performed we have no
matters to report.

52 | Foreign & Colonial Investment Trust PLC
RiskOur response to the risk
Key observations
communicated to the
Audit Committee
Incomplete or inaccurate recognition of
investment income
Investment income is received primarily
in the form of dividends from UK
and overseas investments in quoted
companies, as well as distributions from
unquoted investments. For the year ended
31 December 2017 investment income
totalled £77.9m (2016: £70.4m). Special
dividends charged to income and capital
for the year ended 31 December 2017
totalled £3.8m (2016: £9.4m) (See notes 3
and 19).
Distributions from Private Equity funds
are recognised when the right to the
distribution is established.
There is a risk of incomplete or inaccurate
recognition of income through the failure
to recognise proper income entitlements
or apply appropriate accounting treatment
in particular relating to the categorisation
of special dividends and journal entries
applied to the income account.
Special dividends by their nature require
the exercise of judgment as to whether the
income receivable should be classified as
‘revenue’ or ‘capital’ in accordance with the
SORP and the subsequent implications for
Section 1158 compliance.
For special dividends the Company
determines whether amounts should
be credited to the revenue or capital
columns of the Income Statement
based on the underlying substance of
the transaction. The revenue column of
the Income Statement is the main driver
of the minimum dividend calculation.
There is therefore a risk that an incorrect
classification could potentially result in an
under distribution of income and put the
Company’s investment trust status at risk.
Specifically in relation to our procedures
on management override, we consider the
risk that inappropriate journal entries are
applied to the income account resulting in a
manipulation of the Company’s revenue to
support performance and dividend targets.
We obtained an understanding of FCIB’s processes and
controls for the recognition of investment income by performing
walkthrough procedures and reading their internal control reports.
We agreed all dividends declared for the ten highest dividend
paying securities during the financial year and additionally for a
representative sample of securities from the income received
report to bank statements and to an external pricing source to
verify occurrence and measurement.
We agreed a sample of accrued dividends at the period end to
post year end bank statements and an external pricing source for
occurrence and measurement.
We tested a sample of special dividends from the income received
report by agreeing these to an external source and testing their
recognition basis to ensure that they were appropriately allocated
between revenue and capital within the Income Statement.
We agreed a sample of the distributions received from the
unquoted investments ledger to the notices received from the PE
Managers and to the bank statements to gain assurance over the
occurrence, appropriate classification and measurement.
We tested for completeness of income by selecting a sample of
holdings from the portfolio to verify that any dividends that they
had declared during the period were correctly recorded in the
income received report.
For a sample of securities sold during the year we verified that
dividends declared after the sale date were not recognised as
revenue to test cut off.
Additionally we tested pre and post year-end bank statements for
evidence of income receipts in line with our testing threshold to
ensure that these were recorded in the correct period.
For the samples we tested we recalculated income received from
overseas investments to gain assurance over the measurement
and recognition of income in foreign currencies.
To test for the risk of management override we tested a sample
of manual journal entries posted to the income account and
corroborated their business purpose.
The results of
our procedures
identified no issues
with the accuracy
or completeness of
income receipts.
We concurred with the
accounting treatment
for special dividends
and also the basis
of recognition of
income from unquoted
investments.
Based on the work
performed, we have no
matters to report.