THE LINDSELL TRAIN
INVESTMENT TRUST PLC
Annual Report and Financial Statements
For the year ended 31 March 2024
Company Secretary and Registered Office
Frostrow Capital LLP
25 Southampton Buildings
London
WC2A 1AL
Tel: 020 3008 4910
www.frostrow.com
The Lindsell Train Investment Trust plc
Registered in England, No: 4119429
This report is printed on Revive 100% White Silk a totally recycled paper produced
using 100% recycled waste at a mill that has been awarded the ISO 14001
certificate for environmental management.
The pulp is bleached using a totally chlorine free (TCF) process.
This report has been produced using vegetable based inks.
Contents
Page
Company Summary 1
Strategic Report
Business Review 2
Investment Objective 3
Investment Policy 3
Company Performance 4
Financial Highlights for the Year 5
Five Year Historical Record 5
Principal Data 5
Chairman’s Statement 6
Portfolio Holdings 9
Analysis of Investment Portfolio 10
Manager’s Report 11
Performance and Prospects 14
Key Performance Indicators 14
Alternative Performance Measures 15
Principal Risks, Emerging Risks and Risk Management 16
Long-Term Viability Statement 20
Section 172 Disclosure 21
LTL's Approach to Responsible Ownership 26
Governance
Board of Directors 32
Report of the Directors 34
Corporate Governance Statement 39
Directors’ Remuneration Report 50
Directors’ Remuneration Policy 55
Statement of Directors’ Responsibilities 57
Report of the Audit Committee 59
Independent Auditor's Report 65
Financial Statements
Income Statement 72
Statement of Changes in Equity 73
Statement of Financial Position 74
Statement of Cash Flows 75
Notes to the Financial Statements 76
Appendices (unaudited)
Appendix 1 – Annual Review of Lindsell Train Limited 92
Appendix 2 – Share Capital 100
Appendix 3 – Agreements with Service Providers 101
Additional Shareholder Information (unaudited)
Notice of Annual General Meeting 102
Explanatory Notes to the Resolutions 107
Glossary of Terms and Alternative Performance Measures 108
Company Information 112
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Perivan.com
268118
1
Company Summary
The Company
The Lindsell Train Investment Trust plc (the “Company” or “LTIT”) is a listed investment company.
Its shares are quoted on the premium segment of the Official List and traded on the main market
of the London Stock Exchange. The Company is a member of the Association of Investment
Companies (“AIC”).
The Company is a UK Alternative Investment Fund (“AIF”) under the European Union Alternative
Investment Fund Managers’ Directive (“AIFMD”). The Board is the Small Registered UK Alternative
Investment Fund Manager (“AIFM”) of the Company.
Investment Objective
The objective of the Company is to maximise long-term total returns with a minimum objective
to maintain the real purchasing power of Sterling capital.
Investment Manager
Lindsell Train Limited (“LTL”) acts as discretionary Investment Manager (the “Manager”) of the
Company’s assets. However, the Board retains ultimate discretion over the investments in LTL and
in the LTL managed fund products. Decisions on these investments are based on advice and
information received from the Manager.
Further details concerning the Agreements with the Company’s service providers can be found in
Appendix 3, on page 101.
Performance and Benchmark
The performance and financial highlights are provided on pages 4 and 5.
The Company compares its performance and calculates its performance fee relative to its
benchmark, the MSCI World Index in Sterling.
Dividend
An unchanged final dividend of £51.50 per Ordinary Share (2023: a final dividend of £51.50 per
Ordinary Share) is proposed for the year ended 31 March 2024. If this dividend is approved by
shareholders at the Annual General Meeting, it will be paid on Friday, 13 September 2024 to
shareholders on the register at close of business on Friday, 9 August 2024 (ex-dividend Thursday,
8 August 2024).
Annual General Meeting
The notice of the Annual General Meeting, scheduled for Wednesday, 4 September 2024 at
2.30 p.m. at the Marlborough Suite, St Ermin’s Hotel, 2 Caxton Street, London, SW1H 0QW, is
provided on pages 102 to 106.
Capital Structure
The Company’s capital structure comprises 200,000 Ordinary Shares of 75 pence each. Details are
given in note 13 to the Financial Statements on page 84.
THIS DOCUMENT IS IMPORTANT AND, IF YOU ARE A HOLDER OF ORDINARY SHARES, REQUIRES YOUR IMMEDIATE
ATTENTION. If you are in any doubt as to what action to take, you should seek advice from your stockbroker, bank
manager, solicitor, accountant or other financial adviser authorised under the Financial Services and Markets Act
2000 (as amended). If you have sold or otherwise transferred all of your Ordinary Shares in the capital of the
Company you should send this document, together with any other accompanying documents, including the form
of proxy, at once to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale
or transfer, was effected, for onward transmission to the purchaser or transferee.
THE LINDSELL TRAIN INVESTMENT TRUST PLC
2
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Business Review
The Directors present their Strategic Report for the Company for the year ended 31 March 2024.
The Report contains: a review of the Company’s business model and strategy, an analysis of its
performance during the financial year and its future developments as well as details of the
principal risks and challenges it faces. Its purpose is to inform shareholders and help them to assess
how the Directors have performed their duty to promote the success of the Company.
Further information on how the Directors have discharged their duty under Section 172 of the
Companies Act 2006 can be found on pages 21 to 23.
The Strategic Report contains certain forward-looking statements. These statements are made by
the Directors in good faith based on the information available to them up to the date of this
Report and such statements should be treated with caution due to the inherent uncertainties,
including both economic and business risk factors, underlying any such forward-looking
information.
Business Model
The objective of the Company is to maximise long-term total returns with a minimum objective
to maintain the real purchasing power of Sterling capital.
The Company’s strategy is to create value for shareholders through achieving its investment objective.
As an externally managed investment company the Company has no executive directors,
employees or internal operations. The Company delegates its day-to-day management to
third-parties.
The Board is responsible for all aspects of the Company's affairs, including the setting of
parameters for and monitoring of the investment strategy as well as the review of investment
performance and policy. It also has responsibility for all strategic issues and corporate governance
matters.
Reviews of the financial year and commentary on the future outlook are presented in the
Chairman’s Statement on pages 6 to 8 and the Manager’s Report on pages 11 to 13.
The Company’s Investment Objective and Investment Policy are set out on page 3.
Strategic Report
3
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Investment Objective
The objective of the Company is to maximise long-term total returns with a minimum objective
to maintain the real purchasing power of Sterling capital.
Investment Policy
The Investment Policy of the Company is to invest
(i) in a wide range of financial assets including equities, unlisted equities, bonds, funds, cash
and other financial investments globally with no limitations on the markets and sectors in
which investment may be made, although there is likely to be a bias towards equities and
Sterling assets, consistent with a Sterling-dominated investment objective. The Directors
expect that the flexibility implicit in these powers will assist in the achievement of the
investment objective;
(ii) in LTL managed fund products, subject to Board approval, up to 25% of its gross assets;
and
(iii) in LTL and to retain a holding, currently 23.9%, in order to benefit from the expected long
term growth of the business of the Company’s Manager.
The Company does not envisage any changes to its objective, its investment policy or its
management for the foreseeable future. The current composition of the portfolio as at 31 March
2024, which may be changed at any time (excluding investments in LTL and LTL managed funds)
at the discretion of the Manager within the confines of the policy stated above, is shown on
pages 9 and 10.
Diversification
The Company expects to invest in a concentrated portfolio of securities with the number of equity
investments averaging fifteen companies. The Company will not make investments for the
purpose of exercising control or management and will not invest in the securities of, or lend to,
any one company (or other members of its group) more than 15% by value of its gross assets at
the time of investment. The Company will not invest more than 15% of gross assets in other
closed-ended investment funds.
Gearing
The Directors have discretion to permit borrowings up to 50% of the Net Asset Value. However,
the Directors have decided that it is in the Company’s best interests not to use gearing. This is in
part a reflection of the size and risk associated with the Company’s unlisted investment in LTL,
but also in response to the additional administrative burden required to adhere to the full scope
regime of the AIFMD.
Dividends
The Directors’ policy is to pay annual dividends consistent with retaining the maximum permitted
earnings in accordance with investment trust regulations, thereby building revenue reserves.
In a year when this policy would imply a reduction in the ordinary dividend the Directors may
choose to maintain the dividend by increasing the percentage of revenue paid out or by drawing
down on revenue reserves. Revenue reserves are currently more than twice the annual proposed
2024 ordinary dividend.
All dividends have been distributed from revenue or revenue reserves.
4
Company Performance
Share Price performance and Net Asset Value (“NAV”) compared with the Benchmark for the
year ended 31 March 2024 (based on total return performance with reinvested net dividend)
* Rebased to show the performance per £100 invested.
The closing share price is adjusted for the dividends of £51.50 per share which went ex-dividend on 10 August 2023.
Annualised Total Return of the Share Price, NAV and Benchmark
Note: The table is based on monthly raw data.
* The NAV and share price are adjusted for dividends and show annualised total returns.
** The Combined Benchmark is a combination of the Old Benchmark (the annual average redemption yield of the
longest dated UK government fixed rate bond, plus a premium of 0.5% subject to a minimum yield of 4%) until
31 March 2021 and the Current Benchmark (MSCI World index in Sterling) from 1 April 2021.
The Combined Benchmark does not include adjustments relating to the High Water Mark.
*** The Current Benchmark shows the performance of the MSCI World Index in Sterling. It was only adopted as the
Current Benchmark from 1 April 2021.
Source: Bloomberg and LTL.
Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24
Closing Share Price* MSCI World Index in Sterling*
NAV*
70
90
85
80
75
110
105
100
95
115
120
125
0%
2%
4%
6%
8%
10%
12%
-10%
-8%
-6%
-4%
-2%
14%
16%
18%
Since Inception
Closing Share Price*
20 Year 10 Year 5 Year
12.9%
14.1%
14.9%
11.5%
6.3%
16.1%
5.4%
10.2%
12.5%
7.1%
8.7%
12.8%
-8.2%
5.4%
7.1%
11.5%
NAV* Combined Benchmark** Current Benchmark***
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Strategic Report
5
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Financial Highlights for the Year
* The Net Asset Value and the share price at 31 March 2024 have been adjusted to include the Ordinary dividend
of £51.50 paid on 13 September 2023, with the associated ex-dividend date of 8 August 2023.
^ Alternative Performance Measure (“APM”). See Glossary of Terms and Alternative Performance Measures
beginning on page 108.
Source: Morningstar and Bloomberg.
Five Year Historical Record
Principal Data
31 March 2024 31 March 2023 % Change
Shareholders’ funds (£’000) 205,285 211,390 -2.9%
NAV per Ordinary Share £1,026.43 £1,056.95 -2.9%
Discount to NAV^ 22.0% 0.4%
Share price per Ordinary Share £801.00 £1,052.50 -23.9%
Recommended final dividend per Ordinary Share £51.50 £51.50 –
Recommended special dividend per Ordinary Share – – –
Total dividends recommended for the year £51.50 £51.50
Dividend yield^ 6.4% 4.9%
Ongoing Charges^ 0.8% 0.9%
Earnings/(loss) per Ordinary Share – basic £20.97 £(3.85)
Revenue £51.07 £61.06
Capital £(30.10) £(64.91)
NAV total return^
†
+2.1% -0.4%
Share price total return^
†
-19.8% -0.7%
Benchmark (MSCI World Index in Sterling)
†
+22.5% -1.0%
^ Alternative Performance Measure (see Glossary beginning on page 108).
† These are percentage change figures for the year to 31 March.
Please see Glossary of Terms beginning on page 108 for an explanation of terms used.
Performance Comparisons 2024 2023
Net Asset Value total return per Ordinary Share*^ +2.1% -0.4%
Share price total return per Ordinary Share*^ -19.8% -0.7%
MSCI World Index total return (Sterling) +22.5% -1.0%
UK RPI Inflation (all items) 4.3% 13.5%
Net revenue Dividends Dividends Net Share
available for on Ordinary on Ordinary Asset Value price per
Gross Ordinary Shares Shares per Ordinary Ordinary
income Shares Cost Rate Share Share
To 31 March £’000 £’000 £’000 (£) (£) (£)
2020 12,395 10,598 8,800 44.00 956.65 1,060.00
2021 13,782 12,002 10,000 50.00 1,185.58 1,420.00
2022 14,784 12,729 10,600 53.00 1,113.81 1,105.00
2023 14,135 12,211 10,300 51.50 1,056.95 1,052.50
2024 12,005 10,214 10,300 51.50 1,026.43 801.00
6
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Strategic Report
Chairman’s Statement
At 31 March 2024, the Company’s NAV per share was £1,026.43. It was down from £1,056.95 a year
earlier but when taking into account the payment of the annual dividend of £51.50 per share in
September 2023, the total NAV return was a positive 2.1%. On the other hand the Company’s
share price ended the financial year at £801.00, down materially from £1,052.50 on 31 March 2023.
Whilst the dividend offset some of this decline, the size of the fall resulted in a share price total
return of minus 19.8% over the year. This was the result of the share price discount to the NAV
per share widening from 0.4% at 31 March 2023 to 22.0% at 31 March 2024. The sharp widening
of the share price discount to NAV was attributable to a combination of factors. These include a
lower rate of annualised NAV total returns achieved since 31 March 2020 (6.4% per annum versus
14.4% per annum from 31 March 2001 to 2020), heightened competitive pressures within the fund
management industry, outflows from LTL managed funds and a general widening of discounts
within the investment trust sector.
The benchmark index proved a tough comparator to beat for the fourth successive year. Both the
NAV and share price performances compared unfavorably with the Company’s benchmark index,
the MSCI World Index in Sterling, which over the same period had a much better total return
of 22.5%.
During the year to 31 March 2024, of the Company’s quoted holdings, only RELX and Nintendo
performed better than the benchmark, achieving total returns of 33.6% and 41.1% in Sterling,
respectively. Even more significant than the disappointing return from the remaining quoted
portfolio holdings was the total return of minus 7.1% generated by the Company’s 23.9% unlisted
investment in LTL. With the investment representing 33.6% of NAV at 31 March 2024, it proved
to be the biggest detractor from the NAV’s performance over the year and its fall in value also
contributed to the Company’s widening share price discount to the NAV.
Lindsell Train Limited
For the third time in four calendar years LTL’s core strategies, Global, UK, Japan and North
America, underperformed their comparative benchmark indices. The market’s direction has
increasingly been dictated by a narrow range of technology companies. This has played into the
hands of passive strategies, which have continued to take market share from all active managers
including LTL. Whilst there is no knowing how long this phase can continue, we are reassured
that the key business fundamentals of LTL’s portfolios, such as the average underlying return on
equity of its companies, remains superior to the benchmark indices against which it is compared.
In time these fundamentals should win through, bringing a sustained improvement in absolute
and relative performance. Until that happens, it is understandable that, in such a competitive
industry, some clients are attracted to today’s better performing strategies.
These pressures on LTL’s business have resulted in clients withdrawing funds. All LTL’s pooled
funds, except for North America, its smallest, have shrunk in size and some segregated clients
have terminated mandates. FUM outflows over the year to 31 January 2024 amounted to £3.4bn
(2023: £2.9bn) with funds under management falling to £15.9bn. LTL now has 21 client
relationships (funds and segregated mandates) down from 22 at 31 January 2023. FUM has
however fallen more within LTL’s pooled funds that now make up 62% of FUM.
Whilst the fall in FUM has led to a decline in revenues, it is reassuring to see that the Company’s
salary and bonus cap has helped to ensure that overall costs have declined proportionately and
operating profit margins remain constant at above 65%. Over the year there have been some
important generational changes within the company. A new leadership team is evolving at LTL
with the appointment of James Bullock, Jessica Cameron and Joss Saunders as LTL directors. Nick
Train and Michael Lindsell remain at the heart of the business but there is no doubting the
7
THE LINDSELL TRAIN INVESTMENT TRUST PLC
direction of travel. The future lies with a new generation of leaders and their lieutenants.
Reflecting these changes, variable remuneration paid to Nick and Michael in the year to
31 January 2024 fell 66% and accounted for 16% of LTL’s total remuneration. Profit share and
one-off payments to these new directors and other key staff increased 103% to 40% of the overall
remuneration. Half of these payments (virtually all of them after accounting for tax) were
mandated to fund the purchase of LTL shares from Nick, Michael and the Company, helping to
accelerate the transfer of ownership to potential successors. From LTL’s current financial year at
least 17% of its net profits will be paid in this way to seven members of this upcoming generation.
The changes outlined above represent part of a long-term plan to ensure that the Company
remains true to the investment and business principles first enshrined by Nick and Michael. It is
important that clients who have committed their savings to LTL for multi-year periods know that
the approach they first accessed remains consistent even if the personnel change. Certainly the
Board, as a client and co-investor in LTL, is reassured by the changes made, the progress of
succession and the constancy of how LTL invests.
That constancy, together with all the nuances surrounding it, is outlined in Nick’s Manager Review
that follows. In it he describes an optimistic and encouraging outlook for the quoted assets which
the Company owns. It is self-evident that this optimism also extends to LTL as similar assets
underlie all its client portfolios.
The Valuation of Lindsell Train Limited
The valuation methodology was last amended at 31 March 2022, having taken professional advice,
and is unchanged since. It is based on a percentage of LTL’s FUM, with the percentage applied
adjusted to reflect the ongoing profitability of LTL. Using this methodology the Company’s holding
in LTL was valued at £69m as at 31 March 2024 (2023: £85m). The Board took further professional
advice in January 2024 which confirmed that the methodology adopted in 2022 remains valid.
As part of its regular valuation, the Board compares LTL’s value with other quoted fund
management companies. What stands out is LTL’s profitability that in almost all cases is higher
than its peers. Furthermore, LTL retains considerable financial flexibility and optionality with cash
resources of £108m in addition to the £7.6m invested in the LT North American Fund as at
31 January 2024.
The Company’s Dividend
An important consequence of the fall in LTL’s FUM and the contraction of its business is the
concomitant decline in LTL’s dividend paying capacity. This is a risk my predecessor consistently
warned about in past annual statements. In the year to 31 March 2024 LTL’s dividend accounted
for 80% of the Company’s revenues, down slightly from 84% a year earlier. Such a significant
dependence on LTL, much more than the 33.6% (2023: 40.3%) which it makes up of the Company’s
NAV, means that it has an overwhelming influence on the Company’s dividend paying potential.
In framing its dividend policy, the Company has always assumed that retaining as much net income
as allowable within the Company is preferable and more tax efficient for the Company’s
shareholders. This principle runs alongside the Board’s desire to see the Company’s dividends
grow as returns compound the increasing value of the underlying investments.
In the current year, owing to the decline in the Company’s net revenue after taxation, the Board
has decided to pay an unchanged ordinary dividend of £51.50 per share. Like last year, the Company
will omit paying a special dividend as LTL earned no performance fees in the year to 31 January
2024. In maintaining the Company’s dividend, it will pay out all of its retained earnings in the year
to 31 March 2024 and will utilise £86,000 or just 0.4% of revenue reserves earned in prior years.
8
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Strategic Report
To maintain or grow the Company’s dividend in the future is likely to require a combination of
factors, notably a material improvement in LTL’s relative performance, a stabilisation in LTL’s FUM
and consequent growth in its cash flow together with the continued compounding of the
Company’s investments. That will be asking a lot over the next year and the Board will need to
see evidence of this materialising before utilising more revenue reserves in order to maintain the
Company’s dividend in 2025.
Board Changes
During the year the Board was delighted to welcome David MacLellan who was appointed
Chairman of the Audit Committee in August 2023 following a formal recruitment process.
A resolution proposing his election together with resolutions for those Directors standing for
re-election will be put to Shareholders at the forthcoming Annual General Meeting.
Julian Cazalet resigned as the Chairman of Board in December 2023 as part of the normal
succession process.
I would like to take this opportunity to thank Julian for his considerable contribution to the Company
during his nine years as a director, of which eight were as the Chairman of the Board. He brought
an in-depth knowledge of the investment trust sector, together with extensive experience of wider
financial markets, wisdom, understanding and sound common sense to all his actions and decisions
whilst on the Board. We wish him well in the future.
The Annual General Meeting (“AGM”)
This year the AGM will be held at 2.30 p.m. on Wednesday, 4 September 2024, at the Marlborough
Suite, St Ermin's Hotel, 2 Caxton Street, London, SW1H 0QW. As well as the formal proceedings,
there will be an opportunity for shareholders to meet the Board and the Investment Manager
who will give an update on the Company’s strategy and its investments. Like last year voting will
be conducted via a poll and the Board encourages all shareholders to exercise their right to vote
and to register their votes online in advance. Registering your vote in advance will not restrict
shareholders from attending and voting at the meeting in person should they wish to do so. As
investors we demand high standards of corporate governance from the companies we own in the
Company’s portfolio and we urge all shareholders to follow suit and vote on the resolutions
proposed, as we the Directors intend to do ourselves.
Considerations for the Future
There is no doubt that the challenges which the Company and LTL face are considerable but they
are not intractable. Throughout this difficult period of performance LTL has kept true to its
investment disciplines. It owns a limited number of holdings in great businesses which rarely, if
ever change; this allows the underlying companies to do the job of compounding earnings and
value over time. It is a differentiated approach that stands out against the crowd and is one that
has generated above average return for LTL’s clients for significant periods of time in the past
and the Board believes will continue to do so in the future.
Roger Lambert
Chairman
11 June 2024
Chairman’s Statement continued
9
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Portfolio Holdings at 31 March 2024
(All ordinary shares unless otherwise stated)
% of Look through
Fair value net basis % of
Holding Security £’000 assets net assets
†
6,378 Lindsell Train Limited 69,002 33.6 33.6
235,000 London Stock Exchange 22,302 10.9 11.1
12,500,000 WS Lindsell Train North American 19,624 9.6 –
Equity Fund Acc*
410,000 Nintendo 17,574 8.6 8.6
425,000 Diageo plc 12,433 6.0 6.3
363,000 RELX 12,429 6.0 6.3
222,000 Unilever 8,825 4.3 4.5
149,980 Mondelez International 8,306 4.0 4.4
1,263,393 A.G. Barr 7,353 3.6 3.6
89,000 Heineken 5,688 2.8 2.8
96,800 PayPal 5,131 2.5 2.8
39,099 Laurent Perrier 4,011 1.9 1.9
420,000 Finsbury Growth & Income Trust* 3,612 1.8 –
117,191 Universal Music Group 2,792 1.4 1.4
Indirect Holdings – – 9.6
–––––––––––– –––––––––––– ––––––––––––
Total Investments 199,082 97.0 96.9
Cash & Other net current assets 6,203 3.0 3.1
–––––––––––– –––––––––––– ––––––––––––
Net Assets 205,285 100.00 100.00
–––––––––––– –––––––––––– ––––––––––––
–––––––––––– –––––––––––– ––––––––––––
† Look-through basis: Percentages held in each security are adjusted upwards by the amount of securities held by
LTL managed funds owned by the Company. A downward adjustment is applied to the fund‘s holdings to take
into account the underlying holdings of these funds. It provides shareholders with a measure of stock specific
risk by aggregating the direct holdings of the Company with the indirect holdings held within LTL managed
funds.
* LTL managed funds.
Leverage
^
We detail below the equity exposure of the Funds managed by LTL as at 31 March 2024:
Net Equity
Exposure
WS Lindsell Train North American Equity Fund Acc 98.7%
Finsbury Growth & Income Trust PLC 101.1%
^ See glossary beginning on page 108.
10
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Strategic Report
Analysis of Investment Portfolio at 31 March 2024
Breakdown by Location of Listing
(look-through basis)^
UK* 66.0%
USA 16.1%
Japan 8.6%
Europe excluding UK 6.2%
Rest of World 0%
Cash & Other net current assets 3.1%
––––––––––––
100.0%
––––––––––––
––––––––––––
Breakdown by Location of Underlying Company Revenues
(look-through basis)^
USA** 31.3%
Europe excluding UK** 25.1%
UK** 24.7%
Rest of World 12.5%
Japan 3.3%
Cash & Other net current assets 3.1%
––––––––––––
100.0%
––––––––––––
––––––––––––
Breakdown by Sector
(look-through basis)^
Financials 49.8%
Consumer Staples 25.4%
Communication Services 11.5%
Industrials 7.4%
Information Technology 2.3%
Consumer Discretionary 0.4%
Health Care 0.1%
Cash & Other net current assets 3.1%
––––––––––––
100.0%
––––––––––––
––––––––––––
^ Look-through basis: this adjusts the percentages held in each asset class, country or currency by the amount
held by LTL managed funds. It provides shareholders with a more accurate measure of country and currency
exposure by aggregating the direct holdings of the Company with the indirect holdings held by the LTL funds.
* LTL accounts for 33.6% and is not listed.
** LTL accounts for 14 percentage points of the Europe figures, 15 percentage points of the UK figures,
4 percentage points of the USA figures and 0 percentage point of the RoW figure.
11
THE LINDSELL TRAIN INVESTMENT TRUST PLC THE LINDSELL TRAIN INVESTMENT TRUST PLC
Manager’s Report
At the half year I gave a review of the strategic investment case for ten of these direct equity
holdings. Rather than repeat those reviews in this report, I instead give an update on developments
for each holding over the most recent six-month period, including an account of why we initiated
a new position in Universal Music Group. With one exception (Laurent-Perrier) each of the eleven
is also a holding in our Global and/or UK strategies. This means their performance is important not
just for your portfolio but, more broadly, for the rest of LTL.
Over the six months to 31 March 2024, two of the eleven were down, with the worst faller down
c.4%, two were effectively unchanged and the remainder up between c.5 and 30%. Overall, rather
encouraging.
The two fallers were Diageo (-3.6%) and Unilever (-2.1%).
Diageo unpleasantly surprised investors including us, in Q4 2023 with news that its Latin American
business (c.11% revenues) was suffering an unexpected and marked contraction. Six months later
the situation there seems to be stabilising. What has proven a longer-lasting drag on Diageo’s
share price is the slowing growth in its biggest geography, the United States. Here consumers
have felt the pinch from higher interest rates and, at the margin, traded down their spirits
consumption to more “value” brands. This has impinged on Diageo, given its strong growth in
the US since Covid-19 had been driven by its higher price and higher profit margin premium
brands. Nonetheless, it is important to note here that, at the global level, Diageo’s revenues were
c.$15 billion in 2020. This year, a “disappointing” year, we expect they should be over $20 billion.
In other words, Diageo has grown notably since 2020 and will continue to grow. Just not in a
straight line. We are also sure that this orientation of Diageo’s product portfolio towards premium
brands is beneficial for investors over anything but the short term and look to US consumer
confidence to rebuild as that economy grows.
Unilever’s price fall is, we think, a sign of investors’ doubts about the willingness or ability of its
board to take actions to unlock the value that most observers, including us, see in its global brands
and distribution networks. Notwithstanding the share price weakness, we are encouraged by the
air of urgency and competence being displayed by Unilever’s new CEO, CFO and Chairman (all
appointed in 2023) and hope that they can deploy the company’s strong balance sheet and cash
flows in a way that reignites growth and restores investor confidence, including improving the
current lowly rating of its shares.
The two effectively unchanged share prices were Laurent-Perrier and Mondelez.
Laurent-Perrier’s current year revenues are forecast to be barely up year-on-year, for similar
reasons to Diageo – in 2023/4 consumers are, at the margin, drinking less highest quality alcoholic
beverages. But also like Diageo, it is important to consider that Laurent-Perrier’s revenues this
year will be still c.25% higher than those of 2020. The trend towards global consumers drinking
lower volumes of alcohol, but instead drinking more premium, high quality products continues
and should be beneficial for the owners of iconic premium brands like Laurent-Perrier or
Johnnie Walker.
Mondelez has continued to meet or exceed most analysts’ expectations for business and earnings
growth (and our own expectation). Last year organic revenues were up over 14%, reported
adjusted earnings per share grew at 19% and the dividend was up 10%. More growth is forecast
for this year. Perhaps the current 20x earnings might be considered a fair valuation for Mondelez
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
Manager’s Report continued
Strategic Report
shares and this explains the dull recent share price. To us, however, the reliability of the brands
and the growing cash they generate argues for a higher valuation. We would not consider selling
an asset of this calibre below 30x!
The shares that made money for their owners in local currency terms over the last six months
were Heineken (4.8%), PayPal (14.6%), London Stock Exchange Group (“LSEG”) (15.3%), A.G. Barr
(18.5%), RELX (23.4%) and Nintendo (31.6%).
Confidence in Heineken’s earnings power is gradually recovering, as commodity prices subside,
but we expect there will need to be an acceleration in beer consumption across the company’s
emerging market footprint, particularly in its Asian strongholds, before the shares really rerate.
PayPal shares have recovered from recent lows, but are still ostensibly lowly valued at 12x
estimated forward earnings. It is reassuring to see the board responding to that low valuation by
retiring shares; buying back $5 billion last year and proposing to match that figure in 2024. Those
are sizable sums in the context of PayPal’s current c.$67 billion market capitalisation. For us to
add to our holding, however, we need to see more evidence of the success of the new products
PayPal is bringing to market – tools to streamline e-commerce transactions for vendors and
consumers. We continue to monitor PayPal closely.
LSEG’s shares have also recovered from their lows of 2022, up nearly 50% since then, but are still
a few per cent below the all-time high they hit in 2021, just before the completion of its merger
with Refinitiv. That merger has gone well and we hope LSEG’s shares can hit new highs,
particularly once the benefits of its recent joint venture with Microsoft become apparent, with
product launches due in the second half of 2024.
A.G. Barr’s shares have rallied after a period of torpor; they had gone sideways since 2019. The
rally reflects a number of factors. Most important, this well-run soft drinks manufacturer generates
steady operating margins and a Return on Capital in the mid-teens – 16% and 18% respectively at
the recent interim results. These returns allow the company to generate cash, on top of its existing
net cash and debt free balance sheet. That cash has been used to support existing brands, but also
to acquire new ones, which can benefit from the company’s manufacturing and distribution
capabilities and its marketing nous. The departing CEO, Roger White, has done an outstanding
job for shareholders. If his successor can build on this legacy of growing, profitable brands and a
pristine balance sheet, investors can hope the shares will build on their recent gains.
RELX continues to impress investors with the consistency not only of its growth, but its adherence
to a clearly articulated strategy. That strategy is making RELX data services ever more valuable to
the global scientific, legal and insurance industries. This is one of the biggest holdings we have at
LTL and we believe it can be a big driver of returns for both our Global and UK portfolios.
Nintendo’s share price reflects mingled excitement and impatience about the timing of the launch
of its next gaming console – probably to be released in early 2025. Sales of the current one, Switch,
have exceeded all expectations and its success has allowed Nintendo to sell more copies of its
first-party game software (which is where it earns the richest profits) than ever before. As with
Apple, there is always a degree of apprehension before the release of a next generation device
– can it possibly match or beat the success of its predecessor? All one can say are that the portents
are good. Nintendo shares have proven to be a good proxy for the multi-decade increase in
popularity of interactive entertainment. As each generation of gamers grows in size and with the
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
promise of technology enhancing the gaming experience even more, Nintendo’s centrality to the
industry looks ever more strategically valuable to us. A P/E of 18x for this franchise seems modest.
Universal Music Group’s (“UMG”) share price also rose over the last six months, up 12.7%, while
we continued to accumulate a holding. The paragraph that follows provides our summary
justification for making this investment. The shares have now moved back toward the upper end
of their post-IPO trading range, but that means all the potential alluded to below remains still
to come.
UMG stands out for its impressive oligopolistic position (which importantly is effectively global).
As the world’s leading record label, built through a generation of consolidation (MCA and Decca,
arguably UMG’s predecessors, were founded in 1924 and 1929 respectively), UMG controls roughly
a third of the planet’s recorded music (ahead of the other two ‘majors’ Sony on c.23% and Warner
on c.16%), curating, producing, and promoting artists. On top of this, as a publisher, UMG holds
nearly a quarter of all written songs (just behind Sony’s c.25%, and ahead of Warner’s 12%). Spun
out from Vivendi as an independent listed entity in 2021, backed by major strategic shareholders
such as Tencent and Bill Ackman/Pershing Square, the shares languished for three years. Despite
a torrent of good news (including enhanced distribution agreements) they still trade near their
2021 IPO price.
This perhaps reflects over-optimism at float. However, estimated FY23 sales and operating profit
were c.50% higher than in FY19, taking UMG’s adjusted forward P/E ratio to a mid-20s level. Music
is ingrained and integral to the daily life of swathes of humanity, with engagement levels rising
as new distribution channels widen access. Monetisation (though not consumption) has eluded
the industry at times in the past, but these issues appear well resolved by growing subscription
services, with new markets (such as video games or social media) also emerging. As core content
owners and market leaders UMG holds a uniquely strong hand. The importance of this dominance
is clear, given that globally the top 1% of artists represent 90% of music streams. If management
can embrace these tailwinds and execute on analyst expectations for low double-digit growth,
this should prove an attractive entry point.
In summary, we believe your portfolio (and by extension other LTL portfolios) comprise
a combination of companies remarkable for their strong consumer brands or unique intellectual
property. Such companies have generated attractive investment returns for patient owners over
many decades and we see no reason to expect coming ones to be any different.
Nick Train
Investment Manager
Director, Lindsell Train Limited
11 June 2024
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
Strategic Report
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Performance and Prospects
The Board continues to support fully the Manager's strategy and firmly believes that it will
continue to deliver strong investment returns over the long term.
This is supported by the Company's performance since inception (21 January 2001) with a net
asset value per share total return^ of 12.7% compared with a total return from the Company's
combined benchmark index of 7.1% both calculated on an annualised basis.
The Directors provide an explanation in the Viability Statement on pages 20 and 61 as to how
they have assessed the prospects of the Company, over what period they have done so and why
they consider that period to be appropriate.
Key Performance Indicators (“KPIs”)
The Board reviews the performance of the portfolio in detail and is presented with the views of
the Manager at each meeting. Information on the Company’s performance is provided in the
Chairman’s Statement (beginning on page 6) and the Manager's Report (beginning on page 11).
This performance is assessed against the following KPIs: Net Asset Value Total Return, Share Price
Total Return and Dividend per Ordinary Share. The KPIs are unchanged from the prior year.
Net Asset Value Total Return^ and Share Price Total Return^ are compared with the benchmark
and provide the key performance indicators for assessing the development and performance of
the Company.
31 March 2024 31 March 2023 % Change
NAV total return^
†
+2.1% -0.4%
Share price total return^
†
-19.8% -0.7%
Benchmark (MSCI World Index in Sterling)
†
+22.5% -1.0%
Recommended final dividend per Ordinary Share £51.50 £51.50 –
Recommended special dividend per Ordinary Share – – –
^ Alternative Performance Measure (see Glossary beginning on page 108).
† These are percentage change figures for the year to 31 March.
Please see Glossary of Terms beginning on page 108 for an explanation of terms used.
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THE LINDSELL TRAIN INVESTMENT TRUST PLC THE LINDSELL TRAIN INVESTMENT TRUST PLC
Alternative Performance Measures (“APMs”)
The Board believes that each of the APMs, which are typically used within the Investment Trust
Sector, provides additional useful information to shareholders in order to assess the Company’s
performance between reporting periods and against its peer group. The measures used for the
year under review have remained consistent with the prior year.
Discount/premium to NAV^
The Board regularly reviews the level of the discount/premium of the Company’s share price to
the net asset value per share and considers ways in which share price performance may be
enhanced, including the effectiveness of share buybacks, where appropriate. Any decision to
repurchase shares is at the discretion of the Board.
Dividend Yield^
The Directors regard the Company’s dividend yield to be a key indicator of performance. The
dividend yield measures the gross income receivable based on the payment of the historic
dividend per share expressed as a percentage of the Company’s current share price.
Ongoing Charges^
Ongoing charges represent the costs that shareholders can reasonably expect to pay from one year
to the next, under normal circumstances. The Board continues to be conscious of expenses and
works hard to maintain a sensible balance between high quality service and the cost of provision.
NAV Total Return^
The Directors regard the Company’s net asset value per share total return as being the overall
measure of value delivered to shareholders over the long term. The Board considers the principal
comparator to be the MSCI World Index Total Return (Sterling adjusted).
Share Price Total Return^
The Directors also regard the Company’s share price total return to be a key indicator of
performance. This reflects share price growth of the Company which the Board recognises is
important to investors.
^ Further information on each of the Alternative Performance Measures and the basis of their calculation can be
found in the Glossary beginning on page 108.
31 March 2024 31 March 2023
Discount to NAV 22.0% 0.4%
Dividend yield 6.4% 4.9%
Ongoing charges 0.8% 0.9%
NAV total return +2.1% -0.4%
Share price total return -19.8% -0.7%
THE LINDSELL TRAIN INVESTMENT TRUST PLC
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
Strategic Report
THE LINDSELL TRAIN INVESTMENT TRUST PLC THE LINDSELL TRAIN INVESTMENT TRUST PLC
Principal Risks, Emerging Risks and Risk Management
The Board is responsible for managing the risks faced by the Company. Through delegation to
the Audit Committee, the Board has established procedures to manage risk, to review the
Company’s internal control framework and to establish the level and nature of the principal risks
the Company is prepared to accept in order to achieve its long-term strategic objective. At least
once a year the Audit Committee carries out a robust assessment of the principal and emerging
risks. Further information is provided in the Audit Committee Report beginning on page 59. These
principal risks and the ways they are managed or mitigated are set out on the following pages.
The Board’s policy on risk management has not materially changed during the course of the
reporting period and up to the year end.
The Company's Approach to Risk Management
Change in inherent risk assessment over the last financial year: No change, Decreased, Increased and
New risk included during the year.
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*
Change Principal Risks and Uncertainties Key Mitigations
Corporate Strategy
The Board may have to reduce the Company’s
dividend.
80% of the Company’s income is represented
by dividends from LTL. If LTL’s funds under
management fall the Company’s dividend
paying potential could be negatively impacted.
The Board reviews at every Board meeting the
investment portfolio, income forecasts and
levels of available revenue reserves prepared by
the Company Secretary.
Sufficient dividends are paid to maintain
investment trust status.
The Company has retained revenue reserves,
which can be used to supplement dividend
payments in the event of a short-term
reduction in net revenue.
In the event of a sustained fall in LTL’s FUM and
its dividend paid to the Company, the Company’s
dividend would have to be adjusted downwards.
The Company’s share price may differ
materially from the NAV per share resulting in
the shares trading at either a premium or a
discount to NAV.
Regular consideration is given to the share price
premium or discount to NAV per share and the
Company has authority to buy back shares and
hold in treasury.
Investment Strategy and Activity
The departure of a key individual at the Manager
may affect the Company’s performance.
The Board keeps the investment management
arrangements under continual review. In turn,
the Manager reports on developments at LTL,
including succession and business continuity
plans. The Board meets with other members of
the wider team employed by the Manager.
Key-man insurance has been secured by the
Company to help mitigate this risk. The Board is
also encouraged by the continued development
of the investment management team at LTL
who are now taking on greater responsibility at
a more senior level.
The investment strategy adopted by the
Manager, the high degree of concentration of
the investment and other factors, may lead to a
long-term investment return that is materially
lower than the Company’s comparator
benchmark index, and a possible failure to
achieve the Company’s investment objective.
The Board regularly discusses with the Manager
the structure of the portfolio, including asset
allocation and portfolio concentration.
The Board reviews the performance of the
portfolio against the benchmark at every meeting.
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Change Principal Risks and Uncertainties Key Mitigations
Financial
Fraud (including unauthorised payments and
cyber fraud) occurs leading to a loss.
The Manager and the Company Secretary have
in place robust compliance and risk monitoring
programmes.
The Board receives monthly compliance reviews
and quarterly expenses analysis.
An annual statement is obtained by the Audit
Committee from all service providers giving
representations that there have been no
instances of fraud or bribery.
Operational
Adverse reputational impact of one or more of
the Company’s key service providers which, by
association, causes the Company reputational
damage.
The Board has appointed reputable service
providers who are well experienced in the
investment trust sector. Individual Directors are
well connected in the investment market and
investment company sector and thereby keep
themselves appraised of developments in the
sector. The Manager and the Company
Secretary provide regular news updates on all
matters affecting the Company.
The Board undertakes an annual review of the
level of service provision of the service
providers.
The investment in LTL becomes an even greater
proportion of the overall value of the
Company’s portfolio.
The Board holds quarterly discussions with the
Manager at each Board meeting. Consideration
is given during a strategy meeting to the
prospects of LTL and subsequent impact on the
Company.
The Board receives monthly compliance reports
from the Company Secretary which monitor
compliance with the investment restrictions.
The adverse impact of climate change on the
portfolio companies’ operational performance.
The Board receives quarterly ESG updates, which
include an update on any climate change related
engagement, from the Manager. The Board
monitors the Manager on ESG matters to
ascertain that the portfolio companies are acting
in accordance with the Manager’s ESG approach.
The Manager is a signatory to the UK
Stewardship Code and actively engages with
portfolio companies on ESG matters including
climate change.
LTL developed its own methodology to assess
the carbon impact of the portfolio. LTL became
a signatory of Net Zero Asset Managers
(“NZAM”) in December 2021. This reflects LTL's
enhanced efforts as a firm to support the goal
of net zero greenhouse gas emissions by 2050.
Details of the Company’s and Manager’s ESG
policies together with the weighted average
carbon intensity of the portfolio companies are
set out on pages 26 to 31.
THE LINDSELL TRAIN INVESTMENT TRUST PLC
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Strategic Report
Principal Risks, Emerging Risks and Risk Management continued
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Change Principal Risks and Uncertainties Key Mitigations
Accounting, Legal and Regulatory
The Company and/or the Directors fail(s) to
comply with its legal requirements in relation
to FCA dealing rules/handbook procedures, the
Listing Rules, the Companies Act 2006, relevant
accounting standards, the Bribery Act 2010, the
Criminal Finances Act 2017, the Association of
Investment Companies (“AIC”) Statement of
Recommended Practice (“SORP”), GDPR, tax
regulations or any other applicable regulations.
The Board monitors regulatory changes with
the assistance of the Company Secretary, the
Manager and external professional advisers to
ensure compliance with applicable laws and
regulations.
The Board reviews compliance reports and
internal control reports provided by its service
providers, as well as the Company’s Financial
Statements and revenue forecasts.
The Company Secretary presents a quarterly
report on changes in the regulatory
environment and how and when changes are
to be addressed.
As a member of the AIC, the Board receives
regular technical updates which highlight
forthcoming compliance obligations and
regulatory issues.
The regulatory environment in which the
Company operates changes, affecting the
Company's business model.
The Board monitors the regulatory environment
with the assistance of its Company Secretary,
Manager and external professional advisers to
ensure that the Board is aware of any likely
changes in the regulatory environment and will
be able to adapt as required.
The Company is exposed to market price risk. The Directors acknowledge that market risk is
inherent in the investment process as the
Manager maintains a concentrated portfolio of
securities. The Board has imposed guidelines
within its investment policy to limit exposure to
individual holdings.
The Company Secretary reports to the Board
with respect to compliance with investment
guidelines on a monthly basis. The Manager
provides the Board with regular updates on
market movements. No investment is made in
derivative instruments and no currency hedging
is undertaken.
Further information on financial instruments
and risk can be found in note 17 to the
Financial Statements beginning on page 86.
The Company is exposed to credit risk. The Manager is responsible for undertaking
reviews of the creditworthiness of the
counterparties that it uses.
All business with respect to portfolio activity is
conducted through selected brokers on a
delivery versus payment basis thereby
minimising exposure to broking counterparties.
Further information on financial instruments
and risk can be found in note 17 to the
Financial Statements beginning on page 86.
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THE LINDSELL TRAIN INVESTMENT TRUST PLC THE LINDSELL TRAIN INVESTMENT TRUST PLC
Emerging Risks
The Audit Committee regularly reviews the risk register. Mitigations, the scoring of each risk and
any emerging risks are discussed in detail as part of this process to ensure that emerging as well
as known risks are identified and, so far as practicable mitigated.
The experience and knowledge of the Directors is useful in these discussions, as are update papers
and advice received from the Board's key service providers such as the Manager and the Company
Secretary. In addition, the Company is a member of the AIC, which provides regular technical
updates as well as drawing members' attention to forthcoming industry and/or regulatory issues
and advising on compliance obligations.
Current identified emerging risks are as follows:
Change Principal Risks and Uncertainties Key Mitigations
The Company’s valuation of its investment in
LTL is materially misstated.
The Board approves the monthly valuation of
the Company's Investment.
An audit of LTL’s valuation is conducted
annually by a leading independent external
audit firm.
J.P. Morgan Cazenove Ltd undertook an
independent review of the Company’s valuation
methodology applied to its unlisted investment
in LTL during 2022. The appropriateness of the
valuation methodology was reviewed by the
Board and J.P. Morgan Cazenove Ltd during the
year.
The Manager and the Company Secretary
report to the Board at every meeting. An
internal controls report is produced by the
Company Secretary on an annual basis covering
controls over valuation and release of weekly
net asset value per share.
Emerging Risks and Uncertainties Key Mitigations
Emerging Risks
Geopolitical and macroeconomic conflicts, whether
they be political, economic or military, introduce new
risks and exacerbate existing risks. such as:
disruptions to supply chains, operations and markets
for investee companies both as a direct result of
conflict and as result of economic sanctions;
prolonged inflation and elevated interest rates,
slowing global economic growth and the fear or
presence of recession;
increased market volatility and reduced investor risk
appetites; and
increased threat of state sponsored cyberattacks.
While presenting investment opportunities, the rapid
development of new technologies, such as artificial
intelligence, may disrupt the markets and operating
models of the companies in which the Company
invests, damaging their potential investment returns.
The Manager monitors portfolio construction,
performance and liquidity to assess and manage the
impact of increased market volatility on the listed
portfolio and on the Company’s holding in LTL.
The Manager monitors the impact of the continued
war in Ukraine and the effect of sanctions against
Russia; the conflict in the Middle East and tensions
between China and the West.
The Company’s investment approach means that it
owns companies with strong brand equity and pricing
power making them more able to pass on cost
increases and mitigate the effects of inflation on
portfolio holdings.
The Board reviews regular internal control reports
from its key service providers that include cyber
defences and other mitigants against unauthorised
network access.
In view of the number of extraordinary and
unpredictable events in recent years, the Board
considered that the likelihood of the emerging risks
identified due to geopolitical and macroeconomic
conflicts had increased.
THE LINDSELL TRAIN INVESTMENT TRUST PLC
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
Strategic Report
THE LINDSELL TRAIN INVESTMENT TRUST PLC
The Audit Committee will continue to review newly emerging risks that arise from time to time
to ensure that the implications for the Company are properly assessed and mitigating controls
introduced where necessary.
Future Developments
The Board’s primary focus is on LTL’s investment approach and performance both as the Company’s
Manager and as an investment. The subject is thoroughly discussed at every Board meeting.
In addition, the Company Secretary updates the Board on investor feedback, as well as wider
investment company issues.
An outline of performance, investment activity and strategy, and market background during the
year, as well as the outlook, is provided in the Chairman's Statement beginning on page 6 and
the Manager's Report beginning on page 11.
It is expected that the Company’s strategy will remain unchanged in the coming year.
Long-Term Viability Statement
The Directors have carefully assessed the Company’s financial position and prospects as well as the
principal risks facing the Company and have formed a reasonable expectation that the Company will
be able to continue in operation and meet its liabilities as they fall due over the next five
financial years.
To make this assessment and in reaching this conclusion, the Audit Committee has considered the
Company’s financial position and its ability to liquidate its portfolio and meet its liabilities as they
fall due and notes the following:
• The Company has a liquid investment portfolio of UK and internationally listed securities and
funds, and has some short-term cash on deposit. These liquid assets represent 66.4% of net
assets. The other 33.6% is the unlisted investment in LTL, which is not readily realisable.
• Based on historic analysis, excluding the holding in the LTL fund, 95.9% of the current portfolio
could be liquidated within 30 business days with 92.4% in five business days. There is no
expectation that the nature of the investments held within the portfolio will be materially
different in the future.
• With an ongoing charges ratio of 0.83%, the expenses of the Company are predictable and
modest in comparison with its assets and there are no capital commitments currently foreseen
which would alter that position.
• Revenue expenses of the Company are covered more than five times by investment income.
• The closed-ended nature of the Company means that, unlike an open-ended fund, it does not
need to realise investments when shareholders wish to sell their shares.
• The founder directors of LTL, in which the Company holds 23.9%, have given their verbal
assurance that they remain committed to LTL for at least seven years on a rolling basis.
• The Company has decided not to use gearing.
• The Company has no employees, only its non-executive Directors. Consequently it does not
have any potential redundancy or other employment related liabilities or responsibilities.
The Directors, as well as considering the potential impact of the principal risks and various severe
but plausible downside scenarios, have also made the following assumptions in considering the
Company’s longer-term viability:
• The Board and the Investment Manager will continue to adopt a long-term view when making
investments, and anticipated holding periods will be at least five years.
• Regulation will not increase to a level that makes running the Company uneconomical.
The Board’s long-term view of viability will, of course, be updated each year in the Company’s
Annual Report.
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THE LINDSELL TRAIN INVESTMENT TRUST PLC THE LINDSELL TRAIN INVESTMENT TRUST PLC THE LINDSELL TRAIN INVESTMENT TRUST PLC THE LINDSELL TRAIN INVESTMENT TRUST PLC
Stakeholder Group The benefits of engagement How the Board, the Manager and the Company
with the Company's stakeholders Secretary have engaged with the Company's
stakeholders
Investors The Board recognises the importance
of communication with shareholders.
Clear communication of the Company’s
strategy and the performance against
the Company’s objective can help
maintain demand for the Company’s
shares.
The Board and the Manager receive shareholder
feedback directly from shareholders or from the
appointed broker.
An analysis of the Company’s shareholder register
is provided to the Directors at each Board meeting.
Shareholders have access to the Board, directly
and via the Company Secretary, throughout the
year. These communications help the Board make
informed decisions when considering how to
promote the success of the Company for the
benefit of shareholders over the long term.
Key mechanisms of engagement include:
• The Annual General Meeting.
• The Board will explain in its announcement of
the results of the Annual General Meeting the
actions it intends to take to consult
shareholders in order to understand the
reasons behind any significant votes against.
Following the consultation, an update will be
published no later than six months after the
Annual General Meeting and the Annual
Report will detail the impact the shareholder
feedback has had on any decisions the Board
has taken and any actions or resolutions
proposed.
• The Company’s website which hosts monthly
reports and Annual and Half-year Reports.
• One-on-one investor meetings as required.
• Group meetings with professional investors as
required.
Stakeholder Interests and Board Decision Making
(Section 172 of the Companies Act 2006)
The following disclosure, which is required by the Companies Act 2006 and the AIC Code, describes
how the Directors have had regard to the views of the Company's stakeholders in their decision
making.
THE LINDSELL TRAIN INVESTMENT TRUST PLC
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
Strategic Report
Stakeholder Group The benefits of engagement How the Board, the Manager and the Company
with the Company's stakeholders Secretary have engaged with the Company's
stakeholders
Manager
Service Providers
Engagement with the Company’s
Manager is necessary to evaluate its
performance against the Company’s
stated strategy and to understand any
risks or opportunities this may
present.
The Board monitors the Manager’s
approach to environmental, social
and governance (“ESG”) issues.
Engagement also helps ensure that
investment management costs are
closely monitored and remain
competitive.
The Chairman’s Statement beginning
on page 6 and Appendix 3 beginning
on page 101 describe the key decisions
taken during the year relating to LTL.
As an externally managed investment
company, the Company has no
employees, customers, operations or
premises. Therefore, the Company's
key stakeholders (other than its
shareholders) are considered to be its
service providers.
The Company contracts with third-
parties for other services including:
Company Secretary and Administrator,
Registrar and Custodian. The Company
ensures that the third-parties to whom
the services have been outsourced
complete their roles in line with their
service level agreements and are able
to continue to provide these services,
thereby supporting the Company in its
success and ensuring compliance with
its obligations.
The Board meets regularly with the Company’s
Manager throughout the year both formally at
the quarterly Board meetings and informally as
needed. The Board and Manager communicate
regularly outside these meetings to ensure a
collegiate approach.
Furthermore, Michael Lindsell is a Director of both
the Company and of the Manager. The aim is to
maintain a strong relationship between the Board
and Manager when considering the interests of
the Company’s stakeholders, whilst upholding the
Company’s values.
The Manager’s attendance at each Board meeting
also provides the opportunity for the Manager
and Board to further reinforce their mutual
understanding of what is expected from both
parties.
The Manager’s performance is evaluated
informally on a regular basis, with a formal review
carried out on an annual basis by the
Management Engagement Committee. The
Investment Management Agreement is reviewed
as part of this process.
The Audit Committee review the Manager's
internal controls and governance policies on an
annual basis.
The Board and the Company Secretary engage
regularly with other service providers both in one-
to-one meetings and via regular written
reporting. This regular interaction provides an
environment where topics, issues and business
development needs can be dealt with efficiently
and collegiately.
The Board maintains regular contact with the
Company’s key service providers as well as carrying
out a review of the service providers’ business
continuity plans and additional cyber security
provisions.
The key service providers’ performance is
evaluated by the Management Engagement
Committee on an annual basis, or more often if
appropriate. The terms and conditions underlying
the relationship between the service providers are
reviewed as part of this process. This approach is
taken to enhance service levels and strengthen
relationships between the Company and its
providers to ensure the interests of the Company’s
stakeholders are best served by maintaining a high
level of service whilst keeping costs proportionate.
THE LINDSELL TRAIN INVESTMENT TRUST PLC
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Stakeholder Group The benefits of engagement How the Board, the Manager and the Company
with the Company's stakeholders Secretary have engaged with the Company's
stakeholders
Portfolio
companies
Regulators
The Manager invests in a
concentrated portfolio of durable
business franchises with the intention
of holding these positions for a
considerable time.
The Manager engages with the
management of these companies on
a periodic basis and reports its
impressions on the prospects of the
companies to the Board.
Gaining a deeper understanding of the
portfolio companies and their
strategies as well as incorporating
consideration of ESG factors into the
investment process assists in
understanding and mitigating risks of
investments as well as identifying
future potential opportunities.
The Board ensures compliance with
rules and regulations as relevant to
the Company.
The Board encourages the Company’s Manager to
engage with companies and in doing so expects
ESG issues to be a key consideration.
The Board receives an update on LTL's
engagement activities within a dedicated
quarterly ESG report together with quarterly
updates concerning the prospects of the portfolio
companies.
Details of LTL's approach to responsible ownership
can be found on pages 26 to 31.
The Company Secretary reports to the Board on a
monthly basis and at each Board meeting.
KEY AREAS OF ENGAGEMENT MAIN DECISIONS AND ACTIONS TAKEN
• Ongoing dialogue with shareholders concerning
the strategy of the Company, performance and
the portfolio.
• The impact of market volatility caused by certain
geopolitical events in the portfolio.
• Share price performance and the Company's and
wider investment trust sector discounts.
• The Manager meets with shareholders as required
and at the Annual General Meeting.
• Shareholders are provided with performance
updates via the Company's website as well as the
usual financial reports and monthly manager reports.
• The Board continued to monitor share price
movements closely and concluded that it was not
in shareholders’ best interests to utilise the share
buy-back facility.
• Board Composition. • The Board has in place a refreshment programme
which is reviewed annually by the Nomination
Committee. During the year Julian Cazalet retired
as the Chairman of the Board and Management
Engagement Committee and was replaced by
Roger Lambert.
• Cornforth Consulting was appointed by the Board
in April 2023 to assist with the appointment of a
new Audit Committee Chairman. This resulted in
the appointment of David MacLellan, who joined
the Board on 30 August 2023 and will offer
himself for election by shareholders at the 2024
Annual General Meeting.
• To assist with succession planning and to ensure
Board continuity Vivien Gould will seek re-election
at the forthcoming Annual General Meeting and
will retire at the conclusion of Annual General
Meeting due to be held in September 2025.
In accordance with the Board's Succession Plan
Vivien was previously scheduled to retire at the
conclusion of the 2024 Annual General Meeting.
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
Strategic Report
LTIT’s Responsible Investment Policy
The Board believes that consideration of ESG factors is important to shareholders and other
stakeholders, and has the potential to protect and enhance investment returns.
In its Responsible Engagement & Investment Policy, the Manager states that its evaluation of ESG
factors is an inherent part of the investment process and best practice in this area is encouraged
by the Board. These factors include, but are not limited to: “corporate strategy, operating
performance, competitive positioning, governance, environmental factors (including climate
change), social factors, remuneration, reputation and litigation risks, deployment of capital,
regulation and any other risks or issues facing the business”.
The Board has delegated authority to the Manager to vote the shares owned by the Company
that are held on its behalf by its Custodian. The Board has instructed that the Manager submits
votes for such shares wherever possible and practicable. The Manager is required to refer to the
Board on any matters of a contentious nature.
The Manager’s Responsible Investment and Engagement Policy has been reviewed and endorsed
by the Board. The Manager is a signatory to the United Nations Principles for Responsible
Investment and a signatory of the 2021 UK Stewardship Code.
LTL became a signatory of Net Zero Asset Managers Initiative in December 2021.
Modern Slavery Act
The Company does not provide goods or services in the normal course of business, and as a
financial investment vehicle, does not have customers. Therefore, the Directors do not consider
that the Company is required to make a statement under the Modern Slavery Act 2015 in relation
to slavery or human trafficking. The Company’s suppliers are typically professional advisers and
the Company’s supply chains are considered to be low risk in this regard.
UK Sanctions
The Board has made due diligence enquiries of the service providers that process the Company’s
shareholder data to ensure the Company’s compliance with the UK sanctions regime. The relevant
service providers have confirmed that they check the Company’s shareholder data against the UK
sanctions list on a daily basis. At the date of this report, no sanctioned individuals had been
identified on the Company’s shareholder register. The Board notes that stockbrokers and
execution-only platforms also carry out their own due diligence.
Common Reporting Standard ("CRS")
CRS is a global standard for the automatic exchange of information commissioned by the
Organisation for Economic Cooperation and Development and incorporated into UK law by the
International Tax Compliance Regulations 2015. CRS requires the Company to provide certain
additional details to HMRC in relation to certain shareholders. The reporting obligation began in
2016 and is an annual requirement.
The Registrar, Link Group, has been engaged to collate such information and file the reports with
HMRC on behalf of the Company.
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Taskforce for Climate Related Financial Disclosures (“TCFD”)
The Company notes the TCFD recommendations on climate related financial disclosures. The
Company is an investment company and, as such, it is exempt from the Listing Rules requirement
to report against the TCFD framework.
Climate reporting, at both the LTL and LTIT level, will be available from 30 June 2024 via the LTL
website.
Global Greenhouse Gas Emissions
The Company is an investment trust, with neither employees nor premises, nor has it any financial
or operational control of the assets which it owns. It has no greenhouse gas emissions to report
from its operations, nor does it have responsibility for any other emissions producing sources
under the Companies Act 2006 (Strategic Reports and Directors’ Reports) Regulations 2013 or the
Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report)
Regulations 2018, including those within the Company’s underlying investment portfolio.
The Company consumed less than 40,000 kWh of energy during the year in respect of which the
Directors’ Report is prepared and therefore is exempt from the disclosures required under the
Streamlined Energy and Carbon Reporting criteria.
The Board is aware of the continued emphasis on ESG matters in recent years. The Manager
engages with all the companies in the portfolio to understand their ESG approach and has
developed its own methodology to assess the carbon impact of the portfolio.
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
Strategic Report
LTL's Approach to Responsible Ownership
ESG integration
Seeking Sustainability
As a long-term investor, LTL aims to identify companies that can generate long-term sustainable
high returns on capital. LTL has historically found that such companies tend to exhibit
characteristics associated with good corporate governance and responsible business practices.
Indeed, LTL believes that companies which observe such standards, and that are serious in their
intention of addressing environmental and social factors, will not only become more durable but
will likely prove to be superior investments over time.
To that end LTL’s initial analysis and ongoing company engagement strategy seeks to incorporate
all sustainability factors that they believe will affect the company’s ability to deliver long-term
value to shareholders. Such factors may include but are not limited to; environmental (including
climate change), social and employee matters (including turnover and culture) and governance
factors (including remuneration and capital allocation), cyber resilience, responsible data
utilisation, respect for human rights, anti-corruption and anti-bribery, and any other risks or issues
facing the business and its reputation. This work is catalogued in a proprietary database of risk
factors in order to centralise and codify the team’s views, as well as to prioritize LTL’s ongoing
research and engagement work and is cross-referenced with the SASB Materiality Map ©.
If, as a result of this assessment, LTL believes that an ESG factor is likely to materially impact a
company’s long-term business prospects (either positively or negatively) then this will be reflected
in the long-term growth rate that is applied in the investment team’s valuation of that company,
which alongside the team’s more qualitative research will influence any final portfolio decisions
(for example, whether LTL starts a new position or sell out of an existing holding).
Positive/Negative Screening
As a product of LTL’s investment philosophy, it does not invest in the following industries:
– capital intensive industries (energy, commodities or mining) or any companies involved in the
extraction and production of coal, oil or natural gas; and
– industries that LTL judges to be sufficiently detrimental to society that they may be exposed
to burdensome regulation or litigation that could impinge on financial returns (e.g. tobacco,
gambling or arms manufacturers).
Similarly, LTL’s investment approach has steered Nick Train and the investment team to invest in a
number of companies that play an important positive social or environmental role, for example
through providing access to educational information (e.g. RELX) or encouraging environmental
progress and developing best practice (e.g., Diageo and Mondelez). LTL believes that such positive
benefits for society should be consistent with its aim to generate competitive long-term returns,
thus helping it meet its clients’ investment objectives.
Climate Change
The risks associated with climate change represent the great issue of our era and the transition
to a low-carbon economy will affect all businesses, irrespective of their size, sector or geographic
location. Therefore, no company’s revenues are immune and the assessment of such risks must
be considered within any effective investment approach, particularly one like LTL’s that seeks to
protect its clients’ capital for decades to come.
As a relatively small company with a single office location and fewer than 30 employees, LTL’s
climate exposure comes predominantly from the investment portfolios that it manages on behalf
of its clients. LTL recognises the systemic risk posed by climate change and the potential financial
impacts associated with a transition to a low-carbon economy.
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To help address this, LTL became a signatory of the Net Zero Asset Managers (NZAM) initiative in
December 2021, which affirms its commitment to support the goal of net zero greenhouse gas
emissions by 2050 or sooner. In line with this ambition, LTL published a 2030 interim target in Q4
2022 which has since been approved by the Institutional Investors Group on Climate Change
(‘IIGCC’). LTL felt it was most appropriate to set a Portfolio Coverage Target and has duly targeted
55% of its asset-weighted committed
1
assets to be considered Aligned
2
by 2030, as set out by the
PAII Net Zero Investment Framework. This represents a circa 50% improvement from its baseline
of 36% of assets being Aligned as of 2022, consistent with a fair share of the 50% global reduction
in CO
2
identified as a requirement in the Intergovernmental Panel on Climate Change (‘IPCC’)
special report on global warming of 1.5°C.
LTL also supports the recommendations of the Task Force on Climate-Related Financial Disclosures
(“TCFD”) and its efforts to encourage companies to report their climate related disclosures and data
in a uniform and consistent way. Further information on LTL’s TCFD related disclosures can be found
in its 2023 TCFD Report, which can be found on LTL’s website: www.lindselltrain.com.
1
Committed assets are currently 94% of LTL's total AUM. The assets that were excluded relate to segregated
clients that either declined to have their assets included at this time or did not respond by the required deadline.
There is scope to increase the level of committed assets over time.
2
Aligned status, as set out by the PAII Net Zero Framework, has prescribed requirements of the portfolio
companies, including; 1) Setting short and medium term emission reduction targets, 2) Monitoring emission
intensity performance relative to those targets, and 3) Disclosure of scope 1, 2 and 3 emissions. For higher impact
sectors, further criteria are required to be categorised as Aligned.
Further, using Morningstar’s carbon metrics calculations, LTL is pleased to note that LTIT’s listed equity
holdings have a significantly lower weighted average carbon intensity than its comparable benchmark.
Weighted Average Carbon Intensity
LTIT Listed Equity Source: Bloomberg and individual company annual reports. Data as at March 2024. Carbon
Intensity is computed for each equity holding as follows: Total Emissions (metric tons of Co
2
) / Revenue (Mil USD)
and aggregated at the fund level. Listed position sizes are grossed up to total 100%. Data reflects Scope 1 & 2
emissions only. For the sake of clarity, the calculation does not include the holdings (or look through) of Lindsell
Train Limited, Finsbury Growth & Income Trust PLC or LT North American Fund.
MSCI World Source: Morningstar, data as of February 2024. The Morningstar carbon intensity definition is as follows:
The asset-weighted average of holdings with actual emissions data from the Carbon Disclosure Project or estimated
values from Sustainalytics in a portfolio. A lower score is better. Carbon Intensity is computed for each holding as
follows: Total Emissions (metric tons of Co
2
) / Revenue (Mil USD) and aggregated at the fund level. Sustainalytics
looks at the latest reported scope 1 (direct emissions from owned or controlled sources) and scope 2 (indirect
emissions from the generation of purchased energy) Greenhouse Gas intensity and emissions for over 10k companies.
More than 100 different estimation models are used for non-reporting companies.
LTIT Listed Equity MSCI World
14.9
100.3
0
20
40
60
80
100
120
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
LTL's Approach to Responsible Ownership continued
Strategic Report
Stewardship
Engagement
Engaging with and monitoring investee companies on matters relating to stewardship has always
been an essential element of LTL’s investment strategy. Its long-term approach generally leads it
to be supportive of company management. However, where LTL disagrees with a company’s
actions, it will try to influence management on specific matters or policies if LTL believe it is in
the best interests of its clients. Constructive dialogue has more often than not resulted in
satisfactory outcomes, thus limiting the need for escalation. However, where this is not the case,
LTL will consider escalating its engagement and stewardship activities.
During the year, on a look-through basis (i.e. including positions held by LTL managed funds
owned by the Company), LTL engaged with 27 companies held within the Company’s portfolio
on a wide range of environmental, societal and governance related issues, as detailed in the chart
below. Moreover, to ensure that the 2030 net zero interim target remains achievable, LTL
continues to engage proactively with the management of companies it holds across its portfolios,
the aim being to understand each company’s individual goals and, where appropriate, to provide
the team’s thoughts on their road maps, with the overall ambition of reaching an absolute
reduction in global carbon emissions. Using the data gathered to set the 2030 interim target, LTL
has been able to identify which portfolio companies should be prioritised for engagement on
their progress. LTL has engaged with management at a number of companies in recent months
and will continue to engage with all portfolio companies to understand how they align with LTL’s
net zero goals. This includes encouraging them to set science-based targets where possible. This
initiative has been led by Madeline Wright, Deputy Portfolio Manager and Head of Investment
ESG. The information gathered from this exercise is stored, assessed, and monitored within
Sentinel, LTL’s proprietary ESG database.
Engagement by Topic
Source: Lindsell Train. 1 April 2023 to 31 March 2024. 53 topics raised with 27 companies (on a look through basis).
Personnel (HR)
9%
Remuneration
34%
Governance
Structure
& policies
13%
Human Rights/Modern
slavery (inc. child labour)
2%
Other social
(e.g. Health & nutrition,
Reputation)
9%
Climate
11%
Capital Allocation &
Strategy
19%
Fair treatment
of shareholders
2%
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Key Engagement Case Studies:
Company name: Unilever
Sector: Consumer Franchises
Engagement topics: Strategy, Reputation, Environmental claims
Date of engagements: August 2023, October 2023 and December 2023
Engagement format: Calls
Reason for Engagement: In a call with CFO Graeme Pitkethly, the LTL investment team discussed
Unilever’s decision to retain its presence in Russia. It sought justification for this decision and, whilst
the team recognises that there is no easy choice, LTL conveyed its expectation that management
would keep the situation under active review with the hope of finding the ‘least worst’ outcome.
In October, LTL followed up with Ian Meakins, Designate Chairman. Topics covered included their
retained interest in Russia, Nelson Peltz’s presence on the Board, as well as strategic priorities and
M&A. On Russia, Ian Meakins agreed that clarity and haste are needed. From a strategic
perspective, the focus will be on SKU rationalisation, bolstering existing high-performing brands
and targeted geographic expansion, before any more deals are done. Unilever admit that it has
overinvested in some emerging markets, in some cases at the expense of some developed markets,
and hence a more targeted approach, with due consideration given to the translation of local
currency earnings, is required.
Further engagement took place in December when the LTL team spoke with Unilever IR regarding
the Competition & Markets Authority’s ('CMA') investigation into its green claims. Whilst Unilever
was “surprised and disappointed”, it is not against the purpose of the exercise, in that it upholds
the need for higher standards against claims which could mislead the consumer. Unilever have
been in discussions with the CMA for some time regarding specific claims for a small number of
products, and so it was surprised by the announcement of a formal investigation specifically
targeting only Unilever. The investigation is focussed on the use of vague and broad language in
marketing materials as well as claims about ingredients that might exaggerate how ‘natural’ a
product is. As a result, there is unlikely to be a binary outcome. Nonetheless, it is an opportunity
for Unilever to refute claims that its new CEO, Hein Schumacher, is giving up on sustainability
and instead focus consumer and investor attention on progress made on its four sustainability
priorities (plastic, climate, nature and livelihoods).
Next steps: The engagement regarding Unilever’s presence in Russia and CMA claims is ongoing.
Company name: Mondelez
Sector: Consumer Franchises
Engagement topic: Human Rights / Modern Slavery
Date of engagement: May 2023
Engagement format: Call
Reason for Engagement: LTL spoke with the management of Mondelez ahead of its AGM, which
included a contentious shareholder proposal relating to the eradication of child labour from the
cocoa supply chain. The team has regularly engaged with Mondelez on this issue and so were
eager to hear management’s views on the resolution, and also receive an update on the progress
the company is making on this specific initiative. Management communicated that whilst it is
entirely supportive of the aims and intentions of the shareholder proposal, the company is already
working towards these exact goals and believes that the current strategy continues to be the
right one to achieve them. It confirmed that significant progress has been made: 74% of the
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Strategic Report
LTL's Approach to Responsible Ownership continued
company’s supply chain is now covered by its Cocoa Life programme, up from 28% in 2020. Like
Mondelez, LTL recognises that eradicating child labour from the cocoa supply chain is a systemic
issue that requires wide-scale collaboration and so LTL voted in line with management, as it
believes it is unproductive to expect Mondelez to solve this wider issue on its own.
Next steps: This engagement is ongoing. While LTL accepts that Mondelez cannot solve this wider
issue on its own, as the number 2 chocolate brand in the world LTL would like to see the company
continuing to set the agenda. LTL would like the percentage of the company’s supply chain
covered by the Cocoa Life programme to continue to increase to full coverage, with credible and
sustainable ongoing monitoring firmly in place as this is not a ‘set and forget’ issue.
Company name: Nintendo
Sector: Media
Engagement topic: Capital Allocation
Date of engagement: September 2023
Engagement format: Call
Reason for Engagement: Like many Japanese companies, Nintendo could be accused of
maintaining an overly conservative balance sheet. Currently the company has ¥2 trillion of cash
to guard against technology change and for future growth investments. As a rule, we are
supportive of our companies maintaining net cash balances and, indeed, would be concerned by
any significant levels of net debt, however we recognise that Nintendo could manage its balance
sheet more efficiently. As such, during Q3 we had the opportunity to share with company
management that we would encourage the Board to review its capital allocation and the uses of
its retained earnings. If it was decided to return funds to shareholders we expressed our
preference for a share buyback at an accretive share price rather than a special dividend.
Next steps: This engagement is ongoing.
Proxy Voting
The primary voting policy of LTL is to protect or enhance the economic value of its investments
on behalf of its clients. LTL has appointed Glass Lewis to aid the administration of proxy voting
and provide additional support in this area. However, the Manager maintains decision making
responsibility based on its detailed knowledge of the investee companies. It is LTL’s policy to
exercise all voting rights which have been delegated to LTL by its clients.
Voting record:
Management Shareholder Total
Proposals Proposals Proposals
With Management 199 7 206
Against Management 2 0 2
Abstain 1 1 2
Totals 202 8 210
Source: Glass Lewis. 1 April 2023 to 31 March 2024.
Votes against management and abstentions have typically been in the low single-digit range. The
main reason for this is that LTL’s long-term approach to investment generally leads it to be
supportive of company management and, where required, LTL will try to influence management
through its engagement activities. Given LTL often builds up large, long-term stakes in the
businesses in which it invests, LTL finds that management is open to (and very often encourage)
engagement with LTL. Furthermore, it is LTL’s aim to be invested in ‘exceptional’ companies with
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THE LINDSELL TRAIN INVESTMENT TRUST PLC THE LINDSELL TRAIN INVESTMENT TRUST PLC
strong corporate governance and hence it ought to be rare that LTL finds itself in a position where
it is voting against management.
In the majority of cases where LTL has voted against management it has been on matters relating
to remuneration. Where LTL does not believe that a company’s compensation policy is aligned
with the long-term best interests of the shareholders it will write to management to inform them
of LTL’s intention to vote against such policies.
Regulatory Update on ESG
During the year, regulators around the world remained active on defining and classifying ESG
investing and curbing greenwashing. The UK Financial Conduct Authority (‘FCA’) released its final
Policy Statement on Sustainability Disclosure Requirements (‘SDR’) and investment labels on 28
November 2023. The UK SDR, which applies to all FCA-regulated firms, introduces a set of
sustainability-related product labels, product and entity-level disclosures, and anti-greenwashing
rules for sustainable investing in the UK. While the Investment Manager considers ESG issues to be
important when selecting investments, the Company does not have explicit sustainability objectives
in its investment policy and the Company will not seek to apply a sustainability label under SDR.
Integrity and Business Ethics
The Company is committed to carrying out business in an honest and fair manner. The Board has
adopted a zero tolerance approach to instances of bribery and corruption. Accordingly, it expressly
prohibits any Director or associated persons when acting on behalf of the Company from accepting,
soliciting, paying, offering or promising to pay or authorise any payment, public or private, in the
United Kingdom or abroad to secure any improper benefit from themselves or for the Company.
The Board applies the same standards to its service providers in their activities for the Company.
A copy of the Company’s Anti Bribery and Corruption Policy can be found in the Board and Policies
section of the Company's website. The policy is reviewed annually by the Audit Committee.
In response to the implementation of the Criminal Finances Act 2017, the Board adopted a
zero-tolerance approach to the criminal facilitation of tax evasion. A copy of the Company’s policy
on preventing the facilitation of tax evasion can be found in the Board and Policies section of the
Company's website. The policy is reviewed annually by the Audit Committee.
The Company’s culture is driven by its values of integrity, knowledge and frank and courteous
conduct. It focusses on achieving returns for shareholders in line with the Company’s Investment
Objective, as set out on page 3. In carrying out its activities, the Company aims to conduct itself
responsibly, ethically and fairly, including in relation to social and human rights issues. As an
investment company with limited internal resource, the Company has little direct impact on the
environment. The Company believes that high standards of ESG make good business sense and
have the potential to protect and enhance investment returns. Consequently, the Manager’s
investment criteria ensure that ESG and ethical issues are taken into account and best practice is
encouraged. The Board's expectations are that its principal service providers have appropriate
governance policies in place.
By order of the Board
Roger Lambert
Chairman
11 June 2024
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
Governance
Board of Directors
Roger Lambert*^†+, Chairman, had a forty year career in investment banking, mostly with JP
Morgan Cazenove, where he advised companies in the consumer and financial services sectors
and gained experience of corporate finance, public equity investments and public company
boards. He was a non-executive director of Young & Co.'s Brewery PLC where he was the Senior
Independent Director and Chair of the Audit Committee. He is currently Chair of Trustees of the
Imperial War Graves Endowment Fund, a Governor and Chair of the Finance & Estates Committee
of King’s Schools, Taunton, a Trustee of the Wykeham Crown & Manor Trust and a Trustee of the
Hestercombe Gardens Trust. In addition he is an adviser and trustee to a number of family trusts.
He has an M.A. in History from Oxford University. Roger was appointed Chairman of the Board
and Management Engagement Committee in January 2024.
Nicholas Allan*^†+, Chairman of the Nomination Committee, has significant experience of
investment management. He was a founder of Boyer Allan Investment Management in 1998 and
joint fund manager of the Boyer Allan Pacific Fund Inc until 2012. Prior to that he worked in
various roles in UK merchant bank Kleinwort Benson and its affiliates in London, Boston, New
York, Tokyo and Hong Kong between 1980 and 1998. This included setting up a pan-Asian
securities business and running its global emerging markets securities area. He is a non-executive
director of Walled City Hotels Pte Limited (India), trading as RAAS Hotels, and is also a director of
several charities. He has an M.A. in Natural Sciences from Cambridge University. Nicholas was
appointed Nomination Committee Chairman in March 2022.
Vivien Gould*^†+, Senior Independent Director, is a non-executive director of Baring Emerging
EMEA Opportunities PLC, Schroder AsiaPacific Fund plc, Third Point Investors Limited and National
Philanthropic Trust UK. She has worked in the financial services sector since 1981. She was a
founder director of River & Mercantile Investment Management Limited (1985) and served as a
senior executive and Deputy Managing Director with the Group until 1994. She then worked as
an independent consultant and served on the boards of a number of investment management
companies, listed investment trusts, other financial companies and charitable trusts. Vivien was
appointed Senior Independent Director in September 2020.
Michael Lindsell, Non-Executive Director, joined the investment department of Lazard Brothers
in 1982 after obtaining a BSc (Hons) degree in zoology from Bristol University. In 1985 he moved
to Scimitar Asset Management in Hong Kong where he ran Pacific and Japanese mandates before
specialising in Japan. In 1989 he moved to Warburg Asset Management where he was a director
and head of Mercury Asset Management’s Japanese fund management division. In 1992 he joined
GT Management’s Tokyo office where he held the post of chief investment officer with
responsibility for GT’s Japanese funds, and global funds sourced out of Japan. He returned to the
UK in 1997 and following the acquisition of GT by INVESCO in 1998, he was appointed head of
the combined global product team. He left INVESCO to set up LTL in 1999.
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David MacLellan*^†+, Chairman of the Audit Committee, is Founder and Chairman of RJD
Partners, a director of J&J Denholm Limited, Aquila European Renewables PLC and Chairman of
Custodian Income REIT PLC. David chairs the audit committee at J&J Denholm and Aquila
European Renewables. He was previously a director of a number of public and private companies
including John Laing Infrastructure Fund, a FTSE 250 company where he was latterly chairman.
He is a past council member of the British Venture Capital Association and a member of the
Institute of Chartered Accountants of Scotland. David was appointed Chairman of the Audit
Committee in August 2023. He has a Bachelor of Commerce degree from the University
of Edinburgh.
Helena Vinnicombe*†+, Non-Executive Director, is a member of the Advisory Committee for M&G
Charifund, Charibond and Charity Multi-Asset fund and a non-executive director on the board of
Lowland Investment Company plc, where she also serves as a member of the Audit and
Remuneration Committees. She also provides independent investment consulting to clients with
long-term investment objectives, typically charities and family trusts. Helena was previously a
Director at Smith & Williamson, where she spent most of her career, focussed on private client
investment management. Additionally, she is a Governor of Aureus Primary School, and Trustee
and member of the Finance & Investment Committee of The Child Health Research CIO. She has
an MA in Modern Languages from Cambridge University.
All Directors are Non-Executive and were in office during the year and up to the date of signing
the Financial Statements.
The Board of Directors supervises the management of the Company and looks after the interests
of Shareholders. The re-election of Directors is sought annually at the Annual General Meeting.
* Independent
^ Audit Committee member
† Management Engagement Committee member
+ Nomination Committee member
Michael Lindsell was appointed as a director on 13 July 2006; Vivien Gould was appointed on 29 January 2015;
Nicholas Allan was appointed on 18 September 2018; Roger Lambert and Helena Vinnicombe were appointed on
23 September 2022; and David MacLellan was appointed on 30 August 2023.
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Report of the Directors
The Directors present this Annual Report on the affairs of the Company, together with the audited
Financial Statements of the Company and the Independent Auditor’s Report for the year ended
31 March 2024.
In accordance with the requirement for the Directors to prepare a Strategic Report and an enhanced
Directors’ Remuneration Report for the year ended 31 March 2024, the following information is set
out in the Strategic Report:
• a review of the Company including details about its objective, strategy and business model;
• future developments, details of the principal risks and uncertainties associated with the Company’s
activities (including the Company’s financial risk management objectives and policies); and
• information regarding community, social, employee, human rights and environmental issues.
Information about Directors’ interests in the Company’s ordinary shares is included within the Directors’
Remuneration Report on page 53.
The Corporate Governance Statement on page 39 forms part of this Directors’ Report.
Listing Rule 9.8.4 requires the Company to include certain information, more applicable for
traditional trading companies, in a single identifiable section of the Annual Report or a cross
reference table indicating where the information is set out. The Directors confirm that there are
no disclosures to be made in this regard.
Business and Status of the Company
The Company is registered as a public company in England & Wales under number 04119429 and
is an investment company within the terms of Section 833 of the Companies Act 2006. The
Company is limited by shares, which are listed on the premium segment of The Official List of the
UK Listing Authority and traded on the main market of the London Stock Exchange, which is a
regulated market as defined in Section 1173 of the Companies Act 2006.
The Company has been accepted as an investment trust under Section 1158 of the Corporation
Taxes Act 2010 and Part 2 Chapter 1 of Statutory Instrument 2011/2999. This approval relates to
accounting periods commencing on or after 1 February 2012. The Directors are of the opinion
that the Company has conducted its affairs so as to be able to retain such approval.
The Board has been approved by the Financial Conduct Authority to be a Small Registered UK
Alternative Investment Manager (“AIFM”).
The Alternative Investment Fund Managers’ Directive (“AIFMD”) requires certain disclosures to
be made in respect of any remuneration policy for the AIFM, leverage, risk disclosures and
pre-investment disclosures. The Board is the AIFM, and receives no remuneration in this regard.
The Company does not use gearing, makes sufficient risk disclosure within the Report, and there
have been no material changes to investment policy or objectives. Therefore, it is considered that
separate disclosures are not required.
Results and Dividend
The return/(loss) on ordinary shares after taxation is shown on page 72. Details of the proposed
final dividend can be found on pages 7 and 8 and the dividend policy is outlined in the Strategic
Report on page 3.
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Share Capital
Full details of the Company’s Ordinary Share capital are provided in Note 13 of the Financial
Statements on page 84 and in Appendix 2 on page 100.
The Company’s Articles of Association permit the Company to purchase its own shares. At the
Annual General Meeting held on 30 August 2023 a special resolution was passed giving the
Company authority, until the conclusion of the Annual General Meeting in 2024, to make market
purchases to be cancelled or held in treasury of the Company's ordinary shares up to a maximum
of 29,980 shares being 14.99% of the issued Ordinary Share capital and this figure remains
unchanged at 11 June 2024. This authority has not been used. The Directors intend to seek a fresh
authority at the Annual General Meeting in 2024.
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 which are known to the Company; and no agreements to which the
Company is party that might affect its control following a successful takeover bid.
Substantial Share Interests
During the financial year to 31 March 2024, the Company had not been notified of any changes
in substantial interests in the Company’s voting rights.
At 31 March 2024 the Company had 200,000 shares in issue.
From 31 March 2024 to the date of this report, the Company had been notified of the following
change in substantial interests in the Company’s voting rights.
NUMBER OF SHARES % OF CAPITAL
Mr Michael Lindsell 9,511 4.7
The shareholder register is principally comprised of private wealth managers and retail investors
owning their shares through a variety of online platforms. A profile of the Company’s ownership
is shown below.
Profile of the Company’s Ownership % of Shares held at 31 March 2024
Source: EQ IR
Wealth Managers &
Private Banks
24.8%
Institutional Investors
10.2%
Retail
Shareholders
56.3%
Other
8.7%
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Report of the Directors continued
Governance
THE LINDSELL TRAIN INVESTMENT TRUST PLC
At 31 March 2024 the Directors were aware of the following interests in the voting rights of the
Company:
No. of shares in issue as at 31 March 2024 % of Capital
Hargreaves Lansdown 34,598 17.3
Interactive Investor 22,635 11.3
Mr Nick Train 13,332 6.7
Mr Michael Lindsell 9,086 4.5
AJ Bell 10,176 5.0
Finsbury Growth & Income Trust PLC 10,000 5.0
Rathbones 6,196 3.1
Beneficial Owners of Shares – Information Rights
The beneficial owners of shares who have been nominated by the registered holder of those
shares to receive information rights under Section 146 of the Companies Act 2006 are required
to direct all communications to the registered holder of their shares rather than to the Company’s
registrar, Link Group, or to the Company directly.
Directors
The current Directors of the Company are listed on pages 32 and 33, all of whom served as
Directors of the Company during the year and up to the date of signing the Annual Report.
During the year Richard Hughes resigned as the Chairman of the Audit Committee in April 2023
and also decided to retire from the Board following the Company's 2023 Annual General Meeting.
Both decisions were taken for personal reasons.
As part of the normal succession process Julian Cazalet stood down as Chairman in December 2023.
Powers of the Directors
The powers of the Directors are contained in the Company’s Articles of Association, which are publicly
available at Companies House and can be viewed on the Company's website. Subject to the
provisions of the Companies Acts and the Company’s Articles, the Directors may exercise all powers
within their scope to manage the business of the Company and may delegate any of those powers
to a Director, Committee or Agent.
The Directors may exercise the Company’s authority to borrow, to pay fees, expenses and
additional remuneration or salary for special duties undertaken by any Director, and vote the
shares of portfolio companies.
Unless otherwise determined by the Company by ordinary resolution, the number of Directors
shall not be less than two.
Directors’ Interests
The beneficial interests in the Company of the Directors, and of the persons closely associated
with them, are set out on page 53.
Conflicts of Interest
Directors report on actual or potential conflicts of interest at each Board meeting. Any Director
with a conflict would be excluded from any related discussion.
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Disclosure of Interests
No Director was a party to, or had an interest in, any contract or arrangement with the Company,
except that Michael Lindsell is a director of the Manager, LTL, and the beneficial holder of 35.93%
of the issued share capital of that company.
All of the Directors are non-executive and no Director had a contract of service with the Company
at any time during the year.
Directors’ Indemnification and Insurance
During the year under review and to the date of this report, indemnities were in force between the
Company and each of its Directors under which the Company has agreed to indemnify each Director,
to the extent permitted by law, in respect of certain liabilities incurred as a result of carrying out his
or her role as a Director of the Company. The Directors are also indemnified against the costs of
defending any criminal or civil proceedings or any claim by the Company or a regulator as they are
incurred. Where the defence is unsuccessful the Director must repay those defence costs to the
Company. The indemnities are qualifying third-party indemnity provisions for the purposes of the
Companies Act 2006. A copy of each deed of indemnity is available for inspection at the Company
Secretary’s offices during normal business hours and will be available at the Annual General Meeting.
Directors’ and officers’ liability insurance cover was maintained by the Company during the year.
It is intended that this policy will continue for the year ending 31 March 2025 and subsequent years.
Given the importance of the investment in LTL, the Company has insured the lives of the founders
and key managers, Michael Lindsell and Nick Train, for £10m each. In the unfortunate event of a claim
being made, the proceeds would partly offset the likely fall in the value of the investment in LTL.
Political Donations
The Company does not make political donations.
Statement of Disclosure of Information to the Auditor
So far as the Directors are aware, there is no relevant information (as defined in the Companies
Act 2006) of which the Company's auditor is unaware. The Directors have taken all steps they
ought to have taken to make themselves aware of any relevant audit information (as defined)
and to establish that the auditor is aware of such information.
The above information is given and should be interpreted in accordance with the provisions of
Section 418 of the Companies Act 2006.
Going Concern
The Company’s portfolio, investment activity, the Company’s cash balances and revenue forecasts,
and the trends and factors likely to affect the Company’s performance are reviewed and discussed
at each Board meeting. The Board has considered a detailed assessment of the Company's ability
to meet its liabilities as they fall due, including stress tests which modelled the effects of
substantial falls in portfolio valuations and liquidity constraints on the Company’s NAV, cash flows
and expenses which are set on page 61.
Based on the information available to the Directors at the date of this report, including the results
of these stress tests, the conclusions drawn in the Viability Statement in the Strategic Report on
page 20, the Company’s cash balances and access to funding, the Directors are satisfied that the
Company has adequate financial resources to continue in operation for at least the next
12 months from 11 June 2024 and that, accordingly, it is appropriate to continue to adopt the
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going concern basis in preparing the Financial Statements. In reaching these conclusions and those
in the Viability Statement, the stress testing conducted also featured consideration of the long-
term effects of the continuing geopolitical and economic uncertainties that have affected markets
globally and are likely to continue to do so. These include the continued impact of the war in
Ukraine and the effect of sanctions against Russia; tensions between China and the West; the
conflict in the Middle East and the threat of prolonged inflation and elevated interest rates
slowing economic growth, and the fear or presence of recession.
Further information is provided in the Audit Committee report beginning on page 59.
Annual General Meeting
The Annual General Meeting of the Company will be held on Wednesday, 4 September 2024 at
2.30 p.m. Please refer to the Notice of Meeting beginning on page 102 for details of this year’s
arrangements, together with the explanations of the proposed resolutions.
Other Statutory Information
The following information is disclosed in accordance with the Companies Act 2006:
• The rules on the appointment and replacement of directors are set out in the Company’s
Articles of Association (the “Articles”). Any change to the Articles would be governed by the
Companies Act 2006.
• Subject to the provisions of the Companies Act 2006, to the Articles, and to any directions
given by special resolution, the business of the Company shall be managed by the Directors
who may exercise all the powers of the Company.
The powers shall not be limited by any special powers given to the Directors by the Articles and
a meeting of the Directors at which a quorum is present may exercise all the powers exercisable
by the Directors. The Directors’ powers to issue and buy back shares, in force at the end of the
year, are recorded in the Directors’ Report.
There are no agreements:
i. to which the Company is a party that might affect its control following a takeover bid; and/or
ii. between the Company and its Directors concerning compensation for loss of office.
By order of the Board
Frostrow Capital LLP
Company Secretary
11 June 2024
Report of the Directors continued
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Corporate Governance Statement
The Board has considered the principles and recommendations of the AIC Code of Corporate
Governance (the “AIC Code”). The AIC Code addresses all the principles set out in the UK
Corporate Governance Code issued by the Financial Reporting Council (“FRC”) (the “UK Code”),
as well as setting out additional principles and recommendations on issues that are of specific
relevance to investment companies. The Board considers that reporting against the principles and
recommendations of the AIC Code will provide the best information to Shareholders and the FRC
has confirmed that by following the AIC Code, boards of investment companies will meet their
obligations in relation to the UK Corporate Governance Code and associated disclosure
requirements under paragraph 9.8.6 of the UK Listing Rules. The Corporate Governance Code can
be viewed at www.frc.org.uk. The AIC Code is available on the AIC website (www.theaic.co.uk).
It includes an explanation of how the AIC Code adapts the Principles and Provisions set out in the
Corporate Governance Code to make them relevant for investment companies.
In January 2024 the FRC published a revised UK Corporate Governance Code which will apply to
financial years beginning on or after 1 January 2025. The 2018 Code remains in place until this
time. The Board will consider the updated provisions of the new UK Code over the next year and
expects the publication of a revised AIC Code in due course.
Statement of Compliance
The Board confirms that it complies with the recommendations of the AIC Code and the relevant
provisions of the UK Corporate Governance Code, except as set out below.
UK Corporate Additional Information
Governance Code
• The role of the chief
executive.
• Executive directors’
remuneration.
• The need for an internal
audit function.
• The Chairman of the Board
should not be a member of
the Audit Committee.
AIC Code Additional Information
• The Board should establish a
Remuneration Committee.
The Board considers these provisions are not relevant to the
Company, as it is an externally managed investment company. All
of the Company’s day-to-day management and administrative
functions are outsourced to third-parties. As a result, the Company
has no executive directors, employees or internal operations.
Although Roger Lambert is Chairman of the Board, in light of his
continued independence and his valued contributions in
Committee meetings, the Audit Committee considers it
appropriate that he continues to be a member. The Company has
therefore not reported further in respect of these provisions.
The Board does not consider this provision relevant as the
Company has no employees and there are no executive directors.
Non-executive Directors’ remuneration is determined by the
Board in line with the Directors’ Remuneration Policy.
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Corporate Governance Statement continued
Governance
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Company’s Culture, Values and Strategy
The Company’s culture is driven by its values of integrity, knowledge and frank and courteous
conduct. It focusses on achieving returns for shareholders in line with the Company’s Investment
Objective, as set out on page 3.
The Strategic Report describes how opportunities and risks to the future success of the business
have been considered and addressed, the sustainability of the Company’s business model and
how its governance contributes to the delivery of its strategy. The Board’s key responsibilities are
to set the Company's strategy, values and standards; to provide leadership within a controls
framework which enables risks to be assessed and managed; to challenge constructively and
scrutinise performance of all outsourced activities; and to review regularly the contracts,
performance and remuneration of the Company’s principal service providers and, in particular,
the Manager.
Matters Reserved for the Board
The Board seeks to establish and maintain a corporate culture characterised by fairness in its
treatment of the Company’s service providers, whose efforts are collectively directed towards
delivering returns to shareholders in line with the Company’s purpose and objectives. It is the
Board’s belief that this contributes to the greater success of the Company, as well as being an
appropriate way to conduct relations between parties engaged in a common purpose.
The Board determines what resolutions will be put to shareholders at general meetings, approves
financial results and any communications/announcements relating to the Company. Within the
authority granted by shareholders the Board approves allotments and buy-backs of Ordinary
Shares and increases/reductions of Ordinary Shares in issue and in treasury.
The Board monitors key risks and ensures that there is a structure of internal controls in place to
mitigate the likelihood of risks materialising. These are explained in greater detail on pages 16
to 20. Authority has been delegated to the Manager to take decisions on the purchase and sale
of individual investments. However, the Board retains discretion in relation to the investment in
LTL and LTL managed funds. The Board has also delegated authority to the Committees listed on
pages 41 and 42 and has established Terms of Reference which are available on the Company’s
website and from the Company’s Registered Office.
A schedule of matters reserved for the Board is also available on the Company’s website and from
the Company’s Registered Office.
Board Structure
The Board recognises that its prime purpose is to direct the business so as to maximise shareholder
value within a framework of proper controls. All Directors are non-executive and five are
independent of the Manager.
The Directors normally meet as a Board on a quarterly basis. The Board lays down guidelines
within which the Manager implements investment policy. All Board members are able to take
independent professional advice at the Company’s expense.
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The Manager, the Company Secretary and Administrator all operate in a supportive and
cooperative manner and representatives of each attend Board meetings.
The number of meetings of the Board and Committees for the year under review is given below,
together with individual Directors’ attendance at those meetings. In addition to the scheduled
Board and Committee meetings, Directors attend ad hoc meetings to consider matters such as
the approval of regulatory announcements.
Board Management Annual
(regular Audit Engagement Nomination General
meetings) Committee Committee Committee Meeting
Total number of meetings 4 3 1 1 1
Roger Lambert 4 3 1 1 1
Nicholas Allan 4 3 1 1 1
Julian Cazalet** 3 2 - - 1
Vivien Gould 4 3 1 1 1
Richard Hughes*** 1 1 - - 1
Michael Lindsell 4 3* 1* 1* 1
David MacLellan^ 3 2 1 1 n/a
Helena Vinnicombe 4 3 1 1 1
* Present as an attendee and not a Committee member.
** Retired from the Board on 31 December 2023.
*** Retired from the Board on 30 August 2023.
^ Appointed to the Board on 30 August 2023.
Board Committees
Nomination Committee
The Company’s Nomination Committee during the year comprised Nicholas Allan (Chairman),
Julian Cazalet (until 31 December 2023), Vivien Gould, Richard Hughes (until 30 August 2023),
Roger Lambert and Helena Vinnicombe.
The Directors have many years’ experience within the industry between them and have the
necessary skills to promote and develop the Company. As part of the fulfilment of the Succession
Plan, the Board engaged the services of third-party search consultants. Further details can be
found on page 42.
The Board’s policy on diversity is described in more detail on page 43.
The Board’s policy on tenure is that Directors’ appointments are reviewed through the regular
board performance evaluations. There is no requirement for Directors to stand down after a fixed
period of time as the Company values experience over a number of investment cycles.
Audit Committee
The Company’s Audit Committee during the year comprised David MacLellan (Chairman of the
Committee with effect from 30 August 2023), Nicholas Allan, Julian Cazalet (until 31 December
2023), Vivien Gould, Richard Hughes (Chairman until 14 April 2023, and member of the Committee
until 30 August 2023), Roger Lambert and Helena Vinnicombe (Chairman on an interim basis from
14 April 2023 to 30 August 2023). Although Mr Lambert is Chairman of the Board, the Board
considers it desirable that he continues as a member of the Committee. The Audit Committee has
set out a formal Report on pages 59 to 64 of the Annual Report.
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Corporate Governance Statement continued
Governance
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Management Engagement Committee
The Company’s Management Engagement Committee during the year comprised Roger Lambert
(Chairman), Nicholas Allan, Julian Cazalet (until 31 December 2023), Vivien Gould, Richard Hughes
(until 30 August 2023), David MacLellan and Helena Vinnicombe.
The Committee reviews LTL’s performance against comparator indices and market peers and
considers whether terms of the contract and the fees and other remuneration payable to LTL
remain appropriate on at least an annual basis.
The Committee also considers the performance, terms, fees and other remuneration payable to
the Company Secretary and Administrator, the Custodian, and the Registrar.
Additionally the Committee considers the quality and depth of experience that LTL and Frostrow
bring to the management of the Company.
Following a review at a Committee meeting in March 2024, the Board considers that the
continuing appointment of LTL and Frostrow is in the best interests of the Company's
shareholders.
Appointments to the Board
The rules governing the appointment and replacement of Directors are set out in the Company’s
Articles of Association and the succession planning policy. Where the Board appoints a new
Director during the year or after the year end and before the notice of annual general meeting
is published, that Director will stand for election by shareholders at the next Annual General
Meeting.
When considering new appointments, the Board endeavours to ensure that it has the capabilities
required to be effective and oversee the Company’s strategic priorities. This will include an
appropriate range, balance and diversity of skills, experience and knowledge. The Company is
committed to ensuring that any vacancies arising are filled by the best qualified candidates.
Subject to there being no conflict of interest, all Directors are entitled to vote on candidates for
appointment as new Directors and to recommend to shareholders the re-election of Directors at
the Annual General Meeting. The Chairman does not chair the meeting when the Board is dealing
with the appointment of his successor.
As part of the process to appoint David MacLellan the Board engaged the services of specialist
recruitment consultants, Cornforth Consulting ("Cornforth"), who prepared a list of potential
candidates for consideration by the Board. A short list was then arrived at, the candidates were
interviewed, and Mr MacLellan was subsequently appointed.
Cornforth are signatories of The Standard Voluntary Code of Conduct for Executive Search Firms,
which aims to broaden ethnic diversity and gender balance on boards through executive search
firms’ commitment throughout their recruitment processes, such as initial planning stages,
long/short listing and candidate support.
Cornforth has no other connection with the Company or the individual Directors.
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Composition, Succession and Evaluation
The Board, meeting as the Nomination Committee, regularly considers its structure and recognises
the need for progressive refreshment.
The Board seeks to ensure that it is well-balanced and refreshed regularly by the appointment of
new directors with the skills and experience necessary, in particular, to replace those lost by
directors’ retirements. The Board further ensures that it is comprised of members who collectively:
i. display the necessary balance of professional skills, experience, length of service and
industry/Company knowledge; and
ii. are fit and proper to direct the Company’s business with prudence and integrity; and provide
policy guidance on the structure, size and composition of the Board (and its Committees) and
the identification and selection of suitable candidates for appointment to the Board (and its
Committees).
The composition and skills of the Board are reviewed annually and at such other times as
circumstances may require.
Diversity Policy
The Board supports the principle of boardroom diversity and therefore the Company’s Diversity
Policy applies to both the Board and its committees.
The Company’s policy is that the Board should be comprised of directors who collectively display
the necessary balance of professional skills, experience, length of service and industry knowledge
and that appointments to the Board should be made on merit, against objective criteria, including
diversity in its broadest sense. The objective of the policy is to have a broad range of approaches,
backgrounds, skills, knowledge and experience represented on the Board. The Board believes that
this will make the Board more effective at promoting the long-term sustainable success of the
Company and generating value for all Shareholders by ensuring there is a breadth of perspectives
among the Directors and the challenge needed to support good decision-making. To this end
achieving a diversity of perspectives and backgrounds on the Board during the year has been,
and will continue to be, a key consideration in any Director search process.
The Board will not display any bias in respect of age, gender, race, sexual orientation, religion,
ethnic or national origins, disability, or educational, professional or socio-economic background
in considering the appointment of its Directors.
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Corporate Governance Statement continued
Governance
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Board Diversity
The Board has noted the FCA's updated Listing Rules (LR 9.8.6R(9)) to encourage greater diversity
on listed company boards and has implemented the FCA's disclosure requirements to report
against the following diversity targets:
i) At least 40% of individuals on the board are women;
ii) At least one of the senior board positions is held by a woman; and
iii) At least one individual on the board is from a minority ethnic background.
The Board has chosen to align its diversity reporting reference date with the Company’s financial
year end and proposes to maintain this alignment for future reporting periods.
As an externally managed investment company, the Company does not have the positions of CEO
or CFO. The role of senior independent director is currently held by a woman.
As at 31 March 2024, the Company did not meet the target of at least 40% of the individuals on
its board of directors being women, nor at least one individual on its board of directors being
from a minority ethnic background.
The relatively small size of the Company’s Board, and therefore more infrequent vacancies and
opportunities for recruitment, make achieving diversity on the Board a more challenging, but
ongoing process. As succession planning of the Board progresses in future years, the Company
will seek to increase its diversity on its Board through its Diversity Policy.
As required under LR 9.8.6R(10), further detail in respect of the three targets outlined above as
at 31 March 2024 is disclosed in the tables below.
Number of
Number Senior Positions
of Board Percentage on the Board
Members of the Board (Chair and SID)*
Men 4 67% 1
Women 2 33% 1
Not specified/prefer not to say* – – –
* Directors were also given the opportunity to indicate if there was an ‘other category’ they wished to specify.
Number of
Number Senior Positions
of Board Percentage on the Board
Members of the Board (Chair and SID)*
White British or other White
(including minority-white groups) 6 100% 2
Mixed/Multiple Ethnic Groups – – –
Asian/Asian British – – –
Black/African/Caribbean/Black British – – –
Other ethnic group, including Arab – – –
Not specified/prefer not to say – – –
* As an externally managed investment company, the Company has no executive directors, employees or internal
operations. The Board considers the Chairman and the SID to be the senior positions on the Board.
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In order to collect the data required to fulfil the disclosures in the tables on page 44, the Board
agreed that self-reporting by the individuals concerned was the most appropriate method. The
data was collected anonymously by the Company Secretary using a web-based survey where the
following two questions were posed, and individuals were reminded that ‘Not specified/prefer
not to say’ could be recorded in response:
1. For the purposes of the Listing Rules disclosures, how should you be categorised; and
2. Please advise your ethnicity.
There have been no changes in Board composition that have occurred between the reference
date and the date on which the Annual Report was approved.
Induction/Development
New appointees to the Board are provided with a full induction programme. The programme
covers the Company’s investment strategy, policies and practices. New Directors are also given
key information on the Company’s regulatory and statutory requirements as they arise including
information on the role of the Board, matters reserved for its decision, the terms of reference for
the Board Committees, the Company’s corporate governance practices and procedures and the
latest financial information. Directors are encouraged to participate in training courses where
appropriate.
Board Responsibilities
Division of Responsibilities
It is the responsibility of the independent members of the Board, led by the Chairman, to ensure
the effectiveness of the Manager and other third-party service providers. The Board receives
accurate, timely and clear information to assist it in its decision making, and no one Director has
unfettered powers of decision.
Responsibilities of the Chairman
The Chairman’s primary role is to provide leadership to the Board, assuming responsibility for its
overall effectiveness in directing the Company. The Chairman is responsible for:
• taking the chair at general meetings and Board meetings, conducting meetings effectively
and ensuring all Directors are involved in discussions and decision-making;
• setting the agenda for Board meetings and ensuring the Directors receive accurate, timely and
clear information for decision-making;
• taking a leading role in determining the Board’s composition and structure;
• overseeing the induction of new directors and the development of the Board as a whole;
• leading the annual board evaluation process and assessing the contribution of individual
Directors;
• supporting and also challenging the Manager (and other suppliers) where necessary;
• ensuring effective communications with shareholders and, where appropriate, stakeholders; and
• engaging with shareholders to ensure that the Board has a clear understanding of shareholder
views.
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Corporate Governance Statement continued
Governance
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Responsibilities of the Senior Independent Director (“SID”)
The SID serves as a sounding board for the Chairman and acts as an intermediary for the other
Directors and the shareholders. The SID is responsible for:
• working closely with the Chairman and providing support;
• leading the annual assessment of the performance of the Chairman;
• holding meetings with the other non-executive Directors without the Chairman being present,
on such occasions as necessary;
• working with the Chairman, other Directors and shareholders to resolve major issues;
• working with the Chairman of the Nomination Committee to carry out succession planning for
the Chairman’s role; and
• being available to shareholders and other Directors to address any concerns or issues they feel
have not been adequately dealt with through the usual channels of communication
(i.e. through the Chairman or the Manager).
Company Secretary
The Directors have access to the advice and services of a specialist company secretary, which is
responsible for advising the Board on all governance matters. The Company Secretary ensures
governance procedures are followed and that the Company complies with applicable statutory
and regulatory requirements.
Directors’ Other Commitments
Each of the Directors assessed the overall time commitment of their external appointments and
it was concluded that they have sufficient time to discharge their duties. When appointing new
Directors, the Board takes into account other demands on the Directors’ time. Any additional
significant external appointments are only undertaken with prior approval of the Chairman.
Board Performance Evaluation
During the year the performance of the Board, its committee and individual Directors was
evaluated through a formal assessment process led by the Chairman. The performance of the
Chairman was evaluated by the other Directors under the leadership of the Senior Independent
Director. It was concluded that the Chairman upheld the highest standards of integrity and ethical
leadership promoting a culture of openness and debate based on mutual respect within the
Boardroom. The Chairman is satisfied that the structure and operation of the Board continues to
be effective and relevant and that there is a satisfactory mix of skills, experience, length of service
and knowledge of the Company. The Board has considered the position of all of the Directors,
and believes that it would be in the Company’s best interests to propose them for election/re-
election by Shareholders at the 2024 Annual General Meeting. The relevant experience of each
of the Directors is detailed on pages 32 and 33.
Risk and Internal Control
The Board confirms that there is an ongoing process for identifying, evaluating and managing
those risks which are significant for the Company (particularly operational risks) and that this
process reflects the guidance provided by the FRC. This process has been in place for the year
ended 31 March 2024 and up to the date of the Annual Report and Financial Statements, and is
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regularly reviewed by the Board. The review covers all material financial, operational and
compliance controls and risk management systems.
The Board has ultimate responsibility for the system of internal control and for reviewing its
effectiveness. The key elements of the system are the appointment of an independent custodian
with responsibility for safeguarding the Company’s assets and clearly defined responsibilities
between the Board, the Custodian and the Manager, all of whom have detailed operating
procedures in place. The controls operated by the Board include the authorisation of the
investment strategy and regular reviews of the investment performance and financial results. The
system is designed to manage rather than eliminate the risk of being unable to meet business
objectives and can provide reasonable but not absolute assurance against material misstatement
or loss. The Board reviews the operation and effectiveness of the Company’s internal controls
regularly through identification and assessment of key risks and there is an annual review of how
these are managed.
The Board has delegated the management of the investment portfolio to the Manager, LTL, while
maintaining discretion over the holdings in LTL and LTL managed funds. LTL and the Board
regularly discuss the investments in LTL and LTL managed funds. The day-to-day administration
and the Company Secretarial requirements are contractually delegated to Frostrow Capital LLP,
and the custodial services including the safeguarding of assets to Northern Trust Company (see
note 17 to the Financial Statements). These contracts have been entered into after full
consideration by the Board of the services undertaken and are reviewed annually. The Manager,
Administrator and Custodian all maintain their own systems of internal and financial controls.
The Manager has established a framework to provide reasonable assurance on the effectiveness
of internal controls operated on behalf of its clients. The Manager’s Compliance Officer assesses
and reports to the Board on that effectiveness and on the various business risks that may be
encountered by the Manager.
The Company Secretary and Administrator have established internal controls and have procedures
in place to monitor them.
The Audit Committee reviews, at least annually, a detailed analysis of the activities and potential
risks to which the Company might be exposed and the key controls in place to minimise risk.
The Board is satisfied that its approach to managing internal control and risk conforms to the
recommendations of the FRC’s Guidance on Risk Management, Internal Control and Related
Financial and Business Reporting.
As the Company’s investment management, administration and custodial activities are carried
out by third-party service providers, the Board does not consider it necessary to have an internal
audit function or whistleblowing procedures. The Audit Committee reviews annually the
whistleblowing procedures of the Company’s key service providers.
An overview of the Internal Controls structure of the Company and its service providers is
shown on the next page.
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Governance
Internal Controls Structure
The Board has a responsibility for
establishing and assessing
internal controls to ensure the
Company operates effectively,
efficiently and within the risk
appetites set by the Board. As
the Company relies on third-
party service providers for all of
its operations, it obtains regular
reports from these
counterparties on the nature and
effectiveness of controls within
these organisations.
The Company’s principal service
providers are the Investment
Manager, LTL, the Company
Secretary and Administrator,
Frostrow Capital, and its
custodian, The Northern Trust
Company. The Board receives
regular reporting on compliance
with the control environment
and assesses the effectiveness of
the internal controls through
review of the assurance reports
from each of these
organisations.
In addition, the Company retains
a number of secondary providers
who report to the Board. These
include the registrar, broker and
financial adviser and legal
adviser. The services provided by
these firms are not integral to
the Company’s operating model
and internal controls and so the
reporting they provide to the
Board on their operations is less
extensive.
The Management Engagement
Committee formally evaluates
the performance and service
delivery of all third-party service
providers at least annually and
the Audit Committee evaluates
the performance of the
Company’s external Auditor
annually, following the
completion of the annual audit
process.
Principal third-party
service providers
The Directors
l receive regular
reporting at meetings;
l review the assurance
report produced by
each organisation;
l receive additional
reporting on the
control environment
from each of the
principal third-party
service providers; and
l formally evaluate their
performance on an
annual basis.
LTL
(Investment Management)
Reporting
l Investment performance update at each meeting
l Internal Control Report
l Compliance Report (semi-annually)
l Effectiveness of control environment (annually)
l Portfolio attribution
The Northern Trust Company
(Custodian)
Reporting
l Effectiveness of control environment (semi-annually)
Frostrow Capital LLP
(Company Secretary and Administrator)
Reporting
l Balance sheet
l Liquidity
l Income forecasts
l Portfolio valuation
l Portfolio transactions
l Investment limits and
restrictions (monthly)
l Compliance with
investment policy and
guidelines (monthly)
l Compliance report
(quarterly)
l Effectiveness of
control environment
(semi annually)
l Advice on regulatory
changes
Board of Directors
Non-executive
Sub-committees:
l Audit Committee
l Management Engagement Committee
l Nomination Committee
Secondary third-
party service
providers
The Directors
l receive ad hoc
reporting on their
activities at meetings;
and
l formally evaluate their
performance on an
ad hoc basis.
Link Group
(Registrar)
l Effectiveness of control environment (annually)
Stephenson Harwood
LLP
(Legal Adviser)
l Ad hoc reports
JP Morgan Cazenove
Limited
(Corporate Broker)
l Effectiveness of control
environment (annually)
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Stakeholders
As an externally managed investment company, the Company does not have employees. Its main
stakeholders therefore comprise its shareholders and a small number of service providers.
Stewardship and the Exercise Of Voting Powers
The Board has delegated authority to LTL (as Manager) to cast its vote in relation to the shares
owned by the Company.
Nominee Share Code
Where shares in the Company are held via a nominee company, the Company undertakes:
• to provide the nominee company with multiple copies of shareholder communications, so long
as an indication of quantities has been provided in advance; and
• to allow investors holding shares through a nominee company to attend general meetings.
Nominee companies are encouraged to provide the necessary authority to underlying
shareholders to attend the Company’s Annual General Meeting and to vote via proxy.
Reporting on Engagement with Stakeholders
The AIC Code requires directors to explain their statutory duties as stated in sections 171–177 of
the Companies Act 2006. Under section 172, directors have a duty to promote the success of the
Company for the benefit of its members as a whole and in doing so have regard to the
consequences of any decisions in the long term, as well as having regard to the Company’s
stakeholders amongst other considerations.
The Board’s report on its compliance with Section 172 of the Companies Act 2006 is contained
within the Strategic Report on pages 21 to 23.
Roger Lambert
Chairman
11 June 2024
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Governance
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This Remuneration Report has been prepared in accordance with the requirements of Section 421
of the Companies Act 2006 and the Large and Medium-sized Companies and Groups (Accounts and
Reports) (Amendment) Regulations 2013. An Ordinary Resolution for the approval of this Report
will be put to shareholders at the Company’s forthcoming Annual General Meeting. The Directors’
Remuneration Policy Report, which is separate to this Report, can be found on pages 55 and 56.
The law requires the Company’s Auditor to audit certain disclosures within this Report. Where
disclosures have been audited, they are included as such and the Auditor’s opinion is included in
its report to members on pages 65 to 71.
The Board does not consider it necessary or appropriate to establish a separate Remuneration
Committee as the Company has no employees, the Board is small, and there are no executive
Directors. Non-executive Directors’ remuneration is determined by the Board in line with the
Directors’ Remuneration Policy. The Board considers the framework for the remuneration of the
Directors on an annual basis. It reviews the ongoing appropriateness of the Company’s
remuneration of Directors by reference to the activities of the Company and comparison with
other companies of a similar structure and size together with a review of independent research.
This is in line with the AIC Code.
The Directors exercise independent judgement and discretion when authorising remuneration
outcomes, taking into account the Company's performance together with wider circumstances.
Directors’ Fees
At the most recent review held in November 2023, it was agreed that with effect from 1 January
2024, the Directors’ fees would be as follows:
Chairman £43,000 (January 2023: £40,000)
Chairman of the Audit Committee £36,000 (January 2023: £34,000)
Directors £29,000 (January 2023: £27,000), with the exception of Michael Lindsell who, because
of his connection with the Manager, waives his entitlement to fees.
The table below contains the annual percentage increase in remuneration over the three financial
years prior to the current year in respect of the various director roles:
31 March 31 March 31 March 31 March
2024 2023 2022 2021
Annual Income: (£) (£) (£) (£)
Chairman 40,750 38,875 37,000 35,375
4.8% 5.1% 4.6% 8.0%
Chairman of the Audit Committee 34,500 32,125 30,375 27,500
7.4% 5.8% 10.5% 1.9%
Directors 27,500 26,250 25,250 24,250
4.8% 4.0% 4.1% 7.8%
Taxable expenses 1,567 1,694 Nil Nil
Directors’ Remuneration Report
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During the year the Board engaged the services of Longwater Partners to undertake a review of
the Directors’ remuneration.
Longwater Partners has no other connection with the Company or the individual Directors.
It was recognised that the unique structure under which LTIT operated added a layer of complexity
when compared with other investment companies. The sizeable holding of 33.6% in a private
asset manager is unique; this combined with the especially close relationship between the
management company and the Company make the Directors’ role on this Company more complex
than others. It was therefore concluded that the Directors’ fees reflected the level of time and
commitment required to fulfill their statutory duties.
Directors’ Emoluments
None of the Directors is entitled to pensions or pension related benefits, medical or life insurance,
share options, long-term incentive plans, or any form of performance related pay. Also, no
Director has any right to any payment by way of monetary equivalent to an entitlement or to
any assets of the Company except in their capacity as shareholders.
Expenses
Under the Articles of Association, Directors are entitled to reimbursement of reasonable expenses
incurred by them in connection with attendance at Board and General Meetings, the performance
of their duties, and any additional work or duties they undertake at the Company’s request.
Loss of office
Directors do not have service contracts with the Company but are engaged under Letters of
Appointment. These expressly exclude any entitlement to compensation upon leaving office for
whatever reason.
The single total figure of remuneration for each Director for the year to 31 March 2024 is detailed
below together with the prior year comparative.
Single Total Figure Table (audited information)
Name of Director Fees paid/Total (£) Taxable Expenses (£)†
Year to 31 March:
2024 2023 2024 2023
Roger Lambert* 31,000 13,850 – –
Nicholas Allan 27,500 26,250 225 66
Julian Cazalet** 30,000 38,875 – –
Vivien Gould 27,500 26,250 982 1,299
Richard Hughes*** 11,215 32,125 – –
Michael Lindsell – – – –
David MacLellan^ 20,595 – – –
Helena Vinnicombe+ 29,903 13,850 360 329
–––––––––––– –––––––––––– –––––––––––– ––––––––––––
Totals 177,713 151,200 1,567 1,694
–––––––––––– –––––––––––– –––––––––––– ––––––––––––
–––––––––––– –––––––––––– –––––––––––– ––––––––––––
† Taxable expenses primarily comprise travel and associated expenses incurred by the Directors in attending Board
and Committee meetings in London.
* Appointed as Chairman of the Board on 1 January 2024.
** Retired from the Board on 31 December 2023.
*** Retired from the Board on 30 August 2023.
^ Appointed as Chairman of the Audit Committee on 30 August 2023.
+ Interim Chairman of the Audit Committee from 14 April 2023 to 30 August 2023.
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Governance
Directors’ Remuneration Report continued
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As the Company does not have a Chief Executive Officer or any executive Directors, there are no
percentage increases to disclose in respect of their Single Total Figure.
Voting at Annual General Meeting
A binding Ordinary Resolution approving the Directors’ Remuneration Policy and a non-binding
Ordinary Resolution adopting the Annual Report on Directors’ Remuneration for the year ended
31 March 2023 were approved by shareholders at the Annual General Meeting held on 30 August
2023. The votes cast by proxy were as follows:
Votes Votes Total
Resolutions Cast Cast Votes Votes
For % Against % Cast Withheld*
Directors’ Remuneration Report 48,620 99.6% 185 0.4% 48,805 71
Directors’ Remuneration Policy 48,531 99.7% 151 0.3% 48,682 194
* A vote withheld is not a vote in law and is not counted in the calculation of the proportion of votes “For” and
“Against” a resolution.
Share Price Total Return
The chart below illustrates the total Shareholder return for a holding in the Company’s shares as
compared with the Benchmark between the relevant dates.
Share price and net asset value performance compared with the Combined and Current
Benchmark for ten years to 31 March 2024
Note: The chart is rebased to 100 from 31 March 2014, includes dividends and is plotted yearly.
Rebased to show the performance per £100 invested.
* The Combined Benchmark is a combination of the Old Benchmark (the annual average redemption yield of the
longest dated UK government fixed rate bond, plus a premium of 0.5% subject to a minimum yield of 4%) until
31 March 2021 and the Current Benchmark (MSCI World index in Sterling) from 1 April 2021.
The Combined Benchmark does not include adjustments relating to the High Water Mark.
** The Current Benchmark shows the performance of the MSCI World Index in Sterling from 31 March 2014 to
31 March 2024. It was adopted as the Current Benchmark from 1 April 2021.
Source: Bloomberg and LTL.
The Old Benchmark was chosen to act as an absolute return measure that was originally designed as a market-based
proxy for inflation, in line with the Company’s minimum objective to protect the real value of Shareholders’ capital
from year to year. The Current Benchmark replaced the Old Benchmark on 1 April 2021 as a reflection that the
portfolio had become predominantly invested in equities and was likely to remain so for the foreseeable future.
The MSCI World Index total return in Sterling was chosen as the Current Benchmark as a representative index to
capture the portfolio’s global equity opportunity set.
Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
NAV
Share Price
Combined Benchmark*
Current Benchmark**
100
200
300
400
500
600
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Relative Importance of Spend on Pay
The table below shows the amount of the Company’s income spent on Directors’ remuneration
in comparison with investment management and performance fees paid to LTL and dividends
paid to shareholders.
Year to Year to
31 March 31 March
2024 2023 Increase
(£) (£) (decrease)
Directors’ remuneration 177,713 151,200 17.5%
Investment management fees and other expenses 1,692,000 1,829,000 (7.5%)
Performance fees (charged to capital) nil nil nil
Dividends to shareholders (final) 10,300,000 10,300,000 –
Statement of Directors’ shareholding and share interests (audited information)
Neither the Articles nor the Directors’ Letters of Appointment require any Director to own shares
in the Company. The interests of the Directors and their connected persons in the equity securities
of the Company at 31 March 2024 and 31 March 2023 are shown in the table below:
Ordinary Shares of 75p Ordinary Shares of 75p
31 March 2024 31 March 2023
Roger Lambert 50 50
Nicholas Allan 150 100
Julian Cazalet* n/a 100
Vivien Gould 25 25
Richard Hughes** n/a 25
Michael Lindsell (including spouse and children) 9,086 7,720
Michael Lindsell (non-beneficial)^ 3,600 3,600
David MacLellan*** 75 n/a
Helena Vinnicombe 23 15
* Retired from the Board on 31 December 2023.
** Retired from the Board on 30 August 2023.
*** Appointed as a Director on 30 August 2023.
^ Michael Lindsell’s non-beneficial shares relate to him acting as a trustee of a family trust.
Since the year end to the date of this report, Michael Lindsell has bought a further 425 shares.
There have not been any other changes in the Directors’ interests since the year end.
None of the Directors has been granted, or exercised, any options or rights to subscribe for
Ordinary Shares of the Company.
Annual Report on Remuneration
A Resolution to adopt this Remuneration Report will be put to the forthcoming Annual General
Meeting. The vote is advisory only and not binding on the Company. The Board has not proposed
any significant changes to the way the remuneration policy will be implemented in the next
financial year.
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Governance
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Annual Statement by the Chairman of the Board
The Directors confirm that the Directors’ Remuneration Policy and the Annual Report on Directors’
Remuneration set out above provide a fair and reasonable summary for the financial year ended
31 March 2024 of:
a) the major decisions on Directors’ remuneration;
b) any changes relating to Directors’ remuneration made during the year; and
c) the context in which those changes occurred and the decisions which have been taken.
By order of the Board
Roger Lambert
Chairman
11 June 2024
Directors’ Remuneration Report continued
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Directors’ Remuneration Policy
This Directors’ Remuneration Policy (“Policy”) sets out details of the Company’s policy on the
remuneration of Directors of the Company.
The Policy is subject to a triennial binding vote. However, the Board has resolved that, for good
governance purposes, the Policy will be put to shareholders every year. Accordingly, a resolution
to approve the Policy will be put to shareholders at the 2024 Annual General Meeting. The Policy,
subject to the vote, is set out in full below and is currently in force.
The Company has only non-executive directors and no employees. The Directors of the Company
are entitled to such rates of annual fees as the Board at its discretion determines, subject to
aggregate annual fees not exceeding £220,000 under the Company’s Articles of Association
(“Articles”). No change to this ceiling is currently envisaged. Each Director abstains from voting
on the specific remuneration to be paid to them.
In addition to fees, Directors are entitled to reimbursement of reasonable expenses incurred by
them in the performance of their duties. In line with the majority of investment trusts, no
component of any Directors remuneration is subject to performance factors. There are no
provisions in Directors Letters of Appointment for recovery or withholding of fees or expenses.
Annual fees are pro-rated where a change takes place during a financial year.
The Board reviews annually the remuneration paid by other similar investment trusts and
considers research from third-parties. The Board considers it important to pay sufficient
compensation in order to promote the long-term success of the Company.
Directors’ Fees Current and Projected
Annual Fees Projected Fees
as at Year Ending
Date of Appointment 31 March 2024 31 March 2025
to the Board £ £
Roger Lambert (Chairman)
1
23 September 2022 43,000 43,000
Nicholas Allan 18 September 2018 29,000 29,000
Vivien Gould 29 January 2015 29,000 29,000
Michael Lindsell 13 July 2006 – –
David MacLellan 30 August 2023 36,000 36,000
Helena Vinnicombe 23 September 2022 29,000 29,000
1
Appointed as Chairman on 1 January 2024
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Governance
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The following table of remuneration components was approved with effect from 1 January 2024.
Table of Directors’ Remuneration Components
Component Annual Purpose and operation
Rate (£)
Basic Annual Fee: 29,000
Each Director
Additional Fee: 14,000
Chairman of the Board
Additional Fee: 7,000
Audit Committee
Chairman
Additional Fee: Variable
Each Director
Expenses: Variable
Each Director
Notes:
1. The Board only exercises its discretion to determine fees after an analysis of fees paid to directors of other
companies of a similar size to that of the Company, together with a review of independent research.
2. As the Company has no employees, there are no differences in policy between the remuneration of Directors and
the remuneration of employees.
3. None of the Directors is entitled to receive any remuneration which is performance-related.
4. Advice from remuneration consultants was received during the year under review.
Directors’ Remuneration Year Ended 31 March 2024
The table below shows the rate of annual fees payable to the Chairman, who is the highest paid
Director, and all other non-executive Directors at 31 March 2024 and at 31 March 2023:
Fees 2024 (£) 2023 (£)
Chairman 43,000 40,000
Chairman of Audit Committee 36,000 34,000
Board Member 29,000 27,000
Recruitment Remuneration Principles
1. The remuneration package for any new Chairman or non-executive Director will be the same as the prevailing
rates determined on the bases set out above. The fees and entitlement to reclaim reasonable expenses will be
set out in Directors’ Letters of Appointment.
2. The Board will not pay any introductory fee or incentive to any person to encourage them to become a Director.
However, it may engage the services of search & selection specialists in connection with the process of appointing
new non-executive Directors.
3. The aggregate maximum fees currently payable to all Directors is £220,000 per annum.
In recognition of the time and commitment required by
Directors of public companies. The basic fee is reviewed
against those paid by peer companies to ensure that it
reflects fair and adequate compensation for the role.
For the additional time, commitment and responsibility
required on the Company’s business issues; and providing
leadership as Chairman of the Board.
For the greater time required on the financial and
reporting affairs of the Company.
In the event that the Company undertakes a complex or
large project, such additional fee as will fairly compensate
for the additional time and commitment required by a
Director.
Reimbursement of expenses properly incurred by Directors
in attending meetings and/or otherwise in the
performance of their duties to the Company.
Directors’ Remuneration Policy continued
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The Directors are responsible for preparing the Annual Report and the Financial Statements in
accordance with applicable law and regulation.
Company law requires the Directors to prepare Financial Statements for each financial year. Under
that law the Directors have prepared the Financial Statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS
102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and
applicable law).
Under company law the Directors must not approve the Financial Statements unless they are
satisfied that they give a true and fair view of the state of affairs of the Company and of the
profit or loss of the Company for that period.
In preparing the Financial Statements the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• state whether applicable UK Accounting Standards, comprising FRS 102, have been followed,
subject to any material departures disclosed and explained in the Financial Statements;
• make judgments and estimates that are reasonable and prudent;
• prepare the Financial Statements on a going concern basis unless it is inappropriate to presume
that the Company will continue in business; and
• prepare a directors' report, a strategic report and a directors' remuneration report which
comply with the requirements of the Companies Act 2006.
The Directors 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.
They are responsible for such internal control as they determine is necessary to enable the
preparation of Financial Statements that are free from material misstatement, whether due to
fraud or error, and have general responsibility for taking such steps as are reasonable to them to
safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
The Directors have delegated responsibility to the Administrator for the maintenance and
integrity of the corporate and financial information included on the Company’s website.
Legislation in the United Kingdom governing the preparation and dissemination of Financial
Statements may differ from legislation in other jurisdictions.
Responsibility Statement of the Directors in respect of the Annual Financial Report
The Directors consider that the Annual Report and Financial Statements, taken as a whole, are
fair, balanced and understandable and provide the information necessary for shareholders to
assess the Company’s position and performance, business model and strategy.
Statement of Directors’ responsibilities in respect of the
Financial Statements
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Governance
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Each of the Directors, whose names and functions are listed in the ‘Board of Directors’ on pages 32
and 33 confirms that, to the best of their knowledge:
• the Company Financial Statements, which have been prepared in accordance with
United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard
applicable in the UK and Republic of Ireland”, and applicable law (United Kingdom Generally
Accepted Accounting Practice), give a true and fair view of the assets, liabilities, financial
position and loss of the Company; and
• the Strategic Report includes a fair review of the development and performance of
information required by the FCA's Disclosure Guidance and Transparency Rules.
The Directors also confirm that the Financial Statements, taken as a whole, are fair, balanced and
understandable, and provide the information necessary for shareholders to assess the Company's
position, performance, business model and strategy.
Approved by the Board of Directors and signed on its behalf by
Roger Lambert
Chairman
11 June 2024
Note to those who wish to access this document by electronic means:
The Annual Report for the year ended 31 March 2024 has been approved by the Board of The
Lindsell Train Investment Trust plc. Copies of the Annual Report are circulated to shareholders
and, where possible, to investors through other providers’ products and nominee companies (or
written notification is sent when they are published online). It is also made available in electronic
format for the convenience of readers. Printed copies are available from the Company’s Registered
Office in London.
Statement of Directors’ responsibilities in respect of the
Financial Statements continued
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Report of the Audit Committee
This report to shareholders for the year ended 31 March 2024 has been prepared in accordance
with guidance issued by the Financial Reporting Council and the UK Corporate Governance Code.
Composition of the Committee
The Audit Committee during the year comprised five Directors at the year end, all of whom are
members of the Board. All of the members of the Committee are independent and considered to
have sufficient recent and relevant experience to enable the Committee to function effectively.
David MacLellan has current experience in relation to accounting and financial matters. The
Company Secretary is Secretary to the Committee.
David MacLellan took over from Helena Vinnicombe as Chairman of the Audit Committee in
August 2023.
Role and responsibilities of the Committee
A comprehensive description of the Committee's role, duties and responsibilities can be found in
its terms of reference, which are available on the Company’s website and from the Company’s
Registered Office.
The principal activities undertaken by the Audit Committee are:
• to monitor and review the effectiveness of all aspects of the Company’s financial reporting;
• to satisfy itself as to the integrity of the full year and half-year reports to shareholders;
• to advise the Board that such reports are fair, balanced and understandable and comply with
applicable laws and regulations;
• to monitor the effectiveness of internal controls operated by third-party service providers
appointed by the Board to undertake the day-to-day activities and administration of the
Company’s business;
• to consider significant issues (if any) which are identified by the Auditor and to determine
such action (if any) as needs to be recommended to the Board in connection therewith;
• to meet, at least annually, with the Auditor and review the audit plan proposed by them;
including areas of risk, they will look particularly at their level of materiality and the fee
proposed by them for the statutory audit work;
• to make recommendations to the Board on the appointment, reappointment, replacement or
removal of the Auditor;
• to consider all proposals and fees for non-audit work, which may include tenders from
independent third-parties as well as proposals from the Auditor to undertake such work, the
fees for such work and its suitability to undertake the work involved;
• to monitor and satisfy itself as to the independence, objectivity, resources and qualifications
of the Auditor at least annually;
• to consider, at least annually, whether or not the Company should have an internal audit function.
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Governance
Report of the Audit Committee continued
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Meetings
The Audit Committee met three times during this financial year and meeting attendance is shown
on page 41. Meetings are held to consider the full year and half-year results. Before each year
end, the Board reviews the Auditor’s proposed plans, scope of work and costs for the ensuing full
year audit. Representatives of the Manager and the Company Secretary and Administrator attend
meetings to provide input and respond to questions.
Significant Matters Considered by the Audit Committee and the Board During the Year
In summary, additional to the Committee's core responsibilities, the main matters arising in
relation to 2024 were:
Significant reporting
matter How the issue was addressed
The Committee once again reviewed the impact of the risk
of fraudulent activity. Following an assessment and
identification of types of fraud that the Company could be
exposed to, it was believed that the Company’s key service
providers had adequate, robust controls in place to mitigate
the event of any fraudulent activity.
The Committee reviewed an assessment of the impact of
climate change and the weighted average carbon intensity
of the portfolio companies. The Committee noted the key
topics of engagement undertaken by LTL with each of the
portfolio companies and that the assessment identified that
the Company has a significantly lower weighted average
carbon intensity than its comparable benchmark. Please
refer to page 27 for further information.
The Committee has not had to consider any new audit
regulations in the past year. It has, however, taken note of
reporting guidance and thematic reviews published by the
FRC and determined how to apply any relevant best
practice to the Company’s reporting.
The Committee has noted, in particular, the publication by
the FRC of the Minimum Standard for Audit Committees
and the revised UK Corporate Governance Code. The
Minimum Standard will apply to the Company on a comply
or explain basis as it is included by reference in the new UK
Corporate Governance Code. The Committee will seek to
comply with the Standard as far as it is appropriate for an
externally-managed investment company to do so.
These matters were discussed by the Committee and any recommendations were fully considered
and recommendations were then made to the Board.
Risk assessment of
Fraudulent Activity
Risk assessment of Climate
Change
Audit Regulation
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Going Concern
The Audit Committee, at the request of the Board, considered the ability of the Company to adopt
the Going Concern basis for the preparation of the Financial Statements. Having reviewed the
Company’s financial position, the Committee is satisfied that it is appropriate for the Board to
prepare the Financial Statements for the year ended 31 March 2024 on a going concern basis. The
Committee’s review of the Company’s financial position included consideration of the cash and
cash equivalents position of the Company, the diversification of the listed portfolio, and the
analysis of listed portfolio liquidity, which estimated a liquidation of 92.4% of the portfolio
(excluding the holding in LTL), within five trading days (based on current market volumes). Stress
testing was completed in determining the appropriateness of preparing the Financial Statements
on a going concern basis, as set out below, which estimated that the Company could withstand
a 75% market fall and continue to remain as a going concern being able to meet its liabilities as
they fall due.
Longer-Term Viability Statement
The Committee considered, again on behalf of the Board, the longer-term viability of the
Company in connection with the Board’s statement (see pages 37 and 38). The Committee
reviewed the Company’s financial position (including its cash flows and liquidity position), the
principal risks and uncertainties and the results of stress tests. The stress tests considered the
impact of one or more of the key risks crystallising and then modelled the impact on the portfolio.
The results demonstrated the impact on the Company’s NAV, its expenses and its ability to meet
its liabilities. In even the most stressed scenario, the Company was shown to have sufficient cash,
or to be able to liquidate a sufficient portion of its listed holdings, in order to be able to meet its
liabilities as they fall due. Based on these results the Committee concluded it was reasonable for
the Board to expect that the Company will be able to continue in operation and meet its liabilities
as they fall due over the next five financial years.
Internal Controls
The Committee is responsible for ensuring that suitable controls are in place to prevent and detect
fraud, error and misstatement of financial information. As the Company outsources all of its
functions to third-parties, neither the Committee nor the Company has any internal control
structure in place but instead requires its third-party service providers to report on their internal
controls. These reports are received at least annually, including reports which have been
independently verified by the relevant service provider’s independent Auditor.
Risk Management
The Directors have identified five main areas of risk and have set out the actions taken to evaluate
and manage these risks. The Committee reviews the various actions taken and satisfies itself that
they are sufficient.
Further information can be found in the Strategic Report beginning on page 16.
Alternative Performance Measures
The Committee reviewed the disclosure and description of Alternative Performance Measures
provided on page 15 and within the Glossary of Terms and Alternative Performance Measures
beginning on page 108 and is satisfied that the disclosure is fair and relevant.
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Governance
Report of the Audit Committee continued
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Valuation of investments
The Audit Committee considered the valuation methodology of the unlisted investment in LTL
that represented 33.6% of net assets at the financial year end.
The other 66.4% of the Company’s net assets are listed investments, an unlisted fund and cash.
The valuation of these investments is a material matter in the production of the Financial
Statements.
The Audit Committee reviewed the procedures in place for ensuring the accuracy of the values
and is content that these procedures remain robust. The results of the valuation of all investments
were discussed with the Auditor. No material issues were identified.
As detailed in Appendix 1, LTL’s notional net profits are calculated by applying a fee rate
(averaged over the last six months) to the most recent end-month FUM to produce annualised
fee revenues excluding performance fees. Notional staff costs of 45% of revenues, annualised
fixed costs and tax are deducted from revenues to produce notional annualised net profits.
During the year the Committee challenged and accepted the appropriateness of the 45% notional
staff costs, through the review of a peer group comparison of remuneration costs.
Ownership of investments
The Administrator has not highlighted any issues and confirmed that all additions, disposals and
corporate actions were matched to contract notes or other supporting documentation. In
addition, a list of holdings was checked against an independent statement provided by the
Company’s custodian.
Revenue
Dividend income is reviewed by the Administrator to ensure it is appropriately accounted for and
allocated correctly to revenue or capital. The Audit Committee has also reviewed the Auditor’s
approach to revenue recognition prior to the commencement of the audit. The results of the
audit in this area were discussed with the Auditor and there were no significant issues arising.
Tax Compliance
The Company has engaged Wheelhouse Advisors, formerly part of ACA Compliance Group, to
assist with the Company’s tax compliance matters, in particular, the preparation and submission
of the Company’s corporation tax computation and tax return.
Internal Audit Function
The Committee reviews at least annually whether the Company should have an internal audit
function. It has recommended to the Board that, given the size, structure and nature of the
Company’s activities, and that all operations are carried out by third-party service providers, an
internal audit function is not appropriate. The Board has endorsed the recommendation of
the Committee.
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Auditor
Mr Peter Smith was the audit partner for the financial year under review and he has confirmed
BDO LLP’s willingness to continue to act as Auditor to the Company for the forthcoming financial
year. BDO LLP’s appointment is subject to shareholder re-appointment at the next Annual General
Meeting to be held in September 2024. Details can be found in the Notice of Annual General
Meeting. As a public company listed on the London Stock Exchange, the Company is subject to
mandatory auditor rotation requirements. Based on these requirements, another tender process
will be required in 2032. The Committee will, however, continue to consider annually the need
to go to tender for audit quality, remuneration or independence reasons.
The Auditor is required to change the Partner responsible for the audit affairs of the Company at
least every five years. In accordance with this legislation, 2028 will be Mr Smith’s last audit.
The Audit
The scope of the annual external audit was agreed in advance with the Committee with a focus
on areas of audit risk and the appropriate level of audit materiality. The Auditor reported to the
Audit Committee on the results of the audit work and highlighted any issues which were
significant or material in the context of the Financial Statements. There were no adverse matters
brought to the Audit Committee’s attention in respect of the financial year 2024 audit which
were material or significant or which should be brought to Shareholders’ attention.
The Committee identified the following areas of particular significance which might require
particular Independent audit emphasis:
• ownership of investments and assets included in the portfolio;
• valuation of positions in the portfolio, especially any which are illiquid or unlisted; and
• accuracy and completeness of the recognition of revenue.
Independence and effectiveness of the Auditor
The Committee is satisfied with the independence, objectivity and impartiality of the Auditor. In
order to fulfil the Committee’s responsibility regarding the independence of the Auditor, the
Committee reviewed the Auditor’s arrangements concerning any conflicts of interest, the extent
of any non-audit services, and the statement by the Auditor that it remains independent within
the meaning of the regulations and their professional standards. When considering whether to
appoint the Auditor to undertake non-audit work the Committee takes into account any potential
impairment of independence or impartiality, knowledge of the Company and its proposed fee.
The Committee may also put non-audit work out to tender.
The Audit Committee monitored and evaluated the effectiveness of the Auditor under the terms of
its appointment based on an assessment of their performance, qualification, knowledge, expertise
and resources. The Auditor’s effectiveness was also considered along with other factors such as audit
planning and interpretations of accounting standards.
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The Auditor was provided with an opportunity to address the Committee and, independently, the
Audit Chairman, without the Company Secretary present, to raise any concerns or discuss any matters
relating to the audit work and the co-operation of the Company Secretary, Investment Manager and
others in providing any information and the quality of that information including the timeliness in
responding to audit requests. No concerns were raised by the Auditor or the Audit Committee in
relation to the service provided by the Company Secretary, Investment Manager or any other
third-party service provider.
Appointment of the Independent Auditor
The Committee is satisfied that the independence, objectivity and impartiality of the Auditor has
not been compromised. Accordingly a resolution to re-appoint BDO LLP as the Auditor will be
proposed at the forthcoming Annual General Meeting.
Committee Effectiveness
As part of the Board Evaluation process, the Committee undertook an evaluation of its effectiveness
during April 2024.
The Committee confirmed that it had conducted its affairs in accordance with its terms of reference.
The Committee considers that its approach is comprehensive and appropriate, that it focuses on the
right issues and is managed well.
David MacLellan
Chairman of the Audit Committee
11 June 2024
Governance
Report of the Audit Committee continued
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Independent Auditor’s Report to the members of
The Lindsell Train Investment Trust plc
Opinion on the Financial Statements
In our opinion the Financial Statements:
• give a true and fair view of the state of the Company’s affairs as at 31 March 2024 and of its profit for
the year then ended;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the Financial Statements of The Lindsell Train Investment Trust plc (the ‘Company’) for the
year ended 31 March 2024 which comprise the Income Statement, the Statement of Changes in Equity, the
Statement of Financial Position, the Statement of Cash Flows and notes to the Financial Statements, including
a summary of significant accounting policies. The financial reporting framework that has been applied in
their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting
Standard 102 The Financial Reporting Standard in the United Kingdom and Republic of Ireland (United
Kingdom Generally Accepted Accounting Practice).
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. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit opinion
is consistent with the additional report to the audit committee.
Independence
Following the recommendation of the Audit Committee, we were appointed by the Board of Directors on
23 December 2022 to audit the Financial Statements for the year ended 31 March 2023 and subsequent
financial periods. The period of total uninterrupted engagement including retenders and reappointments is
2 years, covering the years ended 31 March 2023 to 31 March 2024. We remain 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 listed public interest entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by
that standard were not provided to the Company.
Conclusions relating to going concern
In auditing the Financial Statements, we have concluded that the Directors’ use of the going concern basis
of accounting in the preparation of the Financial Statements is appropriate. Our evaluation of the Directors’
assessment of Company’s ability to continue to adopt the going concern basis of accounting included:
• evaluating the appropriateness of the Directors’ method of assessing the going concern in light of economic
and market conditions by reviewing the information used by the Directors in completing their assessment;
• assessing the appropriateness of the Directors’ assumptions and judgements made by comparing the prior
year forecasted costs to the actual costs incurred to check that the projected costs are reasonable;
• assessing the projected management fees for the year to check that it was in line with the current assets
under management levels and the projected market growth forecasts for the following year;
• assessing the appropriateness of the Directors’ assumptions and judgements made in their base case and
stress tested forecasts including consideration of the available cash resources relative to forecast
expenditure and commitments; and
• challenging the Directors’ assumptions and judgements made in their forecasts including performing an
independent analysis of the liquidity of the portfolio.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a
going concern for a period of at least twelve months from when the Financial Statements are authorised for issue.
In relation to the Company’s reporting on how it has applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to the Directors’ statement in the Financial Statements
about whether the Directors considered it appropriate to adopt the going concern basis of accounting.
Governance
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Independent Auditor’s Report to the members of
The Lindsell Train Investment Trust plc continued
Governance
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Our responsibilities and the responsibilities of the Directors with respect to going concern are described in
the relevant sections of this report.
Overview
Key audit matters
(‘KAM’)
2024
2023
1
Valuation and ownership of level 1 and
level 2 investments
✔
✔
Valuation of
unlisted
investmen
t
✔
✔
M
ateriality
Company Financial Statements as a whole
£2m (2023: £2.1m) based on 1% (2023: 1%) of Net assets as at 31 March 2024
1
In the Financial Statements for the year-ended 31 March 2023 we reported one KAM which related to the valuation
and ownership of
investments. In
the current year we have split the valuation and ownership of level 1 and level 2
investments, and valuation of
unlisted
investments into two separate KAMs as they have different risk profiles.
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding of the Company and its environment, including the
Company’s system of internal control, and assessing the risks of material misstatement in the
F
inancial
S
tatements. We also addressed the risk of management override of internal controls, including assessing
whether there was evidence of bias by the Directors that may have represented a risk of material misstatement.
Key audit matters
Key audit matters are those matters that, in our professional judgement, 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, including those which had the greatest
effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the
engagement team. These matters were addressed in the context of our audit of the Financial Statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
How the scope of our audit addressed the key audit matter
We responded to this matter by testing the valuation and ownership of the
whole portfolio of investments. We performed the following procedures:
For level 1 Investments, we have:
– confirmed the year-end bid price was used by agreeing to externally
quoted prices;
– assessed if there were contra indicators, such as liquidity considerations,
to suggest bid price is not the most appropriate indication of fair value
by considering the realisation period for individual holdings; and
– recalculated the valuation by multiplying the number of shares held
per the statement obtained from the custodian by the valuation per
share.
For the level 2 investment, we have:
– compared the valuation of the holdings with the published fund unit
price;
– obtained and assessed the Service Organisation Control Report of the
fund administrator;
– compared the net asset value of the fund per the most recent audited
accounts to the fact sheet for the coterminous period; and
– reviewed the underlying investments in the investee fund and set an
expectation of the valuation movement in the year based on the
change in quoted prices of underlying holdings.
We have confirmed the ownership by obtaining a direct confirmation of
the number of shares held per equity investment from the custodian
regarding all investments held at the balance sheet date.
Key observations:
Based on our procedures performed, we did not identify any matters to
suggest the valuation or ownership of the level 1 and level 2 investments
was not appropriate.
Key audit matters
Valuation and ownership of level 1 and
level 2 investments
(Note 1 and Note 10 to the Financial
Statements)
We considered the valuation and ownership
of investments to be a significant audit area
as investments represent the most
significant balance in the Financial
Statements and underpins the principal
activity of the entity. Given the significance
of the investments there is a risk that an
error in their valuation could have a material
impact on the Financial Statements.
As the portfolio comprises a majority of level
1 investments, we do not consider the use of
bid price to be subject to significant
estimation uncertainty.
There is also a risk of error in the recording
of investment holdings such that those
recorded do not appropriately reflect the
property of the Company.
For these reasons and the materiality to the
Financial Statements as a whole, they are
considered to be a key area of our overall
audit strategy and allocation of our
resources and hence a Key Audit Matter.
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Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could
influence the economic decisions of reasonable users that are taken on the basis of the Financial Statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we
use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly,
misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the
nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their
effect on the Financial Statements as a whole.
Based on our professional judgement, we determined materiality for the Financial Statements as a whole and
performance materiality as follows:
Company Financial Statements
2024 2023
Materiality £2.0m £2.1m
Basis for determining 1% of Net assets 1% of Net assets
materiality
Performance materiality £1.5m £1.48m
Basis for determining 75% of materiality 70% of materiality
performance materiality
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess
of £100,000 (2023: £105,700). We also agreed to report differences below this threshold that, in our view,
warranted reporting on qualitative grounds.
As an investment trust, the net asset value is
the key measure of performance for users of
the Financial Statements.
As an investment trust, the net asset value is
the key measure of performance for users of
the Financial Statements.
Rationale for the
benchmark applied
The level of performance materiality applied
was set after having considered a number of
factors including the expected total value of
known and likely misstatements and the
level of transactions in the year.
The level of performance materiality applied
was set after having considered a number of
factors including the expected total value of
known and likely misstatements and the level
of transactions in the year.
Rationale for the
percentage applied for
performance
materiality
THE LINDSELL TRAIN INVESTMENT TRUST PLC
How the scope of our audit addressed the key audit matter
To test the valuation of the unlisted investment in Lindsell Train Limited,
we have:
• considered whether the valuation methodology is the most
appropriate in the circumstances under the International Private Equity
and Venture Capital Valuation (“IPEV”) Guidelines;
• verified and benchmarked key inputs and estimates to independent
information and our own research;
• recalculated the computational accuracy of the value attributable to
the Company; and
• where appropriate, we have stress-tested certain assumptions applied
to assess the sensitivity of the valuation to these inputs with reference
to materiality.
Key observations:
Based on our procedures performed we did not identify any matters to
suggest the valuation of the unlisted investment was not appropriate.
Key audit matter
Valuation of unlisted investment
(Note 1 and Note 10 to the Financial
Statements)
There is a high level of estimation
uncertainty involved in determining the
valuation of the unlisted investment in
Lindsell Train Limited.
The investment is valued by the Directors
at fair value using a valuation
methodology adopted by the Board.
There is a potential risk of misstatement in
the investment valuations through the
manipulation of judgemental inputs
and/or use of inappropriate valuation
methodology.
Due to the materiality of the balance in
relation to the Financial Statements as a
whole and judgement involvement, we
consider this to be a key audit matter.
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Independent Auditor’s Report to the members of
The Lindsell Train Investment Trust plc continued
Governance
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Other information
The directors are responsible for the other information. The other information comprises the information
included in the annual report other than the Financial Statements and our auditor’s report thereon. Our
opinion on the Financial Statements does not cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility
is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the Financial Statements, or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a material misstatement in the
Financial Statements themselves. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Corporate Governance Statement
The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term
viability and that part of the Corporate Governance Statement relating to the Company’s compliance with
the provisions of the UK Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements
of the Corporate Governance Statement is materially consistent with the Financial Statements, or our
knowledge obtained during the audit.
Going concern and longer-term viability • the Directors’ statement with regards to the appropriateness
of adopting the going concern basis of accounting and any
material uncertainties identified as set out on pages 37 and
38; and
• the Directors’ explanation as to their assessment of the
Company’s prospects, the period this assessment covers and
why the period is appropriate as set out on page 20.
Other Code provisions • directors’ statement on fair, balanced and understandable as
set out on page 57;
• board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks as set out on
page 16;
• the section of the Annual Report that describes the review of
effectiveness of risk management and internal control
systems as set out on pages 46 and 47; and
• the section describing the work of the Audit Committee as
set out on page 60.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we
are required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described
below.
Strategic Report and Directors’ Report In our opinion, based on the work undertaken in the course of
the audit:
• the information given in the Strategic Report and the
Directors’ Report for the financial year for which the Financial
Statements are prepared is consistent with the Financial
Statements; and
• the Strategic Report and the Directors’ Report have been
prepared in accordance with applicable legal requirements.
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In the light of the knowledge and understanding of the
Company and its environment obtained in the course of the
audit, we have not identified material misstatements in the
Strategic Report or the Directors’ Report.
Directors’ remuneration In our opinion, the part of the Directors’ Remuneration Report
to be audited has been properly prepared in accordance with
the Companies Act 2006.
Matters on which we are required We have nothing to report in respect of the following matters
to report by exception in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
• adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches
not visited by us; or
• the Financial Statements and the part of the Directors’
remuneration report to be audited are not in agreement with
the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by
law are not made; or
• we have not received all the information and explanations
we require for our audit.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ responsibilities in respect of the Financial Statements,
the Directors are responsible for the preparation of the Financial Statements and for being satisfied that
they give a true and fair view, and for such internal control as the Directors determine is necessary to enable
the preparation of Financial Statements that are free from material misstatement, whether due to fraud
or error.
In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below:
Non-compliance with laws and regulations
Based on:
• our understanding of the Company and the industry in which it operates;
• discussion with the Investment Manager, the Administrator and those charged with governance; and
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Independent Auditor’s Report to the members of
The Lindsell Train Investment Trust plc continued
Governance
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• obtaining and understanding of the Company’s policies and procedures regarding compliance with laws
and regulations.
we considered the significant laws and regulations to be Companies Act 2006, the FCA listing and DTR rules,
the principles of the AIC Code of Corporate Governance, industry practice represented by the AIC SORP, the
applicable accounting framework, and qualification as an Investment Trust under UK tax legislation as any
non-compliance of this would lead to the Company losing various deductions and exemptions from
corporation tax.
Our procedures in respect of the above included:
• agreement of the financial statement disclosures to underlying supporting documentation;
• enquiries of management and those charged with governance relating to the existence of any non-
compliance with laws and regulations;
• reviewing minutes of meeting of those charged with governance throughout the period for instances of
non-compliance with laws and regulations; and
• reviewing the calculation in relation to Investment Trust compliance to check that the Company was
meeting its requirements to retain their Investment Trust Status. This included a review of other qualitative
factors and ensuring compliance with these.
Fraud
We assessed the susceptibility of the financial statement to material misstatement including fraud.
Our risk assessment procedures included:
• enquiry with the Investment Manager, the Administrator and those charged with governance regarding
any known or suspected instances of fraud;
• review of minutes of meeting of those charged with governance for any known or suspected instances of
fraud; and
• discussion amongst the engagement team as to how and where fraud might occur in the financial
statements.
Based on our risk assessment, we considered the areas most susceptible to be management override of
controls and including the valuation of the unlisted investment.
Our procedures in respect of the above included:
• The procedures set out in the Key Audit Matter section above relating to the unlisted investment in Lindsell
Train Limited;
• In addressing the risk of management override of control, we:
• performed a review of estimates and judgements applied by management in the Financial Statements
to assess their appropriateness and the existence of any systematic bias;
• considered the opportunity and incentive to manipulate accounting entries and target tested relevant
adjustments made in the period end financial reporting process;
•
reviewed for significant transactions outside the normal course of business; and
• performed a review of unadjusted audit differences, if any, for indications of bias or deliberate
misstatement.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement
team members, who were deemed to have the appropriate competence and capabilities and remained alert
to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements,
recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery,
misrepresentations or through collusion. There are inherent limitations in the audit procedures performed
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and the further removed non-compliance with laws and regulations is from the events and transactions
reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor’s Report.
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.
Peter Smith (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
11 June 2024
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
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Financial Statements
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Income Statement for the year ended 31 March 2024
2024 2023
Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
Losses on investments held
at fair value 10 – (6,014) (6,014) – (12,978) (12,978)
Exchange losses on currency
balances – (4) (4) – (3) (3)
Income 2 12,005 – 12,005 14,135 – 14,135
Investment management fees 3 (976) – (976) (1,138) – (1,138)
Other expenses 4 (715) (1) (716) (690) (1) (691)
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Net return/(loss) before taxation 10,314 (6,019) 4,295 12,307 (12,982) (675)
Taxation 7 (100) – (100) (96) – (96)
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Return/(loss) after taxation for
the financial year 10,214 (6,019) 4,195 12,211 (12,982) (771)
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Return/(loss) per Ordinary Share 9 £51.07 £(30.10) £20.97 £61.06 £(64.91) £(3.85)
All revenue and capital items in the above statement derive from continuing operations.
The total columns of this statement represent the profit and loss account of the Company. The
revenue and capital return columns are supplementary to this and are prepared under the
guidance published by the Association of Investment Companies.
The Company does not have any other recognised gains or losses. The net return for the year
disclosed above represents the Company’s total comprehensive income.
No operations were acquired or discontinued during the year.
The notes on pages 76 to 91 form part of these Financial Statements.
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Statement of Changes in Equity for the year ended 31 March 2024
Share Special Capital Revenue
capital reserve reserve reserve Total
2024 2024 2024 2024 2024
£’000 £’000 £’000 £’000 £’000
At 1 April 2023 150 19,850 168,000 23,390 211,390
(Loss)/return for the financial year – – (6,019) 10,214 4,195
Dividends paid for the year ended
31 March 2023 (see note 8) – – – (10,300) (10,300)
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
At 31 March 2024 150 19,850 161,981 23,304 205,285
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
For the year ended 31 March 2023
Share Special Capital Revenue
capital reserve reserve reserve Total
2023 2023 2023 2023 2023
£’000 £’000 £’000 £’000 £’000
At 1 April 2022 150 19,850 180,982 21,779 222,761
(Loss)/return for the financial year – – (12,982) 12,211 (771)
Dividends paid for the year ended
31 March 2022 (see note 8) – – – (10,600) (10,600)
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
At 31 March 2023 150 19,850 168,000 23,390 211,390
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
The notes on pages 76 to 91 form part of these Financial Statements.
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Financial Statements
Statement of Financial Position at 31 March 2024
2024 2023
Notes £’000 £’000 £’000 £’000
Fixed assets
Investments held at fair value
through profit or loss 10 199,082 203,128
Current assets
Other receivables 11 478 491
Cash at bank 6,028 8,010
––––––––– –––––––––
6,506 8,501
Creditors: amounts falling due within
one year
Other payables 12 (303) (239)
––––––––– –––––––––
Net current assets 6,203 8,262
––––––––– –––––––––
Net assets 205,285 211,390
––––––––– –––––––––
––––––––– –––––––––
Called up share capital 13 150 150
Special reserve 14 19,850 19,850
––––––––– –––––––––
20,000 20,000
Capital reserve 14 161,981 168,000
Revenue reserve 23,304 23,390
––––––––– –––––––––
Equity Shareholders’ funds 205,285 211,390
––––––––– –––––––––
––––––––– –––––––––
Net Asset Value per Ordinary Share 15 £1,026.43 £1,056.95
The Financial Statements on pages 72 to 91 were approved by the Board on 11 June 2024 and
were signed on its behalf by:
Roger Lambert
Chairman
The Lindsell Train Investment Trust plc
Registered in England & Wales, No: 4119429
The notes on pages 76 to 91 form part of these Financial Statements.
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Statement of Cash Flows for the year ended 31 March 2024
2024 2023
Notes £’000 £’000
Net cash inflow from operating activities 16 10,294 12,243
––––––––– –––––––––
Investing activities
Purchase of investments held at fair value (2,845) (339)
Sale of investments held at fair value 873 1
––––––––– –––––––––
Net cash outflow from investing activities (1,972) (338)
––––––––– –––––––––
Financing activities
Equity dividends paid 8 (10,300) (10,600)
––––––––– –––––––––
Net cash outflow from financing activities (10,300) (10,600)
––––––––– –––––––––
––––––––– –––––––––
(Decrease)/increase in cash and cash equivalents (1,978) 1,305
Cash and cash equivalents at beginning of year* 8,010 6,708
Loss on exchange movements (4) (3)
––––––––– –––––––––
Cash and cash equivalents at end of year* 6,028 8,010
––––––––– –––––––––
––––––––– –––––––––
Cash flows from operating activities includes dividend income received (gross) of £11,809,000 (2023: £14,156,000)
and deposit interest of £190,000 (2023: £36,000).
* Comprises solely cash held at bank.
The notes on pages 76 to 91 form part of these Financial Statements.
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Financial Statements
Notes to the Financial Statements
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1 Accounting policies
A summary of the principal accounting policies, all of which have been applied consistently
throughout the year, is set out below:
(a) Basis of accounting
The Financial Statements of the Company have been prepared under the historical cost convention
modified to include the revaluation of fixed assets in accordance with United Kingdom Company
law, FRS 102 ‘The Financial Reporting Standard applicable in the UK and Ireland’ and with the
Statement of Recommended Practice (“SORP”) “Financial Statements of Investment Trust Companies
and Venture Capital Trusts”, issued by the Association of Investment Companies in July 2022.
Going concern
The Financial Statements have been prepared on the going concern basis.
The Directors have a reasonable expectation, after considering a schedule of the Company’s
current financial resources and liabilities, that the Company has adequate resources to continue
in existence for at least 12 months from the approval of the Financial Statements; and that it is
appropriate to prepare the Financial Statements on a going concern basis.
The Company does not have a fixed life.
As at 31 March 2024, the Company held £110,456,000 (2023: £100,547,000) in listed investments
and £88,626,000 (2023: £102,581,000) in an unlisted investment and an unlisted fund. The total
operating expenses for the year ended 31 March 2024 were £1,692,000 (2023: £1,829,000). It is
estimated that 56.6% of the investment portfolio, (92.4% of the portfolio, excluding the holding
in LTL), could be liquidated within five business days based on 20% of the 90 days’ average trading
volumes obtained from Bloomberg.
(b) Reporting currency
The Financial Statements are presented in Sterling which is the functional currency of the Company
because it is the currency of the primary economic environment in which the Company operates.
(c) Dividends
Under Section 32 of FRS 102, final dividends should not be accrued in the Financial Statements
unless they have been approved by shareholders before the balance sheet date.
Dividends payable to shareholders are recognised in the Statement of Changes in Equity when
they have been approved by shareholders and have become a liability of the Company. Interim
dividends are recognised in the Financial Statements in the period in which they are paid.
(d) Valuation of fixed asset investments
The Company’s investments are classified as held at fair value through profit or loss in
accordance with Section 11 and 12 of FRS 102 and are managed and evaluated on a fair value
basis in accordance with its investment strategy.
When a purchase or sale is made under a contract, the terms of which require delivery within
the time frame of the relevant market, the investments concerned are recognised or
derecognised on the trade date.
Listed investments are held through profit or loss and accordingly are valued at fair value,
deemed to be bid or last market prices depending on the convention of the exchange on which
they are listed. As the Company’s business is investing in financial assets with a view to profiting
from their total return in the form of interest, dividends or increases in fair value quoted,
investments are held through profit or loss on initial recognition at fair value. The Company
manages and evaluates the performance of these investments on a fair value basis in accordance
with its investment strategy, and information about the Company is provided internally on this
basis to the Board.
Lindsell Train fund products are valued daily using prices supplied by the administrator of
these funds.
Notes to the Financial Statements
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1 Accounting policies continued
The unlisted investment in LTL is valued by the Directors at fair value using a valuation
methodology adopted by the Board. The formula is monitored by the Board to ensure its
ongoing appropriateness. At the most recent update in 2024 the Board sought external advice
to verify its approach. Please refer to note 1(j) for further information.
The investment in LTL (representing 23.9% of the Manager) is held as part of the investment
portfolio. Accordingly, the shares are accounted for and disclosed in the same way as other
investments in the portfolio. The valuation of the investment (see note 17) on pages 86 to 90
is calculated at the end of each month on the basis of fair value as determined by the Directors
of the Company. The valuation process in effect from 31 March 2022 remains unchanged and
is based upon a methodology that uses a percentage of LTL’s funds under management, with
the percentage applied being reviewed monthly and adjusted to reflect the ongoing
profitability of LTL.
Categorisation within the hierarchy has been determined on the basis of the lowest level
input that is significant to the fair value measurement of the relevant asset as follows:
• Level 1 – The unadjusted quoted price in an active market for identical assets or liabilities
that the entity can access at the measurement date.
• Level 2 – Inputs other than quoted prices included within Level 1 that are observable (i.e.
developed using market data) for the asset or liability, either directly or indirectly.
• Level 3 – Inputs are unobservable (i.e. for which market data is unavailable) for the asset
or liability.
(e) Income
Dividends are credited to the revenue column of the Income Statement on an ex-dividend
basis. Where an ex-dividend date is not available, dividends are recognised when the
Company’s right to receive payment is established. The fixed return on a debt security is
recognised on a time apportionment basis so as to reflect the effective interest rate on the
debt security. Bank and deposit interest is accounted for on an accruals basis.
(f) Expenses
All expenses are accounted for on an accruals basis. Finance costs are accounted for on an
accruals basis using the effective interest rate method. Expenses are charged through the
revenue column of the Income Statement except as follows:
– expenses which are incidental to the acquisition or disposal of an investment are charged
to the capital column of the Income Statement;
– expenses are charged to the realised capital reserve, via the capital column of the Income
Statement, where a connection with the maintenance or enhancement of the value of the
investments can be demonstrated;
– the non allocation approach has been taken and charged 100% of the management fees
to revenue; and
– performance fees payable to the Manager are charged 100% to capital.
(g) Taxation
Deferred taxation is provided on all differences which have originated but not reversed by
the balance sheet date, calculated at the rate at which it is anticipated the timing differences
will reverse. Deferred tax assets are recognised only when, on the basis of available evidence,
it is more likely than not that there will be taxable profits in the future against which the
deferred tax asset can be recovered.
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Financial Statements
Notes to the Financial Statements continued
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1 Accounting policies continued
In line with recommendations of the SORP, the allocation method used to calculate tax relief
on expenses presented in the capital column of the Statement of Comprehensive Income is
the marginal basis. Under this basis if taxable income is capable of being offset entirely by
expenses presented in the revenue column of the Income Statement then no tax relief is
transferred to the capital column.
(h) Foreign currency
Transactions denominated in foreign currencies are recorded in the local currency at the actual
exchange rates as at the date of the transaction. Assets and liabilities denominated in foreign
currencies at the year end are reported at the rate of exchange prevailing at the year end. Any
gain or loss arising from a change in exchange rates subsequent to the date of the transaction
is included as an exchange gain or loss in the capital or revenue column of the Income
Statement depending on whether the gain or loss is of a capital or revenue nature.
(i) Capital reserve
The following are taken to this reserve:
– gains or losses on the disposal of investments;
– exchange differences of a capital nature;
– expenses, together with the related taxation effect, allocated to this reserve in accordance
with the above policies; and
– investment holding gains or losses, being the increase or decrease in the valuation of
investments held at the year end.
Revenue reserve
The revenue reserve reflects all income and expenditure which are recognised in the revenue
column of the income statement.
Special reserve
The special reserve arose following Court approval in September 2002 to transfer £19,850,000
from the share premium account. This reserve can be used to finance the redemption and/or
purchase of shares in issue.
In accordance with the Company’s Articles of Association, the capital reserve and special
reserve may not be distributed by way of a dividend but may be utilised for the purposes of
share buybacks. The Company may only distribute by way of dividend accumulated revenue
profits within the revenue reserve.
(j) Significant judgments and estimates
The key significant estimate to report is the valuation of the investment in LTL where material
judgments are made. Please refer to notes 1(d) and 17 for details of how this holding is valued.
Other than this, in the course of preparing the Financial Statements, no material judgments have
been made in the process of applying the Company’s accounting policies, except those that
involve estimations.
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2 Income
2024 2023
£’000 £’000
Income from investments
Overseas dividends 862 833
UK dividends
– Lindsell Train Limited 9,410 11,875
– Other UK dividends 1,543 1,391
––––––––– –––––––––
11,815 14,099
––––––––– –––––––––
––––––––– –––––––––
Other income
Deposit Interest 190 36
––––––––– –––––––––
190 36
––––––––– –––––––––
––––––––– –––––––––
Total income comprises:
Dividends 11,815 14,099
Interest 190 36
––––––––– –––––––––
12,005 14,135
––––––––– –––––––––
––––––––– –––––––––
3 Management fees
2024 2023
£’000 £’000
Investment management fee 1,099 1,255
Rebate of investment management fee (see below) (123) (117)
––––––––– –––––––––
Total management fee 976 1,138
––––––––– –––––––––
––––––––– –––––––––
In accordance with an Investment Management Agreement dated 21 December 2000 (last
revised in November 2020) between the Company and LTL, LTL has been providing investment
management services to the Company. For its services, LTL receives an annual fee of 0.6%,
calculated on the lower of the Adjusted Market Capitalisation and the Adjusted Net Asset
Value of the Company, calculated using weekly data and payable in arrears in respect of each
calendar month. The amount charged during the year is shown above. £139,623 (2023:
£94,893) of the fee for the year was outstanding as at the Balance Sheet date.
A performance fee is payable at the rate of 10 per cent of the value of any positive relative
performance versus the Benchmark (the MSCI World Index Total Return (Sterling adjusted)), in
a financial year. Relative performance is measured by taking the lower of the NAV or Average
Market Price, taking into account dividends, at the end of each financial year and comparing
the percentage annual change with the total return of the Benchmark. A performance fee will
only be paid out if the annual change is both above the Benchmark and is a positive figure.
Relative performance will be carried forward in years where the Manager is not eligible for a
performance fee based on these two criteria. The Company has twelve month performance
periods, ending on 31 March in each year. The performance fee is payable in arrears in respect
of each performance period.
The performance fee payable to the Manager for the year to 31 March 2024 was £nil (2023: £nil).
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Financial Statements
Notes to the Financial Statements continued
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3 Management fees continued
For the avoidance of double charging management fees, the Manager has agreed to rebate
any periodic management fee that it receives from the Company by the amount of fees
receivable by it from LTL managed fund products and other fund products where LTL is the
Manager. The amounts rebated on the Investment Management fee are shown above, of
which £107,585 (2023: £101,725) relates to the Company’s investment in Lindsell Train North
American Equity Fund and £15,656 (2023: £15,065) relates to the Company’s investment in the
Finsbury Growth & Income Trust PLC.
4 Other expenses
2024 2023
£’000 £’000
Directors’ emoluments 178 151
Company Secretarial and Administration fee 192 195
Auditor’s remuneration*
†
55 55
Tax compliance fee 4 6
Safe custody fees 19 18
Printing fees 36 40
Registrars’ fees 32 35
Listing fees 13 14
Legal fees 7 5
Employer’s National Insurance 11 11
Directors’ liability insurance 13 13
Key man insurance 45 47
Director recruitment costs 25 40
Sundry 76 60
VAT irrecoverable 9 –
––––––––– –––––––––
715 690
Capital charges 1 1
––––––––– –––––––––
716 691
––––––––– –––––––––
––––––––– –––––––––
* Excluding VAT.
† Remuneration for the audit of the Financial Statements of the Company.
5 Directors’ emoluments
These are reflected in the table below:
2024 2023
£’000 £’000
Directors’ fees 178 151
––––––––– –––––––––
––––––––– –––––––––
Since 1 January 2024, the Chairman of the Board, Chairman of the Audit Committee, and
other Directors receive set fees at rates of £43,000, £36,000 and £29,000 respectively per
annum, and have no entitlement to any performance fees. Directors’ fees amounting to
£29,000 (2023: £27,000) have been waived by Michael Lindsell in view of his connection with
the Manager.
There were no pension contributions paid or payable.
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6 Disclosure of interests
As at 31 March 2024 the Company held 12,500,000 shares in WS Lindsell Train North American
Equity Fund with a fair value of £19,624,000 and a cost of £12,912,000.
LTL is also the Portfolio Manager of Finsbury Growth & Income Trust PLC in which the
Company has an investment of 420,000 shares with a fair value of £3,612,000 at a cost of
£759,000 (see page 9).
LTL’s appointment as Manager to the Company is subject to termination by either party on
twelve months’ notice.
7 Taxation
The tax charge on the loss on ordinary activities for the year was as follows:
2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
UK corporation tax – – – – – –
Overseas tax 114 – 114 102 – 102
Overseas tax recoverable (14) – (14) (6) – (6)
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Tax charge per accounts 100 – 100 96 – 96
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
The current taxation charge for the year is different from the standard rate of corporation
tax in the UK of 25% (2023: 19%). The differences are explained below:
2024 2023
£’000 £’000
Net gains/(loss) on ordinary activities before taxation 4,295 (675)
––––––––– –––––––––
Theoretical tax at UK Corporation tax rate of 25% (2023: 19%) 1,074 (128)
Effects of:
– UK dividends which are not taxable (2,738) (2,521)
– Overseas dividends which are not taxable (215) (158)
– Non-taxable loss on investments 1,504 2,466
– Current year excess expenses 375 341
– Overseas tax suffered 114 102
– Overseas tax recoverable (14) (6)
––––––––– –––––––––
Actual current tax charge 100 96
––––––––– –––––––––
––––––––– –––––––––
As an Investment Trust, the Company is not subject to UK taxation on capital gains as long as
it maintains exemption under Sections 1158 and 1159 of the Corporation Tax Act 2010. In the
opinion of the Directors, the Company has complied with the requirements of Sections 1158
and 1159 of the Corporation Tax Act 2010.
Factors that may affect future tax charges
As at 31 March 2024, the Company had unutilised management expenses of £31,533,000
(2023: £30,032,000). These expenses could only be utilised if the Company were to generate
taxable profits in the future. As a result, the Company has not recognised a deferred tax asset
of £7,883,250 (2023: £7,508,000) arising from management expenses exceeding taxable
income based on the prospective corporation tax rate of 25% (2023: 19%).
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Financial Statements
Notes to the Financial Statements continued
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8 Dividends paid and payable
2023 2022
£’000 £’000
Final dividend for the year ended 31 March 2023 of £51.50 per
Ordinary share (2022: £51.12 per Ordinary Share) 10,300 10,224
––––––––– –––––––––
––––––––– –––––––––
The total dividend forming the basis of Sections 1158 and 1159 of the Corporation Tax Act
2010 payable in respect of the financial year is set out below:
2024 2023
£’000 £’000
FinaI dividend for the year ended 31 March 2024 of £51.50 per
Ordinary share (2023: £51.50 per Ordinary Share) 10,300 10,300
––––––––– –––––––––
––––––––– –––––––––
9 Return/(loss) per Ordinary Share
2024 2023
Total return/(loss) per Ordinary share
Total return/(loss) £4,195,000 £(771,000)
Weighted average number of Ordinary Shares
in issue during the year 200,000 200,000
––––––––– –––––––––
Total return/(loss) per Ordinary share £20.97 £(3.85)
––––––––– –––––––––
––––––––– –––––––––
The total return/(loss) per Ordinary share shown above can be further analysed between
revenue and capital, as below:
2024 2023
Revenue return per Ordinary Share
Revenue return £10,214,000 £12,211,000
Weighted average number of Ordinary Shares
in issue during the year 200,000 200,000
––––––––– –––––––––
Revenue return per Ordinary Share £51.07 £61.06
––––––––– –––––––––
––––––––– –––––––––
Capital loss per Ordinary Share
Total return £(6,019,000) £(12,982,000)
Weighted average number of Ordinary Shares
in issue during the year 200,000 200,000
––––––––– –––––––––
Capital loss per Ordinary Share £(30.10) £(64.91)
––––––––– –––––––––
––––––––– –––––––––
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10 Investments held at fair value through profit or loss
2024 2023
£’000 £’000
Investments listed on a recognised investment exchange 110,456 100,547
Unlisted investment and Fund 88,626 102,581
––––––––– –––––––––
Valuation at year end 199,082 203,128
––––––––– –––––––––
––––––––– –––––––––
Opening book cost 42,591 42,252
Opening investment holding gains 160,537 173,516
––––––––– –––––––––
Opening Fair Value 203,128 215,768
Movements in the year:
Purchases at cost 2,845 339
Sales – proceeds (877) (1)
Losses on investments (6,014) (12,978)
––––––––– –––––––––
Closing Fair Value 199,082 203,128
––––––––– –––––––––
––––––––– –––––––––
Closing book cost 45,428 42,591
Closing investment holding gains 153,654 160,537
––––––––– –––––––––
Closing Fair Value 199,082 203,128
––––––––– –––––––––
––––––––– –––––––––
Realised gains on investments 869 1
Decrease in investment holding gains for the year (6,883) (12,979)
––––––––– –––––––––
Losses on investments held at fair value (6,014) (12,978)
––––––––– –––––––––
––––––––– –––––––––
The Company received proceeds of £877,000 (2023: £1,000) from investments sold in the year.
The book cost of these investments when they were purchased was £7,729 (2023: £400). These
investments have been revalued over time and until they were sold any unrealised gains/losses
were included in the fair value of the investments.
Investment transaction costs on purchases and sales of investments during the year to
31 March 2024 amounted to £805 and £9 respectively (2023: £85 and £nil respectively).
During the year the investment holding loss attributable to the Company’s holding in LTL
amounted to £16,218,000 (2023 loss: £11,690,000). See note 17 on pages 97 and 98 for further
details.
Significant holdings
Included in the above are the following investments in which the Company has an interest
exceeding 10% of the nominal value of the shares of that class in the investee company as at
31 March 2024.
Investments Country of registration Class of % of
or incorporation capital class held
Lindsell Train Limited* England Ordinary Shares of £100 23.9%
*As at 31 January 2024, the latest year end for LTL, its audited aggregate capital and reserves
amounted to £103,519,000, (2023: £97,680,000) and the profit for that year amounted to
£44,596,000 (2023: £54,315,000). The total amount of dividends paid during the year was
£38,967,000 (2023: £48,876,000) equating to dividends of £1,462 per share (2023: £1,841
per share). The earnings per share were £1,673 (2023: £2,038). The cost of the Company’s
investment in LTL was £64,500.
See note relating to the 2024 and 2023 results under the tables in Appendix 1 on pages 97 and 98.
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Financial Statements
Notes to the Financial Statements continued
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10 Investments held at fair value through profit or loss continued
LTL is a related undertaking of the Company. LTL’s registered office address is 66 Buckingham
Gate, London SW1E 6AU.
LTL has been accounted for as an investment in accordance with the accounting policy in
note 1(d).
The Company has arrangements in place with the Manager to avoid double charging of fees
and expenses on investments made in other LTL managed funds (see note 3).
11 Other receivables
2024 2023
£’000 £’000
Amounts due from brokers 5 1
VAT recoverable 27 34
Prepayments and accrued income 446 456
––––––––– –––––––––
478 491
––––––––– –––––––––
––––––––– –––––––––
12 Other payables
2024 2023
£’000 £’000
Accruals and deferred income 303 239
––––––––– –––––––––
––––––––– –––––––––
13 Share capital
2024 2023
No. of shares No. of shares
000’s £’000 000’s £’000
Allotted and fully paid:
Ordinary Shares of 75p each 200 150 200 150
––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– –––––––––
There has been no change in the capital structure during the year to 31 March 2024.
14 Reserves
Capital reserve
The capital reserve includes investment holding gains of £153,654,000 (2023: £160,537,000).
Revenue reserve
The revenue reserve reflects all income and expenditure which are recognised in the revenue
column of the income statement.
Special reserve
The special reserve arose following Court approval in September 2002 to transfer £19,850,000
from the share premium account. This reserve can be used to finance the redemption and/or
purchase of shares in issue.
In accordance with the Company’s Articles of Association the capital reserve and special
reserve may not be distributed by way of a dividend but may be utilised for the purposes of
share buybacks. The Company may only distribute by way of dividend accumulated revenue
profits within the revenue reserve.
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14 Reserves continued
The Institute of Chartered Accountants in England and Wales has issued guidance stating that
profits arising out of a change in fair value of assets, recognised in accordance with
Accounting Standards, may be distributed provided the relevant assets can be readily
convertible into cash. Securities listed on a recognised stock exchange are generally regarded
as being readily convertible into cash. In accordance with the Company’s Articles of
Association the capital reserve and special reserve may not be distributed by way of dividend
but may be utilised for the purposes of share buybacks and the Company may only distribute
by way of dividend accumulated revenue profits.
15 Net Asset Value per share
The Net Asset Value per Ordinary Share and the Net Asset Value at the year end calculated in
accordance with the Articles of Association were as follows:
Net Asset Value Net Asset Value
per share attributable attributable
2024 2023 2024 2023
£ £ £’000 £’000
1,026.43 1,056.95 205,285 211,390
––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– –––––––––
The movements during the year of the assets attributable to the Ordinary Shares were
as follows:
2024 2023
Ordinary Ordinary
Shares Shares
£’000 £’000
Total Net Assets attributable at beginning of year 211,390 222,761
Total recognised profit/(loss) for the year 4,195 (771)
Dividends paid during the year (10,300) (10,600)
––––––––– –––––––––
Total Net Assets attributable at the end of year 205,285 211,390
––––––––– –––––––––
––––––––– –––––––––
The Net Asset Value per Ordinary Share is based on net assets of £205,285,000
(2023: £211,390,000) and on 200,000 Ordinary Shares (2023: 200,000), being the number of
Ordinary Shares in issue at the year end.
16 Statement of Cash Flows
(a) Reconciliation of operating return to net cash inflow from operating activities
2024 2023
£’000 £’000
Net return/(loss) before finance costs and taxation 4,295 (675)
Losses on investments held at fair value 6,014 12,978
Loss on exchange movements 4 3
Decrease/(increase) in other receivables 32 (34)
(Increase)/decrease in accrued income (15) 56
Increase in other payables 64 11
Taxation on investment income (100) (96)
––––––––– –––––––––
Net cash inflow from operating activities 10,294 12,243
––––––––– –––––––––
––––––––– –––––––––
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Financial Statements
Notes to the Financial Statements continued
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16 Statement of Cash Flows continued
(b) Analysis of cash flows
At At
1 April Exchange 31 March
2023 Cash Flow Movement 2024
£’000 £’000 £’000 £’000
Cash at bank 8,010 (1,978) (4) 6,028
––––––––– ––––––––– ––––––––– –––––––––
Total 8,010 (1,978) (4) 6,028
––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– –––––––––
At At
1 April Exchange 31 March
2022 Cash Flow Movement 2023
£’000 £’000 £’000 £’000
Cash at bank 6,708 1,305 (3) 8,010
––––––––– ––––––––– ––––––––– –––––––––
Total 6,708 1,305 (3) 8,010
––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– –––––––––
17 Financial instruments and capital disclosures
Risk management policies and procedures:
The investment objective of the Company is to maximise long-term total returns with a
minimum objective to maintain the real purchasing power of Sterling capital. In pursuit of
this objective, the Company may be exposed to various forms of risk, as described below.
The Board sets out its principal risks on pages 16 to 20 and its investment policy including its
policy on gearing (bank borrowing), diversification and dividends on page 3.
The Board and its Manager consider and review the number of risks inherent with managing
the Company’s assets which are detailed below:
Market risk
The Company’s portfolio is exposed to fluctuations in market prices in the regions in which it
invests. Market-wide uncertainties which have caused increased volatility include the continued
impact of war in Ukraine and the effect of sanctions against Russia; tensions between China and
the West; the conflict in the Middle East; and the threat of prolonged inflation and elevated
interest rates slowing economic growth, and the fear or presence of recession.
At 31 March 2024, the fair value of the Company’s assets exposed to market price risk was
£199,082,000 (2023: £203,128,000). The Company’s exposure to market price fluctuations is
reviewed by the Board on a quarterly basis and monitored on a continuous basis by the
Manager in pursuance of the investment objective.
Market price risk comprises three elements – foreign currency risk, interest rate risk and other
price risk.
Foreign currency risk
Foreign currency exposure as at 31 March 2024
US$ Euro JPY Total
£’000 £’000 £’000 £’000
Short-term debtors 49 23 210 282
––––––––– ––––––––– ––––––––– –––––––––
Foreign currency exposure on net monetary items 49 23 210 282
Investments held at fair value through
profit or loss that are equities 33,061* 12,492 17,574 63,127
––––––––– ––––––––– ––––––––– –––––––––
Foreign currency exposure 33,110 12,515 17,784 63,409
––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– –––––––––
* This includes the holding in WS Lindsell Train North American Equity Fund of £19,624,000.
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17 Financial instruments and capital disclosures continued
Foreign currency exposure as at 31 March 2023
US$ Euro JPY Total
£’000 £’000 £’000 £’000
Short-term debtors 41 12 216 269
––––––––– ––––––––– ––––––––– –––––––––
Foreign currency exposure on net monetary items 41 12 216 269
Investments held at fair value through
profit or loss that are equities 31,818* 10,634 12,828 55,280
––––––––– ––––––––– ––––––––– –––––––––
Foreign currency exposure 31,859 10,646 13,044 55,549
––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– –––––––––
* This includes the holding in WS Lindsell Train North American Equity Fund of £17,361,000.
Over the year Sterling strengthened against the US Dollar by 2.2% (2023: weakened by 6.2%),
strengthened against the Euro by 2.9% (2023: weakened by 4.0%) and strengthened against
the Japanese Yen by 16.6% (2023: strengthened by 2.6%).
A 5.0% decline or rise of Sterling against foreign currency denominated (i.e. non Sterling)
assets held at the year end would have increased/decreased the Net Asset Value by £3,170,000
or 1.5% of Net Asset Value (2023: £2,777,000 or 1.3% of Net Asset Value).
Interest rate risk
There is no direct exposure to interest rate risk.
Other price risk
Other price risk may affect the value of the quoted investments.
If the fair value of the Company’s investments at the Statement of Financial Position date
increased or decreased by 10%, whilst all other variables remained constant, the capital return
and net assets attributable to shareholders as at 31 March 2024 would have increased or
decreased by £19,908,000 or £99.54 per share (2023: £20,313,000 or 101.56p per share).
Liquidity risk
Liquidity risk is not considered significant under normal market conditions in relation to the
Company’s investments which are listed on recognised stock exchanges and are, for the most
part, readily realisable securities which can be easily sold to meet funding commitments if
necessary. The Company’s unlisted investment in LTL is not readily realisable.
As at 31 March 2024, 56.6% (2023: 51.0%) of the investment portfolio (92.4% of the listed
portfolio) could be liquidated within five business days, based on 20% of the 90 days’ average
daily trading volumes obtained from Bloomberg. The Company would be able to sell all of its
listed holdings within five business days, with the exception of two securities representing
5.5% of NAV.
Credit risk
Cash at bank and other debtors of the Company at the year end as shown on the Balance
Sheet was £6,506,000 (2023: £8,501,000).
Counterparty risk
The Northern Trust Company (the “Bank”) is the appointed custodian of the Company. It
provides securities clearing, safe-keeping, foreign exchange, advance credits and overdrafts,
and cash deposit services. The Bank has a credit rating for long-term deposits/debt of Aa2
from Moody’s, AA- from Standard & Poor’s and AA from Fitch Ratings.
As cash placed at the Bank is deposited in its capacity as a banker not as a trustee, in line with
usual banking practice, such cash is not held in accordance with the Financial Conduct
Authority’s client money rules.
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Financial Statements
Notes to the Financial Statements continued
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17 Financial instruments and capital disclosures continued
Fair values of financial assets and financial liabilities
The tables below set out fair value measurements of financial instruments as at the year end,
by the level in the fair value hierarchy into which the fair value measurement is categorised.
Financial assets/liabilities at fair value through profit or loss
Level 1 Level 2 Level 3 Total
At 31 March 2024 £’000 £’000 £’000 £’000
Investments 110,456 19,624 69,002 199,082
––––––––– ––––––––– ––––––––– –––––––––
110,456 19,624 69,002 199,082
––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– –––––––––
Level 1 Level 2 Level 3 Total
At 31 March 2023 £’000 £’000 £’000 £’000
Investments 100,547 17,361 85,220 203,128
––––––––– ––––––––– ––––––––– –––––––––
100,547 17,361 85,220 203,128
––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– –––––––––
Note: Within the above tables, the entirety of level 1 comprises all the Company’s ordinary equity investments,
level 2 represents the investment in LF Lindsell Train North American Equity Fund and level 3 represents the
investment in LTL.
The valuation techniques used by the Company are explained on pages 5 to 7.
LTL Valuation Methodology
The current methodology was approved and applied to monthly valuations of the Company
from 31 March 2022. J. P. Morgan Cazenove undertook an independent review of the
methodology in January 2024, which confirmed that the methodology adopted in 2022
remains valid. The methodology seeks to capture the changing economics and prospects for
LTL’s business. It is designed to be as transparent as possible so that shareholders can
themselves calculate how any change to the inputs would affect the resultant valuation.
The methodology has a single component based on a percentage of LTL’s funds under
management (‘FUM’), with the percentage applied being reviewed monthly and adjusted to
reflect the ongoing profitability of LTL. At the end of each month the ratio of LTL’s notional
annualised net profits
1
to LTL’s FUM is calculated and, depending on its result, the percentage
of FUM is adjusted according to the table below.
1
LTL’s notional net profits are calculated by applying a fee rate (averaged over the last six months) to the most
recent end-month FUM to produce annualised fee revenues excluding performance fees. Notional staff costs
of 45% of revenues, annualised fixed costs and tax are deducted from revenues to then produce notional
annualised net profits.
Notional annualised net
profits
1
/FUM (%)
Valuation of LTL –
Percentage of FUM
0.15 – 0.16 1.70%
0.16 – 0.17 1.75%
0.17 – 0.18 1.80%
0.18 – 0.19 1.85%
0.19 – 0.20 1.90%
0.20 – 0.21 1.95%
0.21 – 0.22 2.00%
0.22 – 0.23 2.05%
0.23 – 0.24 2.10%
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17 Financial instruments and capital disclosures continued
For instance at 31
st
March 2024 LTL’s annualised notional net profits were £29.4m and its FUM
was £15.2bn. The ratio between the two as a percentage was calculated as 0.193% resulting
in a percentage of FUM of 1.90% and a valuation of LTL of £10,818.76 per share.
The valuation of the investment in LTL continues to be reviewed at the end of each month by
the Company’s Directors, with the methodology reviewed by the Board at its quarterly
meetings.
LTL Valuation per share using differing valuation scenarios
The two tables below show the impact on the LTL valuation if:
(i) in Table 1 a different % was applied to 31 March 2024 FUM; and
(ii) in Table 2 different Price / Earnings (‘P/E’) ratios were applied to LTL’s March 2024
notional net profits.
Table 1 – varying the % of FUM
LTL FUM Valuation
as at 31 March 2024 Valuation per share
(£’000) % of FUM (£’000) (£)
15,180,432 1.00% 151,804 5,694.09
15,180,432 1.25% 189,755 7,117.61
15,180,432 1.50% 227,706 8,541.13
15,180,432 1.75% 265,658 9,964.65
15,180,432 1.90% 288,428 10,818.76
15,180,432 2.00% 303,609 11,388.17
15,180,432 2.25% 341,560 12,811.69
15,180,432 2.50% 379,511 14,235.21
15,180,432 2.75% 417,462 15,658.73
Table 2 – varying the P/E ratio
LTL notional
net profits Valuation
as at 31 March 2024 Valuation per share
(£’000) P/E ratio (£’000) (£)
29,240 7.00 204,682 7,677.48
29,240 8.00 233,922 8,774.27
29,240 9.00 263,162 9,871.05
29,240 9.86 288,428 10,818.76
29,240 10.00 292,402 10,967.84
29,240 11.00 321,643 12,064.62
29,240 12.00 350,883 13,161.40
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Financial Statements
Notes to the Financial Statements continued
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17 Financial instruments and capital disclosures continued
There were no transfers between levels for financial assets and financial liabilities during the
year recorded at fair value as at 31 March 2024 and 31 March 2023. A reconciliation of fair
value measurements in Level 3 is set out below.
Level 3 Financial assets at fair value through profit or loss at 31 March
2024 2023
£’000 £’000
Opening fair value 85,220 96,910
Purchases at cost – –
Sales proceeds (846) –
Realised gains on investments 846 –
Decrease in investment holding gains for the year (16,218) (11,690)
––––––––– –––––––––
Closing fair value 69,002 85,220
––––––––– –––––––––
Capital management policies and procedures
The Company’s capital management objectives are:
• to ensure that it will be able to continue as a going concern; and
• to maximise long-term total returns with a minimum objective to maintain the real purchasing
power of Sterling capital through an appropriate balance of equity capital and debt. The
Directors have discretion to permit borrowings up to 50% of the Net Asset Value. However,
the Directors have decided it is in the best interests of the Company not to use gearing.
The Board, with the assistance of the Manager, monitors and reviews the broad structure of
the Company’s capital on an ongoing basis.
The Company’s objectives, policies and processes for managing capital are unchanged from
last year.
The Company is subject to externally imposed capital requirements:
• as a public company, the Company has a minimum share capital of £50,000; and
• in order to be able to pay dividends out of profits available for distribution, the Company
has to be able to meet one of the two capital restriction tests imposed on investment
companies by UK company law.
These requirements are unchanged since last year and the Company has complied with them
at all times.
At the next Annual General Meeting the Company intends to renew its authority to
repurchase shares at a discount to Net Asset Value.
18 Guarantees, financial commitments and contingent liabilities
There were no financial commitments or contingent liabilities outstanding at the year end
(2023: None).
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19 Ongoing charges (APM)
2024 2023
£’000 % £’000 %
Total operating expenses 1,692 0.8 1,829 0.9
Total operating expenses are included after a management fee waiver of £123,000 (2023:
£117,000) (see note 3).
The above total expense ratios are based on the average Shareholders’ Funds of £203,091,000
(2023: £211,310,000) calculated at the end of each month during the year.
It should be noted that administrative expenses borne by the LTL managed funds are excluded
from the above.
See Glossary on page 110 for other cost disclosures.
20 Related party disclosures
LTL acts as Investment Manager of the Company. The amounts paid to the Investment
Manager are disclosed in note 3 and further details of the relationship between the Company
and the Investment Manager are set out in note 6. Full details of Directors’ interests are set
out on page 53.
On 5 June 2024, the Company and LTL entered into an amended and restated Investment
Management Agreement, to incorporate changes made, and announced, in June 2021 and
June 2022 and additional non-material changes. LTL is considered to be a related party of the
Company under the Listing Rules. The amendment and restatement of the Investment
Management Agreement amounted to small related party transaction to which certain
provisions of Chapter 11 of the Listing Rules do not apply in accordance with LR 11.1.6 R.
21 Subsequent events
There are no significant events that have occurred after the end of the reporting period to
the date of this report which require disclosure.
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Appendices (unaudited)
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DISCLAIMER
The information contained in these Appendices has not been audited by the Auditor and does
not form part of the financial statements. The appendices are for information purposes and
should not be regarded as any offer or solicitation of an offer to buy or sell shares in the Company.
Appendix 1 Annual Review of Lindsell Train Limited (‘LTL’) at
31 January 2024
Background
LTL was established in 2000 by Michael Lindsell and Nick Train and was founded on the shared
investment philosophy that developed while they worked together during the 1990s. The
company’s aim is to foster a work environment in which the investment team can manage capital
consistent with this philosophy, which entails managing concentrated portfolios, invested
strategically in durable franchises. Essential to success is maintaining a relatively simple business
structure encompassing an alignment of interests between on one side LTL’s clients and on the
other its founders and employees.
People
LTL’s board of directors consists of the two founders Michael Lindsell and Nick Train, Michael Lim
who was the Chief Operating Officer and is now the Company Secretary, Joss Saunders (Chief
Operating Officer), and three non-executive directors,; Rory Landman, Julian Bartlett and Jane
Orr, two of which are independent. Rory was appointed to the LTL Board following the retirement
of James Alexandroff in March 2023. Rory served as a non-executive director of the Lindsell Train
Investment Trust from 2011 to 2020, and Julian is a former partner of Grant Thornton LLP. Jane
retired from her executive responsibilities at LTL in March 2023, having previously led the
Marketing & Client Services team and was an executive director of the board, appointed in 2010.
After 14 years at LTL, Keith Wilson retired from the company and left the Board on 31 January
2024. James Bullock and Jessica Cameron were both appointed to the Board in May 2024.
LTL’s executive staff reduced by three from 28 to 25 the last 12 months, which includes the
retirements of Jane Orr and Keith Wilson. All staff are based in the UK other than LTL’s North
American Marketing and Client Services representative, who works out of Texas. LTL’s board
recognises that key employees should share in the ownership of the company, furthering the
alignment of interests between them, LTIT and the founders. This is achieved by acquiring shares
from LTL’s major stakeholders either directly or through a dedicated profit share scheme.
Business
LTL’s strategy is to build excellent long-term performance records for its funds in a way that is
consistent with its investment principles and that meet the aims of its clients. Long-term
performance is detailed below. Success in achieving satisfactory investment performance should
allow the company to expand its FUM in its four key product areas: UK, Global, Japanese, and
North American equities. LTL aspires to manage multiple billions of pounds in each product area,
whilst recognising that there will be a size per product above which their ability to achieve clients’
performance objectives may be compromised. LTL thinks this growth is possible without
significantly expanding the investment team, which numbered six at 31 January 2024.
To achieve this growth in a manageable way, LTL looks to direct new business flows into LT badged
pooled funds and to limit the number of separately managed accounts. The open-ended pooled
funds represented 62% of FUM at end of January, down from 65% the year before. The fall
resulted from a greater proportion of net outflows emanating from open-ended pooled products.
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Additionally, LTL managed 16 separate client relationships, one fewer than a year ago. The largest
pooled fund (the Lindsell Train Global Equity Fund) represented 29% of total FUM and the largest
segregated portfolio accounted for 11%.
In the year to 31 January 2024, LTL’s total FUM fell by 15% from £18.6bn to £15.9bn. This
represented net outflows of £3.4bn, broken down by strategy as Global (£1,993m), Japan (£380m)
and UK (£1,038m).
All four strategies generated positive absolute returns over the twelve months, however each
underperformed relative to their corresponding benchmarks. LTL’s process is simple and remains
the same as it always has been, with LTL seeking to find companies that own long-lasting franchises
with deep moats and the ability to reinvest returns at relatively high rates of return for extended
periods of time. To capture these characteristics LTL portfolios are relatively concentrated with
large average position sizes which rarely change. It also means that at any given time there will
be a large number of quoted companies that LTL do not own, amongst which there are bound to
be some exceptional performers. The unusual feature today is that the performance of some of
these companies has reached new extremes, which makes their omission felt more keenly.
However, this current phenomenon has not, and will not change how LTL invests. It remains
focused on exploiting the credentials of its highly concentrated, idiosyncratic portfolios.
The relative returns of the LTL funds representing each strategy since their inception are shown
below:
To 31 January 2024 Relative Return Inception date Benchmark
UK Equity Fund (GBP) +4.2% p.a. July 2006 FTSE All Share
Global Equity Fund (GBP) +1.6% p.a. March 2011 MSCI World
Japanese Equity Fund (Yen) +0.2% p.a. January 2004 TOPIX
North American Equity Fund -4.4% p.a. April 2020 MSCI North
(GBP) America
Returns based on NAV. LF Lindsell Train UK Equity Fund Acc share class; Lindsell Train Global
Equity Fund B share class; Lindsell Train Japanese Equity Fund A Yen share class; LF Lindsell Train
North American Equity Fund Acc share class.
The Marketing and Client Services team is in contact with institutional clients both directly and
through investment consultants, primarily in the UK, South Africa and the USA. FUM derived from
North America makes up over 14% of total FUM. LTL’s funds are also widely represented on the
major UK retail and IFA platforms.
Financials
In the year to 31 January 2024 LTL’s total revenues fell 11%. Annual management fees make up
the lion’s share of total revenues, at 98.9%, with interest income the remainder; there were no
performance fees earned in the year. LTL’s biggest cost item, direct staff remuneration, is capped
at 25% of fees (other than those earned from The Lindsell Train Investment Trust plc), as governed
by LTL’s Shareholders’ Agreement. Employer National Insurance costs are excluded from the
restriction. Total staff remuneration, including employer National Insurance, amounted to 30% of
fee revenue, the same as last year. Fixed overheads remained constant at £4.6m. Operating profits
were down 12%, registering a margin on sales of 67%. Net profits fell more, by 18% to £44.6m,
on account of the rise in the effective tax rate from 19% to 25%.
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Appendices (unaudited)
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LTL intends to distribute to shareholders dividends equivalent to 80% of its net profits in respect
of each accounting year-end, subject to retaining sufficient working, fixed and regulatory capital
to enable it to continue its business in a prudent manner. Total dividends paid in the year to
31 January 2024 were £1,462 per share, down from £1,841 per share in the previous year.
At 31 January 2024 LTL’s balance sheet was made up of shareholders’ funds of £103.5m including
£96.2m of net current assets.
The Future
LTL believes it has plenty of headroom to grow its FUM, with a continued focus on its stable of
pooled funds. LTL’s investment approach is applied uniformly across all its products and remains
differentiated and appealing to a wide range of clients. A crucial part of that appeal is the ability
for LTL to demonstrate investment results that meet clients’ objectives. Over most of LTL’s history
this has been achieved, but recently the investment approach has faced several difficult years.
Most clients will tolerate short periods of underperformance, especially in a strategy that is so
concentrated and committed to its constituent companies. However, it is not surprising, following
four years of cumulative underperformance, that the company is seeing some net outflows as
clients are attracted to other investment approaches that have exhibited better short-term
investment results.
LTL is confident that by remaining committed to its differentiated investment approach that
targets companies earning higher returns on capital than average, and with the support of a
stable and dedicated team, and a still competitive longer-term performance track record, it can
stay positive about its future. But it is fully aware that there are risks ahead which could have a
material impact on the value of LTL and its dividend paying potential. These risks include
increasing pressure on the active management industry; continued pressures on global equity
markets from inflation, higher interest rates and conflict; the growth of ESG designated
investment funds; and, the underperformance from LTL’s strategies. Perhaps the greatest risk in
relation to LTL’s reputation however remains the withdrawal of either of the founders. They are
currently aged 65 and 64, in good health and remain strongly committed to LTL. They are
supported by increasingly mature and experienced investment professionals, currently numbering
four, all of whom are taking on more responsibility and contributing more to investment decisions
as their careers progress with the company. The clearer articulation of the firm’s succession
planning and the accelerated transfer of ownership of LTL shares to key individuals should also
help mitigate the risk if either founder withdraws.
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Data to 31 January 2024 unless stated otherwise. The period from 31 January to 31 March 2024
has been reviewed by the Board and there are no significant matters to highlight other than those
detailed in this Appendix.
Funds Under Management*
FUM by Strategy
Jan 2024 Jan 2023
£m £m
UK 6,729 7,690
Global 8,956 10,352
Japan 154 554
North America 37 30
–––––––––––– ––––––––––––
Total 15,876 18,626
–––––––––––– ––––––––––––
–––––––––––– ––––––––––––
Largest Client Accounts
Jan 2024 Jan 2023
% of FUM % of FUM
Largest Pooled Fund Asset 29% 30%
Largest Segregated Account 11% 10%
* LTL's year end 2024 and year end 2023 figures above are based on published financial statements. LTL's year
end 2023 figures in LTIT'S Annual Report last year were based on unaudited management accounts. This
therefore results in differences when compared with LTIT's Annual Report last year, as last year's Report
contained LTL unaudited management account numbers for year ending 31 January 2023, which in this year's
Annual Report are using numbers based on published Financial Statements.
Lindsell Train Fund Performance
1 Year 3 Years 5 Years 10 Years
Annualised data to 31 January 2024 % % % %
GBP UK Equity Fund (Accumulation) 1.4 3.4 5.3 7.9
FTSE All Share 1.9 8.4 5.5 5.5
GBP Global Equity Fund (B share) 6.1 2.1 6.2 12.7
MSCI World 13.1 10.8 12.1 12.0
JPY Japanese Equity Fund (A share) 6.9 1.3 3.7 8.3
TOPIX 32.4 14.9 13.0 10.1
GBP North American Equity Fund
(Accumulation) 10.3 8.5
MSCI North American 15.8 12.3
Source: Morningstar Direct
Note: all figures above show total returns.
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Appendix 1 continued
Appendices (unaudited)
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Financials*
Jan 2024 Jan 2023 %
Profit & Loss £’000 £’000 Change
Fee Revenue
Investment Management fee 86,146 96,542 -10.8%
Performance Fee 0 0
–––––––––––– ––––––––––––
86,146 96,542 -10.8%
Bank Interest & Other Income 997 299
–––––––––––– ––––––––––––
87,143 96,841
Staff Remuneration** (25,864) (29,104) -11.1%
Fixed Overheads (4,578) (4,622) -1.0%
FX Currency Translation (losses)/gains (676) 3,878
Investment Unrealised Gain 2,733 46
–––––––––––– ––––––––––––
Operating Profit 58,758 67,039 -12.4%
Taxation (14,162) (12,724)
–––––––––––– ––––––––––––
Net Profit 44,596 54,315 -17.9%
Dividends (38,967) (48,876)
–––––––––––– ––––––––––––
Retained profit 5,629 5,439
–––––––––––– ––––––––––––
Balance Sheet
Fixed Assets 51 75
Investments 7,672 6,960
Assets (inc cash at bank and
investment in Gilts & Bonds) 118,354 107,524
Liabilities (22,558) (16,879)
–––––––––––– ––––––––––––
Net Assets 103,519 97,680
–––––––––––– ––––––––––––
Capital & Reserves
Called up Share Capital 267 267
Share Premium*** 57 57
Share Discount*** (494) (416)
Treasury Share Reserve † 0 (288)
Profit & Loss Account 103,689 98,060
–––––––––––– ––––––––––––
Shareholders' Funds 103,519 97,680
–––––––––––– ––––––––––––
* LTL’s year end 2024 and year end 2023 figures above are based on published financial statements. LTL’s year
end 2023 figures in LTIT’s Annual Report last year were based on unaudited management accounts. This
therefore results in differences when compared with LTIT’s Annual Report last year, as last year’s Report
contained LTL unaudited management account numbers for year ending 31 January 2023, which in this year’s
Annual Report are using numbers based on published Financial Statements.
** Staff costs include permanent staff remuneration, social security, temporary apprentice levy, introduction fees
and other staff related costs. No more than 25% of fees (other than those earned from LTIT) can be paid as
permanent staff remuneration.
*** The Share Premium and Share Discount account for the difference in the cost and resale of shares that were
held in Treasury.
† The Treasury Share Reserve accounts for the difference between the cost and current value of the remaining
shares held in Treasury.
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Five Year History*
Jan 2024 Jan 2023 Jan 2022 Jan 2021 Jan 2020
Operating Profit Margin 64% 69% 66% 66% 65%
Earnings per share (£) 1,673 2,038 2,463 2,340 2,237
Dividends per share (£) 1,462 1,841 1,994 1,817 1,619
Total Staff Cost as % of Fee Revenue 30% 30% 32% 30% 31%
Opening FUM (£m) 18,626 21,215 22,802 21,450 16,260
Changes in FUM (£m) (2,751) (2,589) (1,587) 1,352 5,190
– of market movement 657 338 331 1,200 2,781
– of net new fund (outflows)/inflows (3,408) (2,927) (1,918) 152 2,409
Closing FUM (£m) 15,875 18,626 21,215 22,802 21,450
LT Open ended funds as % of total 62% 65% 70% 73% 73%
*LTL’s year end figures above are based on published financial statements. LTL’s year end 2023 figures in LTIT’s
Annual Report last year were based on unaudited management accounts. This therefore results in differences
when compared with LTIT’s Annual Report last year, as last year’s Report contained LTL unaudited management
account numbers for year ending 31 January 2023, which in this year’s Annual Report are using numbers based
on published Financial Statements.
Jan 2024 Jan 2023 Jan 2022 Jan 2021 Jan 2020
Client Relationships
– Pooled funds 5 5 5 5 4
– Separate accounts 16 17 18 17 17
Ownership
Jan 2024 Jan 2023 Jan 2022
Michael Lindsell and spouse 9,578 9,650 9,650
Nick Train and spouse 9,578 9,650 9,650
The Lindsell Train Investment Trust plc 6,378 6,450 6,450
Other Directors/employees 1,126 893 778
–––––––––– –––––––––– ––––––––––
26,660 26,643 26,528
Treasury Shares 0 17 132
–––––––––– –––––––––– ––––––––––
26,660 26,660 26,660
–––––––––– –––––––––– ––––––––––
–––––––––– –––––––––– ––––––––––
Board of Directors
Rory Landman Independent Non-Executive
Julian Bartlett Independent Non-Executive
James Bullock* Director
Jessica Cameron** Director
Michael Lim Director, IT & Company Secretarial
Michael Lindsell Chief Executive Officer & Portfolio Manager
Jane Orr Non-Executive
Joss Saunders Chief Operating Officer
Nick Train Chairman and Portfolio Manager
* Appointed as a Director on 29 May 2024
** Appointed as a Director on 27 May 2024
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Appendices (unaudited)
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Employees
Jan 2024 Jan 2023
Investment Team (including three Portfolio Managers) 6 7
Client Servicing and Marketing 7 9
Operations and Administration 10 11
Fixed Term Contractors 2 1
Total Employees 25 28
Non-Executive directors 3 2
Total Headcount 28 30
LTIT Directors’ valuation of LTL
31 Mar 2024 31 Mar 2023
Notional annualised net profits (A)* (£’000) 29,240 35,554
Funds under Management less LTIT holdings (B) (£’000) 15,180,432 18,530,045
Normalised notional net profits as % of FUM A/B = (C) 0.193% 0.192%
% of FUM (D) (see table below to view % corresponding to C) 1.90% 1.90%
Valuation (E) i.e. B x D (£’000) 288,428 352,071
Number of shares (F)^ 26,660 26,647
Valuation per share in LTL i.e. E / F 10,818.76 13,212.40
* Notional annualised net profits are made up of:
– annualised fee revenue, based on 6-mth average fee rate applied to most recent month-end unaudited AUM
– annualised fee revenue excludes performance fees
– annualised interest income, based on 3-mth average
– notional staff costs of 45% of annualised fee revenue
– annualised operating costs (excluding staff costs), based on 3-mth normalised average
^ The increase in share in issue is due to the sale of shares from LTL's Treasury to LTL's employees; these Treasury
shares had been purchased in prior years from other LTL employees.
Notional annualised
net profits*/FUM (%)
Valuation of LTL -
Percentage of FUM
0.15 to 0.16 1.70%
0.16 to 0.17 1.75%
0.17 to 0.18 1.80%
0.18 to 0.19 1.85%
0.19 to 0.20 1.90%
0.20 to 0.21 1.95%
0.21 to 0.22 2.00%
0.22 to 0.23 2.05%
0.23 to 0.24 2.10%
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LTL’s Salary and Bonus Cap
LTL’s salary and bonus expenses are capped at 25% of fees (other than those earned from LTIT as
governed by LTL’s Shareholders’ Agreement. Employer national insurance costs are excluded from
the restriction. This cap has been in place since the inception of both LTL and LTIT which, alongside
LTL’s intent to distribute to shareholders dividends equivalent to 80% of its retained profits in
respect of each accounting year (subject to retaining sufficient working and fixed and regulatory
capital to enable LTL to continue its business in a prudent manner) ensures LTL shareholders earn
a tangible reward from their investment in LTL.
The Board has long recognised that it is important that LTL has the ability to sufficiently reward
potential successors, or, if it became necessary to replace the founders, to recruit suitable outside
talent. As a consequence, since 2007 the Board has judged it necessary to apply a higher notional
salary cost of 45% of revenues in calculating LTL’s net profits when determining the valuation of LTL.
To put this in context, LTL’s total salary and bonus expenses (including employer national insurance
payments) have averaged 36% of revenues since 2001. Currently a peer group of quoted fund
managers exhibits an average remuneration costs to revenue of 42%, with the salary to revenue of
peers with FUM equivalent to LTL is slightly higher at 44%. The Board therefore believes that a
notional salary to revenue ratio of 45% makes sufficient allowance for the eventualities
described above.
Whilst the 25% salary and bonus cap remain in place for now, both the LTL and LTIT Boards recognise
that it may be necessary to review this limit in the future.
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Appendices (unaudited)
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Appendix 2
Share Capital
At 31 March 2024 and 31 March 2023, and up to the date of this report, the Company had an
authorised and issued share capital comprising 200,000 Ordinary Shares of 75p nominal value
each. At 31 March 2024 the Ordinary Share price was £801.00 (31 March 2023: £1,052.50).
Income entitlement
The Company’s revenue earnings are distributed to holders of Ordinary Shares by way of such
dividends (if any) as may from time to time be declared by the Directors and approved by the
shareholders.
Capital entitlement
On a winding up of the Company, after settling all liabilities of the Company, holders of Ordinary
Shares are entitled to a distribution of any surplus assets in proportion to the respective amounts
paid up or credited as paid up on their shares.
Voting entitlement
Subject to any rights or restrictions attached to any shares, on a show of hands, every member who
is present in person has one vote and every proxy present who has been duly appointed has one
vote. However, if the proxy has been duly appointed by more than one member entitled to vote on
the resolution, and is instructed by one or more of those members to vote for the resolution and
by one or more others to vote against it, or is instructed by one or more of those members to vote
in one way and is given discretion as to how to vote by one or more others (and wishes to use that
discretion to vote in the other way) he or she has one vote for and one vote against the resolution.
Every corporate representative present who has been duly authorised by a corporation has the same
voting rights as the corporation. On a poll, every member present in person or by duly appointed
proxy or corporate representative has one vote for every share of which they are the holder or in
respect of which their appointment as proxy or corporate representative has been made.
A member, proxy or corporate representative entitled to more than one vote need not, if they
vote, use all their votes or cast all the votes they use the same way. In the case of joint holders, the
vote of the senior who tenders a vote shall be accepted to the exclusion of the votes of the other
joint holders, and seniority shall be determined by the order in which the names of the holders
stand in the register of members. A member is entitled to appoint another person as his proxy to
exercise all or any of their rights to attend and to speak and vote at a meeting of the Company.
The appointment of a proxy shall be deemed also to confer authority to demand or join in
demanding a poll. Delivery of an appointment of proxy shall not preclude a member from
attending and voting at the meeting or at any adjournment of it. A proxy need not be a member.
A member may appoint more than one proxy in relation to a meeting, provided that each proxy
is appointed to exercise the rights attached to a different share or shares held by them.
Transfers
There are no restrictions on transfers of Ordinary Shares except: a) dealings by Directors, Persons
Discharging Managerial Responsibilities and their connected persons which may constitute insider
dealing or are otherwise prohibited by the rules of the FCA; b) transfers to more than four joint
holders; c) transfers to US persons other than as specifically permitted by the Directors; d) if, in
the Directors’ opinion, the assets of the Company might become “plan assets” for the purposes
of US ERISA 1974; and e) transfers which in the opinion of the Directors would cause material
legal, regulatory, financial or tax disadvantage to the Company.
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Appendix 3
Agreements with Service Providers
Investment Management Agreement
In accordance with an Investment Management Agreement ('IMA') originally dated 21 December
2000 (last revised in June 2024) between the Company and LTL, LTL has been providing investment
management services to the Company.
Fees
The Investment Management Fee is payable at the annual rate of 0.60 per cent. of the lower of
(a) the Market Capitalisation of the Company and (b) the Net Asset Value of the Company,
calculated daily.
The Performance Fee is calculated as 10% of the value of any positive relative performance versus
the benchmark in a financial year. Relative performance is measured by taking the lower of the
NAV or Average Market Price (defined as the average price over the last month of the
performance period), taking into account dividends, at the end of each financial year and
comparing the percentage annual change with the total return of the benchmark. A performance
fee will only be paid out if the annual change is both above the benchmark and is a positive
figure. Relative performance will be carried forward in years where the Manager is not eligible
for a performance fee based on these two criteria.
During the year the Directors reviewed the performance of the Manager and consider that the
continued engagement of LTL under the existing terms is in the best interests of the Company
and shareholders. Michael Lindsell did not participate in the review as he is an employee and
shareholder of the Manager.
In addition to the day to day management of investments, the Manager advises the Board on
liquidity and borrowings and liaises with major shareholders. The Manager has a stated policy on
stewardship and engagement with investee companies, which the Board has reviewed and
endorses, and provides verbal reports to the Board where any concerns or issues have been raised.
Administration, Company Secretarial and Management Services Agreement
Accounting, company secretarial and administrative services are provided by Frostrow Capital LLP
(“Frostrow”) pursuant to an agreement dated 30 October 2020. With effect from 1 November
2020, Frostrow is entitled to receive from the Company an annual fee of 0.11 per cent. of the
Company’s Net Asset Value up to £150 million plus 0.05 per cent. of that part of the Company’s
Net Asset Value in excess of £150 million. The agreement is terminable by either party on not less
than six months’ notice.
Details of the fees paid to Frostrow are given in note 4 to the Financial Statements. The services
provided by Frostrow since their appointment were also reviewed during the year and the Board
considered it to be in the best interests of the Company to continue Frostrow’s appointment under
the existing terms.
Other third-party service providers
In addition to the Manager and Administrator, the Company has engaged Link Group to maintain
the share register of the Company, and The Northern Trust Company, London Office as the
Company’s custodian. The agreements for these services were entered into after careful
consideration of their terms and their cost-effectiveness for the Company.
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Additional Shareholder Information (unaudited)
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Notice of Annual General Meeting
Notice is hereby given that the twenty-second Annual General Meeting (“AGM”) of The Lindsell
Train Investment Trust plc (the “Company”) will be held at the Marlborough Suite, St Ermin’s
Hotel, 2 Caxton Street, London, SW1H 0QW on Wednesday, 4 September 2024 at 2.30 p.m. for
the transaction of the following business:
Resolutions
To consider and if thought fit, pass resolutions 1 to 12 as ordinary resolutions (an ordinary
resolution is one that requires a majority in excess of 50% of those present and voting to
be passed):
1. To receive and consider the Financial Statements and Reports of the Directors and the Auditor
for the year ended 31 March 2024.
2. To receive and approve the Directors’ Remuneration Report for the year ended 31 March 2024.
3. To approve the payment of a final dividend for the year ended 31 March 2024 of £51.50
per Ordinary Share.
4. To elect Mr David MacLellan as a Director of the Company.
5. To re-elect Mr Nicholas Allan as a Director of the Company.
6. To re-elect Ms Vivien Gould as a Director of the Company.
7. To re-elect Mr Roger Lambert as a Director of the Company.
8. To re-elect Mr Michael Lindsell as a Director of the Company.
9. To re-elect Ms Helena Vinnicombe as a Director of the Company.
10. To re-appoint BDO LLP as Auditor to the Company, to hold office from the conclusion of this
meeting until the conclusion of the next general meeting at which Financial Statements are
laid before the Company.
11. To authorise the Audit Committee to determine the remuneration of the Auditor of the
Company.
12. To receive and approve the Directors' Remuneration Policy.
To consider and, if thought fit, pass resolutions 13 to 15 as special resolutions (a special resolution
is one that requires a majority of at least 75% of those present and voting to be passed):
13. THAT the Company be and is hereby generally and unconditionally authorised in accordance
with Section 701 of the Companies Act 2006 (the “Act”) to make market purchases (within
the meaning of Section 693(4) of the Act) of Ordinary Shares of 75p each (“Ordinary Shares”)
in the capital of the Company provided that:
a. the maximum number of Ordinary Shares hereby authorised to be purchased shall be 29,980
representing approximately 14.99% of the issued share capital at the date of the meeting at
which the resolution is passed;
b. the minimum price (exclusive of expenses) which may be paid for an Ordinary Share shall
be 75p;
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c. the maximum price (exclusive of expenses) which may be paid for an Ordinary Share shall
be an amount equal to the greater of (i) 105% of the average of the middle market
quotations for an Ordinary Share as derived from the Daily Official List of the London
Stock Exchange for the five business days immediately preceding the day on which that
Ordinary Share is purchased and (ii) the higher of the last independent trade and the
highest current independent bid relating to an Ordinary Share on the trading venue
where the purchase is carried out;
d. any purchase of Ordinary Shares will be made in the market for cash at prices below the
then prevailing Net Asset Value per Ordinary Share;
e. any Ordinary Shares so purchased shall be cancelled unless the Directors otherwise
determine that they shall be held in treasury and treated as treasury shares; and
f. this authority shall expire at the conclusion of the AGM of the Company to be held in
2025 or, if earlier, on the expiry of 15 months from the date of the passing of this
resolution unless such authority is renewed prior to such time.
14. THAT the Directors be and are hereby generally and unconditionally authorised in accordance
with Section 573 of the Companies Act 2006 (“Act”) to sell and/or transfer Ordinary Shares
held by the Company in treasury for cash as if Section 561 of the Act did not apply to such
sale or transfer, up to an aggregate nominal amount of £15,000 (being approximately
10 per cent of the issued Ordinary Share capital of the Company at 11 June 2024), provided
that the authority hereby granted shall expire at the earlier of the conclusion of the next
Annual General Meeting of the Company or the date 15 months after the passing of this
resolution, save that the Directors may before such expiry enter into offer(s) or agreement(s)
which may or shall require Ordinary Shares held in treasury to be sold or transferred after
such expiry and the Directors shall be entitled to sell or transfer Ordinary Shares pursuant to
such offer(s) or agreement(s) as if the authority hereby granted had not so expired.
15. THAT any General Meeting of the Company (other than the AGM of the Company) shall be
called by notice of at least 14 clear days provided that the authority shall expire on the
conclusion of the next AGM of the Company, or, if earlier, on the expiry of 15 months from
the date of the passing of this resolution.
By order of the Board
Frostrow Capital LLP
Company Secretary
11 June 2024
Registered Office:
25 Southampton Buildings
London WC2A 1AL
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Notice of Annual General Meeting continued
Additional Shareholder Information (unaudited)
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Notes
1. Subject to paragraph 8, members are entitled to appoint a proxy to exercise all or any of their rights to attend
and to speak and vote on their behalf at the meeting. A shareholder may appoint more than one proxy in
relation to the meeting provided that each proxy is appointed to exercise the rights attached to a different
share or shares held by that shareholder. A proxy need not be a shareholder of the Company.
2. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes
for or against the resolutions. If no voting indication is given, a proxy may vote or abstain from voting at
his/her discretion. A proxy may vote (or abstain from voting) as he or she thinks fit in relation to any other
matter which is put before the meeting.
3. Hard copy forms of proxy have not been included with this notice. Members can vote by: logging onto
www.signalshares.com and following instructions; requesting a hard copy form of proxy directly from the
registrars, Link Group, by emailing shareholderenquiries@linkgroup.co.uk; in the case of CREST members,
utilising the CREST electronic proxy appointment service in accordance with the procedures set out below or
electronically via Proxymity at www.proxymity.io. To be valid any appointment of a proxy must be completed,
signed and received at Link Group, PXS 1, Central Square, 29 Wellington Street, Leeds LS1 4DL no later than
2.30 p.m. on Monday, 2 September 2024.
4. In the case of a member which is a company, the instrument appointing a proxy must be executed under its
seal or signed on its behalf by a duly authorised officer or attorney or other person authorised to sign. Any
power of attorney or other authority under which the instrument is signed (or a certified copy of it) must be
included with the instrument.
5. The return of a completed proxy form, other such instrument or any CREST Proxy Instruction (as described
below) will not prevent a Shareholder attending the meeting and voting in person if they wish to do so.
6. Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act
2006 to enjoy information rights (a “Nominated Person”) may, under an agreement between them and the
shareholder by whom they were nominated, have a right to be appointed (or have someone else appointed)
as a proxy for the meeting. If a Nominated Person has no such proxy appointment right or does not wish to
exercise it, they may, under any such agreement, have a right to give instructions to the shareholder as to the
exercise of voting rights.
7. The statement of the rights of Shareholders in relation to the appointment of proxies in paragraphs 1 and 3
above does not apply to Nominated Persons. The rights described in these paragraphs can only be exercised
by Shareholders of the Company.
8. Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, only Shareholders registered on
the register of members of the Company (the “Register of Members”) at close of business on 2 September
2024 (or, in the event of any adjournment, on the date which is two business days before the time of the
adjourned meeting) will be entitled to attend and vote or be represented at the meeting in respect of shares
registered in their name at that time. Changes to the Register of Members after that time will be disregarded
in determining the rights of any person to attend and vote at the meeting.
9. As at 10 June 2024 (being the last business day prior to the publication of this notice) the Company’s issued
share capital consists of 200,000 ordinary shares, carrying one vote each. Therefore, the total voting rights in
the Company as at 10 June 2024 are 200,000. There are no ordinary shares held in treasury.
10. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service
may do so by using the procedures described in the CREST Manual. CREST Personal Members or other CREST
sponsored members, and those CREST members who have appointed a service provider(s), should refer to their
CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
11. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate
CREST message (a “CREST Proxy Instruction”) must be properly authenticated in accordance with the
specifications of Euroclear UK and International Limited (“CRESTCo”), and must contain the information
required for such instruction, as described in the CREST Manual. The message, regardless of whether it
constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed
proxy must, in order to be valid, be transmitted so as to be received by the issuer’s agent (ID RA10) no later
than 48 hours before the time appointed for holding the meeting, excluding non-business days. For this
purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the
message by the CREST Application Host) from which the issuer’s agent is able to retrieve the message by enquiry
to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed
through CREST should be communicated to the appointee through other means.
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12. CREST members and, where applicable, their CREST sponsors or voting service providers, should note that
CRESTCo does not make available special procedures in CREST for any particular message. Normal system
timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the
responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member,
or sponsored member, or has appointed a voting service provider, to procure that his CREST sponsor or voting
service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means
of the CREST system by any particular time. In this connection, CREST members and, where applicable, their
CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual
concerning practical limitations of the CREST system and timings.
13. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a)
of the Uncertificated Securities Regulations 2001.
14. If you are an institutional investor you may also be able to appoint a proxy electronically via the Proxymity
platform, a process which has been agreed by the Company and approved by the Registrar. For further
information regarding Proxymity, please go to www.proxymity.io. Your proxy must be lodged by 2.30 p.m. on
Monday, 2 September 2024 in order to be considered valid or, if the meeting is adjourned, by the time which
is 48 hours before the time of the adjourned meeting. Before you can appoint a proxy via this process you will
need to have agreed to Proxymity’s associated terms and conditions. It is important that you read these
carefully as you will be bound by them and they will govern the electronic appointment of your proxy. An
electronic proxy appointment via the Proxymity platform may be revoked completely by sending an
authenticated message via the platform instructing the removal of your proxy vote.
15. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the
appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in
which the names of the joint holders appear in the Register of Members in respect of the joint holding (the
first named being the most senior).
16. Members who wish to change their proxy instructions should submit a new proxy appointment using the
methods set out above. Note that the cut-off time for receipt of proxy appointments (see above) also applies
in relation to amended instructions; any amended proxy appointment received after the relevant cut-off time
will be disregarded.
17. Members who have appointed a proxy using a hard-copy proxy form and who wish to change the instructions
using another hard-copy form, should contact Link Group on 0371 664 0300. Calls are charged at the standard
geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable
international rate. Lines are open between 9.00 a.m. to 5.30 p.m., Monday to Friday excluding public holidays
in England and Wales.
18. If a member submits more than one valid proxy appointment, the appointment received last before the latest
time for the receipt of proxies will take precedence.
19. In order to revoke a proxy instruction, members will need to inform the Company. Members should send a
signed hard copy notice clearly stating their intention to revoke a proxy appointment to Link Group, PXS 1,
Central Square, 29 Wellington Street, Leeds LS1 4DL. In the case of a member which is a company, the
revocation notice must be executed under its common seal or signed on its behalf by an officer of the company
or an attorney for the company. Any power of attorney or any other authority under which the revocation
notice is signed (or a duly certified copy of such power of attorney) must be included with the revocation
notice. If a member attempts to revoke their proxy appointment but the revocation is received after the time
for receipt of proxy appointments then, the proxy appointment will remain valid.
20. If the Chairman, as a result of any proxy appointments, is given discretion as to how the votes the subject of
those proxies are cast and the voting rights in respect of those discretionary proxies, when added to the
interests in the Company’s securities already held by the Chairman, result in the Chairman holding such number
of voting rights that he has a notifiable obligation under the Disclosure Guidance and Transparency Rules, the
Chairman will make the necessary notifications to the Company and the Financial Conduct Authority. As a
result, any member holding 3 per cent. or more of the voting rights in the Company who grants the Chairman
a discretionary proxy in respect of some or all of those voting rights and so would otherwise have a notification
obligation under the Disclosure Guidance and Transparency Rules, need not make a separate notification to
the Company and the Financial Conduct Authority.
21. Information regarding the meeting, including the information required by section 311A of the Companies Act
2006, can be found at www.ltit.co.uk.
22. Any shareholder attending the meeting has the right to ask questions. If multiple questions on the same topic
are received in advance, the Chair may choose to provide a single answer to address shareholder queries on
the same topic.
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Additional Shareholder Information (unaudited)
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The Company must answer any question you ask relating to the business being dealt with at the meeting
unless:
(i) Answering the question would interfere unduly with the preparation for the meeting or involve the
disclosure of confidential information.
(ii) The answer has already been given on a website in the form of an answer to a question.
(iii) It is undesirable in the interests of the Company or the good order of the meeting that the question be
answered.
23. Under section 338 of the Companies Act 2006, Shareholders meeting the threshold requirements set out in
that section, may, subject to conditions, require the Company to give to shareholders notice of a resolution
which may properly be moved and is intended to be moved at that meeting. The conditions are that: The
resolution must not, if passed, be ineffective (whether by reason of inconsistency with any enactment or the
Company’s constitution or otherwise). The resolution must not be defamatory of any person, frivolous or
vexatious. The request: may be in hard copy form or in electronic form; must identify the resolution of which
notice is to be given by either setting out the resolution in full or, if supporting a resolution sent by another
shareholder, clearly identifying the resolution which is being supported; must be authenticated by the person
or persons making it; and must be received by the Company not later than 24 July 2024, which is at least six
weeks before the meeting.
24. Under section 338A of the Companies Act 2006, shareholders meeting the threshold requirements set out in
that section may, subject to conditions, require the Company to include in the business to be dealt with at the
meeting a matter (other than a proposed resolution) which may properly be included in the business (a matter
of business). The conditions are that: The matter of business must not be defamatory of any person, frivolous
or vexatious. The request: – may be in hard copy form or in electronic form; – must identify the matter to be
included in the business by either setting it out in full or, if supporting a statement sent by another shareholder,
clearly identifying the matter which is being supported; – must be accompanied by a statement setting out
the grounds for the request; – must be authenticated by the person or persons making it; and – must be
received by the Company not later than 24 July 2024, which is at least six weeks before the meeting.
Notice of Annual General Meeting continued
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Resolution 1 – To receive the Annual Report and Financial Statements
The first item of business is for the Annual Report and Financial Statements for the year ended 31 March 2024 to
be presented to the AGM. As announced, the Annual Report has been available on the Company’s website since
12 June 2024 and will be posted to Shareholders on or around 20 June 2024.
Resolution 2 – Directors’ Remuneration Report
The Directors’ Remuneration Report is set out in full on pages 50 to 54 of the Annual Report.
Resolution 3 – Dividend
To approve the payment of a final dividend for the year ended 31 March 2024 as set out in the Notice of Meeting
on page 102 of the Annual Report.
Resolution 4 – Election of Director
Resolution 4 deals with the election of Mr David MacLellan as Director.
Resolutions 5 to 9 – Re-election of Directors
Resolutions 5 to 9 deal with the re-election of each Director.
The biographies of the Directors offering themselves for re-election are set out on pages 32 and 33 of the Annual
Report.
Resolutions 10 and 11 – Auditor
Resolution 10 relates to the appointment of BDO LLP as the Company’s independent auditor to hold office until
the next Annual General Meeting of the Company and Resolution 11 authorises the Audit Committee to set their
remuneration. Following the implementation of the Competition and Markets Authority order on Statutory Audit
Services only the Audit Committee may negotiate and agree the terms of the Auditor’s service agreement.
Resolution 12 – Directors’ Remuneration Policy
The Directors’ Remuneration Policy is set out in full on pages 55 to 56 of the Annual Report.
Resolution 13 – Authority to Repurchase Shares
Special Resolution 13 would, if passed, renew the authority to permit the Company to buy back through the stock
market up to a maximum of 29,980 Ordinary Shares of 75p each (equivalent to 14.99% of the Ordinary Shares in
issue at the date of this report). Purchases will only be made through the market for cash at prices below the
prevailing NAV per Ordinary Share, thereby resulting in an increased NAV per Ordinary Share. Shares bought back
may be held in treasury and are then eligible for subsequent resale or cancellation. No voting rights or entitlement
to distribution (either dividend or on a winding up) applies to shares held in treasury.
This means in effect that the authority will have to be renewed at the next Annual General Meeting or earlier if
the authority has been exhausted.
Resolution 14 – Treasury
Authorises the Directors to sell back into the market shares held in treasury. Treasury shares would not be resold at
a price below that at which they had been bought back nor below NAV.
Resolution 15 – General Meetings
Special Resolution 15 seeks shareholder approval for the Company to hold General Meetings (other than the Annual
General Meeting) on not less than 14 clear days’ notice.
The Company will only use this shorter notice period where it is merited by the purpose of the meeting and will
endeavour to give not less than 14 working days’ notice if possible, in line with the recommendations of the UK
Corporate Governance code.
Recommendation
The Board considers that the resolutions relating to the above items are in the best interests of Shareholders as a
whole. Accordingly, the Board unanimously recommends to the Shareholders that they vote in favour of the above
resolutions to be proposed at the forthcoming Annual General Meeting as Directors intend to do in respect of their
own beneficial holdings totalling 9,834 shares.
Explanatory Notes to the Resolutions
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Additional Shareholder Information (unaudited)
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AIC
Association of Investment Companies.
Alternative Investment Fund Managers Directive (“AIFMD”)
The Alternative Investment Fund Managers Directive (the “Directive”) is a European Union
Directive that entered into force on 22 July 2013. The Directive regulates EU fund managers that
manage alternative investment funds (this includes investment trusts).
Alternative Performance Measure (“APM”)
An alternative performance measure is a financial measure of historical or future financial
performance, financial position or cash flow that is not prescribed by the relevant accounting
standards. The Company’s APMs are the discount and premium, dividend yield, share price and
NAV total return and ongoing charges as defined within this Glossary. The Directors believe that
these measures enhance the comparability of information between reporting periods and aid
investors in understanding the Company’s performance. The measures used for the year under
review have remained consistent with the prior year.
Benchmark
With effect from 1 April 2021 the Company’s comparator benchmark is the MSCI World Index
total return in Sterling.
Prior to 1 April 2021 the benchmark was the annual average redemption yield on the longest-
dated UK government fixed rate (1.625% 2071) calculated using weekly data, plus a premium of
0.5%, subject to a minimum yield of 4.0%.
Discount and premium (APM)
If the share price of an investment trust is higher than the Net Asset Value (NAV) per share, the
shares are trading at a premium to NAV. In this circumstance the price that an investor pays or
receives for a share would be more than the value attributable to it by reference to the underlying
assets. The premium is the difference between the share price (based on share prices) and the
NAV, expressed as a percentage of the NAV.
A discount occurs when the share price is below the NAV. Investors would therefore be paying
less than the value attributable to the shares by reference to the underlying assets.
A premium or discount is generally the consequence of supply and demand for the shares on the
stock market.
The discount or premium is calculated by dividing the difference between the share price and the
NAV by the NAV.
As at As at
31 March 31 March
2024 2023
£ £
Share Price 801.00 1,052.50
Net Asset Value per Share 1,026.43 1,056.95
–––––––––– ––––––––––
Discount to Net Asset Value per Share 22.0% 0.4%
Dividend yield (APM)
A financial ratio that indicates how much a company pays out in dividends each year relative to
its share price. Dividend yield is represented as a percentage and can be calculated by dividing
the value of dividends paid in a given year per share held by the share price.
Glossary of Terms and Alternative Performance Measures (“APM”)
(unaudited)
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The figures disclosed on pages 5, 14 and 15 have been calculated as shown below:
2024 2023
Total Dividends declared per Ordinary Share (a) £51.50 £51.50
Closing price per Ordinary Share on 31 March (b) £801.00 £1,052.50
–––––––––– ––––––––––
Dividend Yield (a) ÷ (b) 6.4% 4.9%
ESG
Environmental, social and governance.
Leverage
The AIFMD leverage definition is slightly different from the Association of Investment Companies’
method of calculating gearing and is defined as follows: any method by which the AIFM increases
the exposure of an AIF it manages whether through borrowing of cash or securities, or leverage
embedded in derivative positions.
For the purposes of the AIFMD, leverage is any method which increases the Company’s exposure,
including the borrowing of cash and the use of derivatives. It is expressed as a ratio between the
Company’s exposure and its net asset value.
The MSCI requires the Company to include the following statement in the Annual Report.
MSCI World Index total return in Sterling (the Company's comparator Benchmark)
The MSCI information (relating to the Benchmark) may only be used for your internal use, may not
be reproduced or redisseminated in any form and may not be used as a basis for or a component of
any financial instruments or products or indices. None of the MSCI information is intended to
constitute investment advice or a recommendation to make (or refrain from making) any kind of
investment decision and may not be relied on as such. Historical data and analysis should not be
taken as an indication or guarantee of any future performance analysis, forecast or prediction. The
MSCI information is provided on an “as is” basis and the user of this information assumes the entire
risk of any use made of this information. MSCI, each of its affiliates and each other person involved
in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI
Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality,
accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular
purpose) with respect to this information. Without limiting any of the foregoing, in no event shall
any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential
(including, without limitation lost profits) or any other damages. (www.msci.com).
Net Asset Value (“NAV”) per Ordinary Share
The NAV per Ordinary Share is Shareholders’ funds expressed as an amount per individual share.
Equity Shareholders’ funds are the total value of all the Company’s assets, at current market value,
having deducted all current and long-term liabilities and any provision for liabilities and charges.
The NAV per Ordinary Share of the Company is announced to the market weekly.
The figures disclosed on pages 5, 14 and 15 have been calculated as shown below:
2024 2023
‘000 ‘000
Net Asset Value (a) £205,285 £211,390
Ordinary Shares in issue (b) 200 200
–––––––––– ––––––––––
Net Asset Value per Ordinary Share (a) ÷ (b) £1,206.43 £1,056.95
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Ongoing charges (APM)
Ongoing charges are expenses of a type that are likely to recur in the foreseeable future, whether
charged to capital or revenue, and which relate to the operation of the Company as an investment
trust, excluding the costs of acquisition or disposal of investments, financing costs and gains or losses
arising on investments. Ongoing charges are based on costs incurred in the year as being the best
estimate of future costs and include the annual management charge but not the performance fee.
The calculation methodology is set out by the Association of Investment Companies.
The figures disclosed on pages 5 and 15 have been calculated as shown below:
2024 2023
£'000 £'000
Total operating expenses (a) 1,692 1,829
Average Net Asset Value (b) 203,091 211,310
–––––––––– ––––––––––
Ongoing Charges excluding synthetic costs (a) ÷ (b) 0.8% 0.9%
–––––––––– ––––––––––
Ongoing Charges including the charges of the underlying funds 0.9% 0.9%
(Ws Lindsell Train North American Fund) synthetic costs –––––––––– ––––––––––
Revenue return per Share
The revenue return per share is the revenue return profit for the year divided by the weighted
average number of ordinary shares in issue during the year.
SASB
The Sustainability Accounting Standards Board.
SASB Materiality Map©
The Materiality Map was developed by the SASB. It ranks issues by industry based on two types
of evidence: evidence that investors in the industry are interested in the issue, and evidence that
the issue has the ability to impact companies within the industry.
Share price and NAV total return (APM)
These are the returns on the share price and NAV respectively taking into account both the rise
and fall of share prices and valuations and the dividends paid to Shareholders.
Any dividends received by a Shareholder are assumed to have been reinvested in either additional
shares (for share price total return) or the Company’s assets (for NAV total return).
The share price and NAV total return are calculated as the returns to Shareholders after reinvesting
the net dividend in additional shares on the date that the share price goes ex-dividend.
The figures disclosed on pages 5, 14 and 15 have been calculated at shown below:
Year Ended 31 March 2024
LTIT Share
LTIT NAV Price
NAV/Share Price at 31 March 2024 a £1,206.43 £801.00
Dividend Adjustment Factor* b 1.02 0.80
Adjusted closing NAV/Share Price c = a x b 1,231.77 642.40
NAV/Share Price at 31 March 2023 d £1,056.95 £1,052.50
Total return ((c/d)-1)) x100 +2.1% -19.8%
* The dividend adjustment factor is calculated on the assumption that the dividends of £51.50 paid by the Company
during the year were reinvested into shares or assets of the Company at the cum income NAV per share/share price,
as appropriate, at the ex-dividend date.
Glossary of Terms and Alternative Performance Measures (“APM”)
(unaudited) continued
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LTL total return performance
The total return performance for LTL is calculated as the return after receiving but not reinvesting
dividends received over the year.
The figure disclosed on page 5 has been calculated as shown below:
LTL valuation
Valuation at 31 March 2023 a £13,212
Valuation at 31 March 2024 b £10,819
Dividends paid during the year c £1,462
Total return {((b-a)+c)/a}x100 -7.0%
TCFD
Task Force on Climate-Related Financial Disclosures.
Treasury Shares
Shares previously issued by a company that have been bought back from Shareholders to be held
by the company for potential sale or cancellation at a later date. Such shares are not capable of
being voted and carry no rights to dividends.
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Additional Shareholder Information (unaudited)
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Company Information
Directors
Roger Lambert (Chairman of the Board and
Management Engagement Committee)
Nicholas Allan (Chairman of the Nomination
Committee)
Vivien Gould (Senior Independent Director)
Michael Lindsell
David MacLellan (Chairman of Audit
Committee)
Helena Vinnicombe
Company Secretary, Administrator
and Registered Office
Frostrow Capital LLP
25 Southampton Buildings
London
WC2A 1AL
Tel: 020 3008 4910
www.frostrow.com
email: info@frostrow.com
(Authorised and Regulated by the
Financial Conduct Authority)
Manager
Lindsell Train Limited
3rd Floor
66 Buckingham Gate
London
SW1E 6AU
Tel: 020 7808 1210
(Authorised and Regulated by the
Financial Conduct Authority)
Solicitor
Stephenson Harwood LLP
1 Finsbury Circus
London
EC2M 7SH
Broker
J.P. Morgan Cazenove Ltd
25 Bank Street
Canary Wharf
London
E14 5JP
Independent Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
Custodian
The Northern Trust Company
50 Bank Street
Canary Wharf
London
E14 5NT
Registrar
If you have any queries in relation to your
shareholding please contact:
Link Group
Central Square
29 Wellington Street
Leeds LS1 4DL
email: enquiries@linkgroup.co.uk
telephone +44 (0)371 664 0300
Website: www.linkgroup.eu
+ Calls are charged at the standard geographic
rate and will vary by provider.
Calls outside the United Kingdom will be
charged at the applicable international rate.
Lines are open between 09:00 – 17:30, Monday
to Friday excluding public holidays in England
and Wales.
Shareholder Portal
You can register online to view your holdings
using the Share Portal, a service offered by Link
Group at www.signalshares.com. The Share
Portal is an online service enabling you to
quickly and easily access and maintain your
shareholding online – reducing the need for
paperwork and providing 24 hour access to
your shareholding details.
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Identification codes
LSE: LTI
SEDOL: 3197794
ISIN: GB0031977944
BLOOMBERG: LTI LN
Legal Entity Identifier: 213800VMBJH2TCFDZU08
Shareholder relations
The price of the Company’s Ordinary Shares is listed in the Financial Times. For further information
visit: www.lindselltrain.com and follow the links.
Individual Savings Account (“ISA”)
The Company’s shares are eligible to be held in an ISA account subject to HM Revenue & Customs’
limits.
Registered in England, No: 4119429
Disability Act
Copies of this Annual Report and other documents issued by the Company are available from the
Company Secretary. If needed, copies can be made available in a variety of formats, including
braille, audio tape or larger type as appropriate. You can contact the Registrar to the Company,
Link Group, which has installed telephones to allow speech and hearing impaired people who
have their own telephone to contact them directly, without the need for an intermediate
operator; for this service please call 0800 731 1888. Specially trained operators are available during
normal business hours to answer queries via this service. Alternatively, if you prefer to go through
a ‘typetalk’ operator (provided by The Royal National Institute for Deaf People) you should dial
18001 from your textphone followed by the number you wish to dial.
WARNING TO SHAREHOLDERS – BEWARE OF SHARE FRAUD
Many companies have become aware that their Shareholders have received unsolicited phone calls or
correspondence concerning investment matters. These are typically from overseas based ‘brokers’ who
target UK Shareholders offering to sell them what often turn out to be worthless or high-risk shares in US or
UK investments. They can be very persistent and extremely persuasive. Shareholders are therefore advised to
be very wary of any unsolicited advice, offers to buy shares or offers of free company reports. Please note
that it is very unlikely that either the Company or the Company’s Registrar, Link Group, would make
unsolicited telephone calls to Shareholders. Such calls would relate only to official documentation already
circulated to Shareholders and never in respect of investment ‘advice’. Shareholders who suspect they may
have been approached by fraudsters should advise the Financial Conduct Authority (“FCA”) using the share
fraud report form at www.fca.org. uk/scams or call the FCA Customer Helpline on 0800 111 6768. You may
also wish to call either the Company Secretary or the Registrar whose contact details can be found on
page 112.
THE LINDSELL TRAIN INVESTMENT TRUST PLC THE LINDSELL TRAIN INVESTMENT TRUST PLC
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Contents
Page
Company Summary 1
Strategic Report
Business Review 2
Investment Objective 3
Investment Policy 3
Company Performance 4
Financial Highlights for the Year 5
Five Year Historical Record 5
Principal Data 5
Chairman’s Statement 6
Portfolio Holdings 9
Analysis of Investment Portfolio 10
Manager’s Report 11
Performance and Prospects 14
Key Performance Indicators 14
Alternative Performance Measures 15
Principal Risks, Emerging Risks and Risk Management 16
Long-Term Viability Statement 20
Section 172 Disclosure 21
LTL's Approach to Responsible Ownership 26
Governance
Board of Directors 32
Report of the Directors 34
Corporate Governance Statement 39
Directors’ Remuneration Report 50
Directors’ Remuneration Policy 55
Statement of Directors’ Responsibilities 57
Report of the Audit Committee 59
Independent Auditor's Report 65
Financial Statements
Income Statement 72
Statement of Changes in Equity 73
Statement of Financial Position 74
Statement of Cash Flows 75
Notes to the Financial Statements 76
Appendices (unaudited)
Appendix 1 – Annual Review of Lindsell Train Limited 92
Appendix 2 – Share Capital 100
Appendix 3 – Agreements with Service Providers 101
Additional Shareholder Information (unaudited)
Notice of Annual General Meeting 102
Explanatory Notes to the Resolutions 107
Glossary of Terms and Alternative Performance Measures 108
Company Information 112
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Perivan.com
268118
THE LINDSELL TRAIN
INVESTMENT TRUST PLC
Annual Report and Financial Statements
For the year ended 31 March 2024
Company Secretary and Registered Office
Frostrow Capital LLP
25 Southampton Buildings
London
WC2A 1AL
Tel: 020 3008 4910
www.frostrow.com
The Lindsell Train Investment Trust plc
Registered in England, No: 4119429