THE LINDSELL TRAIN
INVESTMENT TRUST PLC
Annual Report and Financial Statements
For the year ended 31 March 2023
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
Strategic Report
Business Review 2
Investment Objective 3
Investment Policy 3
Company Performance 4
Financial Highlights for the Year 5
Chairman’s Statement 5
Portfolio Holdings 9
Analysis of Investment Portfolio 10
Manager’s Report 11
Performance and Prospects 13
Key Performance Indicators 13
Principal Risks 15
Longer-Term Viability Statement 19
Section 172 Disclosure 21
LTIT’s Responsible Investment Policy 24
LTL’s Approach to Responsible Ownership 25
Governance
Board of Directors 30
Report of the Directors 32
Corporate Governance Statement 36
Directors’ Remuneration Report 46
Directors’ Remuneration Policy 50
Statement of Directors’ Responsibilities 53
Report of the Audit Committee 55
Independent Auditor's Report 61
Financial Statements
Income Statement 68
Statement of Changes in Equity 69
Statement of Financial Position 70
Statement of Cash Flows 71
Notes to the Financial Statements 72
Appendices (unaudited)
Appendix 1 – Annual Review of Lindsell Train Limited 88
Appendix 2 – Share Capital 96
Appendix 3 – Agreements with Service Providers 98
Additional Shareholder Information (unaudited)
Notice of Annual General Meeting 99
Glossary of Terms and Alternative Performance Measures 104
Company Information 107
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Perivan.com
265392
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 holding in LTL and LTL
managed fund products. Decisions on these holdings 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 98.
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.
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.
Dividend
A final dividend of £51.50 per Ordinary Share (2022: a final dividend of £51.12 and a special
dividend of £1.88) is proposed for the year ended 31 March 2023. If this dividend is approved by
shareholders at the Annual General Meeting, it will be paid on Tuesday, 12 September 2023 to
shareholders on the register at close of business on Friday, 11 August 2023 (ex-dividend Thursday,
10 August 2023).
Annual General Meeting
The notice of the Annual General Meeting, scheduled for Wednesday, 30 August 2023 at 2.30 p.m.
at the Marlborough Suite, St Ermin’s Hotel, 2 Caxton Street, London, SW1H 0QW, is provided on
pages 99 to 103.
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 80.
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 2023.
The Report contains: a review of the Company’s strategy, an analysis of its performance during
the financial year, comment on its future outlook and details of the principal risks and challenges
that it faces.
Reviews of the financial year and commentary on the future outlook are presented in the
Chairman’s Statement on pages 5 to 8 and the Manager’s Report on pages 11 to 12. The
Company’s Investment Objective and Investment Policy are set out on page 3.
The Strategic Report has been prepared to provide shareholders with information 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 24.
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.
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.
Throughout the year under review, the Company continued to operate as an approved
investment company, pursuing its investment objective.
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 24.2%, in order to benefit from the 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
2023, 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 increasing 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
2023 ordinary dividend.
All dividends have been distributed from revenue.
4
Company Performance
Share price performance and Net Asset Value (“NAV”) compared with the Benchmark for the
year ended 31 March 2023 (based on total return performance with reinvested net dividend)
* Rebased to show the performance per £100 invested.
The closing price is adjusted for the dividends of £53.00 per share which went ex-dividend on 11 August 2022.
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.
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 2023 have been adjusted to include the Ordinary dividend
of £51.12 and a special dividend of £1.88 per Share paid on 13 September 2022, with the associated ex-dividend
date of 11 August 2022.
^ Alternative Performance Measure (“APM”). See Glossary of Terms and Alternative Performance Measures
beginning on page 104.
Source: Morningstar and Bloomberg.
Chairman’s Statement
The Company’s net asset value per share (“NAV”) was £1,056.95 on 31 March 2023. Although it fell
from £1,113.81 a year earlier, the payment of the Company’s total annual dividend of £53.00 per
share in September 2022 ensured that the NAV total return was only fractionally down, by 0.4%.
This was a marginally better result than the performance of the Company’s benchmark, the
MSCI World Index in Sterling, which fell in value by 1.0% over the year. The Company’s share price
closely tracked the NAV for most of the year and at 31 March 2023 closed at £1,052.50, a
0.4% discount. After two consecutive years of underperformance compared with the benchmark
index between 31 March 2020 and 31 March 2022 it was pleasing to see comparative returns
improving.
The Company’s long-term returns remain satisfactory even with rising inflation over the last two
years and continue to meet the Company’s investment objective as outlined on page 1. The annual
NAV total return since inception was 13.3% and remained well ahead of annual RPI inflation of
3.5%. Over the last five years NAV annual total returns were 11.1% compared with a rise in the RPI
of 5.7%, even though this captures the lower NAV returns and higher inflation of the last two years.
The Manager believes that the best way to mitigate rising inflation is to invest in companies whose
market positions allow them to raise prices or innovate through the application of technology to
grow and to offset cost pressures. We see some evidence of this from the strong corporate
performances reported by the Company’s quoted holdings after lockdowns ended.
In the face of these challenging circumstances there is a reassuring consistency and thus no change
to the Manager’s overall approach to investment. Indeed the quoted portfolio is all but unchanged
from this time last year. It is comprised of ten durable cash generative companies and two pooled
funds, themselves made up of similar companies, generating in aggregate higher returns on
capital than the average quoted company. The Manager believes that by letting these great
quoted businesses compound their returns from year to year rather than changing them in the
hope of anticipating shorter-term market price fluctuations, which incurs execution risk and
dealing expense, performance will generate lasting real returns for shareholders as has been the
case for much of the Company’s existence.
Lindsell Train Limited (‘LTL’)
The Company’s cornerstone holding in LTL, which represented 40.3% of NAV at 31 March 2023,
has held back the Company’s overall performance in recent years even if in the year to 31 March
2023, the LTL valuation total return was marginally positive at 0.2%. From LTL’s peak valuation
Performance Comparisons 2023 2022
Net Asset Value total return per Ordinary Share*^ -0.4% -2.3%
Share price total return per Ordinary Share*^ -0.7% -20.0%
MSCI World Index total return (Sterling) -1.0% 15.4%
UK RPI Inflation (all items) 13.5% 8.9%
6
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Strategic Report
on 30 June 2021, LTL’s total return to 31 March 2023 was down by 14.0%. Over the last two years
LTL has been defending its approach to investment in the face of disappointing investment
performance across all its strategies. Relative performance was worst in 2021 and improved for
some strategies in 2022 but cumulatively there is some ground to be made up. In the
circumstances, and exacerbated by other factors unrelated to performance, it is perhaps not
surprising that LTL’s FUM has fallen on account of net client withdrawals. FUM for LTL peaked in
June 2021 at £24.6 billion and had fallen to £18.6 billion at 31 March 2023, experiencing over
that time £5.3 billion of net outflows. Lower FUM has resulted in LTL’s valuation falling from
£18,730.17 at its peak at 30 June 2021 to £13,212.40 at 31 March 2023, a reduction of 29.5%.
Throughout this period LTL has stuck to its investment approach and, almost without exception,
to the companies it owns in each of its strategies. LTL is encouraged by how well most of its
investee companies have progressed as businesses even if this has not been reflected in market
prices. Provided LTL’s companies continue to thrive, market prices should in time recover and
relative performance improve.
LTL has further expanded its profit share scheme to ensure that key individuals are incentivised
to continue to pursue their careers with LTL. From LTL’s current financial year 15% of its net profits,
up from 8% last year, will be paid to selected individuals within the scheme. 50% of these profit
share payments have to be invested in LTL shares at the prevailing LTL valuation. The shares are
sourced from LTL’s founders, Nick Train and Michael Lindsell, and your Company, with the founders
providing 75% and your Company 25% after LTL’s Treasury is exhausted. These profit share
commitments are perpetual provided that the individual remains in LTL’s employment. This
transfer of ownership will mean that the Company’s holding in LTL diminishes slowly over time.
The Board believes that by ceding ownership to future successors in this way it builds up an
alignment of interests between employees and shareholders to allow LTL to flourish in the future.
The number of shares the Company holds in LTL has remained static since 31 March 2019 but from
this year will begin to fall, reflecting these sales.
It is intended that these initiatives will accompany a transfer of responsibilities to selected
employees to ensure that LTL thrives beyond the founders active involvement. Any change is likely
to be incremental as both founders remain bound to the business, having recently renewed their
seven year rolling commitment to continue to work at LTL.
The rising profit share payments outlined above should not materially affect the profitability of
LTL, as the payments transfer rewards previously destined to the founders to successors within
the constraints of LTL’s salary and bonus cap. If LTL increases the profit share awards in the future
beyond a certain level it may be necessary to give consideration to amending the salary and bonus
cap to accommodate the payments. Any change in the salary and bonus cap will require approval
from the Board of this Company.
The Valuation of Lindsell Train Limited
An important task for the Board is to determine the valuation of its 24.2% minority stake in LTL.
The valuation methodology, which was amended at 31 March 2022 having taken professional
advice, has been applied throughout the year. It is based on a percentage of LTL’s FUM, with the
percentage applied adjusted to reflect the ongoing profitability of LTL, and currently values the
LTL stake at £85 million (2022: £97 million). The increase in UK Corporation Tax from April 2023
Chairman’s Statement continued
7
THE LINDSELL TRAIN INVESTMENT TRUST PLC
from 19% to 25% has already impacted the LTL valuation as the Directors accounted for a staged
increase in the tax rate when calculating LTL’s valuation from October 2022. The Board continues
to monitor a number of alternative approaches to the valuation of LTL to ensure that the result
of the new methodology makes sense in the context of the future prospects for LTL and also when
it is compared with similar businesses.
As the share transfers resulting from profit share awards increase, so the utility and importance
of LTL’s valuation expands from primarily determining a monthly price for LTL’s shares to becoming
the price that governs the transfer of value between founders, employees and the Company.
Dividend
The Board proposes to pay a total dividend for the year to 31 March 2023 of £51.50 per share
which represents a small 0.7% rise in the ordinary dividend from £51.12. No special dividend will
be paid this year as LTL did not earn any performance fees. It represents a 2.8% fall in the total
dividend and means that the Company will retain slightly less than the maximum amount it is
permitted to retain to guarantee continued Investment Trust status.
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 our shareholders.
However this principle also runs alongside a desire to see LTL’s dividends grow, reflecting the
success of the Company. In three instances in the past (in 2007, 2010 and 2011) following market
volatility, the Board decided either to retain less than the maximum allowed or to draw down on
its revenue reserves to prevent the dividend from falling, which would have resulted if there had
been a strict interpretation of the dividend policy. The Board is minded to do the same in the
future but is aware that, as the LTL dividend now represents 84% of the Company’s total revenues
(a much higher percentage compared with earlier years), depleting revenue reserves to simply
maintain the dividend without some assurance that those reserves would soon be replenished
might not be in the best interests of shareholders. We do not know what 2023 will bring for LTL,
but at current levels of FUM the LTL dividend is likely to fall again in its year ending January 2024.
Board Changes
During the year the Board was delighted to welcome Roger Lambert and Helena Vinnicombe,
who were appointed as Directors in September 2022 following a formal recruitment process.
A resolution proposing their election together with resolutions for those Directors standing for
re-election will be put to Shareholders at the forthcoming Annual General Meeting.
Richard Hughes resigned as the Chairman of the Audit Committee in April 2023 and has also
decided to retire from the Board following the Annual General Meeting. Both decisions were
taken for personal reasons. Richard’s experience as a fund manger and as an observer of
companies and markets over his career made his contribution to the company as the Audit
Committee Chairman particularly valuable, especially in revising the valuation methodology for
LTL and cataloguing and assessing the potential risks facing the Company. The Board is sad to
lose a valued member. We wish him well for the future.
8
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Strategic Report
Following Richard’s resignation Helena Vinnicombe agreed to become the Chairman of the Audit
Committee for an interim period and Cornforth Consulting Ltd (“Cornforth”) was appointed by
the Board in April 2023 to assist with the appointment of a new Audit Committee Chairman.
I have been honoured and privileged to serve as Chairman of the Company since 2015. I have
indicated to the Board that I wish to stand down as part of the normal succession process and it
has been agreed that I will do so at the end of 2023. I am delighted that Roger Lambert has been
chosen by my Board colleagues to succeed me from 1 January 2024.
Change of Auditor
During the year the Board initiated a formal competitive tender process for our external audit
engagement. At the forthcoming Annual General Meeting, the Board will propose that BDO LLP
replace PricewaterhouseCoopers LLP as the Company’s external auditor. Full details of this process
can be found in the Report of the Audit Committee beginning on page 55.
The Annual General Meeting
This year’s Annual General Meeting will be held at 2.30 p.m. on Wednesday, 30 August 2023, 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, and to receive an update on the Company’s strategy and its key investments.
This year for the first time voting will be conducted via a poll and I encourage all shareholders to
exercise their right to vote. The Board strongly encourages shareholders 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 that we own in the Company’s portfolio,
and we urge you, our shareholders, to follow suit and vote on the resolutions that are proposed,
as we the Directors intend to do ourselves.
Considerations for the Future
With interest rates rising as much and as quickly as they have, it is encouraging that markets have
been able to absorb these increases with relative equanimity. Recent troubles in the global
banking sector show that perhaps markets have yet to fully adjust to the effects of this change.
In this environment the Board is much reassured that the Company owns a selection of durable
quoted companies with a history of having thrived through more difficult times in the past. The
holding in LTL, as a unquoted, relatively young company, may represent more risk from this
perspective but, as its business is built on the same durable platform of companies that it owns
for its clients, it is also uniquely aligned with the risks faced by the quoted portfolio.
Let us hope these companies continue to compound the returns we seek. If they do, market prices
should eventually respond, which should be to the benefit of our direct holdings and LTL’s
business.
Julian Cazalet
Chairman
12 June 2023
Chairman’s Statement continued
9
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Portfolio Holdings at 31 March 2023
(All ordinary shares unless otherwise stated)
% of Look through
Fair value net basis % of
Holding Security £’000 assets total assets
†
6,450 Lindsell Train Limited 85,220 40.32 40.32
235,000 London Stock Exchange 18,490 8.75 8.94
12,500,000 LF Lindsell Train North American* 17,361 8.21 0.00
Equity Fund
420,500 Diageo 15,195 7.19 7.40
410,000 Nintendo 12,828 6.07 6.07
363,000 RELX 9,500 4.49 4.73
222,000 Unilever 9,301 4.40 4.57
149,980 Mondelez International 8,468 4.00 4.45
1,263,393 A.G. Barr 6,367 3.01 3.03
89,000 Heineken 6,618 3.13 3.24
97,400 PayPal 5,988 2.83 3.06
39,000 Laurent Perrier 4,016 1.90 1.90
420,000 Finsbury Growth & Income Trust* 3,776 1.79 0.00
Indirect Holdings – – 8.26
–––––––––––– –––––––––––– ––––––––––––
Total Investments 203,128 96.09 95.97
Net Current Assets 8,262 3.91 4.03
–––––––––––– –––––––––––– ––––––––––––
Net Assets 211,390 100.00 100.00
–––––––––––– –––––––––––– ––––––––––––
–––––––––––– –––––––––––– ––––––––––––
† 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 2023:
Net Equity
Exposure
LF Lindsell Train North American Equity Fund ACC 97.91%
Finsbury Growth & Income Trust PLC 101.48%
10
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Strategic Report
Analysis of Investment Portfolio at 31 March 2023
Breakdown by Location of Listing
(look-through basis)^
UK* 70%
USA 15%
Japan 6%
Europe excluding UK 5%
Rest of World 0%
Cash & Equivalents 4%
––––––––––––
100%
––––––––––––
––––––––––––
Breakdown by location of underlying company revenues
(look-through basis)^
USA** 28%
Europe excluding UK** 27%
UK** 26%
Rest of World 12%
Japan 3%
Cash & Equivalents 4%
––––––––––––
100%
––––––––––––
––––––––––––
Breakdown by Sector
(look-through basis)^
Financials 54%
Consumer Staples 27%
Communication Services 7%
Industrials 5%
Information Technology 2%
Consumer Discretionary 1%
Cash & Equivalents 4%
––––––––––––
100%
––––––––––––
––––––––––––
^ 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
managed funds.
* LTL accounts for 40.3% and is not listed.
** LTL accounts for 17 percentage points of the Europe figures, 18 percentage points of the UK figures,
5 percentage points of the USA figures and 0 percentage points of the RoW figure.
11
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Manager’s Report
We did not initiate any holdings over the last six months, nor did we dispose of any. In fact, our
only activity was to add to our most recent position, Laurent Perrier. This is now getting on for a
2% holding and we look to build it further, when shares come available, which is infrequently.
We know this lack of activity could be construed as us running out of ideas, or complacency.
I assure you this is not so, and that Michael Lindsell and I remain as committed to and ambitious
for your Company as ever. We both added to our own holdings in the Company over the period.
Instead, the lack of portfolio activity reflects our double conviction. First, that the companies we
own are fine businesses with plenty of growth ahead of them and, therefore, with the potential
to command higher (we hope much higher) share prices in the future. Second, we reiterate our
view that buying and selling shares in the hope of improving investment performance is, on
balance and for most investors, over time, a loser’s game. The costs of such selling and buying are
certain, while the benefits of switching horses in mid-stream are most uncertain, particularly when
you own a stable of thoroughbreds, which we believe is the case for ours.
Nonetheless, we know that for the NAV of your Company to make significant progress, the shares
of our investee companies must also progress. In fact, we want as many as possible to be hitting
regular all-time highs, because that is the best validation of our kind of investment approach.
That investment approach being based on identifying long-term winners and then running those
winners for the genuinely long-term. Candidly, we wish more of our holdings had been hitting
new highs over the last couple of years.
However, in this report let me note: three portfolio holdings hit all-time share price highs in the
first quarter of 2023. We hope this trio goes even better as the year progresses and that they are
soon joined by other important holdings hitting all-time share price highs too.
The three recent winners were Laurent Perrier, Mondelez and RELX, each of which had
encouraging recent trading updates. I hope it doesn’t sound flippant, but we think there is every
ground for expecting these companies to continue to do well. Their respective business franchises
– one of the world’s premium champagne brands (and the only publicly-quoted one); the owner
of two beloved global mega-brands, Cadbury and Oreos; and a globally-significant provider of
“must-have data” for scientists, lawyers and risk professionals – remain compelling propositions
for investors, we think. All three have been terrific long-term investments too, in addition to their
2023 gains. Why shouldn’t they carry on being so?
Elsewhere, there are several holdings where the shares have picked up in recent months and are
now within striking distance of all-time highs. Diageo for instance is less than 10% off its peak. A
period of dull price performance since 2021 has coincided with some interesting changes to the
share register. We note three relatively recent buyers of Diageo shares: the Gates Foundation (as
in Bill Gates), Berkshire Hathaway and Diageo itself. We are encouraged to see investors and an
industry participant of this calibre sharing our confidence in the secular growth and inflation
protection offered by Diageo’s brands. And, of course, Diageo’s purchases of its own shares for
cancellation increase the value of each remaining share; great for long-term holders like us.
Bill Gates also took advantage of a recent corporate placing of Heineken shares to acquire a stake
in that company, worth nearly $1.0 billion. This is a nice approbation of the durability and likely
long-term prosperity of this great business, and we hope to see our Heineken shares surpass their
2019 peak soon. They are currently about 10% shy.
12
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Strategic Report
Bill Gates’ old business, Microsoft, recently acquired £1.7 billion-worth of shares in London Stock
Exchange Group (“LSEG”) – as part of a strategic joint venture between the two companies. This
has pushed LSEG shares better, and they are now c10.7% below their 2021 highs (at worst they
traded 35% below those levels). With each passing set of results the wisdom of LSEG’s 2021
purchase of Refinitiv looks more certain. Certainly, it is the reason that Microsoft has partnered
with LSEG. And if the LSEG board’s ambitions are achieved – and that board now has a senior
Microsoft officer as a non-executive - then we have no doubt that old share price peak will be
handsomely superseded.
Another new strategic holding has been built in one of your portfolio companies. Nintendo has
a new, major investor; the Saudi Public Wealth Fund now speaks for 8% of its equity. Today the
shares are 20% below the highs they reached in 2021 (although admittedly somewhat further
below their all-time high of as long ago as 2007). What will make those highs be surpassed? Well
– how about the news that Nintendo’s Mario movie, released in April 2023, has rapidly become
the most successful video-game film spin-off ever and is, after just a week’s release, the second
most successful animated movie released since the onset of Covid-19? To us and, we assume, the
Saudi Public Wealth Fund, that success reinforces our confidence in the longevity of Nintendo’s
wonderful gaming franchises, which have been loved by generation after generation of kids and
their parents. Nintendo shares are valued on a lowly 14x historic earnings and a dividend yield of
nearly 3%, which speaks of a scepticism on the part of investors about the earnings power of the
company. To us that scepticism seems profoundly wrong.
Unilever shares currently stand 16% below their 2019 peak (though 28% above their lows of early
2022) and probably need a resurgence of confidence in Emerging Markets to really get going
again; of course, this will happen one day.
I must acknowledge that for the other two holdings in your portfolio, all-time high share prices
look more distant in the short term. A.G. Barr sits 45% below its 2019 highs and PayPal a
disappointing 75%. Yet both are forecast to grow sales and earnings over the next few years,
each have obviously valuable brands or market positions and both have very strong balance sheets
– so you never know.
In summary, we are pretty pleased with the business performance of the companies in your
portfolio. Excepting the impact of Covid-19, they have exhibited the reliability we hoped for. Their
share prices have been less satisfactory, at least until recently. But we are sure if the businesses
continue to prosper, the shares will follow – to the benefit of your Company.
Nick Train
Investment Manager
Director, Lindsell Train Limited
12 June 2023
Manager’s Report continued
13
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Performance and Prospects
As set out in the Chairman's statement beginning on page 5, considering the opportunities and
challenges faced during the year, relative to the wider market, the Board is satisfied with the
Company’s performance compared with the benchmark and other key performance indicators,
when assessed over the five and ten year periods referred to in the chart on page 4.
The Board continues to fully support 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 13.3% compared with a total return from the Company's
combined benchmark index of 4.6% both calculated on an annualised basis.
The Directors provide an explanation in the Viability Statement on pages 19 and 20 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 5) 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 which are unchanged from last year with the
exception of Dividend per Ordinary Share.
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.
Principal Data
31 March 2023 31 March 2022 % Change
Shareholders’ funds (£’000) 211,390 222,761 -5.1%
NAV per Ordinary Share £1,056.95 £1,113.81 -5.1%
Discount to NAV^ 0.42% 0.79%
Share price per Ordinary Share £1,052.50 £1,105.00 -4.8%
Recommended final dividend per Ordinary Share £51.50 £51.12 +0.7%
Recommended special dividend per Ordinary Share – £1.88 -100.0%
Total dividends recommended for the year £51.50 £53.00 -2.8%
Dividend yield^ 4.89% 4.80%
Ongoing Charges^ 0.87% 0.82%
Earnings/(loss) per Ordinary Share – basic £(3.85) £(21.77)
Revenue £61.06 £63.65
Capital £(64.91) £(85.42)
NAV total return^
†
-0.4% -2.3%
Share price total return^
†
-0.7% -20.0%
Benchmark (MSCI World Index in Sterling)
†
-1.0% 15.4%
^ Alternative Performance Measure (see Glossary beginning on page 104).
† These are percentage change figures for the year to 31 March.
Please see Glossary of Terms beginning on page 104 for an explanation of terms used.
14
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Strategic Report
Five Year Historical Record
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 (£) (£) (£)
2019 8,680 7,172 5,900 29.50 895.93 1,475.00
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
Alternative Performance Measures (“APM”)
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 104.
Key Performance Indicators (“KPIs”) continued
15
THE LINDSELL TRAIN INVESTMENT TRUST PLC THE LINDSELL TRAIN INVESTMENT TRUST PLC
Principal Risks
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 with the assistance of Frostrow. A risk management process has been established to identify
and assess risks, their likelihood and the possible severity of impact. Further information is
provided in the Audit Committee Report beginning on page 55. 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.
Movement during the year: Unchanged, Reduced, Increased, New risk included during the year
*
Movement Key Risks and Uncertainties Key Mitigations
Corporate Strategy
The Board may have to reduce the Company’s
dividend.
84% 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 at every Board meeting.
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 total return may
differ materially from the NAV per share total
return 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, including the high degree of
concentration of the investment portfolio, may
lead to an investment return that is materially
lower than the Company’s benchmark index,
and/or 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.
16
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Principal Risks continued
Strategic Report
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Movement Key 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 25 to 29.
17
THE LINDSELL TRAIN INVESTMENT TRUST PLC
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Movement Key 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 82.
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 82.
18
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Emerging Risks
The Audit Committee reviews a risk map regularly during the year. Emerging risks are discussed
in detail as part of this process and also throughout the year to try and ensure that new (as well
as known) risks are identified and, so far as practicable, mitigated. Current identified emerging
risks are as follows:
Movement Key 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 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.
Movement Key Risks and Uncertainties Key Mitigations
Emerging Risks
Geopolitical and macroeconomic developments
introduce new risks and exacerbate existing
risks. These include:
• higher inflation is leading policy makers to
increase interest rates. This in turn may lead
to a reduction in trade, a threat of recession
and higher unemployment;
• sanctions damage the prospects of investee
companies with material exposure to
Russia;
• increased market volatility and reduced risk
appetites across a wide variety of asset
classes;
• increased threat of state sponsored cyber-
attacks; and
• geopolitical tension between China and
the West.
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 current impact of
sanctions and other economic responses to the
war in Ukraine on investee companies.
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.
Strategic Report
THE LINDSELL TRAIN INVESTMENT TRUST PLC
19
THE LINDSELL TRAIN INVESTMENT TRUST PLC
THE LINDSELL TRAIN INVESTMENT TRUST PLC
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 5 and
the Manager's Report beginning on page 11.
It is expected that the Company’s strategy will remain unchanged in the coming year.
Longer-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. The Board has chosen a five year horizon in view of the long-term
outlook adopted by the Investment Manager when making investment decisions.
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 59.7% of net
assets. The other 40.3% is the unlisted investment in LTL, which is not readily realisable.
• Based on historic analysis, including the holding in the LTL fund, 56.8% of the current portfolio
could be liquidated within 30 business days with 51.0% 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 0.87%, 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 24.2%, 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.
20
THE LINDSELL TRAIN INVESTMENT TRUST PLC
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.
Strategic Report
Longer-Term Viability Statement continued
21
THE LINDSELL TRAIN INVESTMENT TRUST PLC THE LINDSELL TRAIN INVESTMENT TRUST PLC
Who? Why? How?
Investors The benefits of engagement with
the Company’s Stakeholders
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.
How the Board, the Manager and the Company
Secretary have engaged with the Company’s
Stakeholders
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.
• Should any significant votes (greater than
20%) be cast against resolutions proposed at
the Annual General Meeting, the Board will
engage with shareholders. 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 the
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.
STAKEHOLDER GROUP
Section 172 Disclosure
Engaging with the Company’s Stakeholders
The following Section 172 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.
22
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Who? Why? How?
Manager
Service Providers
The benefits of engagement with
the Company’s Stakeholders
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 5 and Appendix
3 beginning on page 98 describe
the key decisions taken during the
year relating to LTL.
The Company contracts with third-
parties for other services including:
Company Secretary and
administration, Registrar and
Custodian. The Company ensures
that the third-parties to whom the
services have been outsourced
complete their roles in line with
expectation thereby supporting the
Company.
How the Board, the Manager and the Company
Secretary have engaged with the Company’s
Stakeholders
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.
STAKEHOLDER GROUP
Engaging with the Company’s Stakeholders continued
Strategic Report
23
THE LINDSELL TRAIN INVESTMENT TRUST PLC THE LINDSELL TRAIN INVESTMENT TRUST PLC
Who? Why? How?
Portfolio companies
Regulators
The benefits of engagement with
the Company’s Stakeholders
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.
How the Board, the Manager and the Company
Secretary have engaged with the Company’s
Stakeholders
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 25 to 29.
The Company Secretary reports to the Board on a
monthly basis and at each Board meeting.
STAKEHOLDER GROUP
KEY AREAS OF ENGAGEMENT WITH STAKEHOLDERS
HOW THE BOARD HAS ENGAGED WITH THE
COMPANY’S STAKEHOLDERS
• Ongoing dialogue with shareholders concerning
the strategy of the Company, performance and
the portfolio.
• 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 reports.
• Board Composition. • Cornforth was appointed by the Board in April
2022 to assist with the appointment of two new
Directors, resulting in the appointment of Roger
Lambert and Helena Vinnicombe, who joined the
Board on 23 September 2022 and will offer
themselves for election by shareholders at the
2023 Annual General Meeting.
• As part of the Board's succession plans, it is
intended that Julian Cazalet will retire as Chairman
of the Board and Management Engagement
Committee at the end of December 2023.
Mr Cazalet will be succeeded as Chairman by
Mr Lambert.
24
THE LINDSELL TRAIN INVESTMENT TRUST PLC
• Audit Tender • During the year the Audit Committee led a
competitive audit tender process, which resulted
in the recommendation that BDO LLP be
appointed as the Company's new auditor. Further
information concerning the audit tender process
can be found on pages 58, 59 and 60.
• Board Composition (continued). • Richard Hughes will retire as a Director at the
conclusion of the Company’s Annual General
Meeting. Ms Vinnicombe took over from
Mr Hughes as Chairman of the Audit Committee
with effect from 14 April 2023, on an interim basis.
• Cornforth was appointed by the Board in April
2023 to assist with the appointment of a new
Audit Committee Chairman.
KEY AREAS OF ENGAGEMENT WITH STAKEHOLDERS HOW THE BOARD HAS ENGAGED WITH THE
COMPANY’S STAKEHOLDERS
LTIT’s Responsible Investment Policy
The Board believes that it is in shareholders’ best interests to consider ESG factors when selecting
and retaining investments and the Manager takes these issues into account.
In its Responsible Engagement & Investment Policy, the Manager states that its evaluation of ESG
factors is an inherent part of the investment process. 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 in December 2021.
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.
Engaging with the Company’s Stakeholders continued
Strategic Report
25
THE LINDSELL TRAIN INVESTMENT TRUST PLC THE LINDSELL TRAIN INVESTMENT TRUST PLC
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 frame work.
Disclosure Concerning Greenhouse Gas Emissions (“GHG”) for the year ended 31 March 2023
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.
Consequently, 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.
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 it believes 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 LTL’s investment team’s views, as well as to prioritise its 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 LTL’s valuation of that company, which alongside
its more qualitative research will influence any final portfolio decisions (for example, whether LTL
starts a new position or sells out of an existing holding).
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LTL’s approach to Responsible Ownership continued
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 it 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 best practice (e.g.
Mondelez). LTL believes that such positive benefits for society should be consistent with its aim to
generate competitive long-term returns, thus helping LTL 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 their clients’ capital for decades to come.
As a relatively small company with a single office location and 28 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. To address this, LTL became a
signatory of the NZAM initiative in December 2021 and is now committed
1
to becoming net zero
across all assets under its management by 2050. In line with this ambition, LTL set a 2030 interim
target 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 assets to be considered Aligned
2
by 2030, as set
out by the Paris Aligned Investment Initiative (“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
IPCC special report on global warming of 1.5°C.
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. 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 on LTL’s website: www.lindselltrain.com within its 2023 TCFD Report.
Strategic Report
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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 2023. Carbon
Intensity is computed for each equity holding as follows: Total Emissions (metric tons of Co2) / Revenue (Mil USD),
and aggregated at the fund level. 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 at March 2023. 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 Co2) / 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
10,000 companies. More than 100 different estimation models are used for non-reporting companies.
Stewardship
Engagement
Engaging with and monitoring investee companies on matters relating to stewardship have
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 believes
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, LTL engaged with three companies held within the Company’s portfolio, focussed
on six governance topics (please refer to page 28).
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
LTL’s approach to Responsible Ownership continued
Engagement (continued)
In addition, Madeline Wright, Deputy Portfolio Manager and Head of Investment ESG at LTL,
completed her process of holding an ESG specific discussion with all of LTL’s portfolio companies
(c.70 in total), aimed at establishing a baseline for LTL’s ongoing engagement and clarifying its
portfolio companies’ stances on, and approaches to, certain ESG factors, with the objective of
ensuring that all portfolio companies report this essential data going forward. This information
is stored, assessed, and monitored within Sentinel, LTL’s proprietary ESG database.
As a public supporter of the TCFD and The IFRS Sustainability Alliance (previously known as the
Sustainability Accounting Standards Board), LTL’s encouraging it’s portfolio companies to report
in line with these, or similar (if more relevant to their business) frameworks, and also to report
on positive impact goals and progress to net-zero. Furthermore, as signatories of NZAM, LTL is
monitoring carefully the transition to net-zero of each of its businesses and encouraging the
companies to set science-based targets where possible.
Key Engagement Examples:
Unilever
This engagement in Q2 2022 centred on the recent news of the appointment of activist investor,
Nelson Peltz of Trian Fund Management, to its board as a non-executive director, after his
purchase of 1.5% of Unilever’s shares. As Trian’s objectives are ostensibly in line with that of LTL,
LTL had no objection to the appointment despite being somewhat surprised at the small size of
the investment required to get a seat at the table. LTL did however take the opportunity to urge
the board to resist any proposals that merely boost short-term value. Nils Andersen (non-executive
chairman), confirmed that the board remains committed to their long-term strategy and is
focussed on protecting the strategic value of Unilever’s assets.
In early 2023, LTL engaged with the Chairman of Unilever regarding the announcement of its
choice of new CEO.
PayPal
LTL has engaged with PayPal on several occasions to share its views regarding compensation best
practice and continues to believe that it could foster greater shareholder alignment through
improved compensation structures. In accordance with LTL’s escalation process, it voted against
PayPal’s resolution. LTL wrote to the management of PayPal, outlining the reasons for its vote,
and encouraging them to review their compensation structure.
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.
Strategic Report
29
Voting record:
Management Shareholder Total
Proposals Proposals Proposals
With Management 199 2 201
Against Management 1 – 1
Abstain 1 1 2
Totals 201 3 204
Source: Glass Lewis. 1 April 2022 – 31 March 2023.
Votes against management 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 encourages) engagement with LTL. Furthermore,
it is LTL’s aim to be invested in ‘exceptional’ companies with 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 LTL will write to management to inform
them of LTL’s intention to vote against such policies.
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, tax evasion 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. As such, policies and procedures are in place to prevent this and
can be found on the Company’s website.
The Board applies the same standards to its service providers in their activities for the Company.
The Company’s culture is driven by its values of integrity, knowledge, skill and frank and courteous
conduct. It focuses 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
Julian Cazalet
Chairman
12 June 2023
THE LINDSELL TRAIN INVESTMENT TRUST PLC
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Governance
Board of Directors
Julian Cazalet*^†+, Chairman, is a director of Deltex Medical Group plc and two charitable trusts.
He was previously Chairman of Herald Investment Trust plc for 10 years, retiring in 2019. Before
that he was a Managing Director – Corporate Finance at J.P. Morgan Cazenove where he advised
investment trusts in addition to his work with industrial and commercial companies, having been
a partner in Cazenove since 1978. A qualified Chartered Accountant, he has an M.A. in Economics
from Cambridge University.
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.
Richard Hughes*^†+, Non-Executive Director, was a non-executive director and the Senior
Independent Director of Middlefield Canadian Income PCC, where he also served as the Chair of
its Nomination & Remuneration and Audit Committees. He also formerly served as a non-executive
director of Edentree Asset Management Limited and chaired its Investment Committee and was
a member of its Risk and Audit Committee. Richard has significant experience with closed-end
funds, namely M&G’s Investment Trust business of which he was a director. He also managed a
number of funds, including M&G Smaller Companies Fund, M&G Recovery Fund and M&G
Charifund. He was a director of M&G Group plc and Managing Director of M&G Investment
Management Limited. He was a director of M&G Limited and M&G Group plc from 1994 to 2000,
and a director of M&G Recovery Trust plc from 1992 to 1998. Richard was Chairman of the Audit
Committee until April 2023.
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Roger Lambert*^†+, Non-Executive Director, 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.
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.
Helena Vinnicombe*^†+, Chairman of the Audit Committee, is a member of the Advisory
Committee for the M&G 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. Helena
was appointed as Chairman of the Audit Committee on an interim basis in April 2023.
All Directors are Non-Executive.
* Independent
^ Audit Committee member
† Management Engagement Committee member
+ Nomination Committee member
Michael Lindsell was appointed as a director on 13 July 2006; Julian Cazalet and Vivien Gould were appointed on
29 January 2015; Nicholas Allan and Richard Hughes were appointed on 18 September 2018; and Roger Lambert
and Helena Vinnicombe were appointed on 23 September 2022.
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Governance
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
Report of the Directors
The Directors present the Annual Report together with the audited Financial Statements of the
Company and the Independent Auditor’s Report for the year ended 31 March 2023.
In accordance with the requirement for Directors to prepare a Strategic Report and an enhanced
Directors’ Remuneration Report for the year ended 31 March 2023, the following information is set
out in the Strategic Report: a review of the business of the Company including details about its
objective, strategy and details of the key risks and uncertainties associated with the Company’s activities.
The Corporate Governance Statement (beginning on page 36) 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 received approval from HM Revenue & Customs as an investment company
under sections 1158 and 1159 of the Corporation Tax Act 2010. In the opinion of the Directors,
the Company continues to conduct its affairs to qualify for 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 68. Details of the proposed
final dividend can be found on page 7 and the dividend policy is outlined in the Strategic Report
on page 3.
Share Capital
Full details of the Company’s Ordinary Share capital are provided in Note 13 of the Financial
Statements on page 80 and in Appendix 2 on page 96.
The Company’s Articles of Association permit the Company to purchase its own shares. At the
Annual General Meeting held on 8 September 2022 a special resolution was passed giving the
Company authority, until the conclusion of the Annual General Meeting in 2023, 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 12 June 2023. This authority has not been used. The Directors intend to seek a fresh
authority at the Annual General Meeting in 2023.
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
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
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 Shareholdings
As at 31 March 2023 and 31 May 2023 (being the latest practicable date before publication of the
Annual Report), the Company had been notified of the following substantial interests in the
Company’s voting rights:
No. of Shares as at No. of Shares as at
31 March 2023 % of Capital 31 May 2023 % of Capital
Hargreaves Lansdown 34,201 17.10 34,026 17.01
Interactive Investor 22,383 11.19 22,686 11.34
Mr Nick Train 13,332 6.67 13,332 6.67
Mr Michael Lindsell 11,481 5.74 11,581 5.79
Finsbury Growth & Income
Trust PLC 10,000 5.00 10,000 5.00
AJ Bell 9,997 5.00 10,229 5.11
Rathbones 6,739 3.37 6,739 3.37
As at 31 March 2023 and 31 May 2023 the Company had 200,000 Ordinary Shares in issue.
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
Details of the Directors of the Company who served during the year are set out on pages 30 and
31. Particulars of their remuneration are given on pages 46 to 49.
No other person was a Director during any part of the year or up to the approval of this Report.
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. 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 49.
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.
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Governance
Report of the Directors continued
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
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 36.22%
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 2024 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.
Independent Auditor
Following an audit tender which commenced in September 2022, a resolution to appoint BDO
LLP as the Company’s auditor and authorise the Audit Committee to determine its remuneration
will be proposed at the forthcoming Annual General Meeting. Further details of the audit tender
are included in the Chairman's Statement and the Report of the Audit Committee.
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.
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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
pages 19 and 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 the date of approval of this report, and that, accordingly, it is appropriate to
continue to adopt the 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 uncertainty created by the increase in
global inflation and rising interest rates, together with the consequences of the war in Ukraine
and the subsequent long-term effects on economies and international relations.
Further information is provided in the Audit Committee report beginning on page 55.
Annual General Meeting
The Annual General Meeting of the Company will be held on Wednesday, 30 August 2023 at
2.30 p.m. Please refer to the Notice of Meeting beginning on page 99 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
12 June 2023
THE LINDSELL TRAIN INVESTMENT TRUST PLC THE LINDSELL TRAIN INVESTMENT TRUST PLC
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Governance
THE LINDSELL TRAIN INVESTMENT TRUST PLC
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 (“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 in line with the principal recommendations of the AIC Code
will provide the best information to shareholders. The Financial Reporting Council 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 paragraph 9.8.6 of the UK Listing Rules.
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.
Company’s Culture, Values and Strategy
The Company’s culture is driven by its values of integrity, knowledge, skill 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 1.
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.
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 Julian Cazalet 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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Matters Reserved for the Board
The Board is responsible for setting the Company’s investment objectives, strategy and benchmark.
It also decides on the appointment and replacement of key suppliers including the Manager, the
Auditor (subject to shareholder approval), Registrar, Custodian, Company Secretary, Administrator
and Tax Services Supplier.
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 15
to 18. 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
page 38 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 six 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.
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 Director’s attendance at those meetings:
Board Management Annual
(regular Audit Engagement Nomination General
meetings) Committee Committee Committee Meeting
Total number of meetings 4 3 1 1 1
Julian Cazalet 4 3 1 1 1
Nicholas Allan 4 3 1 1 1
Vivien Gould 4 3 1 1 1
Richard Hughes 4 3 1 1 1
Roger Lambert** 2 2 1 1 n/a
Michael Lindsell 4 3* 1* 1* 1
Helena Vinnicombe** 2 2 1 1 n/a
* Present as an attendee and not a Committee member.
** Appointed to the Board on 23 September 2022.
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Board Committees
Nomination Committee
The Company’s Nomination Committee during the year comprised Nicholas Allan (Chairman),
Julian Cazalet, Vivien Gould, Richard Hughes, 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 39.
The Board’s policy on diversity is described in more detail on pages 39 and 40.
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 Richard Hughes (Chairman of the
Committee during the year until 14 April 2023), Helena Vinnicombe (Chairman on an interim basis
from 14 April 2023), Nicholas Allan, Julian Cazalet, Vivien Gould and Roger Lambert. Although
Mr Cazalet 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 55 to 60
of the Annual Report.
Management Engagement Committee
The Company’s Management Engagement Committee during the year comprised Julian Cazalet
(Chairman), Nicholas Allan, Vivien Gould, Richard Hughes, Roger Lambert 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 2023, 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.
Corporate Governance Statement continued
Governance
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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 Roger Lambert and Helena Vinnicombe, the Board engaged the
services of specialist recruitment consultants, 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 Lambert and Ms Vinnicombe were 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.
Succession Planning
The Board, meeting as the Nomination Committee, regularly considers its structure and recognises
the need for progressive refreshment.
The Board has an approved succession planning policy to ensure that (i) there is a formal, rigorous
and transparent procedure for the appointment of new directors; and (ii) the Board and its
Committees are comprised of members who collectively display the necessary balance of
professional skills, experience and industry/company knowledge. The policy is reviewed annually
and at such other times as circumstances may require.
Diversity Policy
Board Diversity
The Board supports the principle of boardroom diversity of which gender and ethnicity are two
important aspects and therefore the Company’s Diversity Policy applies to both the Board and its
Committees.
The Company’s policy is that the Board and its Committees should be comprised of directors with
a diverse range of skills, knowledge and experience and that appointments to the Board and its
Committees should be made on merit, against objective criteria, including diversity in its broadest
sense. The objective of the policy is to ensure there is a broad range of approaches, backgrounds,
skills, knowledge and experience represented on the Board and its Committees. The Board
believes that this will make the Board and its Committees 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 on the Board and its Committees during the year
has been, and will continue to be, a key consideration in any Director search process.
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40
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Governance
Corporate Governance Statement continued
THE LINDSELL TRAIN INVESTMENT TRUST PLC
The Board will not discriminate on the grounds of gender, ethnicity, age, sexual orientation,
disability or socio-economic background when considering the appointment of Directors.
Education, professional background and cognitive and personal strengths are considered against
the specification prepared for each appointment.
The Board has noted the FCA’s new Listing Rules which require companies 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 2023, 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 2023 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 5 71% 1
Women 2 29% 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.
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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) 7 100% 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 has therefore excluded the columns relating to executive management from the tables above.
In addition, the senior positions on the Company’s Board of (B) the chief executive and (D) the chief financial officer
are not applicable to the Company. In the absence of the aforementioned roles, the board considers the Chairman
and the SID to be the senior positions on the Board.
In order to collect the data required to fulfil the disclosures in the tables above and on page 40,
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.
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42
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Governance
Corporate Governance Statement continued
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.
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 Board.
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Board Performance Evaluation
The Board annually evaluates the performance of the Board, Committees, individual Directors
and third-party service providers using a structured questionnaire and without recourse to an
external facilitator. The Board is satisfied from the results of these that the Board, its Committees
and its third-party providers function effectively, both collectively and individually, and contain
an appropriate balance of skills and experience for the effective management of the Company.
No material weaknesses or concerns were identified.
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 2023 and up to the date of the Annual Report and Financial Statements, and is
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 LINDSELL TRAIN INVESTMENT TRUST PLC
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Governance
Corporate Governance Statement continued
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
BDO LLP
(Statutory Auditor)
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 Adhoc reports
JP Morgan Cazenove
Limited
(Corporate Broker)
l Effectiveness of control
environment (annually)
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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 previous page.
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.
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 24.
Julian Cazalet
Chairman
12 June 2023
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Governance
THE LINDSELL TRAIN INVESTMENT TRUST PLC
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 50
to 52.
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 61 to 67.
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.
Directors’ Fees
At the most recent review held in December 2022, it was agreed that with effect from 1 January
2023, the Directors’ fees would be as follows:
Chairman £40,000 (January 2022: £38,500)
Chairman of the Audit Committee £34,000 (January 2022: £31,500)
Directors £27,000 (January 2022: £26,000), 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
2023 2022 2021 2020
Annual Income: (£) (£) (£) (£)
Chairman 38,875 37,000 35,375 32,750
5.1% 4.6% 8.0%
Chairman of the Audit Committee 32,125 30,375 27,500 27,000
5.8% 10.5% 1.9%
Directors 26,250 25,250 24,250 22,500
4.0% 4.1% 7.8%
Taxable expenses 1,694 1,083 Nil Nil
No advice from remuneration consultants was received during the year under review although a
review of remuneration of the Company’s peer group of investment companies was undertaken,
supported by a review of published research by Nurole Limited and Trust Associates Limited.
Directors’ Remuneration Report
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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 2023 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:
2023 2022 2023 2022
Julian Cazalet 38,875 37,000 – –
Nicholas Allan 26,250 25,250 66 192
Vivien Gould 26,250 25,250 1,299 891
Richard Hughes 32,125 30,375 – –
Roger Lambert* 13,850 – – –
Michael Lindsell – – – –
Helena Vinnicombe* 13,850 – 329 –
–––––––––––– –––––––––––– –––––––––––– ––––––––––––
Totals 151,200 117,875 1,694 1,083
–––––––––––– –––––––––––– –––––––––––– ––––––––––––
–––––––––––– –––––––––––– –––––––––––– ––––––––––––
† Taxable expenses primarily comprise travel and associated expenses incurred by the Directors in attending Board
and Committee meetings in London.
* Appointed to the Board on 23 September 2022.
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.
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Governance
Directors’ Remuneration Report continued
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 2022 were approved by shareholders at the Annual General Meeting held on
8 September 2022. The votes cast by proxy were as follows:
Votes Votes Total
Resolutions Cast Cast Votes Votes
For % Against % Cast Withheld*
Directors’ Remuneration Report 53,784 99.70% 161 0.30% 53,945 49
Directors’ Remuneration Policy 53,799 99.70% 160 0.30% 53,959 35
* 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 2023
Note: The chart is rebased to 100 from 31 March 2013, 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 2013 to
31 March 2023. It was only 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.
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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
2023 2022 Increase
(£) (£) (decrease)
Directors’ remuneration 151,200 117,875 28.3%
Investment management fees and other expenses 1,829,000 1,978,000 (7.5%)
Performance fees (charged to capital) nil nil nil
Dividends to shareholders (final and special) 10,300,000 10,600,000 (2.8%)
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 2023 and 31 March 2022 are shown in the table below:
Ordinary Shares of 75p Ordinary Shares of 75p
31 March 2023 31 March 2022
Julian Cazalet 100 50
Nicholas Allan 100 50
Vivien Gould 25 25
Richard Hughes 25 25
Roger Lambert* 50 n/a
Michael Lindsell (including spouse and children) 7,720 7,345
Helena Vinnicombe* 15 n/a
Michael Lindsell (non-beneficial)** 3,600 3,600
* Appointed to the Board on 23 September 2022.
** 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 100 shares and Helena Vinnicombe
has bought a further 8 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, but does give shareholders
a chance to inform the Board of their views on Directors’ remuneration. The Board has not
proposed any significant changes to the way the remuneration policy will be implemented in the
next financial year.
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 2023 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
Julian Cazalet
Chairman
12 June 2023
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Governance
THE LINDSELL TRAIN INVESTMENT TRUST PLC
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 2023 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 Director’s 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 2023 31 March 2024
to the Board £ £
Julian Cazalet (Chairman)
1
29 January 2015 40,000 30,000
Nicholas Allan 18 September 2018 27,000 27,000
Vivien Gould 29 January 2015 27,000 27,000
Richard Hughes
2
18 September 2018 34,000 11,354
Roger Lambert
3
23 September 2022 27,000 30,250
Michael Lindsell 13 July 2006 Nil Nil
Helena Vinnicombe
4
23 September 2022 27,000 33,540
1
Will retire from the Board on 31 December 2023
2
Will retire from the Board on 30 August 2023
3
Will be appointed as Chairman with effect from 1 January 2024
4
Appointed as Audit Committee Chairman on an interim basis with effect from 14 April 2023
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The following table of remuneration components was approved with effect from 1 January 2023.
Table of Directors’ Remuneration Components
Component Annual Purpose and operation
Rate (£)
Basic Annual Fee: 27,000
Each Director
Additional Fee: 13,000
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. No advice from remuneration consultants was received during the year under review.
Directors’ Remuneration Year Ended 31 March 2023
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 2023 and at 31 March 2022:
Fees 2023 (£) 2022 (£)
Chairman 40,000 38,500
Chairman of Audit Committee 34,000 31,500
Board Member 27,000 26,000
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.
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Governance
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Directors’ Remuneration Policy continued
Service Contracts
None of the Directors has a service contract with the Company. Non-executive Directors are
engaged under Letters of Appointment.
Loss of Office
Directors’ Letters of Appointment expressly prohibit any entitlement to payment or compensation
on loss of office.
Scenarios
All remuneration of the Chairman and non-executive Directors is fixed at annual rates and there
are no performance-related scenarios where remuneration will vary. It is accordingly not
considered appropriate to provide different remuneration scenarios for each Director.
Statement of consideration of conditions elsewhere in the Company
The Company has no employees, nor does it have any subsidiaries or associated companies which
have employees, and accordingly a process of consulting with employees on the setting of the
Company’s Remuneration Policy is not applicable.
Other Items
None of the Directors has any entitlement to pensions or pension related benefits, medical or life
insurance schemes, share options, long-term incentive plans or any form of performance related
payments. No Director is entitled to any other monetary payment or any assets of the Company
except in their capacity (where applicable) as shareholders of the Company.
Directors’ and Officers’ liability insurance cover is maintained by the Company, at the Company’s
expense, on behalf of all Directors.
The Company has also provided indemnities to the Directors in respect of costs or other liabilities
which they may incur in connection with any claims relating to their performance or the
performance of the Company whilst they are Directors.
Consideration of Shareholders’ views
Any feedback received from shareholders is considered as part of the Board's annual review of
remuneration. In respect of the year under review no feedback has been received from
shareholders in relation to remuneration.
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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
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Each of the Directors, whose names and functions are listed in the ‘Board of Directors’ on pages 30
and 31 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
Julian Cazalet
Chairman
12 June 2023
Note to those who wish to access this document by electronic means:
The Annual Report for the year ended 31 March 2023 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 2023 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 six Directors, 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. Julian Cazalet
and Richard Hughes have current experience in relation to accounting and financial matters. The
Company Secretary is Secretary to the Committee.
Helena Vinnicombe took over from Richard Hughes as Chairman of the Audit Committee in April
2023, on an interim basis. The Board has initiated a recruitment process and has appointed
Cornforth to identify a Director to be appointed in Richard Hughes’s stead.
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
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Meetings
The Audit Committee met three times during this financial year and meeting attendance is shown
on page 37. 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 Issues Considered by the Audit Committee during the year
In summary, additional to the Committee's core responsibilities, the main matters arising in
relation to 2023 were:
• The Committee is aware of the increase in fraudulent activity over the last three years
exploiting organisations, as a result of the Covid-19 pandemic, together with the cost of living
crisis. 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 notes the key topics of
engagement undertaken by LTL with each of the portfolio companies and that 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 notes the consultation published by the Department of Business, Energy and
Industrial Strategy on restoring trust in audit and Corporate Governance, and will continue to
monitor the timescale for implementation of these proposals.
• The Committee led the audit tender and the recommendation of the appointment of BDO LLP
as Auditor.
• During the year, the audit of the Company's 2022 Financial Statements, undertaken by
PricewaterhouseCoopers LLP, was chosen for inspection by the United Kingdom Financial
Reporting Council’s (“FRC’s”) Audit Quality Review (the “Review”). The Committee considered
the findings of the Review and, having changed auditor to BDO LLP, the Committee discussed
with the new auditor the points raised, and how these had been incorporated into the audit
approach for the year ended 31 March 2023.
These matters were discussed by the Committee and any recommendations were fully considered
and recommendations were then made to the Board.
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 2023 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 portfolio, and the analysis of
portfolio liquidity, which estimated a liquidation of c.51% of the portfolio 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 on
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pages 34 and 35, which estimated that the Company could withstand a c.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 19 and 20). 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 six 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 15.
Alternative Performance Measures
The Committee reviewed the disclosure and description of Alternative Performance Measures
provided on pages 104 to 106 and within the Glossary of Terms and Alternative Performance
Measures beginning on page 104 and is satisfied that the disclosure is fair and relevant.
Valuation of investments
The Audit Committee considered the valuation methodology of the unlisted investment in LTL that
represented 40.3% of net assets at the financial year end.
The other 59.7% of the Company’s net assets are quoted 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.
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Governance
Report of the Audit Committee continued
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.
Audit process and tender
During the year, as part of the Board’s review of costs and as notified, the Audit Committee led a
competitive audit tender process. A selection of audit firms was invited to participate, including
members of the ‘big four’ firms and mid-tier firms; two firms submitted proposals and were
interviewed by the Audit Committee. Each firm that participated in the process was given
extensive access to documentation, met with the Committee Chairman and was requested to
submit a written proposal to the Committee. The firms then gave presentations to the Committee
and were judged against a number of objective criteria determined in advance of the process.
The Committee submitted two audit firm candidates for the engagement to the Board, together
with a justified preference for one of them. The Committee concluded that BDO LLP was the
preferred firm to conduct the audit engagement judged against the selection criteria and the
quality of the proposed team and firm (including industry experience) and the approach to
managing the audit. The Board agreed with the recommendation and the Company will seek
shareholder approval of the appointment of BDO LLP at the forthcoming Annual General
Meeting.
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
Accordingly, PricewaterhouseCoopers LLP resigned as the Company’s auditor and provided a
statement explaining the reasons for its resignation which was posted to shareholders in
accordance with the Companies Act 2006. The statement is available on the Company’s website
and the National Storage Mechanism. The Directors wish to thank PricewaterhouseCoopers LLP
for its service as auditor.
Mr Chris Meyrick 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 approval at the next Annual General
Meeting to be held in August 2023. 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, Mr Chris Meyrick has already
completed four audits on behalf of PricewaterhouseCoopers LLP prior to joining BDO LLP and
will be replaced by Mr Peter Smith at the conclusion of the 2023 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 2023 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 LINDSELL TRAIN INVESTMENT TRUST PLC
Report of the Audit Committee continued
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 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 2023.
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.
Helena Vinnicombe
Chairman of the Audit Committee
12 June 2023
Governance
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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 2023 and of its loss 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 2023 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. We are independent of the Company in accordance with the ethical requirements that are
relevant to our audit of the Financial Statements in the UK, including the FRC’s Ethical Standard as applied
to 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 the 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 market
volatility and the present uncertainties in economic recovery 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 by performing an
independent analysis of the liquidity of the portfolio and further stress testing the potential downsides
considered.
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.
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
Independent Auditor
’s Report to the members of
The Lindsell Train Investment Trust plc
continued
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.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in
the relevant sections of this Report.
O
verview
Key audit matters
Valuation and ownership of investments
Materiality
Company Financial Statements as a whole
£2.1m based on 1% of Net Assets as at 31/03/2023
An overview of the scope of our audit
O
ur 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 Financial
Statements. 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 full portfolio of investments.
In respect of listed and fund investments, we performed the following
procedures:
– confirmed the year-end bid price was used by agreeing to
independently quoted prices;
– obtained direct confirmation of the number of shares / units held in
each investment from the custodian at the balance sheet date; and
– tested the computational accuracy by multiplying the number of
shares/units held per the statement obtained from the custodian by
the valuation per share.
In respect of unlisted, private company, investment, we performed the
following procedures with support from our internal valuation experts:
– considered whether the valuation methodology is the most
appropriate in the circumstances under the International Private Equity
and Venture Capital Valuation (“IPEV”) Guidelines and applicable
accounting standards;
– independently confirmed the number of shares held to companies
house at the balance sheet date;
– assessed the appropriateness of assumptions used in applying the
valuation methodology. This included validating the Funds Under
Management (‘FUM’) to the published factsheets of LTL managed funds
and investment management revenue to historical records as well as
comparing cost assumptions and earnings / price to FUM ratios to
comparable companies; and
– performing sensitivity analysis over key inputs.
Key audit matter
Valuation and ownership of investments
(Note 1 and Note 10 to the Financial
Statements)
The investment portfolio at the year-end
comprised of listed equity investments
(£100,547,000), an unquoted fund
(£17,361,000) and one unlisted, private
company, investment (£85,220,000) held at
fair value through profit or loss.
We considered the valuation and ownership
of investments to be the most significant
audit area as the investments also represent
the most significant balance in the Financial
Statements and underpin a significant
portion of the principal activity of the entity.
Whilst we do not consider their valuation to
be subject to a significant degree of
estimation or judgement, there is a risk that
the prices used for the listed equity
investments and unquoted fund held by the
Company are not reflective of fair value of
those investments as at the year end.
Determining the fair value of the unlisted
investment involves judgement with respect
to determining the most appropriate
valuation methodology to adopt and
estimates in relation to the inputs used in
applying that methodology. Changes in
these can result in material changes in the
valuation of the unlisted investment.
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
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
2023
Materiality £2.1m
Basis for determining materiality 1% of Net Assets
Rationale for the benchmark applied As an investment trust, the net asset value is the key measure of
performance for users of the Financial Statements.
Performance materiality £1.48m
Basis for determining performance 70% of materiality
materiality
Rationale for the percentage applied The level of performance materiality applied was set after
for performance materiality having considered a number of factors including the expected
total value of known and likely misstatements and the level of
transactions in the year.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess
of £105,700. We also agreed to report differences below this threshold that, in our view, warranted reporting
on qualitative grounds.
Other information
The Directors are responsible for the other information. The other information comprises the information
included in the Annual Report and Financial Statements 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.
THE LINDSELL TRAIN INVESTMENT TRUST PLC
THE LINDSELL TRAIN INVESTMENT TRUST PLC
How the scope of our audit addressed the key audit matter
Key observations:
Based on our procedures performed we did not identify any matters to
suggest the valuation or ownership of the listed or unlisted equity
investments was not appropriate.
Key audit matter
Valuation and ownership of investments
(Note 1 and Note 10 to the Financial
Statements)
There is also a risk of error in the recording
of investment holdings such that those
recording does not appropriately reflect
the property of the Company.
64
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Independent Auditor’s Report to the members of
The Lindsell Train Investment Trust plc continued
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 34
and 35; 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 35.
Other Code provisions • Directors’ statement on fair, balanced and understandable as
set out on page 53;
• Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks as set out on
page 53;
• The section of the Annual Report that describes the review
of effectiveness of risk management and internal control
systems as set out on page 43; and
• The section describing the work of the Audit Committee as
set out on page 55.
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.
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.
Governance
65
THE LINDSELL TRAIN INVESTMENT TRUST PLC
THE LINDSELL TRAIN INVESTMENT TRUST PLC
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Matters on which we are required We have nothing to report in respect of the following matters
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 management and those charged with governance; and
• 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.
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
Independent Auditor’s Report to the members of
The Lindsell Train Investment Trust plc continued
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.
Fraud
We assessed the susceptibility of the financial statement to material misstatement including fraud.
Our risk assessment procedures included:
• enquiry with management and those charged with governance also considered Audit Committee
regarding any known or suspected instances of fraud;
• obtaining an understanding of the Company’s policies and procedures relating to:
• Detecting and responding to the risks of fraud; and
• Internal controls established to mitigate risks related to fraud.
• review of minutes of meeting of those charged with governance for any known or suspected instances
of fraud;
• discussion amongst the engagement team as to how and where fraud might occur in the Financial
Statements; and
Based on our risk assessment, we considered the areas most susceptible to be management override of
controls, including the valuation of the unlisted, private company, investment.
Our procedures in respect of the above included:
• the procedures set out in the Key Audit Matters section above;
• recalculating investment management fees in total;
• obtaining independent confirmation of bank balances; and
• testing journals which met a defined risk criteria by agreeing to supporting documentation and evaluating
whether there was evidence of bias by the Investment Manager and Directors that represented a risk of
material misstatement due to fraud.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement
team members who were all deemed to have 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
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.
Governance
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
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.
Chris Meyrick (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
12 June 2023
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
68
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Financial Statements
Income Statement for the year ended 31 March 2023
2023 2022
Revenue Capital Total Revenue Capital Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
Losses on investments held
at fair value 10 – (12,978) (12,978) – (17,089) (17,089)
Exchange (loss)/gains on currency
balances – (3) (3) – 6 6
Income 2 14,135 – 14,135 14,784 – 14,784
Investment management fees 3 (1,138) – (1,138) (1,309) – (1,309)
Other expenses 4 (690) (1) (691) (668) (1) (669)
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Net return/(loss) before taxation 12,307 (12,982) (675) 12,807 (17,084) (4,277)
Taxation 7 (96) – (96) (78) – (78)
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Return/(loss) after taxation for
the financial year 12,211 (12,982) (771) 12,729 (17,084) (4,355)
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Return/(loss) per Ordinary Share 9 £61.06 £(64.91) £(3.85) £63.65 £(85.42) £(21.77)
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 loss 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 72 to 87 form part of these Financial Statements.
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
THE LINDSELL TRAIN INVESTMENT TRUST PLC
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Statement of Changes in Equity 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
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
For the year ended 31 March 2022
Share Special Capital Revenue
capital reserve reserve reserve Total
2022 2022 2022 2022 2022
£’000 £’000 £’000 £’000 £’000
At 1 April 2021 150 19,850 198,066 19,050 237,116
(Loss)/return for the financial year – – (17,084) 12,729 (4,355)
Dividends paid for the year ended
31 March 2021 (see note 8) – – – (10,000) (10,000)
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
At 31 March 2022 150 19,850 180,982 21,779 222,761
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– ––––––––– –––––––––
The notes on pages 72 to 87 form part of these Financial Statements.
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
Statement of Financial Position at 31 March 2023
2023 2022
Notes £’000 £’000 £’000 £’000
Fixed assets
Investments held at fair value
through profit or loss 10 203,128 215,768
Current assets
Other receivables 11 491 513
Cash at bank 8,010 6,708
––––––––– –––––––––
8,501 7,221
Creditors: amounts falling due within
one year
Other payables 12 (239) (228)
––––––––– –––––––––
Net current assets 8,262 6,993
––––––––– –––––––––
Net assets 211,390 222,761
––––––––– –––––––––
––––––––– –––––––––
Called up share capital 13 150 150
Special reserve 14 19,850 19,850
––––––––– –––––––––
20,000 20,000
Capital reserve 14 168,000 180,982
Revenue reserve 23,390 21,779
––––––––– –––––––––
Equity Shareholders’ funds 211,390 222,761
––––––––– –––––––––
––––––––– –––––––––
Net Asset Value per Ordinary Share 15 £1,056.95 £1,113.81
The Financial Statements on pages 68 to 87 were approved by the Board on 12 June 2023 and
were signed on its behalf by:
Julian Cazalet
Chairman
The Lindsell Train Investment Trust plc
Registered in England & Wales, No: 4119429
The notes on pages 72 to 87 form part of these Financial Statements.
Financial Statements
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
Statement of Cash Flows for the year ended 31 March 2023
Restated
2023 2022
†
Notes £’000 £’000
Net cash inflow from operating activities 16 12,243 10,125
––––––––– –––––––––
Investing activities
Purchase of investments held at fair value (339) (673)
Sale of investments held at fair value 1 1,709
––––––––– –––––––––
Net cash (outflow)/inflow from investing activities (338) 1,036
––––––––– –––––––––
Financing activities
Equity dividends paid 8 (10,600) (10,000)
––––––––– –––––––––
Net cash outflow from financing activities (10,600) (10,000)
––––––––– –––––––––
––––––––– –––––––––
Increase in cash and cash equivalents 1,305 1,161
Cash and cash equivalents at beginning of year* 6,708 5,541
(Loss)/gains on exchange movements* (3) 6
––––––––– –––––––––
Cash and cash equivalents at end of year* 8,010 6,708
––––––––– –––––––––
––––––––– –––––––––
Cash flows from operating activities includes dividend income received (gross) of £14,156,000 (2022:£14,880,000)
and deposit interest of £36,000 (2022:£nil).
* Comprises solely cash held at bank.
† Restatement of presentation only. See note 1(k) for further details.
The notes on pages 72 to 87 form part of these Financial Statements.
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
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 2023, the Company held £100,547,000 (2022: £101,256,000) in listed investments
and £102,581,000 (2022: £114,512,000) in an unlisted investment and an unlisted fund. The total
operating expenses for the year ended 31 March 2023 were £1,829,000 (2022: £1,978,000). It is
estimated that 51.0% of the investment portfolio, (92.3% of the listed portfolio) 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.
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, 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.
Financial Statements
Notes to the Financial Statements
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
THE LINDSELL TRAIN INVESTMENT TRUST PLC
1 Accounting policies continued
The unlisted investment in Lindsell Train Limited 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 2022 the Board sought
external advice to verify its approach. Please refer to note 1(j) for further information.
The investment in LTL (representing 24.2% 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 82 to 86
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 with effect from 31 March 2023 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; 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.
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.
74
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Financial Statements
Notes to the Financial Statements continued
1 Accounting policies continued
(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.
(k) Statement of Cash Flows (presentation for comparative year restated)
In preparing the Company’s Statement of Cash Flows for the year ended 31 March 2023, the
Directors have made the judgement that purchases and sales of investments form part of the
Company’s investing activities, on the basis that these activities are intended for the
achievement of longer-term shareholder returns, consistent with the Company’s investment
objective.
The Company has re-assessed the previous classification of purchases and sales of investments
as “operating activities” in the Company’s Statement of Cash Flows and, after careful
consideration, the Board decided to change the accounting policy to better reflect the nature
of investment activities and classify purchases and sales of investments as “investing activities”.
As a result, the presentation of the Statement of Cash Flows for the year ended 31 March
2022 has been restated. This change in accounting policy has no impact on net assets or
income in either the current or prior year.
75
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
THE LINDSELL TRAIN INVESTMENT TRUST PLC
2 Income
2023 2022
£’000 £’000
Income from investments
Overseas dividends 833 689
UK dividends
– Lindsell Train Limited 11,875 12,861
– Other UK dividends 1,391 1,234
––––––––– –––––––––
14,099 14,784
––––––––– –––––––––
––––––––– –––––––––
Other income
Deposit Interest 36 –
––––––––– –––––––––
36 –
––––––––– –––––––––
––––––––– –––––––––
Total income comprises:
Dividends 14,099 14,784
Interest 36 –
––––––––– –––––––––
14,135 14,784
––––––––– –––––––––
––––––––– –––––––––
3 Management fees
2023 2022
£’000 £’000
Investment management fee 1,255 1,449
Rebate of investment management fee (see below) (117) (140)
––––––––– –––––––––
Total management fee 1,138 1,309
––––––––– –––––––––
––––––––– –––––––––
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. £94,893 (2022:
£101,681) 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 2023 was £nil (2022: £nil).
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
76
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Financial Statements
Notes to the Financial Statements continued
which £101,725 (2022: £123,593) relates to the Company’s investment in Lindsell Train North
American Equity Fund and £15,065 (2022: £16,399) relates to the Company’s investment in the
Finsbury Growth & Income Trust PLC.
4 Other expenses
2023 2022
£’000 £’000
Directors’ emoluments 151 118
Company Secretarial and Administration fee 195 211
Auditor’s remuneration*
†
55 35
Tax compliance fee 6 5
Safe custody fees 18 19
Printing fees 40 44
Registrars’ fees 35 33
Listing fees 14 10
Legal fees 5 12
Employer’s National Insurance 11 8
Directors’ liability insurance 13 12
Key man insurance 47 24
Consultancy fees** – 50
Costs associated with the redesign of the Company’s website – 12
Director recruitment costs 40 –
Sundry 60 41
VAT irrecoverable – 34
––––––––– –––––––––
690 668
Capital charges 1 1
––––––––– –––––––––
691 669
––––––––– –––––––––
––––––––– –––––––––
* Excluding VAT.
† Remuneration for the audit of the Financial Statements of the Company.
** Fees paid to J.P.Morgan Cazenove Ltd in relation to amendments to the Management Agreement and
their review of the Company’s valuation methodology applied to its unlisted investment in LTL.
5 Directors’ emoluments
These are reflected in the table below:
2023 2022
£’000 £’000
Directors’ fees 151 118
––––––––– –––––––––
––––––––– –––––––––
Since 1 January 2023, the Chairman of the Board, Chairman of the Audit Committee, and
other Directors receive set fees at rates of £40,000, £34,000 and £27,000 respectively per
annum, and have no entitlement to any performance fees. Directors’ fees amounting to
£27,000 (2022: £26,000) have been waived by Michael Lindsell in view of his connection with
the Manager.
There were no pension contributions paid or payable.
3 Management fees continued
77
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
6 Disclosure of interests
As at 31 March 2023 the Company held 12,500,000 shares in Lindsell Train North American
Equity Fund with a fair value of £17,361,000 and a cost of £12,752,000.
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 £3,776,000 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:
2023 2022
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
UK corporation tax – – – – – –
Overseas tax 102 – 102 90 – 90
Overseas tax recoverable (6) – (6) (12) – (12)
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Tax charge per accounts 96 – 96 78 – 78
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
The current taxation charge for the year is different from the standard rate of corporation
tax in the UK of 19% (2022: 19%). The differences are explained below:
2023 2022
£’000 £’000
Net loss on ordinary activities before taxation (675) (4,277)
––––––––– –––––––––
Theoretical tax at UK Corporation tax rate of 19% (2022: 19%) (128) (813)
Effects of:
– UK dividends which are not taxable (2,521) (2,678)
– Overseas dividends which are not taxable (158) (131)
– Non-taxable loss on investments 2,466 3,246
– Current year excess expenses 341 376
– Overseas tax suffered 102 90
– Overseas tax recoverable (6) (12)
––––––––– –––––––––
Actual current tax charge 96 78
––––––––– –––––––––
––––––––– –––––––––
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 2023, the Company had unutilised management expenses of £30,032,000
(2022: £28,241,000). 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 £7,508,000 (2022: £7,060,000) arising from management expenses exceeding taxable
income based on the prospective corporation tax rate of 25% (2022: 25%).
78
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Financial Statements
Notes to the Financial Statements continued
8 Dividends paid and payable
2022 2021
£’000 £’000
Final dividend for the year ended 31 March 2022 of £51.12 per
Ordinary share (2021: £47.07 per Ordinary Share) 10,224 9,414
––––––––– –––––––––
––––––––– –––––––––
Special dividend paid for the year ended 31 March 2022 of
£1.88 per Ordinary share (2021: £2.93 per Ordinary Share) 376 586
––––––––– –––––––––
10,600 10,000
––––––––– –––––––––
––––––––– –––––––––
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:
2023 2022
£’000 £’000
FinaI dividend for the year ended 31 March 2023 of £51.50 per
Ordinary share (2022: £51.12 per Ordinary Share) 10,300 10,224
––––––––– –––––––––
––––––––– –––––––––
Special dividend paid for the year ended 31 March 2023 of
£nil per Ordinary share (2022: £1.88 per Ordinary Share) – 376
––––––––– –––––––––
10,300 10,600
––––––––– –––––––––
––––––––– –––––––––
9 (Loss)/return per Ordinary Share
2023 2022
Total loss per Ordinary share
Total loss £(771,000) £(4,355,000)
Weighted average number of Ordinary Shares
in issue during the year 200,000 200,000
––––––––– –––––––––
Total loss per Ordinary share £(3.85) £(21.77)
––––––––– –––––––––
––––––––– –––––––––
The total loss per Ordinary share shown above can be further analysed between revenue and
capital, as below:
2023 2022
Revenue return per Ordinary Share
Revenue return £12,211,000 £12,729,000
Weighted average number of Ordinary Shares
in issue during the year 200,000 200,000
––––––––– –––––––––
Revenue return per Ordinary Share £61.06 £63.65
––––––––– –––––––––
––––––––– –––––––––
Capital loss per Ordinary Share
Total return £(12,982,000) £(17,084,000)
Weighted average number of Ordinary Shares
in issue during the year 200,000 200,000
––––––––– –––––––––
Capital loss per Ordinary Share £(64.91) £(85.42)
––––––––– –––––––––
––––––––– –––––––––
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
10 Investments held at fair value through profit or loss
2023 2022
£’000 £’000
Investments listed on a recognised investment exchange 100,547 101,256
Unlisted investment and Fund 102,581 114,512
––––––––– –––––––––
Valuation at year end 203,128 215,768
––––––––– –––––––––
––––––––– –––––––––
Opening book cost 42,252 43,805
Opening investment holding gains 173,516 190,088
––––––––– –––––––––
Opening Fair Value 215,768 233,893
Movements in the year:
Purchases at cost 339 673
Sales – proceeds (1) (1,709)
Losses on investments (12,978) (17,089)
––––––––– –––––––––
Closing Fair Value 203,128 215,768
––––––––– –––––––––
––––––––– –––––––––
Closing book cost 42,591 42,252
Closing investment holding gains 160,537 173,516
––––––––– –––––––––
Closing Fair Value 203,128 215,768
––––––––– –––––––––
––––––––– –––––––––
Realised gains/(losses) on investments 1 (517)
Decrease in investment holding gains for the year (12,979) (16,572)
––––––––– –––––––––
Losses on investments held at fair value (12,978) (17,089)
––––––––– –––––––––
––––––––– –––––––––
The Company received proceeds of £1,000 (2022: £1,709,000) from investments sold in the
year. The book cost of these investments when they were purchased was £400
(2022: £2,227,000). 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 2023 amounted to £85 and £nil respectively (2022: £280 and £673 respectively).
During the year the investment holding loss attributable to the Company’s holding in LTL
amounted to £11,690,000 (2022 loss: £17,328,000). See note 17 on page 86 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 2023.
Investments Country of registration Class of % of
or incorporation capital class held
Lindsell Train Limited* England Ordinary Shares of £100 24.2%
*As at 31 January 2023, the latest year end for LTL, its unaudited aggregate capital and
reserves amounted to £98,450,000, (2022: £90,703,000) and the profit for that year amounted
to £55,089,000 (2022: £65,343,000). The total amount of dividends paid during the year was
£48,876,000, (2022: £53,134,000) equating to dividends of £1,841 per share (2022: £1,994 per
share). The earnings per share were £2,068 (2022: £2,463). The cost of the Company’s
investment in LTL was £64,500.
80
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Financial Statements
Notes to the Financial Statements continued
10 Investments held at fair value through profit or loss continued
LTL is the only 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
2023 2022
£’000 £’000
Amounts due from brokers 1 –
VAT recoverable 34 –
Prepayments and accrued income 456 513
––––––––– –––––––––
491 513
––––––––– –––––––––
––––––––– –––––––––
12 Other payables
2023 2022
£’000 £’000
Accruals and deferred income 239 228
––––––––– –––––––––
––––––––– –––––––––
13 Share capital
2023 2022
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 2023.
14 Capital reserve
The capital reserve includes investment holding gains of £160,537,000 (2022: £173,516,000).
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.
81
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
THE LINDSELL TRAIN INVESTMENT TRUST PLC
14 Capital reserve 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
2023 2022 2023 2022
£ £ £’000 £’000
1,056.95 1,113.81 211,390 222,761
––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– –––––––––
The movements during the year of the assets attributable to the Ordinary Shares were
as follows:
2023 2022
Ordinary Ordinary
Shares Shares
£’000 £’000
Total Net Assets attributable at beginning of year 222,761 237,116
Total recognised losses for the year (771) (4,355)
Dividends paid during the year (10,600) (10,000)
––––––––– –––––––––
Total Net Assets attributable at the end of year 211,390 222,761
––––––––– –––––––––
––––––––– –––––––––
The Net Asset Value per Ordinary Share is based on net assets of £211,390,000
(2022: £222,761,000) and on 200,000 Ordinary Shares (2022: 200,000), being the number of
Ordinary Shares in issue at the year end.
16 Statement of Cash Flows
(a) Reconciliation of operating loss to net cash inflow from operating activities
2023 2022
£’000 £’000
Net loss before finance costs and taxation (675) (4,277)
Losses on investments held at fair value 12,978 17,089
Loss/(gains) on exchange movements 3 (6)
Increase in other receivables (34) (23)
Decrease in accrued income 56 80
Increase/(decrease) in other payables 11 (2,651)
Taxation on investment income (96) (87)
––––––––– –––––––––
Net cash inflow from operating activities 12,243 10,125
––––––––– –––––––––
––––––––– –––––––––
82
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Financial Statements
Notes to the Financial Statements continued
16 Statement of Cash Flows continued
(b) Analysis of cash flows
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
––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– –––––––––
At At
1 April Exchange 31 March
2021 Cash Flow Movement 2022
£’000 £’000 £’000 £’000
Cash at bank 5,541 1,161 6 6,708
––––––––– ––––––––– ––––––––– –––––––––
Total 5,541 1,161 6 6,708
––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– –––––––––
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 15 to 18 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 rising
interest rates as a response to persistent inflationary pressures, conflict between Ukraine and
Russia and heightened tensions between China and the West.
At 31 March 2023, the fair value of the Company’s assets exposed to market price risk was
£203,128,000 (2022: £215,768,000). 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 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 LF Lindsell Train North American Equity Fund of £17,361,000.
83
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THE LINDSELL TRAIN INVESTMENT TRUST PLC
THE LINDSELL TRAIN INVESTMENT TRUST PLC
17 Financial instruments and capital disclosures continued
Foreign currency exposure as at 31 March 2022
US$ Euro JPY Total
£’000 £’000 £’000 £’000
Short-term debtors 40 6 249 295
––––––––– ––––––––– ––––––––– –––––––––
Foreign currency exposure on net monetary items 40 6 249 295
Investments held at fair value through
profit or loss that are equities 33,308* 8,262 15,819 57,389
––––––––– ––––––––– ––––––––– –––––––––
Foreign currency exposure 33,348 8,268 16,068 57,684
––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– –––––––––
* This includes the holding in LF Lindsell Train North American Equity Fund of £17,601,000.
Over the year Sterling weakened against the US Dollar by 6.22% (2022: weakened by 4.57%),
weakened against the Euro by 3.98% (2022: strengthened by 0.81%) and strengthened
against the Japanese Yen by 2.58% (2022: strengthened by 4.82%).
A 5% 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 £2,777,000 or
1.31% of Net Asset Value (2022: £2,884,000 or 1.29% 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 2023 would have increased or
decreased by £20,313,000 or 101.56p per share (2022: £21,577,000 or 107.88p 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 2023, 51.0% (2022: 49.0%) of the investment portfolio (92.3% 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
4.9% of NAV.
Credit risk
Cash at bank and other debtors of the Company at the year end as shown on the Balance
Sheet was £8,501,000 (2022: £7,221,000).
Counterparty risk
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.
84
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Financial Statements
Notes to the Financial Statements continued
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 2023 £’000 £’000 £’000 £’000
Investments 100,547 17,361 85,220 203,128
––––––––– ––––––––– ––––––––– –––––––––
100,547 17,361 85,220 203,128
––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– –––––––––
Level 1 Level 2 Level 3 Total
At 31 March 2022 £’000 £’000 £’000 £’000
Investments 101,257 17,601 96,910 215,768
––––––––– ––––––––– ––––––––– –––––––––
101,257 17,601 96,910 215,768
––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– –––––––––
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 6 and 7.
LTL Valuation Methodology
During the year ended 31 March 2022, the Board appointed J.P.Morgan Cazenove Ltd to
undertake an independent review of the Company’s valuation methodology applied to its
unlisted investment in LTL. The current methodology was adopted and applied to monthly
valuations from 31 March 2022 onwards.
In adopting the current methodology the Board 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 to LTL’s FUM is calculated and, depending on its result, the percentage
of FUM is adjusted according to the table below.
`
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%
0.24 – 0.25 2.15%
0.25 – 0.26 2.20%
0.26 – 0.27 2.25%
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17 Financial instruments and capital disclosures continued
For instance at 31 March 2023 LTL’s annualised notional net profits were £35.60m and its FUM
was £18.53bn. The ratio between the two as a percentage was calculated as 0.192% resulting
in a percentage of FUM of 1.90% and a valuation of LTL of £13,212.40 per share.
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.
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 2023 FUM; and
(ii) in Table 2 different Price / Earnings (‘P/E’) ratio were applied to LTL’s March 2023 notional
net profits.
Table 1 – varying the % of FUM
LTL FUM Valuation
as at 31 March 2023 Valuation per share
(£’000) % of FUM (£’000) (£)
18,530,045 0.50% 92,650 3,476.95
18,530,045 0.75% 138,975 5,215.42
18,530,045 1.00% 185,300 6,953.90
18,530,045 1.25% 231,626 8,692.37
18,530,045 1.50% 277,951 10,430.84
18,530,045 1.75% 324,276 12,169.32
18,530,045 1.90% 352,071 13,212.40
18,530,045 2.00% 370,601 13,907.79
18,530,045 2.25% 416,926 15,646.26
18,530,045 2.50% 463,251 17,384.74
18,530,045 2.75% 509,576 19,123.21
Table 2 – varying the P/E ratio
LTL notional
net profits Valuation
as at 31 March 2023 Valuation per Share
(£’000) P/E ratio (£’000) (£)
35,554 6.00 213,327 8,005.65
35,554 7.00 248,881 9,339.92
35,554 8.00 284,435 10,674.20
35,554 9.00 319,990 12,008.47
35,554 9.90 352,071 13,212.40
35,554 10.00 355,544 13,342.75
35,554 11.00 391,099 14,677.02
35,554 12.00 426,653 16,011.30
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Financial Statements
Notes to the Financial Statements continued
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 2023 and 31 March 2022. 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
2023 2022
£’000 £’000
Opening fair value 96,910 114,238
Purchases at cost – –
Sales proceeds – –
Total losses included in gains on investments
in the Income Statement
– on sold assets – –
– on assets held at the end of the year (11,690) (17,328)
––––––––– –––––––––
Closing fair value 85,220 96,910
––––––––– –––––––––
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
(2022: None).
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19 Ongoing charges (APM)
2023 2022
£’000 % £’000 %
Total operating expenses 1,829 0.87 1,978 0.82
Total operating expenses are included after a management fee waiver of £117,000 (2022:
£140,000) (see note 3).
The above total expense ratios are based on the average Shareholders’ Funds of £211,310,000
(2022: £240,223,000) 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.
20 Related party disclosures
LTL acts as 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 49.
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)
DISCLAIMER
The information contained in these Appendices has not been audited by the Auditor and does
not constitute any form of financial statement. 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 2023
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 consisted of the two founders Michael Lindsell and Nick Train, Michael
Lim (the prior COO who remains responsible for IT and is the Company’s Secretary), Joss Saunders
(the new COO), Keith Wilson (the Head of Marketing and Client Services), Jane Orr (Director of
Marketing) and James Alexandroff and Julian Bartlett (independent non-executive directors).
James was a co-founder of a specialist investment boutique, Arisaig Partners, and is a longstanding
shareholder in LTIT and Julian is a former partner of Grant Thornton LLP.
In March 2023, after the end of the LTL’s financial year and following a tenure of eight years,
James Alexandroff resigned from the board. At the same time, Rory Landman has been appointed
an independent non-executive director. Rory served as a non-executive director of LTIT from 2011
to 2020. He has a wide range of investment experience over 35 years, including as Senior Bursar
of Trinity College, Cambridge University (where he remains a Fellow), and as a leading manager
of emerging markets equities at Thames River Capital and Baring Asset Management. Rory is a
qualified Chartered Accountant and has a law degree from Cambridge University. Jane Orr - who
joined the company in 2007 and previously headed the Marketing & Client Services team and was
appointed to the LTL board in 2010 - has now relinquished all her executive responsibilities but
will continue her involvement on the board, being appointed as a non-executive director in March
2023. These changes mean that the LTL board now comprises five executive directors and three
non-executive directors, two of whom are independent.
LTL’s employees have increased in number from 25 to 28 over the last 12 months. All staff are
based in the UK other than LTL’s North American Marketing and Client Services representative,
who works out of the New York area. The increase in employee numbers included an additional
recruit in risk oversight who was also a member of LTL’s Risk and Compliance Committee (‘RCC’).
The RCC is chaired by Julian Bartlett, one of LTL’s independent non-executive directors. To further
enhance its investment risk oversight, LTL is looking to engage an external risk consultancy firm
in 2023. In recognition of the importance of investment risk arising from ESG issues, early in 2022
Madeline Wright was appointed Head of Investment ESG, reporting to the ESG Committee chaired
by Nick Train. The ESG Committee, established in March 2021, is responsible for defining the
Company’s ESG strategy and how this is put into practice, as well as overseeing the identification
and mitigation of risks relating to ESG.
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LTL’s board recognises that key employees should share in the ownership of the company so as to
further align their interests with those of LTIT and the founders. This is achieved by acquiring
shares from LTL’s major stakeholders either directly or through a dedicated profit share scheme.
In the year to 31 January 2023, 8% of the net profits of the company were paid to members of
the scheme. This will rise to 15% in the current year. Scheme members are required to invest 50%
of the awards into LTL shares.
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 meets 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,
more recently, 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 remained at seven at 31 January 2023.
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. LTL’s open-ended pooled
fund products represented 65% of FUM at end of January, down from 70% the year before. The
fall resulted from a greater proportion of net outflows emanating from open-ended pooled
products. Additionally, LTL managed 17 separate client relationships, one fewer than a year ago.
The largest pooled fund (the Lindsell Train Global Equity Fund) represented 30% of total FUM
and the largest segregated portfolio accounted for 10%.
In the year to 31 January 2023, LTL’s total FUM fell by 12% from £21.2bn to £18.6bn. This
represented net outflows of £2.9bn, broken down by strategy as Global (£1,791m), Japan (£189m)
and UK (£949m).
All four strategies generated positive absolute returns over the twelve months and all bar the UK
strategy generated relative outperformance against their corresponding benchmarks (with the
UK strategy recovering strongly from a difficult start to the year). However there is much catching
up to do on account of the disappointing performance in 2021. The relative returns of the LTL
funds representing each strategy since their inception are shown below:
To 31 January 2023 Relative Return Inception date Benchmark
UK Equity Fund (GBP) +4.5% p.a. July 2006 FTSE All Share
Global Equity Fund (GBP) +2.4% p.a. March 2011 MSCI World
Japanese Equity Fund (Yen) +1.4% p.a. January 2004 TOPIX
North American Equity Fund -4.0% 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 now makes up over 14% of total FUM. LTL’s funds are also widely represented on
the major UK retail and IFA platforms.
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Appendix 1 continued
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Financials
In the year to 31 January 2023 LTL’s total revenues fell 21%. Annual management fees make up
the lion’s share of total revenues, at 99.7%, 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, down from 32% last year. Fixed overheads were down from £5.0m to £4.6m.
Operating profits were down 17%, registering a margin on sales of 69%.
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 2023 were £1,841 per share, down from £1,994 per share in the previous year.
At 31 January 2023 LTL’s balance sheet was made up of shareholders’ funds of £98.4m including
£91.9m 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 and
so it was a welcome return to relative outperformance for three of the four strategies in the past
year. 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 three years of cumulative underperformance, that the company is seeing some net
outflows as clients are attracted to other investment approaches that may 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 funds with a primary ESG
objective; and the underperformance from LTL’s strategies in 2020 and 2021. Perhaps the greatest
risk in relation to LTL’s reputation however remains the withdrawal of either of the founders.
They are currently aged 64 and 63, in good health and remain strongly committed to LTL. They
are supported by increasingly mature and experienced investment professionals, currently
numbering five, 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 2023 unless stated otherwise. The period from 31 January to 31 March 2023
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 2023 Jan 2022
£m £m
UK 7,690 8,475
Global 10,352 12,040
Japan 554 702
North America 30 28
–––––––––––– ––––––––––––
Total 18,626 21,245
–––––––––––– ––––––––––––
–––––––––––– ––––––––––––
Largest Client Accounts
Jan 2023 Jan 2022
% of FUM % of FUM
Largest Pooled Fund Asset 30% 34%
Largest Segregated Account 10% 10%
Lindsell Train Fund Performance
1 Year 3 Years 5 Years 10 Years
Annualised data to 31 January 2023 % % % %
GBP UK Equity Fund (Accumulation) 2.6 2.6 5.6 10.1
FTSE All Share 5.2 5.0 4.2 6.3
GBP Global Equity Fund (B share) 2.3 3.3 7.7 13.7
MSCI World 0.9 10.1 9.6 11.9
JPY Japanese Equity Fund (A share) 8.0 0.0 1.4 10.7
TOPIX 7.0 8.0 3.9 10.1
GBP North American Equity Fund
(Accumulation) 0.6
MSCI North American (1.0)
Source: Morningstar Direct
Note: all figures above show total returns.
* LTL’s year end 2023 figures are based on management accounts, whilst periods ending 31 January 2022 and
before are based on published financial statements. This therefore results in differences in prior year numbers
i.e. year end 31 January 2022 when compared with LTIT’s Annual Report last year, as last year’s Report contained
LTL management account numbers for year ending 31 January 2022, which in this year’s Annual Report are using
numbers based on published Financial Statements.
Appendix 1 continued
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Financials*
Jan 2023 Jan 2022 %
Profit & Loss £’000 £’000 Change
Fee Revenue
Investment Management fee 96,599 119,971 -19%
Performance Fee 0 2,662 -100%
–––––––––––– ––––––––––––
96,599 122,633 -21%
Bank Interest & Other Income 299 11
–––––––––––– ––––––––––––
96,898 122,644
Staff Remuneration** (29,104) (38,643) -25%
Fixed Overheads (4,617) (5,041) -8%
FX Currency Translation Gain 3,821 954
Investment Unrealised Gain 46 914
–––––––––––– ––––––––––––
Operating Profit 67,044 80,828 -17%
Taxation (11,955) (15,485)
–––––––––––– ––––––––––––
Net Profit 55,089 65,343 -16%
Dividends (48,876) (53,134)
–––––––––––– ––––––––––––
Retained profit 6,213 12,209
–––––––––––– ––––––––––––
Balance Sheet
Fixed Assets 75 174
Investments 6,960 6,914
Current Assets (inc cash at bank) 106,558 93,683
Liabilities (15,143) (10,068)
–––––––––––– ––––––––––––
Net Assets 98,450 90,703
–––––––––––– ––––––––––––
Capital & Reserves
Called up Share Capital 267 267
Share Premium*** 57 57
Share Discount*** (416) 0
Treasury Share Reserve† (288) (2,238)
Profit & Loss Account 98,830 92,617
–––––––––––– ––––––––––––
Shareholders’ Funds 98,450 90,703
–––––––––––– ––––––––––––
* LTL’s year end 2023 figures are based on management accounts, whilst periods ending 31 January 2022 and
before are based on published Financial Statements. This therefore results in differences in prior year numbers
i.e. year end 31 January 2022 when comparing to LTIT’s Annual Report last year, as last year’s report contained
LT management account numbers for year ending 31 January 2022, 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 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 2023 Jan 2022 Jan 2021 Jan 2020 Jan 2019
Operating Profit Margin 69% 66% 66% 65% 66%
Earnings per share (£)** 2,068 2,463 2,340 2,237 1,688
Dividends per share (£)** 1,841 1,994 1,817 1,619 1,099
Total Staff Cost as % of Fee Revenue 30% 32% 30% 31% 32%
Opening FUM (£m) 21,245 22,802 21,450 16,260 13,179
Changes in FUM (£m) (2,619) (1,557) 1,352 5,190 3,081
– of market movement 308 331 1,200 2,781 808
– of net new fund (outflows)/inflows (2,927) (1,888) 152 2,409 2,273
Closing FUM (£m) 18,626 21,245 22,802 21,450 16,260
LT Open ended funds as % of total 65% 70% 73% 73% 72%
* LTL’s year end 2023 figures are based on management accounts, whilst periods ending 31 January 2022 and
before are based on published financial statements. This therefore results in differences in prior year numbers
i.e. year end 31 January 2022 when comparing to LTIT’s annual report last year, as last year’s report contained
LT management account numbers for year ending 31 January 2022, which in this year’s annual report are using
numbers based on published financial statements.
** On 1 February 2019 LTL undertook a share split with each share sub divided into 10 shares of £10 each. The per
share figure is retrospectively changed in y/e January 2019 in the table above based on 26,660 shares for ease of
comparison.
Client Relationships
– Pooled funds 5 5 5 4 4
– Segregated accounts 17 18 17 17 17
Ownership
Jan 2023 Jan 2022
Michael Lindsell and spouse 9,650 9,650
Nick Train and spouse 9,650 9,650
The Lindsell Train Investment Trust plc 6,450 6,450
Other Directors/employees 893 778
–––––––––– ––––––––––
26,643 26,528
Treasury Shares 17 132
–––––––––– ––––––––––
26,660 26,660
–––––––––– ––––––––––
–––––––––– ––––––––––
Board of Directors as at 31 January 2023
James Alexandroff Non-Executive
Julian Bartlett Non-Executive
Michael Lim Director, IT & Company Secretarial
Michael Lindsell Chief Executive Officer & Portfolio Manager
Jane Orr Director, Marketing
Joss Saunders Chief Operating Officer
Nick Train Chairman and Portfolio Manager
Keith Wilson Head of Marketing & Client Services
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Appendix 1 continued
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Employees
Jan 2023 Jan 2022
Investment Team (including three Portfolio Managers) 7 7
Client Servicing and Marketing 9 8
Operations and Administration 11 10
Fixed Term Contractors 1 0
Total Employees 28 25
Non-Executive directors 2 2
Total Headcount 30 27
LTIT Director’s valuation of LTL
31 Mar 2023 31 Mar 2022
Notional annualised net profits (A)* (£'000) 35,554 42,598
Funds under Management less LTIT holdings (B) (£'000) 18,530,045 20,451,498
Normalised notional net profits as % of FUM A/B = (C) 0.192% 0.208%
% of FUM (D) (see table below to view % corresponding to (C)) 1.90% 1.95%
Valuation (E) i.e. B x D (£'000) 352,071 398,804
Number of shares (F)^ 26,647 26,543
Valuation per share in LTL i.e. E / F £13,212.40 £15,024.84
* 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
– From April 2023, the UK corporation tax rate was increased from 19% to 25%. In order to reflect this change
within the notional net–profits, a blended rate has been used from the 31 October 2022 valuation onwards,
tapering to the 31 March 2023 valuation, as shown in table overleaf.
^ The increase in shares 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 – 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%
0.24 – 0.25 2.15%
0.25 – 0.26 2.20%
0.26 – 0.27 2.25%
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Month-end valuation Tax rate applied
March 2022 19% for 12 months
April 2023 19% for 12 months
May 2023 19% for 12 months
June 2023 19% for 12 months
July 2023 19% for 12 months
August 2023 19% for 12 months
September 2023 19% for 12 months
October 2023 19% for 5 months; 25% for 7 months
November 2023 19% for 4 months; 25% for 8 months
December 2023 19% for 3 months; 25% for 9 months
January 2023 19% for 2 months; 25% for 10 months
February 2023 19% for 1 month; 25% for 11 months
March 2023 25% for 12 months
LTL’s Salary and Bonus Cap
LTL’s salary and bonus expenses are 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. 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 LTIT 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 LTIT Board has judged it necessary to apply a higher notional
salary cost of 45% of revenues in calculating LTL’s net profits
1
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%, while the salary to revenue
of peers with FUM equivalent to LTL is slightly higher at 44%. The LTIT 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.
THE LINDSELL TRAIN INVESTMENT TRUST PLC
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Appendix 2
Share Capital
At 31 March 2023 and 31 March 2022, 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 2023 the Ordinary Share price was £1,052.50 (31 March 2022: £1,105.00).
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.
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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
The Manager, LTL, is engaged under the terms of an amended and restated management
agreement dated 10 November 2020 (the “IMA”). Details of the IMA are given in note 3 to the
Financial Statements. The IMA is terminable on twelve months’ notice by either party.
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 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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Notice of Annual General Meeting
Notice is hereby given that the twenty-first 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, 30 August 2023 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 2023.
2. To receive and approve the Directors’ Remuneration Report for the year ended 31 March 2023.
3. To approve the payment of a final dividend for the year ended 31 March 2023 of £51.50
per Ordinary Share.
4. To elect Mr Roger Lambert as a Director of the Company.
5. To elect Ms Helena Vinnicombe as a Director of the Company.
6. To re-elect Mr Nicholas Allan as a Director of the Company.
7. To re-elect Mr Julian Cazalet as a Director of the Company.
8. To re-elect Ms Vivien Gould as a Director of the Company.
9. To re-elect Mr Michael Lindsell as a Director of the Company.
10. To 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 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;
b. the minimum price which may be paid for an Ordinary Share shall be 75p;
c. the maximum price (excluding expenses) which may be paid for an Ordinary Share shall
be the higher of (a) 105% of the average of the middle market quotations of the Ordinary
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Notice of Annual General Meeting continued
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Shares for the five business days prior to the date of the market purchase; and (b) the
higher of the last independent trade and highest current independent bid on the London
Stock Exchange as stipulated in the technical standards referred to in Article 5(6) of the
Market Abuse Regulation (EU) No. 596/2014 (which forms part of UK law by virtue of the
European Union (Withdrawal) Act 2018;
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. unless renewed, such authority hereby conferred shall expire at the end of the next
Annual General Meeting of the Company to be held after the passing of this resolution
or, if earlier, the date fifteen months from the passing of the resolution, save that the
Company may, prior to such expiry, enter into contract(s) to purchase shares which will or
may be completed or executed wholly or partly after such expiry.
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 12 June 2023), 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 the Directors be authorised to call general meetings (other than the Annual General
Meeting of the Company) on not less than 14 clear days’ notice, such authority to expire on
the conclusion of the next Annual General Meeting of the Company or if earlier, on the expiry
15 months from the date of the passing of the resolution.
By order of the Board
Frostrow Capital LLP
Company Secretary
12 June 2023
Registered Office:
25 Southampton Buildings
London WC2A 1AL
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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 Friday, 25 August 2023.
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 25 August 2023
(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 12 June 2023 (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 12 June 2023 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
Friday 25 August 2023 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.
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 2023 to
be presented to the AGM. As announced, the Annual Report has been available on the Company’s website since
13 June 2023 and will be posted to Shareholders on or around 20 June 2023.
Resolution 2 – Directors’ Remuneration Report
The Directors’ Remuneration Report is set out in full on pages 46 to 49 of the Annual Report.
Resolution 3 – Dividend
To approve the payment of a final dividend for the year ended 31 March 2023 as set out in the Notice of Meeting
on page 99 of the Annual Report.
Resolutions 4 and 5 – Election of Directors
Resolutions 4 and 5 deal with the election of Mr Roger Lambert and Ms Helena Vinnicombe as Directors.
Resolutions 6 to 9 – Re-election of Directors
Resolutions 6 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 30 and 31 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 50 to 52 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 8,143 shares.
Explanatory Notes to the Resolutions
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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
2023 2022
£ £
Share Price 1,052.50 1,105.00
Net Asset Value per Share 1,056.95 1,113.81
–––––––––– ––––––––––
Discount to Net Asset Value per Share 0.42% 0.79%
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 page 5 have been calculated as shown below:
2023 2022
Total Dividends declared per Ordinary Share (a) £51.50 £53.00
Closing price per Ordinary Share on 31 March (b) £1,052.50 £1,105.00
–––––––––– ––––––––––
Dividend Yield (a) ÷ (b) 4.89% 4.80%
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 page 13 have been calculated as shown below:
2023 2022
‘000 ‘000
Net Asset Value (a) £211,390 £222,761
Ordinary Shares in issue (b) 200 200
–––––––––– ––––––––––
Net Asset Value per Ordinary Share (a) ÷ (b) £1,056.95 £1,113.81
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 page 13 have been calculated as shown below:
2023 2022
£'000 £'000
Total operating expenses (a) 1,829 1,978
Average Net Asset Value (b) 211,310 240,223
–––––––––– ––––––––––
Ongoing Charges (a) ÷ (b) 0.87% 0.82%
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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 page 13 have been calculated at shown below:
Year Ended 31 March 2023
LTIT Share
LTIT NAV Price
NAV/Share Price at 31 March 2023 a £1,056.95 £1,052.50
Dividend Adjustment Factor* b 1.049 1.043
Adjusted closing NAV/Share Price c = a x b 1,108.90 1,097.40
NAV/Share Price at 31 March 2022 d £1,113.81 £1,105.00
Total return ((c/d)-1)) x100 -0.4% -0.7%
* The dividend adjustment factor is calculated on the assumption that the dividends of £53 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.
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 2022 a £15,025
Valuation at 31 March 2023 b £13,212
Dividends paid during the year c £1,841
Total return {((b-a)+c)/a}x100 +0.2%
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.
Glossary of Terms and Alternative Performance Measures continued
107
THE LINDSELL TRAIN INVESTMENT TRUST PLC
THE LINDSELL TRAIN INVESTMENT TRUST PLC
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Company Information
Directors
Julian Cazalet (Chairman of the Board and
Management Engagement Committee)
Nicholas Allan (Chairman of the Nomination
Committee)
Vivien Gould (Senior Independent Director)
Richard Hughes
Michael Lindsell
Roger Lambert
Helena Vinnicombe (Chairman of the Audit
Committee)
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
10th Floor
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.
108
THE LINDSELL TRAIN INVESTMENT TRUST PLC
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 at a discount 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 and that any 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.
Company Information continued
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
Strategic Report
Business Review 2
Investment Objective 3
Investment Policy 3
Company Performance 4
Financial Highlights for the Year 5
Chairman’s Statement 5
Portfolio Holdings 9
Analysis of Investment Portfolio 10
Manager’s Report 11
Performance and Prospects 13
Key Performance Indicators 13
Principal Risks 15
Longer-Term Viability Statement 19
Section 172 Disclosure 21
LTIT’s Responsible Investment Policy 24
LTL’s Approach to Responsible Ownership 25
Governance
Board of Directors 30
Report of the Directors 32
Corporate Governance Statement 36
Directors’ Remuneration Report 46
Directors’ Remuneration Policy 50
Statement of Directors’ Responsibilities 53
Report of the Audit Committee 55
Independent Auditor's Report 61
Financial Statements
Income Statement 68
Statement of Changes in Equity 69
Statement of Financial Position 70
Statement of Cash Flows 71
Notes to the Financial Statements 72
Appendices (unaudited)
Appendix 1 – Annual Review of Lindsell Train Limited 88
Appendix 2 – Share Capital 96
Appendix 3 – Agreements with Service Providers 98
Additional Shareholder Information (unaudited)
Notice of Annual General Meeting 99
Glossary of Terms and Alternative Performance Measures 104
Company Information 107
THE LINDSELL TRAIN INVESTMENT TRUST PLC
Perivan.com
265392
THE LINDSELL TRAIN
INVESTMENT TRUST PLC
Annual Report and Financial Statements
For the year ended 31 March 2023
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