Annual Financial Report

12 June 2024

The Lindsell Train Investment Trust plc

(the “Company” or “LTIT”)

This announcement contains regulated information

Annual Financial Report for the year ended 31 March 2024

Company Summary

The Company

The Lindsell Train Investment Trust plc (the “Company” or “LTIT”) is a listed investment company. Its shares are quoted on the premium segment of the Official List and traded on the main market of the London Stock Exchange. The Company is a member of the Association of Investment Companies (“AIC”).

The Company is a UK Alternative Investment Fund (“AIF”) under the European Union Alternative Investment Fund Managers’ Directive (“AIFMD”). The Board is the Small Registered UK Alternative Investment Fund Manager (“AIFM”) of the Company.

Investment Objective

The objective of the Company is to maximise long-term total returns with a minimum objective to maintain the real purchasing power of Sterling capital.

Investment Manager

Lindsell Train Limited (“LTL”) acts as discretionary Investment Manager (the “Manager”) of the Company’s assets. However, the Board retains ultimate discretion over the investments in LTL and in the LTL managed fund products. Decisions on these investments are based on advice and information received from the Manager.

Further details concerning the Agreements with the Company’s service providers can be found in Appendix 3.

Performance and Benchmark

The performance and financial highlights are provided on pages 4 and 5 of the Annual Report.

The Company compares its performance and calculates its performance fee relative to its benchmark, the MSCI World Index in Sterling.

Dividend

An unchanged final dividend of £51.50 per Ordinary Share (2023: a final dividend of £51.50 per Ordinary Share) is proposed for the year ended 31 March 2024. If this dividend is approved by shareholders at the Annual General Meeting, it will be paid on Friday, 13 September 2024 to shareholders on the register at close of business on Friday, 9 August 2024 (ex-dividend Thursday, 8 August 2024).

Annual General Meeting

The notice of the Annual General Meeting, scheduled for Wednesday, 4 September 2024 at 2.30 p.m. at the Marlborough Suite, St Ermin’s Hotel, 2 Caxton Street, London, SW1H 0QW, is provided on pages 102 to 106 of the Annual Report.

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.

Business Review

The Directors present their Strategic Report for the Company for the year ended 31 March 2024. The Report contains: a review of the Company’s business model and strategy, an analysis of its performance during the financial year and its future developments as well as details of the principal risks and challenges it faces. Its purpose is to inform shareholders and help them to assess how the Directors have performed their duty to promote the success of the Company.

Further information on how the Directors have discharged their duty under Section 172 of the Companies Act 2006 can be found on pages 21 to 23 of the Annual Report.

The Strategic Report contains certain forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the date of this Report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

Business Model

The objective of the Company is to maximise long-term total returns with a minimum objective to maintain the real purchasing power of Sterling capital.

The Company’s strategy is to create value for shareholders through achieving its investment objective.

As an externally managed investment company the Company has no executive directors, employees or internal operations. The Company delegates its day-to-day management to third-parties.

The Board is responsible for all aspects of the Company's affairs, including the setting of parameters for and monitoring of the investment strategy as well as the review of investment performance and policy. It also has responsibility for all strategic issues and corporate governance matters.

Reviews of the financial year and commentary on the future outlook are presented in the Chairman’s Statement and the Manager’s Report.

Investment Objective

The objective of the Company is to maximise long-term total returns with a minimum objective to maintain the real purchasing power of Sterling capital.

Investment Policy

The Investment Policy of the Company is to invest

(i) in a wide range of financial assets including equities, unlisted equities, bonds, funds, cash and other financial investments globally with no limitations on the markets and sectors in which investment may be made, although there is likely to be a bias towards equities and Sterling assets, consistent with a Sterling-dominated investment objective. The Directors expect that the flexibility implicit in these powers will assist in the achievement of the investment objective;

(ii) in LTL managed fund products, subject to Board approval, up to 25% of its gross assets; and

(iii) in LTL and to retain a holding, currently 23.9%, in order to benefit from the expected long term growth of the business of the Company’s Manager.

The Company does not envisage any changes to its objective, its investment policy or its management for the foreseeable future. The current composition of the portfolio as at 31 March 2024, which may be changed at any time (excluding investments in LTL and LTL managed funds) at the discretion of the Manager within the confines of the policy stated above, is shown on pages 9 and 10 of the Annual Report.

Diversification

The Company expects to invest in a concentrated portfolio of securities with the number of equity investments averaging fifteen companies. The Company will not make investments for the purpose of exercising control or management and will not invest in the securities of, or lend to, any one company (or other members of its group) more than 15% by value of its gross assets at the time of investment. The Company will not invest more than 15% of gross assets in other closed-ended investment funds.

Gearing

The Directors have discretion to permit borrowings up to 50% of the Net Asset Value. However, the Directors have decided that it is in the Company’s best interests not to use gearing. This is in part a reflection of the size and risk associated with the Company’s unlisted investment in LTL, but also in response to the additional administrative burden required to adhere to the full scope regime of the AIFMD.

Dividends

The Directors’ policy is to pay annual dividends consistent with retaining the maximum permitted earnings in accordance with investment trust regulations, thereby building revenue reserves.

In a year when this policy would imply a reduction in the ordinary dividend the Directors may choose to maintain the dividend by increasing the percentage of revenue paid out or by drawing down on revenue reserves. Revenue reserves are currently more than twice the annual proposed 2024 ordinary dividend.

All dividends have been distributed from revenue or revenue reserves.

Financial Highlights for the Year

Performance Comparisons	2024	2023
Net Asset Value total return per Ordinary Share*^	+2.1%	-0.4%
Share price total return per Ordinary Share*^	-19.8%	-0.7%
MSCI World Index total return (Sterling)	+22.5%	-1.0%
UK RPI Inflation (all items)	4.3%	13.5%

* The Net Asset Value and the share price at 31 March 2024 have been adjusted to include the Ordinary dividend of £51.50 paid on 13 September 2023, with the associated ex-dividend date of 8 August 2023.

^ Alternative Performance Measure (“APM”). See Glossary of Terms and Alternative Performance Measures.

Source: Morningstar and Bloomberg.

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	(£)	(£)	(£)
2020	12,395	10,598	8,800	44.00	956.65	1,060.00
2021	13,782	12,002	10,000	50.00	1,185.58	1,420.00
2022	14,784	12,729	10,600	53.00	1,113.81	1,105.00
2023	14,135	12,211	10,300	51.50	1,056.95	1,052.50
2024	12,005	10,214	10,300	51.50	1,026.43	801.00

Principal Data

	31 March 2024	31 March 2023	% Change
Shareholders’ funds (£’000)	205,285	211,390	-2.9%
NAV per Ordinary Share	£1,026.43	£1,056.95	-2.9%
Discount to NAV^	22.0%	0.4%
Share price per Ordinary Share	£801.00	£1,052.50	-23.9%
Recommended final dividend per Ordinary Share	£51.50	£51.50	–
Recommended special dividend per Ordinary Share	–	–	–
Total dividends recommended for the year	£51.50	£51.50
Dividend yield^	6.4%	4.9%
Ongoing Charges^	0.8%	0.9%
Earnings/(loss) per Ordinary Share – basic	£20.97	£(3.85)
Revenue	£51.07	£61.06
Capital	£(30.10)	£(64.91)
NAV total return^†	+2.1%	-0.4%
Share price total return^†	-19.8%	-0.7%
Benchmark (MSCI World Index in Sterling)†	+22.5%	-1.0%

^ Alternative Performance Measure (see Glossary).

† These are percentage change figures for the year to 31 March.

Please see Glossary of Terms for an explanation of terms used.

Chairman’s Statement

At 31 March 2024, the Company’s NAV per share was £1,026.43. It was down from £1,056.95 a year earlier but when taking into account the payment of the annual dividend of £51.50 per share in September 2023, the total NAV return was a positive 2.1%. On the other hand the Company’s share price ended the financial year at £801.00, down materially from £1,052.50 on 31 March 2023. Whilst the dividend offset some of this decline, the size of the fall resulted in a share price total return of minus 19.8% over the year. This was the result of the share price discount to the NAV per share widening from 0.4% at 31 March 2023 to 22.0% at 31 March 2024. The sharp widening of the share price discount to NAV was attributable to a combination of factors. These include a lower rate of annualised NAV total returns achieved since 31 March 2020 (6.4% per annum versus 14.4% per annum from 31 March 2001 to 2020), heightened competitive pressures within the fund management industry, outflows from LTL managed funds and a general widening of discounts within the investment trust sector.

The benchmark index proved a tough comparator to beat for the fourth successive year. Both the NAV and share price performances compared unfavorably with the Company’s benchmark index, the MSCI World Index in Sterling, which over the same period had a much better total return of 22.5%.

During the year to 31 March 2024, of the Company’s quoted holdings, only RELX and Nintendo performed better than the benchmark, achieving total returns of 33.6% and 41.1% in Sterling, respectively. Even more significant than the disappointing return from the remaining quoted portfolio holdings was the total return of minus 7.1% generated by the Company’s 23.9% unlisted investment in LTL. With the investment representing 33.6% of NAV at 31 March 2024, it proved to be the biggest detractor from the NAV’s performance over the year and its fall in value also contributed to the Company’s widening share price discount to the NAV.

Lindsell Train Limited

For the third time in four calendar years LTL’s core strategies, Global, UK, Japan and North America, underperformed their comparative benchmark indices. The market’s direction has increasingly been dictated by a narrow range of technology companies. This has played into the hands of passive strategies, which have continued to take market share from all active managers including LTL. Whilst there is no knowing how long this phase can continue, we are reassured that the key business fundamentals of LTL’s portfolios, such as the average underlying return on equity of its companies, remains superior to the benchmark indices against which it is compared. In time these fundamentals should win through, bringing a sustained improvement in absolute and relative performance. Until that happens, it is understandable that, in such a competitive industry, some clients are attracted to today’s better performing strategies.

These pressures on LTL’s business have resulted in clients withdrawing funds. All LTL’s pooled funds, except for North America, its smallest, have shrunk in size and some segregated clients have terminated mandates. FUM outflows over the year to 31 January 2024 amounted to £3.4bn (2023: £2.9bn) with funds under management falling to £15.9bn. LTL now has 21 client relationships (funds and segregated mandates) down from 22 at 31 January 2023. FUM has however fallen more within LTL’s pooled funds that now make up 62% of FUM.

Whilst the fall in FUM has led to a decline in revenues, it is reassuring to see that the Company’s salary and bonus cap has helped to ensure that overall costs have declined proportionately and operating profit margins remain constant at above 65%. Over the year there have been some important generational changes within the company. A new leadership team is evolving at LTL with the appointment of James Bullock, Jessica Cameron and Joss Saunders as LTL directors. Nick Train and Michael Lindsell remain at the heart of the business but there is no doubting the direction of travel. The future lies with a new generation of leaders and their lieutenants. Reflecting these changes, variable remuneration paid to Nick and Michael in the year to 31 January 2024 fell 66% and accounted for 16% of LTL’s total remuneration. Profit share and one-off payments to these new directors and other key staff increased 103% to 40% of the overall remuneration. Half of these payments (virtually all of them after accounting for tax) were mandated to fund the purchase of LTL shares from Nick, Michael and the Company, helping to accelerate the transfer of ownership to potential successors. From LTL’s current financial year at least 17% of its net profits will be paid in this way to seven members of this upcoming generation.

The changes outlined above represent part of a long-term plan to ensure that the Company remains true to the investment and business principles first enshrined by Nick and Michael. It is important that clients who have committed their savings to LTL for multi-year periods know that the approach they first accessed remains consistent even if the personnel change. Certainly the Board, as a client and co-investor in LTL, is reassured by the changes made, the progress of succession and the constancy of how LTL invests.

That constancy, together with all the nuances surrounding it, is outlined in Nick’s Manager Review that follows. In it he describes an optimistic and encouraging outlook for the quoted assets which the Company owns. It is self-evident that this optimism also extends to LTL as similar assets underlie all its client portfolios.

The Valuation of Lindsell Train Limited

The valuation methodology was last amended at 31 March 2022, having taken professional advice, and is unchanged since. It is based on a percentage of LTL’s FUM, with the percentage applied adjusted to reflect the ongoing profitability of LTL. Using this methodology the Company’s holding in LTL was valued at £69m as at 31 March 2024 (2023: £85m). The Board took further professional advice in January 2024 which confirmed that the methodology adopted in 2022 remains valid.

As part of its regular valuation, the Board compares LTL’s value with other quoted fund management companies. What stands out is LTL’s profitability that in almost all cases is higher than its peers. Furthermore, LTL retains considerable financial flexibility and optionality with cash resources of £108m in addition to the £7.6m invested in the LT North American Fund as at 31 January 2024.

The Company’s Dividend

An important consequence of the fall in LTL’s FUM and the contraction of its business is the concomitant decline in LTL’s dividend paying capacity. This is a risk my predecessor consistently warned about in past annual statements. In the year to 31 March 2024 LTL’s dividend accounted for 80% of the Company’s revenues, down slightly from 84% a year earlier. Such a significant dependence on LTL, much more than the 33.6% (2023: 40.3%) which it makes up of the Company’s NAV, means that it has an overwhelming influence on the Company’s dividend paying potential.

In framing its dividend policy, the Company has always assumed that retaining as much net income as allowable within the Company is preferable and more tax efficient for the Company’s shareholders. This principle runs alongside the Board’s desire to see the Company’s dividends grow as returns compound the increasing value of the underlying investments.

In the current year, owing to the decline in the Company’s net revenue after taxation, the Board has decided to pay an unchanged ordinary dividend of £51.50 per share. Like last year, the Company will omit paying a special dividend as LTL earned no performance fees in the year to 31 January 2024. In maintaining the Company’s dividend, it will pay out all of its retained earnings in the year to 31 March 2024 and will utilise £86,000 or just 0.4% of revenue reserves earned in prior years.

To maintain or grow the Company’s dividend in the future is likely to require a combination of factors, notably a material improvement in LTL’s relative performance, a stabilisation in LTL’s FUM and consequent growth in its cash flow together with the continued compounding of the Company’s investments. That will be asking a lot over the next year and the Board will need to see evidence of this materialising before utilising more revenue reserves in order to maintain the Company’s dividend in 2025.

Board Changes

During the year the Board was delighted to welcome David MacLellan who was appointed Chairman of the Audit Committee in August 2023 following a formal recruitment process. A resolution proposing his election together with resolutions for those Directors standing for re-election will be put to Shareholders at the forthcoming Annual General Meeting.

Julian Cazalet resigned as the Chairman of Board in December 2023 as part of the normal succession process.

I would like to take this opportunity to thank Julian for his considerable contribution to the Company during his nine years as a director, of which eight were as the Chairman of the Board. He brought an in-depth knowledge of the investment trust sector, together with extensive experience of wider financial markets, wisdom, understanding and sound common sense to all his actions and decisions whilst on the Board. We wish him well in the future.

The Annual General Meeting (“AGM”)

This year the AGM will be held at 2.30 p.m. on Wednesday, 4 September 2024, at the Marlborough Suite, St Ermin's Hotel, 2 Caxton Street, London, SW1H 0QW. As well as the formal proceedings, there will be an opportunity for shareholders to meet the Board and the Investment Manager who will give an update on the Company’s strategy and its investments. Like last year voting will be conducted via a poll and the Board encourages all shareholders to exercise their right to vote and to register their votes online in advance. Registering your vote in advance will not restrict shareholders from attending and voting at the meeting in person should they wish to do so. As investors we demand high standards of corporate governance from the companies we own in the Company’s portfolio and we urge all shareholders to follow suit and vote on the resolutions proposed, as we the Directors intend to do ourselves.

Considerations for the Future

There is no doubt that the challenges which the Company and LTL face are considerable but they are not intractable. Throughout this difficult period of performance LTL has kept true to its investment disciplines. It owns a limited number of holdings in great businesses which rarely, if ever change; this allows the underlying companies to do the job of compounding earnings and value over time. It is a differentiated approach that stands out against the crowd and is one that has generated above average return for LTL’s clients for significant periods of time in the past and the Board believes will continue to do so in the future.

Roger Lambert

Chairman

11 June 2024

Portfolio Holdings at 31 March 2024

(All ordinary shares unless otherwise stated)

			% of	Look through
		Fair value	net	basis % of
Holding	Security	£’000	assets	net assets†
6,378	Lindsell Train Limited	69,002	33.6	33.6
235,000	London Stock Exchange	22,302	10.9	11.1
12,500,000	WS Lindsell Train North American	19,624	9.6	–
	Equity Fund Acc*
410,000	Nintendo	17,574	8.6	8.6
425,000	Diageo plc	12,433	6.0	6.3
363,000	RELX	12,429	6.0	6.3
222,000	Unilever	8,825	4.3	4.5
149,980	Mondelez International	8,306	4.0	4.4
1,263,393	A.G. Barr	7,353	3.6	3.6
89,000	Heineken	5,688	2.8	2.8
96,800	PayPal	5,131	2.5	2.8
39,099	Laurent Perrier	4,011	1.9	1.9
420,000	Finsbury Growth & Income Trust*	3,612	1.8	–
117,191	Universal Music Group	2,792	1.4	1.4
	Indirect Holdings	–	–	9.6
	Total Investments	199,082	97.0	96.9
	Cash & Other net current assets	6,203	3.0	3.1
	Net Assets	205,285	100.00	100.00

† Look-through basis: Percentages held in each security are adjusted upwards by the amount of securities held by LTL managed funds owned by the Company. A downward adjustment is applied to the fund‘s holdings to take into account the underlying holdings of these funds. It provides shareholders with a measure of stock specific risk by aggregating the direct holdings of the Company with the indirect holdings held within LTL managed funds.

* LTL managed funds.

Leverage^

We detail below the equity exposure of the Funds managed by LTL as at 31 March 2024:

	Net Equity Exposure
WS Lindsell Train North American Equity Fund Acc	98.7%
Finsbury Growth & Income Trust PLC	101.1%

^ See glossary.

Analysis of Investment Portfolio at 31 March 2024

Breakdown by Location of Listing

(look-through basis)^

UK*	66.0%
USA	16.1%
Japan	8.6%
Europe excluding UK	6.2%
Rest of World	0%
Cash & Other net current assets	3.1%
	100.0%

Breakdown by Location of Underlying Company Revenues

(look-through basis)^

USA**	31.3%
Europe excluding UK**	25.1%
UK**	24.7%
Rest of World	12.5%
Japan	3.3%
Cash & Other net current assets	3.1%
	100.0%

Breakdown by Sector

(look-through basis)^

Financials	49.8%
Consumer Staples	25.4%
Communication Services	11.5%
Industrials	7.4%
Information Technology	2.3%
Consumer Discretionary	0.4%
Health Care	0.1%
Cash & Other net current assets	3.1%
	100.0%

^ Look-through basis: this adjusts the percentages held in each asset class, country or currency by the amount held by LTL managed funds. It provides shareholders with a more accurate measure of country and currency exposure by aggregating the direct holdings of the Company with the indirect holdings held by the LTL funds.

* LTL accounts for 33.6% and is not listed.

** LTL accounts for 14 percentage points of the Europe figures, 15 percentage points of the UK figures, 4 percentage points of the USA figures and 0 percentage point of the RoW figure.

Manager’s Report

At the half year I gave a review of the strategic investment case for ten of these direct equity holdings. Rather than repeat those reviews in this report, I instead give an update on developments for each holding over the most recent six-month period, including an account of why we initiated a new position in Universal Music Group. With one exception (Laurent-Perrier) each of the eleven is also a holding in our Global and/or UK strategies. This means their performance is important not just for your portfolio but, more broadly, for the rest of LTL.

Over the six months to 31 March 2024, two of the eleven were down, with the worst faller down c.4%, two were effectively unchanged and the remainder up between c.5 and 30%. Overall, rather encouraging.

The two fallers were Diageo (-3.6%) and Unilever (-2.1%).

Diageo unpleasantly surprised investors including us, in Q4 2023 with news that its Latin American business (c.11% revenues) was suffering an unexpected and marked contraction. Six months later the situation there seems to be stabilising. What has proven a longer-lasting drag on Diageo’s share price is the slowing growth in its biggest geography, the United States. Here consumers have felt the pinch from higher interest rates and, at the margin, traded down their spirits consumption to more “value” brands. This has impinged on Diageo, given its strong growth in the US since Covid-19 had been driven by its higher price and higher profit margin premium brands. Nonetheless, it is important to note here that, at the global level, Diageo’s revenues were c.$15 billion in 2020. This year, a “disappointing” year, we expect they should be over $20 billion. In other words, Diageo has grown notably since 2020 and will continue to grow. Just not in a straight line. We are also sure that this orientation of Diageo’s product portfolio towards premium brands is beneficial for investors over anything but the short term and look to US consumer confidence to rebuild as that economy grows.

Unilever’s price fall is, we think, a sign of investors’ doubts about the willingness or ability of its board to take actions to unlock the value that most observers, including us, see in its global brands and distribution networks. Notwithstanding the share price weakness, we are encouraged by the air of urgency and competence being displayed by Unilever’s new CEO, CFO and Chairman (all appointed in 2023) and hope that they can deploy the company’s strong balance sheet and cash flows in a way that reignites growth and restores investor confidence, including improving the current lowly rating of its shares.

The two effectively unchanged share prices were Laurent-Perrier and Mondelez.

Laurent-Perrier’s current year revenues are forecast to be barely up year-on-year, for similar reasons to Diageo – in 2023/4 consumers are, at the margin, drinking less highest quality alcoholic beverages. But also like Diageo, it is important to consider that Laurent-Perrier’s revenues this year will be still c.25% higher than those of 2020. The trend towards global consumers drinking lower volumes of alcohol, but instead drinking more premium, high quality products continues and should be beneficial for the owners of iconic premium brands like Laurent-Perrier or Johnnie Walker.

Mondelez has continued to meet or exceed most analysts’ expectations for business and earnings growth (and our own expectation). Last year organic revenues were up over 14%, reported adjusted earnings per share grew at 19% and the dividend was up 10%. More growth is forecast for this year. Perhaps the current 20x earnings might be considered a fair valuation for Mondelez shares and this explains the dull recent share price. To us, however, the reliability of the brands and the growing cash they generate argues for a higher valuation. We would not consider selling an asset of this calibre below 30x!

The shares that made money for their owners in local currency terms over the last six months were Heineken (4.8%), PayPal (14.6%), London Stock Exchange Group (“LSEG”) (15.3%), A.G. Barr (18.5%), RELX (23.4%) and Nintendo (31.6%).

Confidence in Heineken’s earnings power is gradually recovering, as commodity prices subside, but we expect there will need to be an acceleration in beer consumption across the company’s emerging market footprint, particularly in its Asian strongholds, before the shares really rerate.

PayPal shares have recovered from recent lows, but are still ostensibly lowly valued at 12x estimated forward earnings. It is reassuring to see the board responding to that low valuation by retiring shares; buying back $5 billion last year and proposing to match that figure in 2024. Those are sizable sums in the context of PayPal’s current c.$67 billion market capitalisation. For us to add to our holding, however, we need to see more evidence of the success of the new products PayPal is bringing to market – tools to streamline e-commerce transactions for vendors and consumers. We continue to monitor PayPal closely.

LSEG’s shares have also recovered from their lows of 2022, up nearly 50% since then, but are still a few per cent below the all-time high they hit in 2021, just before the completion of its merger with Refinitiv. That merger has gone well and we hope LSEG’s shares can hit new highs, particularly once the benefits of its recent joint venture with Microsoft become apparent, with product launches due in the second half of 2024.

A.G. Barr’s shares have rallied after a period of torpor; they had gone sideways since 2019. The rally reflects a number of factors. Most important, this well-run soft drinks manufacturer generates steady operating margins and a Return on Capital in the mid-teens – 16% and 18% respectively at the recent interim results. These returns allow the company to generate cash, on top of its existing net cash and debt free balance sheet. That cash has been used to support existing brands, but also to acquire new ones, which can benefit from the company’s manufacturing and distribution capabilities and its marketing nous. The departing CEO, Roger White, has done an outstanding job for shareholders. If his successor can build on this legacy of growing, profitable brands and a pristine balance sheet, investors can hope the shares will build on their recent gains.

RELX continues to impress investors with the consistency not only of its growth, but its adherence to a clearly articulated strategy. That strategy is making RELX data services ever more valuable to the global scientific, legal and insurance industries. This is one of the biggest holdings we have at LTL and we believe it can be a big driver of returns for both our Global and UK portfolios.

Nintendo’s share price reflects mingled excitement and impatience about the timing of the launch of its next gaming console – probably to be released in early 2025. Sales of the current one, Switch, have exceeded all expectations and its success has allowed Nintendo to sell more copies of its first-party game software (which is where it earns the richest profits) than ever before. As with Apple, there is always a degree of apprehension before the release of a next generation device – can it possibly match or beat the success of its predecessor? All one can say are that the portents are good. Nintendo shares have proven to be a good proxy for the multi-decade increase in popularity of interactive entertainment. As each generation of gamers grows in size and with the promise of technology enhancing the gaming experience even more, Nintendo’s centrality to the industry looks ever more strategically valuable to us. A P/E of 18x for this franchise seems modest.

Universal Music Group’s (“UMG”) share price also rose over the last six months, up 12.7%, while we continued to accumulate a holding. The paragraph that follows provides our summary justification for making this investment. The shares have now moved back toward the upper end of their post-IPO trading range, but that means all the potential alluded to below remains still to come.

UMG stands out for its impressive oligopolistic position (which importantly is effectively global). As the world’s leading record label, built through a generation of consolidation (MCA and Decca, arguably UMG’s predecessors, were founded in 1924 and 1929 respectively), UMG controls roughly a third of the planet’s recorded music (ahead of the other two ‘majors’ Sony on c.23% and Warner on c.16%), curating, producing, and promoting artists. On top of this, as a publisher, UMG holds nearly a quarter of all written songs (just behind Sony’s c.25%, and ahead of Warner’s 12%). Spun out from Vivendi as an independent listed entity in 2021, backed by major strategic shareholders such as Tencent and Bill Ackman/Pershing Square, the shares languished for three years. Despite a torrent of good news (including enhanced distribution agreements) they still trade near their 2021 IPO price.

This perhaps reflects over-optimism at float. However, estimated FY23 sales and operating profit were c.50% higher than in FY19, taking UMG’s adjusted forward P/E ratio to a mid-20s level. Music is ingrained and integral to the daily life of swathes of humanity, with engagement levels rising as new distribution channels widen access. Monetisation (though not consumption) has eluded the industry at times in the past, but these issues appear well resolved by growing subscription services, with new markets (such as video games or social media) also emerging. As core content owners and market leaders UMG holds a uniquely strong hand. The importance of this dominance is clear, given that globally the top 1% of artists represent 90% of music streams. If management can embrace these tailwinds and execute on analyst expectations for low double-digit growth, this should prove an attractive entry point.

In summary, we believe your portfolio (and by extension other LTL portfolios) comprise a combination of companies remarkable for their strong consumer brands or unique intellectual property. Such companies have generated attractive investment returns for patient owners over many decades and we see no reason to expect coming ones to be any different.

Nick Train

Investment Manager
Director,
Lindsell Train Limited
11 June 2024

Performance and Prospects

The Board continues to support fully the Manager's strategy and firmly believes that it will continue to deliver strong investment returns over the long term.

This is supported by the Company's performance since inception (21 January 2001) with a net asset value per share total return^ of 12.7% compared with a total return from the Company's combined benchmark index of 7.1% both calculated on an annualised basis.

The Directors provide an explanation in the Viability Statement 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 and the Manager's Report. This performance is assessed against the following KPIs: Net Asset Value Total Return, Share Price Total Return and Dividend per Ordinary Share. The KPIs are unchanged from the prior year.

Net Asset Value Total Return^ and Share Price Total Return^ are compared with the benchmark and provide the key performance indicators for assessing the development and performance of the Company.

	31 March 2024	31 March 2023	% Change
NAV total return^†	+2.1%	-0.4%
Share price total return^†	-19.8%	-0.7%
Benchmark (MSCI World Index in Sterling)†	+22.5%	-1.0%
Recommended final dividend per Ordinary Share	£51.50	£51.50	–
Recommended special dividend per Ordinary Share	–	–	–

^ Alternative Performance Measure (see Glossary).

† These are percentage change figures for the year to 31 March.

Please see Glossary of Terms for an explanation of terms used.

Alternative Performance Measures (“APMs”)

The Board believes that each of the APMs, which are typically used within the Investment Trust Sector, provides additional useful information to shareholders in order to assess the Company’s performance between reporting periods and against its peer group. The measures used for the year under review have remained consistent with the prior year.

Discount/premium to NAV^

The Board regularly reviews the level of the discount/premium of the Company’s share price to the net asset value per share and considers ways in which share price performance may be enhanced, including the effectiveness of share buybacks, where appropriate. Any decision to repurchase shares is at the discretion of the Board.

Dividend Yield^

The Directors regard the Company’s dividend yield to be a key indicator of performance. The dividend yield measures the gross income receivable based on the payment of the historic dividend per share expressed as a percentage of the Company’s current share price.

Ongoing Charges^

Ongoing charges represent the costs that shareholders can reasonably expect to pay from one year to the next, under normal circumstances. The Board continues to be conscious of expenses and works hard to maintain a sensible balance between high quality service and the cost of provision.

NAV Total Return^

The Directors regard the Company’s net asset value per share total return as being the overall measure of value delivered to shareholders over the long term. The Board considers the principal comparator to be the MSCI World Index Total Return (Sterling adjusted).

Share Price Total Return^

The Directors also regard the Company’s share price total return to be a key indicator of performance. This reflects share price growth of the Company which the Board recognises is important to investors.

^ Further information on each of the Alternative Performance Measures and the basis of their calculation can be found in the Glossary.

	31 March 2024	31 March 2023
Discount to NAV	22.0%	0.4%
Dividend yield	6.4%	4.9%
Ongoing charges	0.8%	0.9%
NAV total return	+2.1%	-0.4%
Share price total return	-19.8%	-0.7%

Principal Risks, Emerging Risks and Risk Management

The Board is responsible for managing the risks faced by the Company. Through delegation to the Audit Committee, the Board has established procedures to manage risk, to review the Company’s internal control framework and to establish the level and nature of the principal risks the Company is prepared to accept in order to achieve its long-term strategic objective. At least once a year the Audit Committee carries out a robust assessment of the principal and emerging risks. Further information is provided in the Audit Committee Report beginning on page 59 of the Annual Report. These principal risks and the ways they are managed or mitigated are set out below.

The Board’s policy on risk management has not materially changed during the course of the reporting period and up to the year end.

The Company's Approach to Risk Management

Change in inherent risk assessment over the last financial year: No change, Decreased, Increased and New risk included during the year.

Change	Principal Risks and Uncertainties	Key Mitigations
	Corporate Strategy The Board may have to reduce the Company’s dividend. 80% of the Company’s income is represented by dividends from LTL. If LTL’s funds under management fall the Company’s dividend paying potential could be negatively impacted.	The Board reviews at every Board meeting the investment portfolio, income forecasts and levels of available revenue reserves prepared by the Company Secretary. Sufficient dividends are paid to maintain investment trust status. The Company has retained revenue reserves, which can be used to supplement dividend payments in the event of a short-term reduction in net revenue. In the event of a sustained fall in LTL’s FUM and its dividend paid to the Company, the Company’s dividend would have to be adjusted downwards.
	The Company’s share price may differ materially from the NAV per share resulting in the shares trading at either a premium or a discount to NAV.	Regular consideration is given to the share price premium or discount to NAV per share and the Company has authority to buy back shares and hold in treasury.
	Investment Strategy and Activity The departure of a key individual at the Manager may affect the Company’s performance.	The Board keeps the investment management arrangements under continual review. In turn, the Manager reports on developments at LTL, including succession and business continuity plans. The Board meets with other members of the wider team employed by the Manager. Key-man insurance has been secured by the Company to help mitigate this risk. The Board is also encouraged by the continued development of the investment management team at LTL who are now taking on greater responsibility at a more senior level.
	The investment strategy adopted by the Manager, the high degree of concentration of the investment and other factors, may lead to a long-term investment return that is materially lower than the Company’s comparator benchmark index, and a possible failure to achieve the Company’s investment objective.	The Board regularly discusses with the Manager the structure of the portfolio, including asset allocation and portfolio concentration. The Board reviews the performance of the portfolio against the benchmark at every meeting.
	The adverse impact of climate change on the portfolio companies’ operational performance.		The Board receives quarterly ESG updates, which include an update on any climate change related engagement, from the Manager. The Board monitors the Manager on ESG matters to ascertain that the portfolio companies are acting in accordance with the Manager’s ESG approach. The Manager is a signatory to the UK Stewardship Code and actively engages with portfolio companies on ESG matters including climate change. LTL developed its own methodology to assess the carbon impact of the portfolio. LTL became a signatory of Net Zero Asset Managers (“NZAM”) in December 2021. This reflects LTL's enhanced efforts as a firm to support the goal of net zero greenhouse gas emissions by 2050. Details of the Company’s and Manager’s ESG policies together with the weighted average carbon intensity of the portfolio companies are set out on pages 26 to 31 of the Annual Report.
	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.
	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.
	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.
	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.
	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.
	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’s valuation of its investment in LTL is materially misstated.		The Board approves the monthly valuation of the Company's Investment. An audit of LTL’s valuation is conducted annually by a leading independent external audit firm. J.P. Morgan Cazenove Ltd undertook an independent review of the Company’s valuation methodology applied to its unlisted investment in LTL during 2022. The appropriateness of the valuation methodology was reviewed by the Board and J.P. Morgan Cazenove Ltd during the year. The Manager and the Company Secretary report to the Board at every meeting. An internal controls report is produced by the Company Secretary on an annual basis covering controls over valuation and release of weekly net asset value per share.

Emerging Risks

The Audit Committee regularly reviews the risk register. Mitigations, the scoring of each risk and any emerging risks are discussed in detail as part of this process to ensure that emerging as well as known risks are identified and, so far as practicable mitigated.

The experience and knowledge of the Directors is useful in these discussions, as are update papers and advice received from the Board's key service providers such as the Manager and the Company Secretary. In addition, the Company is a member of the AIC, which provides regular technical updates as well as drawing members' attention to forthcoming industry and/or regulatory issues and advising on compliance obligations.

Current identified emerging risks are as follows:

Emerging Risks and Uncertainties

Key Mitigations

Emerging Risks Geopolitical and macroeconomic conflicts, whether they be political, economic or military, introduce new risks and exacerbate existing risks. such as: disruptions to supply chains, operations and markets for investee companies both as a direct result of conflict and as result of economic sanctions; prolonged inflation and elevated interest rates, slowing global economic growth and the fear or presence of recession; increased market volatility and reduced investor risk appetites; and increased threat of state sponsored cyberattacks. While presenting investment opportunities, the rapid development of new technologies, such as artificial intelligence, may disrupt the markets and operating models of the companies in which the Company invests, damaging their potential investment returns.

The Manager monitors portfolio construction, performance and liquidity to assess and manage the impact of increased market volatility on the listed portfolio and on the Company’s holding in LTL. The Manager monitors the impact of the continued war in Ukraine and the effect of sanctions against Russia; the conflict in the Middle East and tensions between China and the West. The Company’s investment approach means that it owns companies with strong brand equity and pricing power making them more able to pass on cost increases and mitigate the effects of inflation on portfolio holdings. The Board reviews regular internal control reports from its key service providers that include cyber defences and other mitigants against unauthorised network access. In view of the number of extraordinary and unpredictable events in recent years, the Board considered that the likelihood of the emerging risks identified due to geopolitical and macroeconomic conflicts had increased.

The Audit Committee will continue to review newly emerging risks that arise from time to time to ensure that the implications for the Company are properly assessed and mitigating controls introduced where necessary.

Future Developments

The Board’s primary focus is on LTL’s investment approach and performance both as the Company’s Manager and as an investment. The subject is thoroughly discussed at every Board meeting.

In addition, the Company Secretary updates the Board on investor feedback, as well as wider investment company issues.

An outline of performance, investment activity and strategy, and market background during the year, as well as the outlook, is provided in the Chairman's Statement and the Manager's Report.

It is expected that the Company’s strategy will remain unchanged in the coming year.

Long-Term Viability Statement

The Directors have carefully assessed the Company’s financial position and prospects as well as the principal risks facing the Company and have formed a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the next five financial years.

To make this assessment and in reaching this conclusion, the Audit Committee has considered the Company’s financial position and its ability to liquidate its portfolio and meet its liabilities as they fall due and notes the following:

• The Company has a liquid investment portfolio of UK and internationally listed securities and funds, and has some short-term cash on deposit. These liquid assets represent 66.4% of net assets. The other 33.6% is the unlisted investment in LTL, which is not readily realisable.

• Based on historic analysis, excluding the holding in the LTL fund, 95.9% of the current portfolio could be liquidated within 30 business days with 92.4% in five business days. There is no expectation that the nature of the investments held within the portfolio will be materially different in the future.

• With an ongoing charges ratio of 0.83%, the expenses of the Company are predictable and modest in comparison with its assets and there are no capital commitments currently foreseen which would alter that position.

• Revenue expenses of the Company are covered more than five times by investment income.

• The closed-ended nature of the Company means that, unlike an open-ended fund, it does not need to realise investments when shareholders wish to sell their shares.

• The founder directors of LTL, in which the Company holds 23.9%, have given their verbal assurance that they remain committed to LTL for at least seven years on a rolling basis.

• The Company has decided not to use gearing.

• The Company has no employees, only its non-executive Directors. Consequently it does not have any potential redundancy or other employment related liabilities or responsibilities.

The Directors, as well as considering the potential impact of the principal risks and various severe but plausible downside scenarios, have also made the following assumptions in considering the Company’s longer-term viability:

• The Board and the Investment Manager will continue to adopt a long-term view when making investments, and anticipated holding periods will be at least five years.

• Regulation will not increase to a level that makes running the Company uneconomical.

The Board’s long-term view of viability will, of course, be updated each year in the Company’s Annual Report.

Stakeholder Interests and Board Decision Making (Section 172 of the Companies Act 2006)

The following disclosure, which is required by the Companies Act 2006 and the AIC Code, describes how the Directors have had regard to the views of the Company's stakeholders in their decision making.

Stakeholder Group	The benefits of engagement with the Company's stakeholders	How the Board, the Manager and the Company Secretary have engaged with the Company's stakeholders
Investors	The Board recognises the importance of communication with shareholders. Clear communication of the Company’s strategy and the performance against the Company’s objective can help maintain demand for the Company’s shares.	The Board and the Manager receive shareholder feedback directly from shareholders or from the appointed broker. An analysis of the Company’s shareholder register is provided to the Directors at each Board meeting. Shareholders have access to the Board, directly and via the Company Secretary, throughout the year. These communications help the Board make informed decisions when considering how to promote the success of the Company for the benefit of shareholders over the long term. Key mechanisms of engagement include: • The Annual General Meeting. • The Board will explain in its announcement of the results of the Annual General Meeting the actions it intends to take to consult shareholders in order to understand the reasons behind any significant votes against. Following the consultation, an update will be published no later than six months after the Annual General Meeting and the Annual Report will detail the impact the shareholder feedback has had on any decisions the Board has taken and any actions or resolutions proposed. • The Company’s website which hosts monthly reports and Annual and Half-year Reports. • One-on-one investor meetings as required. • Group meetings with professional investors as required.
Manager	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 and Appendix 3 describe the key decisions taken during the year relating to LTL.	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.
Service Providers	As an externally managed investment company, the Company has no employees, customers, operations or premises. Therefore, the Company's key stakeholders (other than its shareholders) are considered to be its service providers. The Company contracts with third- parties for other services including: Company Secretary and Administrator, Registrar and Custodian. The Company ensures that the third-parties to whom the services have been outsourced complete their roles in line with their service level agreements and are able to continue to provide these services, thereby supporting the Company in its success and ensuring compliance with its obligations.	The Board 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.
Portfolio companies	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 encourages the Company’s Manager to engage with companies and in doing so expects ESG issues to be a key consideration. The Board receives an update on LTL's engagement activities within a dedicated quarterly ESG report together with quarterly updates concerning the prospects of the portfolio companies. Details of LTL's approach to responsible ownership can be found on pages 26 to 31 of the Annual Report.
Regulators	The Board ensures compliance with rules and regulations as relevant to the Company.	The Company Secretary reports to the Board on a monthly basis and at each Board meeting.

KEY AREAS OF ENGAGEMENT	MAIN DECISIONS AND ACTIONS TAKEN
• Ongoing dialogue with shareholders concerning the strategy of the Company, performance and the portfolio. • The impact of market volatility caused by certain geopolitical events in the portfolio. • Share price performance and the Company's and wider investment trust sector discounts.	• The Manager meets with shareholders as required and at the Annual General Meeting. • Shareholders are provided with performance updates via the Company's website as well as the usual financial reports and monthly manager reports. • The Board continued to monitor share price movements closely and concluded that it was not in shareholders' best interests to utilise the share buy-back facility.
• Board Composition.	• The Board has in place a refreshment programme which is reviewed annually by the Nomination Committee. During the year Julian Cazalet retired as the Chairman of the Board and Management Engagement Committee and was replaced by Roger Lambert. • Cornforth Consulting was appointed by the Board in April 2023 to assist with the appointment of a new Audit Committee Chairman. This resulted in the appointment of David MacLellan, who joined the Board on 30 August 2023 and will offer himself for election by shareholders at the 2024 Annual General Meeting. • To assist with succession planning and to ensure Board continuity Vivien Gould will seek re-election at the forthcoming Annual General Meeting and will retire at the conclusion of Annual General Meeting due to be held in September 2025. In accordance with the Board's Succession Plan Vivien was previously scheduled to retire at the conclusion of the 2024 Annual General Meeting.

LTIT’s Responsible Investment Policy

The Board believes that consideration of ESG factors is important to shareholders and other stakeholders, and has the potential to protect and enhance investment returns.

In its Responsible Engagement & Investment Policy, the Manager states that its evaluation of ESG factors is an inherent part of the investment process and best practice in this area is encouraged by the Board. These factors include, but are not limited to: “corporate strategy, operating performance, competitive positioning, governance, environmental factors (including climate change), social factors, remuneration, reputation and litigation risks, deployment of capital, regulation and any other risks or issues facing the business”.

The Board has delegated authority to the Manager to vote the shares owned by the Company that are held on its behalf by its Custodian. The Board has instructed that the Manager submits votes for such shares wherever possible and practicable. The Manager is required to refer to the Board on any matters of a contentious nature.

The Manager’s Responsible Investment and Engagement Policy has been reviewed and endorsed by the Board. The Manager is a signatory to the United Nations Principles for Responsible Investment and a signatory of the 2021 UK Stewardship Code.

LTL became a signatory of Net Zero Asset Managers Initiative in December 2021.

Modern Slavery Act

The Company does not provide goods or services in the normal course of business, and as a financial investment vehicle, does not have customers. Therefore, the Directors do not consider that the Company is required to make a statement under the Modern Slavery Act 2015 in relation to slavery or human trafficking. The Company’s suppliers are typically professional advisers and the Company’s supply chains are considered to be low risk in this regard.

UK Sanctions

The Board has made due diligence enquiries of the service providers that process the Company’s shareholder data to ensure the Company’s compliance with the UK sanctions regime. The relevant service providers have confirmed that they check the Company’s shareholder data against the UK sanctions list on a daily basis. At the date of this report, no sanctioned individuals had been identified on the Company’s shareholder register. The Board notes that stockbrokers and execution-only platforms also carry out their own due diligence.

Common Reporting Standard ("CRS")

CRS is a global standard for the automatic exchange of information commissioned by the Organisation for Economic Cooperation and Development and incorporated into UK law by the International Tax Compliance Regulations 2015. CRS requires the Company to provide certain additional details to HMRC in relation to certain shareholders. The reporting obligation began in 2016 and is an annual requirement.

The Registrar, Link Group, has been engaged to collate such information and file the reports with HMRC on behalf of the Company.

Taskforce for Climate Related Financial Disclosures (“TCFD”)

The Company notes the TCFD recommendations on climate related financial disclosures. The Company is an investment company and, as such, it is exempt from the Listing Rules requirement to report against the TCFD framework.

Climate reporting, at both the LTL and LTIT level, will be available from 30 June 2024 via the LTL website.

Global Greenhouse Gas Emissions

The Company is an investment trust, with neither employees nor premises, nor has it any financial or operational control of the assets which it owns. It has no greenhouse gas emissions to report from its operations, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Reports and Directors’ Reports) Regulations 2013 or the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, including those within the Company’s underlying investment portfolio.

The Company consumed less than 40,000 kWh of energy during the year in respect of which the Directors’ Report is prepared and therefore is exempt from the disclosures required under the Streamlined Energy and Carbon Reporting criteria.

The Board is aware of the continued emphasis on ESG matters in recent years. The Manager engages with all the companies in the portfolio to understand their ESG approach and has developed its own methodology to assess the carbon impact of the portfolio.

LTL's Approach to Responsible Ownership

ESG integration

Seeking Sustainability

As a long-term investor, LTL aims to identify companies that can generate long-term sustainable high returns on capital. LTL has historically found that such companies tend to exhibit characteristics associated with good corporate governance and responsible business practices. Indeed, LTL believes that companies which observe such standards, and that are serious in their intention of addressing environmental and social factors, will not only become more durable but will likely prove to be superior investments over time.

To that end LTL’s initial analysis and ongoing company engagement strategy seeks to incorporate all sustainability factors that they believe will affect the company’s ability to deliver long-term value to shareholders. Such factors may include but are not limited to; environmental (including climate change), social and employee matters (including turnover and culture) and governance factors (including remuneration and capital allocation), cyber resilience, responsible data utilisation, respect for human rights, anti-corruption and anti-bribery, and any other risks or issues facing the business and its reputation. This work is catalogued in a proprietary database of risk factors in order to centralise and codify the team’s views, as well as to prioritize LTL’s ongoing research and engagement work and is cross-referenced with the SASB Materiality Map ©.

If, as a result of this assessment, LTL believes that an ESG factor is likely to materially impact a company’s long-term business prospects (either positively or negatively) then this will be reflected in the long-term growth rate that is applied in the investment team’s valuation of that company, which alongside the team’s more qualitative research will influence any final portfolio decisions (for example, whether LTL starts a new position or sell out of an existing holding).

Positive/Negative Screening

As a product of LTL’s investment philosophy, it does not invest in the following industries:

– capital intensive industries (energy, commodities or mining) or any companies involved in the extraction and production of coal, oil or natural gas; and

– industries that LTL judges to be sufficiently detrimental to society that they may be exposed to burdensome regulation or litigation that could impinge on financial returns (e.g. tobacco, gambling or arms manufacturers).

Similarly, LTL’s investment approach has steered Nick Train and the investment team to invest in a number of companies that play an important positive social or environmental role, for example through providing access to educational information (e.g. RELX) or encouraging environmental progress and developing best practice (e.g., Diageo and Mondelez). LTL believes that such positive benefits for society should be consistent with its aim to generate competitive long-term returns, thus helping it meet its clients’ investment objectives.

Climate Change

The risks associated with climate change represent the great issue of our era and the transition to a low-carbon economy will affect all businesses, irrespective of their size, sector or geographic location. Therefore, no company’s revenues are immune and the assessment of such risks must be considered within any effective investment approach, particularly one like LTL’s that seeks to protect its clients’ capital for decades to come.

As a relatively small company with a single office location and fewer than 30 employees, LTL’s climate exposure comes predominantly from the investment portfolios that it manages on behalf of its clients. LTL recognises the systemic risk posed by climate change and the potential financial impacts associated with a transition to a low-carbon economy.

To help address this, LTL became a signatory of the Net Zero Asset Managers (NZAM) initiative in December 2021, which affirms its commitment to support the goal of net zero greenhouse gas emissions by 2050 or sooner. In line with this ambition, LTL published a 2030 interim target in Q4 2022 which has since been approved by the Institutional Investors Group on Climate Change (‘IIGCC’). LTL felt it was most appropriate to set a Portfolio Coverage Target and has duly targeted 55% of its asset-weighted committed1 assets to be considered Aligned2 by 2030, as set out by the PAII Net Zero Investment Framework. This represents a circa 50% improvement from its baseline of 36% of assets being Aligned as of 2022, consistent with a fair share of the 50% global reduction in CO2 identified as a requirement in the Intergovernmental Panel on Climate Change (‘IPCC’) special report on global warming of 1.5°C.

LTL also supports the recommendations of the Task Force on Climate-Related Financial Disclosures (“TCFD”) and its efforts to encourage companies to report their climate related disclosures and data in a uniform and consistent way. Further information on LTL’s TCFD related disclosures can be found in its 2023 TCFD Report, which can be found on LTL’s website: www.lindselltrain.com.

1 Committed assets are currently 94% of LTL's total AUM. The assets that were excluded relate to segregated clients that either declined to have their assets included at this time or did not respond by the required deadline. There is scope to increase the level of committed assets over time.

2 Aligned status, as set out by the PAII Net Zero Framework, has prescribed requirements of the portfolio companies, including; 1) Setting short and medium term emission reduction targets, 2) Monitoring emission intensity performance relative to those targets, and 3) Disclosure of scope 1, 2 and 3 emissions. For higher impact sectors, further criteria are required to be categorised as Aligned.

Further, using Morningstar’s carbon metrics calculations, LTL is pleased to note that LTIT’s listed equity holdings have a significantly lower weighted average carbon intensity than its comparable benchmark.

Stewardship

Engagement

Engaging with and monitoring investee companies on matters relating to stewardship has always been an essential element of LTL’s investment strategy. Its long-term approach generally leads it to be supportive of company management. However, where LTL disagrees with a company’s actions, it will try to influence management on specific matters or policies if LTL believe it is in the best interests of its clients. Constructive dialogue has more often than not resulted in satisfactory outcomes, thus limiting the need for escalation. However, where this is not the case, LTL will consider escalating its engagement and stewardship activities.

During the year, on a look-through basis (i.e. including positions held by LTL managed funds owned by the Company), LTL engaged with 27 companies held within the Company’s portfolio on a wide range of environmental, societal and governance related issues, as detailed in the chart below. Moreover, to ensure that the 2030 net zero interim target remains achievable, LTL continues to engage proactively with the management of companies it holds across its portfolios, the aim being to understand each company’s individual goals and, where appropriate, to provide the team’s thoughts on their road maps, with the overall ambition of reaching an absolute reduction in global carbon emissions. Using the data gathered to set the 2030 interim target, LTL has been able to identify which portfolio companies should be prioritised for engagement on their progress. LTL has engaged with management at a number of companies in recent months and will continue to engage with all portfolio companies to understand how they align with LTL’s net zero goals. This includes encouraging them to set science-based targets where possible. This initiative has been led by Madeline Wright, Deputy Portfolio Manager and Head of Investment ESG. The information gathered from this exercise is stored, assessed, and monitored within Sentinel, LTL’s proprietary ESG database.

Engagement by Topic

Source: Lindsell Train. 1 April 2023 to 31 March 2024. 53 topics raised with 27 companies (on a look through basis).

Key Engagement Case Studies:

Company name: Unilever

Sector: Consumer Franchises

Engagement topics: Strategy, Reputation, Environmental claims

Date of engagements: August 2023, October 2023 and December 2023

Engagement format: Calls

Reason for Engagement: In a call with CFO Graeme Pitkethly, the LTL investment team discussed Unilever’s decision to retain its presence in Russia. It sought justification for this decision and, whilst the team recognises that there is no easy choice, LTL conveyed its expectation that management would keep the situation under active review with the hope of finding the ‘least worst’ outcome.

In October, LTL followed up with Ian Meakins, Designate Chairman. Topics covered included their retained interest in Russia, Nelson Peltz’s presence on the Board, as well as strategic priorities and M&A. On Russia, Ian Meakins agreed that clarity and haste are needed. From a strategic perspective, the focus will be on SKU rationalisation, bolstering existing high-performing brands and targeted geographic expansion, before any more deals are done. Unilever admit that it has overinvested in some emerging markets, in some cases at the expense of some developed markets, and hence a more targeted approach, with due consideration given to the translation of local currency earnings, is required.

Further engagement took place in December when the LTL team spoke with Unilever IR regarding the Competition & Markets Authority’s ('CMA') investigation into its green claims. Whilst Unilever was “surprised and disappointed”, it is not against the purpose of the exercise, in that it upholds the need for higher standards against claims which could mislead the consumer. Unilever have been in discussions with the CMA for some time regarding specific claims for a small number of products, and so it was surprised by the announcement of a formal investigation specifically targeting only Unilever. The investigation is focussed on the use of vague and broad language in marketing materials as well as claims about ingredients that might exaggerate how ‘natural’ a product is. As a result, there is unlikely to be a binary outcome. Nonetheless, it is an opportunity for Unilever to refute claims that its new CEO, Hein Schumacher, is giving up on sustainability and instead focus consumer and investor attention on progress made on its four sustainability priorities (plastic, climate, nature and livelihoods).

Next steps: The engagement regarding Unilever’s presence in Russia and CMA claims is ongoing.

Company name: Mondelez

Sector: Consumer Franchises

Engagement topic: Human Rights / Modern Slavery

Date of engagement: May 2023

Engagement format: Call

Reason for Engagement: LTL spoke with the management of Mondelez ahead of its AGM, which included a contentious shareholder proposal relating to the eradication of child labour from the cocoa supply chain. The team has regularly engaged with Mondelez on this issue and so were eager to hear management’s views on the resolution, and also receive an update on the progress the company is making on this specific initiative. Management communicated that whilst it is entirely supportive of the aims and intentions of the shareholder proposal, the company is already working towards these exact goals and believes that the current strategy continues to be the right one to achieve them. It confirmed that significant progress has been made: 74% of the company’s supply chain is now covered by its Cocoa Life programme, up from 28% in 2020. Like Mondelez, LTL recognises that eradicating child labour from the cocoa supply chain is a systemic issue that requires wide-scale collaboration and so LTL voted in line with management, as it believes it is unproductive to expect Mondelez to solve this wider issue on its own.

Next steps: This engagement is ongoing. While LTL accepts that Mondelez cannot solve this wider issue on its own, as the number 2 chocolate brand in the world LTL would like to see the company continuing to set the agenda. LTL would like the percentage of the company’s supply chain covered by the Cocoa Life programme to continue to increase to full coverage, with credible and sustainable ongoing monitoring firmly in place as this is not a ‘set and forget’ issue.

Company name: Nintendo

Sector: Media

Engagement topic: Capital Allocation

Date of engagement: September 2023

Engagement format: Call

Reason for Engagement: Like many Japanese companies, Nintendo could be accused of maintaining an overly conservative balance sheet. Currently the company has ¥2 trillion of cash to guard against technology change and for future growth investments. As a rule, we are supportive of our companies maintaining net cash balances and, indeed, would be concerned by any significant levels of net debt, however we recognise that Nintendo could manage its balance sheet more efficiently. As such, during Q3 we had the opportunity to share with company management that we would encourage the Board to review its capital allocation and the uses of its retained earnings. If it was decided to return funds to shareholders we expressed our preference for a share buyback at an accretive share price rather than a special dividend.

Next steps: This engagement is ongoing.

Proxy Voting

The primary voting policy of LTL is to protect or enhance the economic value of its investments on behalf of its clients. LTL has appointed Glass Lewis to aid the administration of proxy voting and provide additional support in this area. However, the Manager maintains decision making responsibility based on its detailed knowledge of the investee companies. It is LTL’s policy to exercise all voting rights which have been delegated to LTL by its clients.

Voting record:

	Management Proposals	Shareholder Proposals	Total Proposals
With Management	199	7	206
Against Management	2	0	2
Abstain	1	1	2
Totals	202	8	210

Source: Glass Lewis. 1 April 2023 to 31 March 2024.

Votes against management and abstentions have typically been in the low single-digit range. The main reason for this is that LTL’s long-term approach to investment generally leads it to be supportive of company management and, where required, LTL will try to influence management through its engagement activities. Given LTL often builds up large, long-term stakes in the businesses in which it invests, LTL finds that management is open to (and very often encourage) engagement with LTL. Furthermore, it is LTL’s aim to be invested in ‘exceptional’ companies with strong corporate governance and hence it ought to be rare that LTL finds itself in a position where it is voting against management.

In the majority of cases where LTL has voted against management it has been on matters relating to remuneration. Where LTL does not believe that a company’s compensation policy is aligned with the long-term best interests of the shareholders it will write to management to inform them of LTL’s intention to vote against such policies.

Regulatory Update on ESG

During the year, regulators around the world remained active on defining and classifying ESG investing and curbing greenwashing. The UK Financial Conduct Authority (‘FCA’) released its final Policy Statement on Sustainability Disclosure Requirements (‘SDR’) and investment labels on 28 November 2023. The UK SDR, which applies to all FCA-regulated firms, introduces a set of sustainability-related product labels, product and entity-level disclosures, and anti-greenwashing rules for sustainable investing in the UK. While the Investment Manager considers ESG issues to be important when selecting investments, the Company does not have explicit sustainability objectives in its investment policy and the Company will not seek to apply a sustainability label under SDR.

Integrity and Business Ethics

The Company is committed to carrying out business in an honest and fair manner. The Board has adopted a zero tolerance approach to instances of bribery and corruption. Accordingly, it expressly prohibits any Director or associated persons when acting on behalf of the Company from accepting, soliciting, paying, offering or promising to pay or authorise any payment, public or private, in the United Kingdom or abroad to secure any improper benefit from themselves or for the Company.

The Board applies the same standards to its service providers in their activities for the Company. A copy of the Company’s Anti Bribery and Corruption Policy can be found in the Board and Policies section of the Company's website. The policy is reviewed annually by the Audit Committee.

In response to the implementation of the Criminal Finances Act 2017, the Board adopted a zero-tolerance approach to the criminal facilitation of tax evasion. A copy of the Company’s policy on preventing the facilitation of tax evasion can be found in the Board and Policies section of the Company's website. The policy is reviewed annually by the Audit Committee.

The Company’s culture is driven by its values of integrity, knowledge and frank and courteous conduct. It focusses on achieving returns for shareholders in line with the Company’s Investment Objective. In carrying out its activities, the Company aims to conduct itself responsibly, ethically and fairly, including in relation to social and human rights issues. As an investment company with limited internal resource, the Company has little direct impact on the environment. The Company believes that high standards of ESG make good business sense and have the potential to protect and enhance investment returns. Consequently, the Manager’s investment criteria ensure that ESG and ethical issues are taken into account and best practice is encouraged. The Board's expectations are that its principal service providers have appropriate governance policies in place.

By order of the Board

Roger Lambert

Chairman

11 June 2024

Governance

Statement of Directors’ responsibilities in respect of the Financial Statements

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.

Each of the Directors, whose names and functions are listed in the ‘Board of Directors’ on pages 32 and 33 of the Annual Report confirms that, to the best of their knowledge:

• the Company Financial Statements, which have been prepared in accordance with United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law (United Kingdom Generally Accepted Accounting Practice), give a true and fair view of the assets, liabilities, financial position and loss of the Company; and

• the Strategic Report includes a fair review of the development and performance of information required by the FCA's Disclosure Guidance and Transparency Rules.

The Directors also confirm that the Financial Statements, taken as a whole, are fair, balanced and understandable, and provide the information necessary for shareholders to assess the Company's position, performance, business model and strategy.

Approved by the Board of Directors and signed on its behalf by

Roger Lambert

Chairman

11 June 2024

Note to those who wish to access this document by electronic means:

The Annual Report for the year ended 31 March 2024 has been approved by the Board of The Lindsell Train Investment Trust plc. Copies of the Annual Report are circulated to shareholders and, where possible, to investors through other providers’ products and nominee companies (or written notification is sent when they are published online). It is also made available in electronic format for the convenience of readers. Printed copies are available from the Company’s Registered Office in London.

Financial Statements

Income Statement for the year ended 31 March 2024

		2024			2023
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£’000	£’000	£’000	£’000	£’000	£’000
Losses on investments held at fair value	10	–	(6,014)	(6,014)	–	(12,978)	(12,978)
Exchange losses on currency balances		–	(4)	(4)	–	(3)	(3)
Income	2	12,005	–	12,005	14,135	–	14,135
Investment management fees	3	(976)	–	(976)	(1,138)	–	(1,138)
Other expenses	4	(715)	(1)	(716)	(690)	(1)	(691)
Net return/(loss) before taxation		10,314	(6,019)	4,295	12,307	(12,982)	(675)
Taxation	7	(100)	–	(100)	(96)	–	(96)
Return/(loss) after taxation for the financial year		10,214	(6,019)	4,195	12,211	(12,982)	(771)
Return/(loss) per Ordinary Share	9	£51.07	£(30.10)	£20.97	£61.06	£(64.91)	£(3.85)

All revenue and capital items in the above statement derive from continuing operations.

The total columns of this statement represent the profit and loss account of the Company. The revenue and capital return columns are supplementary to this and are prepared under the guidance published by the Association of Investment Companies.

The Company does not have any other recognised gains or losses. The net return for the year disclosed above represents the Company’s total comprehensive income.

No operations were acquired or discontinued during the year.

The notes form part of these Financial Statements.

Statement of Changes in Equity for the year ended 31 March 2024

	Share	Special	Capital	Revenue
	capital	reserve	reserve	reserve	Total
	2024	2024	2024	2024	2024
	£’000	£’000	£’000	£’000	£’000
At 1 April 2023	150	19,850	168,000	23,390	211,390
(Loss)/return for the financial year	–	–	(6,019)	10,214	4,195
Dividends paid for the year ended 31 March 2023 (see note 8)	–	–	–	(10,300)	(10,300)
At 31 March 2024	150	19,850	161,981	23,304	205,285

For the year ended 31 March 2023

	Share	Special	Capital	Revenue
	capital	reserve	reserve	reserve	Total
	2023	2023	2023	2023	2023
	£’000	£’000	£’000	£’000	£’000
At 1 April 2022	150	19,850	180,982	21,779	222,761
(Loss)/return for the financial year	–	–	(12,982)	12,211	(771)
Dividends paid for the year ended 31 March 2022 (see note 8)	–	–	–	(10,600)	(10,600)
At 31 March 2023	150	19,850	168,000	23,390	211,390

The notes form part of these Financial Statements.

Statement of Financial Position at 31 March 2024

		2024		2023
	Notes	£’000	£’000	£’000	£’000
Fixed assets
Investments held at fair value through profit or loss	10		199,082		203,128
Current assets
Other receivables	11	478		491
Cash at bank		6,028		8,010
		6,506		8,501
Creditors: amounts falling due within one year
Other payables	12	(303)		(239)
Net current assets			6,203		8,262
Net assets			205,285		211,390
Called up share capital	13		150		150
Special reserve	14		19,850		19,850
			20,000		20,000
Capital reserve	14		161,981		168,000
Revenue reserve			23,304		23,390
Equity Shareholders’ funds			205,285		211,390
Net Asset Value per Ordinary Share	15		£1,026.43		£1,056.95

The Financial Statements were approved by the Board on 11 June 2024 and were signed on its behalf by:

Roger Lambert

Chairman

The Lindsell Train Investment Trust plc
Registered in England & Wales, No: 4119429

The notes form part of these Financial Statements.

Statement of Cash Flows for the year ended 31 March 2024

		2024	2023
	Notes	£’000	£’000
Net cash inflow from operating activities	16	10,294	12,243
Investing activities
Purchase of investments held at fair value		(2,845)	(339)
Sale of investments held at fair value		873	1
Net cash outflow from investing activities		(1,972)	(338)
Financing activities
Equity dividends paid	8	(10,300)	(10,600)
Net cash outflow from financing activities		(10,300)	(10,600)
(Decrease)/increase in cash and cash equivalents		(1,978)	1,305
Cash and cash equivalents at beginning of year*		8,010	6,708
Loss on exchange movements		(4)	(3)
Cash and cash equivalents at end of year*		6,028	8,010

Cash flows from operating activities includes dividend income received (gross) of £11,809,000 (2023: £14,156,000) and deposit interest of £190,000 (2023: £36,000).

* Comprises solely cash held at bank.

The notes form part of these Financial Statements.

Notes to the Financial Statements

1 Accounting policies

A summary of the principal accounting policies, all of which have been applied consistently throughout the year, is set out below:

(a) Basis of accounting

The Financial Statements of the Company have been prepared under the historical cost convention modified to include the revaluation of fixed assets in accordance with United Kingdom Company law, FRS 102 ‘The Financial Reporting Standard applicable in the UK and Ireland’ and with the Statement of Recommended Practice (“SORP”) “Financial Statements of Investment Trust Companies and Venture Capital Trusts”, issued by the Association of Investment Companies in July 2022.

Going concern

The Financial Statements have been prepared on the going concern basis.

The Directors have a reasonable expectation, after considering a schedule of the Company’s current financial resources and liabilities, that the Company has adequate resources to continue in existence for at least 12 months from the approval of the Financial Statements; and that it is appropriate to prepare the Financial Statements on a going concern basis.

The Company does not have a fixed life.

As at 31 March 2024, the Company held £110,456,000 (2023: £100,547,000) in listed investments and £88,626,000 (2023: £102,581,000) in an unlisted investment and an unlisted fund. The total operating expenses for the year ended 31 March 2024 were £1,692,000 (2023: £1,829,000). It is estimated that 56.6% of the investment portfolio, (92.4% of the portfolio, excluding the holding in LTL), could be liquidated within five business days based on 20% of the 90 days’ average trading volumes obtained from Bloomberg.

(b) Reporting currency

The Financial Statements are presented in Sterling which is the functional currency of the Company because it is the currency of the primary economic environment in which the Company operates.

(c) Dividends

Under Section 32 of FRS 102, final dividends should not be accrued in the Financial Statements unless they have been approved by shareholders before the balance sheet date.

Dividends payable to shareholders are recognised in the Statement of Changes in Equity when they have been approved by shareholders and have become a liability of the Company. Interim dividends are recognised in the Financial Statements in the period in which they are paid.

(d) Valuation of fixed asset investments

The Company’s investments are classified as held at fair value through profit or loss in accordance with Section 11 and 12 of FRS 102 and are managed and evaluated on a fair value basis in accordance with its investment strategy.

When a purchase or sale is made under a contract, the terms of which require delivery within the time frame of the relevant market, the investments concerned are recognised or derecognised on the trade date.

Listed investments are held through profit or loss and accordingly are valued at fair value, deemed to be bid or last market prices depending on the convention of the exchange on which they are listed. As the Company’s business is investing in financial assets with a view to profiting from their total return in the form of interest, dividends or increases in fair value quoted, investments are held through profit or loss on initial recognition at fair value. The Company manages and evaluates the performance of these investments on a fair value basis in accordance with its investment strategy, and information about the Company is provided internally on this basis to the Board.

Lindsell Train fund products are valued daily using prices supplied by the administrator of these funds.

The unlisted investment in LTL is valued by the Directors at fair value using a valuation methodology adopted by the Board. The formula is monitored by the Board to ensure its ongoing appropriateness. At the most recent update in 2024 the Board sought external advice to verify its approach. Please refer to note 1(j) for further information.

The investment in LTL (representing 23.9% of the Manager) is held as part of the investment portfolio. Accordingly, the shares are accounted for and disclosed in the same way as other investments in the portfolio. The valuation of the investment (see note 17) is calculated at the end of each month on the basis of fair value as determined by the Directors of the Company. The valuation process in effect from 31 March 2022 remains unchanged and is based upon a methodology that uses a percentage of LTL’s funds under management, with the percentage applied being reviewed monthly and adjusted to reflect the ongoing profitability of LTL.

Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset as follows:

• Level 1 – The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date.
• Level 2 – Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly.
• Level 3 – Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.

(e) Income

Dividends are credited to the revenue column of the Income Statement on an ex-dividend basis. Where an ex-dividend date is not available, dividends are recognised when the Company’s right to receive payment is established. The fixed return on a debt security is recognised on a time apportionment basis so as to reflect the effective interest rate on the debt security. Bank and deposit interest is accounted for on an accruals basis.

(f) Expenses

All expenses are accounted for on an accruals basis. Finance costs are accounted for on an accruals basis using the effective interest rate method. Expenses are charged through the revenue column of the Income Statement except as follows:

• expenses which are incidental to the acquisition or disposal of an investment are charged to the capital column of the Income Statement;
• expenses are charged to the realised capital reserve, via the capital column of the Income Statement, where a connection with the maintenance or enhancement of the value of the investments can be demonstrated;
• the non allocation approach has been taken and charged 100% of the management fees to revenue; and
• performance fees payable to the Manager are charged 100% to capital.

(g) Taxation

Deferred taxation is provided on all differences which have originated but not reversed by the balance sheet date, calculated at the rate at which it is anticipated the timing differences will reverse. Deferred tax assets are recognised only when, on the basis of available evidence, it is more likely than not that there will be taxable profits in the future against which the deferred tax asset can be recovered.

In line with recommendations of the SORP, the allocation method used to calculate tax relief on expenses presented in the capital column of the Statement of Comprehensive Income is the marginal basis. Under this basis if taxable income is capable of being offset entirely by expenses presented in the revenue column of the Income Statement then no tax relief is transferred to the capital column.

(h) Foreign currency

Transactions denominated in foreign currencies are recorded in the local currency at the actual exchange rates as at the date of the transaction. Assets and liabilities denominated in foreign currencies at the year end are reported at the rate of exchange prevailing at the year end. Any gain or loss arising from a change in exchange rates subsequent to the date of the transaction is included as an exchange gain or loss in the capital or revenue column of the Income Statement depending on whether the gain or loss is of a capital or revenue nature.

(i) Capital reserve

The following are taken to this reserve:

• gains or losses on the disposal of investments;
• exchange differences of a capital nature;
• expenses, together with the related taxation effect, allocated to this reserve in accordance with the above policies; and
• investment holding gains or losses, being the increase or decrease in the valuation of investments held at the year end.

Revenue reserve

The revenue reserve reflects all income and expenditure which are recognised in the revenue column of the income statement.

Special reserve

The special reserve arose following Court approval in September 2002 to transfer £19,850,000 from the share premium account. This reserve can be used to finance the redemption and/or purchase of shares in issue.

In accordance with the Company’s Articles of Association, the capital reserve and special reserve may not be distributed by way of a dividend but may be utilised for the purposes of share buybacks. The Company may only distribute by way of dividend accumulated revenue profits within the revenue reserve.

(j) Significant judgments and estimates

The key significant estimate to report is the valuation of the investment in LTL where material judgments are made. Please refer to notes 1(d) and 17 for details of how this holding is valued.

Other than this, in the course of preparing the Financial Statements, no material judgments have been made in the process of applying the Company’s accounting policies, except those that involve estimations.

2 Income

	2024 £’000	2023 £’000
Income from investments
Overseas dividends	862	833
UK dividends
– Lindsell Train Limited	9,410	11,875
– Other UK dividends	1,543	1,391
	11,815	14,099
Other income
Deposit Interest	190	36
	190	36
Total income comprises:
Dividends	11,815	14,099
Interest	190	36
	12,005	14,135

3. Management fees

	2024	2023
	£’000	£’000
Investment management fee	1,099	1,255
Rebate of investment management fee (see below)	(123)	(117)
Total management fee	976	1,138

In accordance with an Investment Management Agreement dated 21 December 2000 (last revised in November 2020) between the Company and LTL, LTL has been providing investment management services to the Company. For its services, LTL receives an annual fee of 0.6%, calculated on the lower of the Adjusted Market Capitalisation and the Adjusted Net Asset Value of the Company, calculated using weekly data and payable in arrears in respect of each calendar month. The amount charged during the year is shown above. £139,623 (2023: £94,893) of the fee for the year was outstanding as at the Balance Sheet date.

A performance fee is payable at the rate of 10 per cent of the value of any positive relative performance versus the Benchmark (the MSCI World Index Total Return (Sterling adjusted)), in a financial year. Relative performance is measured by taking the lower of the NAV or Average Market Price, taking into account dividends, at the end of each financial year and comparing the percentage annual change with the total return of the Benchmark. A performance fee will only be paid out if the annual change is both above the Benchmark and is a positive figure. Relative performance will be carried forward in years where the Manager is not eligible for a performance fee based on these two criteria. The Company has twelve month performance periods, ending on 31 March in each year. The performance fee is payable in arrears in respect of each performance period.

The performance fee payable to the Manager for the year to 31 March 2024 was £nil (2023: £nil).

For the avoidance of double charging management fees, the Manager has agreed to rebate any periodic management fee that it receives from the Company by the amount of fees receivable by it from LTL managed fund products and other fund products where LTL is the Manager. The amounts rebated on the Investment Management fee are shown above, of which £107,585 (2023: £101,725) relates to the Company’s investment in Lindsell Train North American Equity Fund and £15,656 (2023: £15,065) relates to the Company’s investment in the Finsbury Growth & Income Trust PLC.

4 Other expenses

	2024 £’000	2023 £’000
Directors’ emoluments	178	151
Company Secretarial and Administration fee	192	195
Auditor’s remuneration*†	55	55
Tax compliance fee	4	6
Safe custody fees	19	18
Printing fees	36	40
Registrars’ fees	32	35
Listing fees	13	14
Legal fees	7	5
Employer’s National Insurance	11	11
Directors’ liability insurance	13	13
Key man insurance	45	47
Director recruitment costs	25	40
Sundry	76	60
VAT irrecoverable	9	–
	715	690
Capital charges	1	1
	716	691

* Excluding VAT.

† Remuneration for the audit of the Financial Statements of the Company.

5 Directors’ emoluments

These are reflected in the table below:

	2024 £’000	2023 £’000
Directors’ fees	178	151

Since 1 January 2024, the Chairman of the Board, Chairman of the Audit Committee, and other Directors receive set fees at rates of £43,000, £36,000 and £29,000 respectively per annum, and have no entitlement to any performance fees. Directors’ fees amounting to £29,000 (2023: £27,000) have been waived by Michael Lindsell in view of his connection with the Manager.

There were no pension contributions paid or payable.

6 Disclosure of interests

As at 31 March 2024 the Company held 12,500,000 shares in WS Lindsell Train North American Equity Fund with a fair value of £19,624,000 and a cost of £12,912,000.

LTL is also the Portfolio Manager of Finsbury Growth & Income Trust PLC in which the Company has an investment of 420,000 shares with a fair value of £3,612,000 at a cost of £759,000.

LTL’s appointment as Manager to the Company is subject to termination by either party on twelve months’ notice.

7 Taxation

The tax charge on the loss on ordinary activities for the year was as follows:

	2024			2023
	Revenue	Capital	Total	Revenue	Capital	Total
	£’000	£’000	£’000	£’000	£’000	£’000
UK corporation tax	–	–	–	–	–	–
Overseas tax	114	–	114	102	–	102
Overseas tax recoverable	(14)	–	(14)	(6)	–	(6)
Tax charge per accounts	100	–	100	96	–	96

The current taxation charge for the year is different from the standard rate of corporation tax in the UK of 25% (2023: 19%). The differences are explained below:

	2024 £’000	2023 £’000
Net gains/(loss) on ordinary activities before taxation	4,295	(675)
Theoretical tax at UK Corporation tax rate of 25% (2023: 19%)	1,074	(128)
Effects of:
– UK dividends which are not taxable	(2,738)	(2,521)
– Overseas dividends which are not taxable	(215)	(158)
– Non-taxable loss on investments	1,504	2,466
– Current year excess expenses	375	341
– Overseas tax suffered	114	102
– Overseas tax recoverable	(14)	(6)
Actual current tax charge	100	96

As an Investment Trust, the Company is not subject to UK taxation on capital gains as long as it maintains exemption under Sections 1158 and 1159 of the Corporation Tax Act 2010. In the opinion of the Directors, the Company has complied with the requirements of Sections 1158 and 1159 of the Corporation Tax Act 2010.

Factors that may affect future tax charges

As at 31 March 2024, the Company had unutilised management expenses of £31,533,000 (2023: £30,032,000). These expenses could only be utilised if the Company were to generate taxable profits in the future. As a result, the Company has not recognised a deferred tax asset of £7,883,250 (2023: £7,508,000) arising from management expenses exceeding taxable income based on the prospective corporation tax rate of 25% (2023: 19%).

8 Dividends paid and payable

	2023 £’000	2022 £’000
Final dividend for the year ended 31 March 2023 of £51.50 per Ordinary share (2022: £51.12 per Ordinary Share)	10,300	10,224

The total dividend forming the basis of Sections 1158 and 1159 of the Corporation Tax Act 2010 payable in respect of the financial year is set out below:

	2024 £’000	2023 £’000
FinaI dividend for the year ended 31 March 2024 of £51.50 per Ordinary share (2023: £51.50 per Ordinary Share)	10,300	10,300

9 Return/(loss) per Ordinary Share

	2024	2023
Total return/(loss) per Ordinary share
Total return/(loss)	£4,195,000	£(771,000)
Weighted average number of Ordinary Shares in issue during the year	200,000	200,000
Total return/(loss) per Ordinary share	£20.97	£(3.85)

The total return/(loss) per Ordinary share shown above can be further analysed between revenue and capital, as below:

	2024	2023
Revenue return per Ordinary Share
Revenue return	£10,214,000	£12,211,000
Weighted average number of Ordinary Shares in issue during the year	200,000	200,000
Revenue return per Ordinary Share	£51.07	£61.06
Capital loss per Ordinary Share
Total return	£(6,019,000)	£(12,982,000)
Weighted average number of Ordinary Shares in issue during the year	200,000	200,000
Capital loss per Ordinary Share	£(30.10)	£(64.91)

10 Investments held at fair value through profit or loss

	2024 £’000	2023 £’000
Investments listed on a recognised investment exchange	110,456	100,547
Unlisted investment and Fund	88,626	102,581
Valuation at year end	199,082	203,128
Opening book cost	42,591	42,252
Opening investment holding gains	160,537	173,516
Opening Fair Value	203,128	215,768
Movements in the year:
Purchases at cost	2,845	339
Sales – proceeds	(877)	(1)
Losses on investments	(6,014)	(12,978)
Closing Fair Value	199,082	203,128
Closing book cost	45,428	42,591
Closing investment holding gains	153,654	160,537
Closing Fair Value	199,082	203,128
Realised gains on investments	869	1
Decrease in investment holding gains for the year	(6,883)	(12,979)
Losses on investments held at fair value	(6,014)	(12,978)

The Company received proceeds of £877,000 (2023: £1,000) from investments sold in the year. The book cost of these investments when they were purchased was £7,729 (2023: £400). These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the investments.

Investment transaction costs on purchases and sales of investments during the year to 31 March 2024 amounted to £805 and £9 respectively (2023: £85 and £nil respectively).

During the year the investment holding loss attributable to the Company’s holding in LTL amounted to £16,218,000 (2023 loss: £11,690,000). See note 17 for further details.

Significant holdings

Included in the above are the following investments in which the Company has an interest exceeding 10% of the nominal value of the shares of that class in the investee company as at 31 March 2024.

Investments	Country of registration or incorporation	Class of capital	% of class held
Lindsell Train Limited*	England	Ordinary Shares of £100	23.9%

* As at 31 January 2024, the latest year end for LTL, its audited aggregate capital and reserves amounted to £103,519,000, (2023: £97,680,000) and the profit for that year amounted to £44,596,000 (2023: £54,315,000). The total amount of dividends paid during the year was £38,967,000 (2023: £48,876,000) equating to dividends of £1,462 per share (2023: £1,841 per share). The earnings per share were £1,673 (2023: £2,038). The cost of the Company’s investment in LTL was £64,500.

See note relating to the 2024 and 2023 results under the tables in Appendix 1.

LTL is a related undertaking of the Company. LTL’s registered office address is 66 Buckingham Gate, London SW1E 6AU.

LTL has been accounted for as an investment in accordance with the accounting policy in note 1(d).

The Company has arrangements in place with the Manager to avoid double charging of fees and expenses on investments made in other LTL managed funds (see note 3).

11 Other receivables

	2024	2023
	£’000	£’000
Amounts due from brokers	5	1
VAT recoverable	27	34
Prepayments and accrued income	446	456
	478	491

12 Other payables

	2024	2023
	£’000	£’000
Accruals and deferred income	303	239

13 Share capital

	2024		2023
	No. of shares		No. of shares
	000’s	£’000	000’s	£’000
Allotted and fully paid:
Ordinary Shares of 75p each	200	150	200	150

There has been no change in the capital structure during the year to 31 March 2024.

14 Reserves

Capital reserve

The capital reserve includes investment holding gains of £153,654,000 (2023: £160,537,000).

Revenue reserve

The revenue reserve reflects all income and expenditure which are recognised in the revenue column of the income statement.

Special reserve

The special reserve arose following Court approval in September 2002 to transfer £19,850,000 from the share premium account. This reserve can be used to finance the redemption and/or purchase of shares in issue.

In accordance with the Company’s Articles of Association the capital reserve and special reserve may not be distributed by way of a dividend but may be utilised for the purposes of share buybacks. The Company may only distribute by way of dividend accumulated revenue profits within the revenue reserve.

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 per share attributable		Net Asset Value attributable
2024	2023	2024	2023
£	£	£’000	£’000
1,026.43	1,056.95	205,285	211,390

The movements during the year of the assets attributable to the Ordinary Shares were as follows:

	2024 Ordinary Shares £’000	2023 Ordinary Shares £’000
Total Net Assets attributable at beginning of year	211,390	222,761
Total recognised profit/(loss) for the year	4,195	(771)
Dividends paid during the year	(10,300)	(10,600)
Total Net Assets attributable at the end of year	205,285	211,390

The Net Asset Value per Ordinary Share is based on net assets of £205,285,000 (2023: £211,390,000) and on 200,000 Ordinary Shares (2023: 200,000), being the number of Ordinary Shares in issue at the year end.

16 Statement of Cash Flows

(a) Reconciliation of operating return to net cash inflow from operating activities

	2024 £’000	2023 £’000
Net return/(loss) before finance costs and taxation	4,295	(675)
Losses on investments held at fair value	6,014	12,978
Loss on exchange movements	4	3
Decrease/(increase) in other receivables	32	(34)
(Increase)/decrease in accrued income	(15)	56
Increase in other payables	64	11
Taxation on investment income	(100)	(96)
Net cash inflow from operating activities	10,294	12,243

(b) Analysis of cash flows

	At			At
	1 April		Exchange	31 March
	2023	Cash Flow	Movement	2024
	£’000	£’000	£’000	£’000
Cash at bank	8,010	(1,978)	(4)	6,028
Total	8,010	(1,978)	(4)	6,028
	At 1 April 2022	Cash Flow	Exchange Movement	At 31 March 2023
	£’000	£’000	£’000	£’000
Cash at bank	6,708	1,305	(3)	8,010
Total	6,708	1,305	(3)	8,010

17 Financial instruments and capital disclosures

Risk management policies and procedures:

The investment objective of the Company is to maximise long-term total returns with a minimum objective to maintain the real purchasing power of Sterling capital. In pursuit of this objective, the Company may be exposed to various forms of risk, as described below.

The Board sets out its principal risks on pages 16 to 20 of the Annual Report and its investment policy including its policy on gearing (bank borrowing), diversification and dividends on page 3 of the Annual Report.

The Board and its Manager consider and review the number of risks inherent with managing the Company’s assets which are detailed below:

Market risk

The Company’s portfolio is exposed to fluctuations in market prices in the regions in which it invests. Market-wide uncertainties which have caused increased volatility include the continued impact of war in Ukraine and the effect of sanctions against Russia; tensions between China and the West; the conflict in the Middle East; and the threat of prolonged inflation and elevated interest rates slowing economic growth, and the fear or presence of recession.

At 31 March 2024, the fair value of the Company’s assets exposed to market price risk was £199,082,000 (2023: £203,128,000). The Company’s exposure to market price fluctuations is reviewed by the Board on a quarterly basis and monitored on a continuous basis by the Manager in pursuance of the investment objective.

Market price risk comprises three elements – foreign currency risk, interest rate risk and other price risk.

Foreign currency risk

Foreign currency exposure as at 31 March 2024

	US$ £’000	Euro £’000	JPY £’000	Total £’000
Short-term debtors	49	23	210	282
Foreign currency exposure on net monetary items	49	23	210	282
Investments held at fair value through profit or loss that are equities	33,061*	12,492	17,574	63,127
Foreign currency exposure	33,110	12,515	17,784	63,409

* This includes the holding in WS Lindsell Train North American Equity Fund of £19,624,000.

Foreign currency exposure as at 31 March 2023

	US$ £’000	Euro £’000	JPY £’000	Total £’000
Short-term debtors	41	12	216	269
Foreign currency exposure on net monetary items	41	12	216	269
Investments held at fair value through profit or loss that are equities	31,818*	10,634	12,828	55,280
Foreign currency exposure	31,859	10,646	13,044	55,549

* This includes the holding in WS Lindsell Train North American Equity Fund of £17,361,000.

Over the year Sterling strengthened against the US Dollar by 2.2% (2023: weakened by 6.2%), strengthened against the Euro by 2.9% (2023: weakened by 4.0%) and strengthened against the Japanese Yen by 16.6% (2023: strengthened by 2.6%).

A 5.0% decline or rise of Sterling against foreign currency denominated (i.e. non Sterling) assets held at the year end would have increased/decreased the Net Asset Value by £3,170,000 or 1.5% of Net Asset Value (2023: £2,777,000 or 1.3% of Net Asset Value).

Interest rate risk

There is no direct exposure to interest rate risk.

Other price risk

Other price risk may affect the value of the quoted investments.

If the fair value of the Company’s investments at the Statement of Financial Position date increased or decreased by 10%, whilst all other variables remained constant, the capital return and net assets attributable to shareholders as at 31 March 2024 would have increased or decreased by £19,908,000 or £99.54 per share (2023: £20,313,000 or 101.56p per share).

Liquidity risk

Liquidity risk is not considered significant under normal market conditions in relation to the Company’s investments which are listed on recognised stock exchanges and are, for the most part, readily realisable securities which can be easily sold to meet funding commitments if necessary. The Company’s unlisted investment in LTL is not readily realisable.

As at 31 March 2024, 56.6% (2023: 51.0%) of the investment portfolio (92.4% of the listed portfolio) could be liquidated within five business days, based on 20% of the 90 days’ average daily trading volumes obtained from Bloomberg. The Company would be able to sell all of its listed holdings within five business days, with the exception of two securities representing 5.5% of NAV.

Credit risk

Cash at bank and other debtors of the Company at the year end as shown on the Balance Sheet was £6,506,000 (2023: £8,501,000).

Counterparty risk

The Northern Trust Company (the “Bank”) is the appointed custodian of the Company. It provides securities clearing, safe-keeping, foreign exchange, advance credits and overdrafts, and cash deposit services. The Bank has a credit rating for long-term deposits/debt of Aa2 from Moody’s, AA- from Standard & Poor’s and AA from Fitch Ratings.

As cash placed at the Bank is deposited in its capacity as a banker not as a trustee, in line with usual banking practice, such cash is not held in accordance with the Financial Conduct Authority’s client money rules.

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

At 31 March 2024	Level 1 £’000	Level 2 £’000	Level 3 £’000	Total £’000
Investments	110,456	19,624	69,002	199,082
	110,456	19,624	69,002	199,082
At 31 March 2023	Level 1 £’000	Level 2 £’000	Level 3 £’000	Total £’000
Investments	100,547	17,361	85,220	203,128
	100,547	17,361	85,220	203,128

Note: Within the above tables, the entirety of level 1 comprises all the Company’s ordinary equity investments, level 2 represents the investment in LF Lindsell Train North American Equity Fund and level 3 represents the investment in LTL.

The valuation techniques used by the Company are explained on pages 5 to 7 of the Annual Report.

LTL Valuation Methodology

The current methodology was approved and applied to monthly valuations of the Company from 31 March 2022. J. P. Morgan Cazenove undertook an independent review of the methodology in January 2024, which confirmed that the methodology adopted in 2022 remains valid. The methodology seeks to capture the changing economics and prospects for LTL’s business. It is designed to be as transparent as possible so that shareholders can themselves calculate how any change to the inputs would affect the resultant valuation.

The methodology has a single component based on a percentage of LTL’s funds under management (‘FUM’), with the percentage applied being reviewed monthly and adjusted to reflect the ongoing profitability of LTL. At the end of each month the ratio of LTL’s notional annualised net profits1 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 profits1/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%

1 LTL’s notional net profits are calculated by applying a fee rate (averaged over the last six months) to the most recent end-month FUM to produce annualised fee revenues excluding performance fees. Notional staff costs of 45% of revenues, annualised fixed costs and tax are deducted from revenues to then produce notional annualised net profits.

For instance at 31st March 2024 LTL’s annualised notional net profits were £29.4m and its FUM was £15.2bn. The ratio between the two as a percentage was calculated as 0.193% resulting in a percentage of FUM of 1.90% and a valuation of LTL of £10,818.76 per share.

The valuation of the investment in LTL continues to be reviewed at the end of each month by the Company’s Directors, with the methodology reviewed by the Board at its quarterly meetings.

LTL Valuation per share using differing valuation scenarios

The two tables below show the impact on the LTL valuation if:

(i) in Table 1 a different % was applied to 31 March 2024 FUM; and

(ii) in Table 2 different Price / Earnings (‘P/E’) ratios were applied to LTL’s March 2024 notional net profits.

Table 1 – varying the % of FUM

LTL FUM as at 31 March 2024		Valuation	Valuation per share
(£’000)	% of FUM	(£’000)	(£)
15,180,432	1.00%	151,804	5,694.09
15,180,432	1.25%	189,755	7,117.61
15,180,432	1.50%	227,706	8,541.13
15,180,432	1.75%	265,658	9,964.65
15,180,432	1.90%	288,428	10,818.76
15,180,432	2.00%	303,609	11,388.17
15,180,432	2.25%	341,560	12,811.69
15,180,432	2.50%	379,511	14,235.21
15,180,432	2.75%	417,462	15,658.73

Table 2 – varying the P/E ratio

LTL notional net profits as at 31 March 2024		Valuation	Valuation per share
(£’000)	P/E ratio	(£’000)	(£)
29,240	7.00	204,682	7,677.48
29,240	8.00	233,922	8,774.27
29,240	9.00	263,162	9,871.05
29,240	9.86	288,428	10,818.76
29,240	10.00	292,402	10,967.84
29,240	11.00	321,643	12,064.62
29,240	12.00	350,883	13,161.40

There were no transfers between levels for financial assets and financial liabilities during the year recorded at fair value as at 31 March 2024 and 31 March 2023. A reconciliation of fair value measurements in Level 3 is set out below.

Level 3 Financial assets at fair value through profit or loss at 31 March

	2024 £’000	2023 £’000
Opening fair value	85,220	96,910
Purchases at cost	–	–
Sales proceeds	(846)	–
Realised gains on investments	846	–
Decrease in investment holding gains for the year	(16,218)	(11,690)
Closing fair value	69,002	85,220

Capital management policies and procedures

The Company’s capital management objectives are:

• to ensure that it will be able to continue as a going concern; and

• to maximise long-term total returns with a minimum objective to maintain the real purchasing power of Sterling capital through an appropriate balance of equity capital and debt. The Directors have discretion to permit borrowings up to 50% of the Net Asset Value. However, the Directors have decided it is in the best interests of the Company not to use gearing.

The Board, with the assistance of the Manager, monitors and reviews the broad structure of the Company’s capital on an ongoing basis.

The Company’s objectives, policies and processes for managing capital are unchanged from last year.

The Company is subject to externally imposed capital requirements:

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

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

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

At the next Annual General Meeting the Company intends to renew its authority to repurchase shares at a discount to Net Asset Value.

18 Guarantees, financial commitments and contingent liabilities

There were no financial commitments or contingent liabilities outstanding at the year end (2023: None).

19 Ongoing charges (APM)

	2024		2023
	£’000	%	£’000	%
Total operating expenses	1,692	0.8	1,829	0.9

Total operating expenses are included after a management fee waiver of £123,000 (2023: £117,000) (see note 3).

The above total expense ratios are based on the average Shareholders’ Funds of £203,091,000 (2023: £211,310,000) calculated at the end of each month during the year.

It should be noted that administrative expenses borne by the LTL managed funds are excluded from the above.

See Glossary for other cost disclosures.

20 Related party disclosures

LTL acts as Investment Manager of the Company. The amounts paid to the Investment Manager are disclosed in note 3 and further details of the relationship between the Company and the Investment Manager are set out in note 6. Full details of Directors’ interests are set out on page 53 of the Annual Report.

On 5 June 2024, the Company and LTL entered into an amended and restated Investment Management Agreement, to incorporate changes made, and announced, in June 2021 and June 2022 and additional non-material changes. LTL is considered to be a related party of the Company under the Listing Rules. The amendment and restatement of the Investment Management Agreement amounted to small related party transaction to which certain provisions of Chapter 11 of the Listing Rules do not apply in accordance with LR 11.1.6 R.

21 Subsequent events

There are no significant events that have occurred after the end of the reporting period to the date of this report which require disclosure.

Appendices (unaudited)

DISCLAIMER

The information contained in these Appendices has not been audited by the Auditor and does not form part of the financial statements. The appendices are for information purposes and should not be regarded as any offer or solicitation of an offer to buy or sell shares in the Company.

Appendix 1 Annual Review of Lindsell Train Limited (‘LTL’) at 31 January 2024

Background

LTL was established in 2000 by Michael Lindsell and Nick Train and was founded on the shared investment philosophy that developed while they worked together during the 1990s. The company’s aim is to foster a work environment in which the investment team can manage capital consistent with this philosophy, which entails managing concentrated portfolios, invested strategically in durable franchises. Essential to success is maintaining a relatively simple business structure encompassing an alignment of interests between on one side LTL’s clients and on the other its founders and employees.

People

LTL’s board of directors consists of the two founders Michael Lindsell and Nick Train, Michael Lim who was the Chief Operating Officer and is now the Company Secretary, Joss Saunders (Chief Operating Officer), and three non-executive directors,; Rory Landman, Julian Bartlett and Jane Orr, two of which are independent. Rory was appointed to the LTL Board following the retirement of James Alexandroff in March 2023. Rory served as a non-executive director of the Lindsell Train Investment Trust from 2011 to 2020, and Julian is a former partner of Grant Thornton LLP. Jane retired from her executive responsibilities at LTL in March 2023, having previously led the Marketing & Client Services team and was an executive director of the board, appointed in 2010. After 14 years at LTL, Keith Wilson retired from the company and left the Board on 31 January 2024. James Bullock and Jessica Cameron were both appointed to the Board in May 2024.

LTL’s executive staff reduced by three from 28 to 25 the last 12 months, which includes the retirements of Jane Orr and Keith Wilson. All staff are based in the UK other than LTL’s North American Marketing and Client Services representative, who works out of Texas. LTL’s board recognises that key employees should share in the ownership of the company, furthering the alignment of interests between them, LTIT and the founders. This is achieved by acquiring shares from LTL’s major stakeholders either directly or through a dedicated profit share scheme.

Business

LTL’s strategy is to build excellent long-term performance records for its funds in a way that is consistent with its investment principles and that meet the aims of its clients. Long-term performance is detailed below. Success in achieving satisfactory investment performance should allow the company to expand its FUM in its four key product areas: UK, Global, Japanese, and North American equities. LTL aspires to manage multiple billions of pounds in each product area, whilst recognising that there will be a size per product above which their ability to achieve clients’ performance objectives may be compromised. LTL thinks this growth is possible without significantly expanding the investment team, which numbered six at 31 January 2024.

To achieve this growth in a manageable way, LTL looks to direct new business flows into LT badged pooled funds and to limit the number of separately managed accounts. The open-ended pooled funds represented 62% of FUM at end of January, down from 65% the year before. The fall resulted from a greater proportion of net outflows emanating from open-ended pooled products.

Additionally, LTL managed 16 separate client relationships, one fewer than a year ago. The largest pooled fund (the Lindsell Train Global Equity Fund) represented 29% of total FUM and the largest segregated portfolio accounted for 11%.

In the year to 31 January 2024, LTL’s total FUM fell by 15% from £18.6bn to £15.9bn. This represented net outflows of £3.4bn, broken down by strategy as Global (£1,993m), Japan (£380m) and UK (£1,038m).

All four strategies generated positive absolute returns over the twelve months, however each underperformed relative to their corresponding benchmarks. LTL’s process is simple and remains the same as it always has been, with LTL seeking to find companies that own long-lasting franchises with deep moats and the ability to reinvest returns at relatively high rates of return for extended periods of time. To capture these characteristics LTL portfolios are relatively concentrated with large average position sizes which rarely change. It also means that at any given time there will be a large number of quoted companies that LTL do not own, amongst which there are bound to be some exceptional performers. The unusual feature today is that the performance of some of these companies has reached new extremes, which makes their omission felt more keenly.

However, this current phenomenon has not, and will not change how LTL invests. It remains focused on exploiting the credentials of its highly concentrated, idiosyncratic portfolios.

The relative returns of the LTL funds representing each strategy since their inception are shown below:

To 31 January 2024	Relative Return	Inception date	Benchmark
UK Equity Fund (GBP)	+4.2% p.a.	July 2006	FTSE All Share
Global Equity Fund (GBP)	+1.6% p.a.	March 2011	MSCI World
Japanese Equity Fund (Yen)	+0.2% p.a.	January 2004	TOPIX
North American Equity Fund (GBP)	-4.4% p.a.	April 2020	MSCI North America

Returns based on NAV. LF Lindsell Train UK Equity Fund Acc share class; Lindsell Train Global Equity Fund B share class; Lindsell Train Japanese Equity Fund A Yen share class; LF Lindsell Train North American Equity Fund Acc share class.

The Marketing and Client Services team is in contact with institutional clients both directly and through investment consultants, primarily in the UK, South Africa and the USA. FUM derived from North America makes up over 14% of total FUM. LTL’s funds are also widely represented on the major UK retail and IFA platforms.

Financials

In the year to 31 January 2024 LTL’s total revenues fell 11%. Annual management fees make up the lion’s share of total revenues, at 98.9%, with interest income the remainder; there were no performance fees earned in the year. LTL’s biggest cost item, direct staff remuneration, is capped at 25% of fees (other than those earned from The Lindsell Train Investment Trust plc), as governed by LTL’s Shareholders’ Agreement. Employer National Insurance costs are excluded from the restriction. Total staff remuneration, including employer National Insurance, amounted to 30% of fee revenue, the same as last year. Fixed overheads remained constant at £4.6m. Operating profits were down 12%, registering a margin on sales of 67%. Net profits fell more, by 18% to £44.6m, on account of the rise in the effective tax rate from 19% to 25%.

LTL intends to distribute to shareholders dividends equivalent to 80% of its net profits in respect of each accounting year-end, subject to retaining sufficient working, fixed and regulatory capital to enable it to continue its business in a prudent manner. Total dividends paid in the year to 31 January 2024 were £1,462 per share, down from £1,841 per share in the previous year.

At 31 January 2024 LTL’s balance sheet was made up of shareholders’ funds of £103.5m including £96.2m of net current assets.

The Future

LTL believes it has plenty of headroom to grow its FUM, with a continued focus on its stable of pooled funds. LTL’s investment approach is applied uniformly across all its products and remains differentiated and appealing to a wide range of clients. A crucial part of that appeal is the ability for LTL to demonstrate investment results that meet clients’ objectives. Over most of LTL’s history this has been achieved, but recently the investment approach has faced several difficult years. Most clients will tolerate short periods of underperformance, especially in a strategy that is so concentrated and committed to its constituent companies. However, it is not surprising, following four years of cumulative underperformance, that the company is seeing some net outflows as clients are attracted to other investment approaches that have exhibited better short-term investment results.

LTL is confident that by remaining committed to its differentiated investment approach that targets companies earning higher returns on capital than average, and with the support of a stable and dedicated team, and a still competitive longer-term performance track record, it can stay positive about its future. But it is fully aware that there are risks ahead which could have a material impact on the value of LTL and its dividend paying potential. These risks include increasing pressure on the active management industry; continued pressures on global equity markets from inflation, higher interest rates and conflict; the growth of ESG designated investment funds; and, the underperformance from LTL’s strategies. Perhaps the greatest risk in relation to LTL’s reputation however remains the withdrawal of either of the founders. They are currently aged 65 and 64, in good health and remain strongly committed to LTL. They are supported by increasingly mature and experienced investment professionals, currently numbering four, all of whom are taking on more responsibility and contributing more to investment decisions as their careers progress with the company. The clearer articulation of the firm’s succession planning and the accelerated transfer of ownership of LTL shares to key individuals should also help mitigate the risk if either founder withdraws.

Data to 31 January 2024 unless stated otherwise. The period from 31 January to 31 March 2024 has been reviewed by the Board and there are no significant matters to highlight other than those detailed in this Appendix.

Funds Under Management*

FUM by Strategy

	Jan 2024	Jan 2023
	£m	£m
UK	6,729	7,690
Global	8,956	10,352
Japan	154	554
North America	37	30
Total	15,876	18,626

Largest Client Accounts

	Jan 2024	Jan 2023
	% of FUM	% of FUM
Largest Pooled Fund Asset	29%	30%
Largest Segregated Account	11%	10%

* LTL 's year end 2024 and year end 2023 figures above are based on published financial statements. LTL 's year end 2023 figures in L TIT'S Annual Report last year were based on unaudited management accounts. This therefore results in differences when compared with L TIT's Annual Report last year, as last year's Report contained LTL unaudited management account numbers for year ending 31 January 2023, which in this year's Annual Report are using numbers based on published Financial Statements.

Lindsell Train Fund Performance

Annualised data to 31 January 2024		1 Year %	3 Years %	5 Years %	10 Years %
GBP	UK Equity Fund (Accumulation)	1.4	3.4	5.3	7.9
	FTSE All Share	1.9	8.4	5.5	5.5
GBP	Global Equity Fund (B share)	6.1	2.1	6.2	12.7
	MSCI World	13.1	10.8	12.1	12.0
JPY	Japanese Equity Fund (A share)	6.9	1.3	3.7	8.3
	TOPIX	32.4	14.9	13.0	10.1
GBP	North American Equity Fund
	(Accumulation)	10.3	8.5
	MSCI North American	15.8	12.3

Source: Morningstar Direct

Note: all figures above show total returns.

Financials*

	Jan 2024	Jan 2023	%
Profit & Loss	£’000	£’000	Change
Fee Revenue
Investment Management fee	86,146	96,542	-10.8%
Performance Fee	0	0
	86,146	96,542	-10.8%
Bank Interest & Other Income	997	299
	87,143	96,841
Staff Remuneration**	(25,864)	(29,104)	-11.1%
Fixed Overheads	(4,578)	(4,622)	-1.0%
FX Currency Translation (losses)/gains	(676)	3,878
Investment Unrealised Gain	2,733	46
Operating Profit	58,758	67,039	-12.4%
Taxation	(14,162)	(12,724)
Net Profit	44,596	54,315	-17.9%
Dividends	(38,967)	(48,876)
Retained profit	5,629	5,439
Balance Sheet
Fixed Assets	51	75
Investments	7,672	6,960
Assets (inc cash at bank and investment in Gilts & Bonds)	118,354	107,524
Liabilities	(22,558)	(16,879)
Net Assets	103,519	97,680
Capital & Reserves
Called up Share Capital	267	267
Share Premium***	57	57
Share Discount***	(494)	(416)
Treasury Share Reserve†	0	(288)
Profit & Loss Account	103,689	98,060
Shareholders' Funds	103,519	97,680

*  LTL 's year end 2024 and year end 2023 figures above are based on published financial statements. LTL 's year end 2023 figures in L TIT'S Annual Report last year were based on unaudited management accounts. This therefore results in differences when compared with L TIT's Annual Report last year, as last year's Report contained LTL unaudited management account numbers for year ending 31 January 2023, which in this year's Annual Report are using numbers based on published Financial Statements.

** Staff costs include permanent staff remuneration, social security, temporary apprentice levy, introduction fees and other staff related costs. No more than 25% of fees (other than those earned from LTIT) can be paid as permanent staff remuneration.

*** The Share Premium and Share Discount account for the difference in the cost and resale of shares that were held in Treasury.

† The Treasury Share Reserve accounts for the difference between the cost and current value of the remaining shares held in Treasury.

Five Year History*

	Jan 2024	Jan 2023	Jan 2022	Jan 2021	Jan 2020
Operating Profit Margin	64%	69%	66%	66%	65%
Earnings per share (£)	1,673	2,038	2,463	2,340	2,237
Dividends per share (£)	1,462	1,841	1,994	1,817	1,619
Total Staff Cost as % of Fee Revenue	30%	30%	32%	30%	31%
Opening FUM (£m)	18,626	21,215	22,802	21,450	16,260
Changes in FUM (£m)	(2,751)	(2,589)	(1,587)	1,352	5,190
– of market movement	657	338	331	1,200	2,781
– of net new fund (outflows)/inflows	(3,408)	(2,927)	(1,918)	152	2,409
Closing FUM (£m)	15,875	18,626	21,215	22,802	21,450
LT Open ended funds as % of total	62%	65%	70%	73%	73%

* LTL’s year end figures above are based on published financial statements. LTL’s year end 2023 figures in LTIT’s Annual Report last year were based on unaudited management accounts. This therefore results in differences when compared with LTIT’s Annual Report last year, as last year’s Report contained LTL unautited management account numbers for year ending 31 January 2023, which in this year’s Annual Report are using numbers based on published Financial Statements.

	Jan 2024	Jan 2023	Jan 2022	Jan 2021	Jan 2020
Client Relationships
– Pooled funds	5	5	5	5	4
– Separate accounts	16	17	18	17	17

Ownership

	Jan 2024	Jan 2023	Jan 2022
Michael Lindsell and spouse	9,578	9,650	9,650
Nick Train and spouse	9,578	9,650	9,650
The Lindsell Train Investment Trust plc	6,378	6,450	6,450
Other Directors/employees	1,126	893	778
	26,660	26,643	26,528
Treasury Shares	0	17	132
	26,660	26,660	26,660

Board of Directors

Rory Landman Independent Non-Executive

Julian Bartlett Independent Non-Executive

James Bullock* Director

Jessica Cameron** Director

Michael Lim Director, IT & Company Secretarial

Michael Lindsell Chief Executive Officer & Portfolio Manager

Jane Orr Non-Executive

Joss Saunders Chief Operating Officer

Nick Train Chairman and Portfolio Manager

* Appointed as a Director on 29 May 2024

** Appointed as a Director on 27 May 2024

Employees

	Jan 2024	Jan 2023
Investment Team (including three Portfolio Managers)	6	7
Client Servicing and Marketing	7	9
Operations and Administration	10	11
Fixed Term Contractors	2	1
Total Employees	25	28
Non-Executive directors	3	2
Total Headcount	28	30

LTIT Directors’ valuation of LTL

	31 Mar 2024	31 Mar 2023
Notional annualised net profits (A)* (£’000)	29,240	35,554
Funds under Management less LTIT holdings (B) (£’000)	15,180,432	18,530,045
Normalised notional net profits as % of FUM A/B = (C)	0.193%	0.192%
% of FUM (D) (see table below to view % corresponding to C)	1.90%	1.90%
Valuation (E) i.e. B x D (£’000)	288,428	352,071
Number of shares (F)^	26,660	26,647
Valuation per share in LTL i.e. E / F	10,818.76	13,212.40

* Notional annualised net profits are made up of:

– annualised fee revenue, based on 6-mth average fee rate applied to most recent month-end unaudited AUM

– annualised fee revenue excludes performance fees

– annualised interest income, based on 3-mth average

– notional staff costs of 45% of annualised fee revenue

– annualised operating costs (excluding staff costs), based on 3-mth normalised average

^ The increase in share in issue is due to the sale of shares from LTL's Treasury to LTL's employees; these Treasury shares had been purchased in prior years from other LTL employees.

Notional annualised net profits*/FUM (%)	Valuation of LTL - Percentage of FUM
0.15 to 0.16	1.70%
0.16 to 0.17	1.75%
0.17 to 0.18	1.80%
0.18 to 0.19	1.85%
0.19 to 0.20	1.90%
0.20 to 0.21	1.95%
0.21 to 0.22	2.00%
0.22 to 0.23	2.05%
0.23 to 0.24	2.10%

LTL’s Salary and Bonus Cap

LTL’s salary and bonus expenses are capped at 25% of fees (other than those earned from LTIT as governed by LTL’s Shareholders’ Agreement. Employer national insurance costs are excluded from the restriction. This cap has been in place since the inception of both LTL and LTIT which, alongside LTL’s intent to distribute to shareholders dividends equivalent to 80% of its retained profits in respect of each accounting year (subject to retaining sufficient working and fixed and regulatory capital to enable LTL to continue its business in a prudent manner) ensures LTL shareholders earn a tangible reward from their investment in LTL.

The Board has long recognised that it is important that LTL has the ability to sufficiently reward potential successors, or, if it became necessary to replace the founders, to recruit suitable outside talent. As a consequence, since 2007 the Board has judged it necessary to apply a higher notional salary cost of 45% of revenues in calculating LTL’s net profits when determining the valuation of LTL.

To put this in context, LTL’s total salary and bonus expenses (including employer national insurance payments) have averaged 36% of revenues since 2001. Currently a peer group of quoted fund managers exhibits an average remuneration costs to revenue of 42%, with the salary to revenue of peers with FUM equivalent to LTL is slightly higher at 44%. The Board therefore believes that a notional salary to revenue ratio of 45% makes sufficient allowance for the eventualities described above.

Whilst the 25% salary and bonus cap remain in place for now, both the LTL and LTIT Boards recognise that it may be necessary to review this limit in the future.

Appendix 2

Share Capital

At 31 March 2024 and 31 March 2023, and up to the date of this report, the Company had an authorised and issued share capital comprising 200,000 Ordinary Shares of 75p nominal value each. At 31 March 2024 the Ordinary Share price was £801.00 (31 March 2023: £1,052.50).

Income entitlement

The Company’s revenue earnings are distributed to holders of Ordinary Shares by way of such dividends (if any) as may from time to time be declared by the Directors and approved by the shareholders.

Capital entitlement

On a winding up of the Company, after settling all liabilities of the Company, holders of Ordinary Shares are entitled to a distribution of any surplus assets in proportion to the respective amounts paid up or credited as paid up on their shares.

Voting entitlement

Subject to any rights or restrictions attached to any shares, on a show of hands, every member who is present in person has one vote and every proxy present who has been duly appointed has one vote. However, if the proxy has been duly appointed by more than one member entitled to vote on the resolution, and is instructed by one or more of those members to vote for the resolution and by one or more others to vote against it, or is instructed by one or more of those members to vote in one way and is given discretion as to how to vote by one or more others (and wishes to use that discretion to vote in the other way) he or she has one vote for and one vote against the resolution. Every corporate representative present who has been duly authorised by a corporation has the same voting rights as the corporation. On a poll, every member present in person or by duly appointed proxy or corporate representative has one vote for every share of which they are the holder or in respect of which their appointment as proxy or corporate representative has been made.

A member, proxy or corporate representative entitled to more than one vote need not, if they vote, use all their votes or cast all the votes they use the same way. In the case of joint holders, the vote of the senior who tenders a vote shall be accepted to the exclusion of the votes of the other joint holders, and seniority shall be determined by the order in which the names of the holders stand in the register of members. A member is entitled to appoint another person as his proxy to exercise all or any of their rights to attend and to speak and vote at a meeting of the Company.

The appointment of a proxy shall be deemed also to confer authority to demand or join in demanding a poll. Delivery of an appointment of proxy shall not preclude a member from attending and voting at the meeting or at any adjournment of it. A proxy need not be a member. A member may appoint more than one proxy in relation to a meeting, provided that each proxy is appointed to exercise the rights attached to a different share or shares held by them.

Transfers

There are no restrictions on transfers of Ordinary Shares except: a) dealings by Directors, Persons Discharging Managerial Responsibilities and their connected persons which may constitute insider dealing or are otherwise prohibited by the rules of the FCA; b) transfers to more than four joint holders; c) transfers to US persons other than as specifically permitted by the Directors; d) if, in the Directors’ opinion, the assets of the Company might become “plan assets” for the purposes of US ERISA 1974; and e) transfers which in the opinion of the Directors would cause material legal, regulatory, financial or tax disadvantage to the Company.

Appendix 3

Agreements with Service Providers

Investment Management Agreement

In accordance with an Investment Management Agreement ('IMA') originally dated 21 December 2000 (last revised in June 2024) between the Company and LTL, LTL has been providing investment management services to the Company.

Fees

The Investment Management Fee is payable at the annual rate of 0.60 per cent. of the lower of (a) the Market Capitalisation of the Company and (b) the Net Asset Value of the Company, calculated daily.

The Performance Fee is calculated as 10% of the value of any positive relative performance versus the benchmark in a financial year. Relative performance is measured by taking the lower of the NAV or Average Market Price (defined as the average price over the last month of the performance period), taking into account dividends, at the end of each financial year and comparing the percentage annual change with the total return of the benchmark. A performance fee will only be paid out if the annual change is both above the benchmark and is a positive figure. Relative performance will be carried forward in years where the Manager is not eligible for a performance fee based on these two criteria.

During the year the Directors reviewed the performance of the Manager and consider that the continued engagement of LTL under the existing terms is in the best interests of the Company and shareholders. Michael Lindsell did not participate in the review as he is an employee and shareholder of the Manager.

In addition to the day to day management of investments, the Manager advises the Board on liquidity and borrowings and liaises with major shareholders. The Manager has a stated policy on stewardship and engagement with investee companies, which the Board has reviewed and endorses, and provides verbal reports to the Board where any concerns or issues have been raised.

Administration, Company Secretarial and Management Services Agreement

Accounting, company secretarial and administrative services are provided by Frostrow Capital LLP (“Frostrow”) pursuant to an agreement dated 30 October 2020. With effect from 1 November 2020, Frostrow is entitled to receive from the Company an annual fee of 0.11 per cent. of the Company’s Net Asset Value up to £150 million plus 0.05 per cent. of that part of the Company’s Net Asset Value in excess of £150 million. The agreement is terminable by either party on not less than six months’ notice.

Details of the fees paid to Frostrow are given in note 4 to the Financial Statements. The services provided by Frostrow since their appointment were also reviewed during the year and the Board considered it to be in the best interests of the Company to continue Frostrow’s appointment under the existing terms.

Other third-party service providers

In addition to the Manager and Administrator, the Company has engaged Link Group to maintain the share register of the Company, and The Northern Trust Company, London Office as the Company’s custodian. The agreements for these services were entered into after careful consideration of their terms and their cost-effectiveness for the Company.

Additional Shareholder Information (unaudited)

Glossary of Terms and Alternative Performance Measures (“APM”) (unaudited)

AIC

Association of Investment Companies.

Alternative Investment Fund Managers Directive (“AIFMD”)

The Alternative Investment Fund Managers Directive (the “Directive”) is a European Union Directive that entered into force on 22 July 2013. The Directive regulates EU fund managers that manage alternative investment funds (this includes investment trusts).

Alternative Performance Measure (“APM”)

An alternative performance measure is a financial measure of historical or future financial performance, financial position or cash flow that is not prescribed by the relevant accounting standards. The Company’s APMs are the discount and premium, dividend yield, share price and NAV total return and ongoing charges as defined within this Glossary. The Directors believe that these measures enhance the comparability of information between reporting periods and aid investors in understanding the Company’s performance. The measures used for the year under review have remained consistent with the prior year.

Benchmark

With effect from 1 April 2021 the Company’s comparator benchmark is the MSCI World Index total return in Sterling.

Prior to 1 April 2021 the benchmark was the annual average redemption yield on the longest- dated UK government fixed rate (1.625% 2071) calculated using weekly data, plus a premium of 0.5%, subject to a minimum yield of 4.0%.

Discount and premium (APM)

If the share price of an investment trust is higher than the Net Asset Value (NAV) per share, the shares are trading at a premium to NAV. In this circumstance the price that an investor pays or receives for a share would be more than the value attributable to it by reference to the underlying assets. The premium is the difference between the share price (based on share prices) and the NAV, expressed as a percentage of the NAV.

A discount occurs when the share price is below the NAV. Investors would therefore be paying less than the value attributable to the shares by reference to the underlying assets.

A premium or discount is generally the consequence of supply and demand for the shares on the stock market.

The discount or premium is calculated by dividing the difference between the share price and the NAV by the NAV.

	As at	As at
	31 March	31 March
	2024	2023
	£	£
Share Price	801.00	1,052.50
Net Asset Value per Share	1,026.43	1,056.95
Discount to Net Asset Value per Share	22.0%	0.4%

Dividend yield (APM)

A financial ratio that indicates how much a company pays out in dividends each year relative to its share price. Dividend yield is represented as a percentage and can be calculated by dividing the value of dividends paid in a given year per share held by the share price.

The figures disclosed on pages 5, 14 and 15 of the Annual Report have been calculated as shown below:

	2024	2023
Total Dividends declared per Ordinary Share (a)	£51.50	£51.50
Closing price per Ordinary Share on 31 March (b)	£801.00	£1,052.50
Dividend Yield (a) ÷ (b)	6.4%	4.9%

ESG

Environmental, social and governance.

Leverage

The AIFMD leverage definition is slightly different from the Association of Investment Companies’ method of calculating gearing and is defined as follows: any method by which the AIFM increases the exposure of an AIF it manages whether through borrowing of cash or securities, or leverage embedded in derivative positions.

For the purposes of the AIFMD, leverage is any method which increases the Company’s exposure, including the borrowing of cash and the use of derivatives. It is expressed as a ratio between the Company’s exposure and its net asset value.

The MSCI requires the Company to include the following statement in the Annual Report.

MSCI World Index total return in Sterling (the Company's comparator Benchmark)

The MSCI information (relating to the Benchmark) may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation lost profits) or any other damages. (www.msci.com).

Net Asset Value (“NAV”) per Ordinary Share

The NAV per Ordinary Share is Shareholders’ funds expressed as an amount per individual share. Equity Shareholders’ funds are the total value of all the Company’s assets, at current market value, having deducted all current and long-term liabilities and any provision for liabilities and charges.

The NAV per Ordinary Share of the Company is announced to the market weekly.

The figures disclosed on pages 5, 14 and 15 of the Annual Report have been calculated as shown below:

		2024	2023
		‘000	‘000
Net Asset Value (a)		£205,285	£211,390
Ordinary Shares in issue (b)		200	200
Net Asset Value per Ordinary Share (a) ÷ (b)		£1,206.43	£1,056.95

Ongoing charges (APM)

Ongoing charges are expenses of a type that are likely to recur in the foreseeable future, whether charged to capital or revenue, and which relate to the operation of the Company as an investment trust, excluding the costs of acquisition or disposal of investments, financing costs and gains or losses arising on investments. Ongoing charges are based on costs incurred in the year as being the best estimate of future costs and include the annual management charge but not the performance fee. The calculation methodology is set out by the Association of Investment Companies.

The figures disclosed on pages 5 and 15 of the Annual Report have been calculated as shown below:

	2024	2023
	£'000	£'000
Total operating expenses (a)	1,692	1,829
Average Net Asset Value (b)	203,091	211,310
Ongoing Charges excluding synthetic costs (a) ÷ (b)	0.8%	0.9%
Ongoing Charges including the charges of the underlying funds (Ws Lindsell Train North American Fund) synthetic costs	0.9%	0.9%

Revenue return per Share

The revenue return per share is the revenue return profit for the year divided by the weighted average number of ordinary shares in issue during the year.

SASB

The Sustainability Accounting Standards Board.

SASB Materiality Map©

The Materiality Map was developed by the SASB. It ranks issues by industry based on two types of evidence: evidence that investors in the industry are interested in the issue, and evidence that the issue has the ability to impact companies within the industry.

Share price and NAV total return (APM)

These are the returns on the share price and NAV respectively taking into account both the rise and fall of share prices and valuations and the dividends paid to Shareholders.

Any dividends received by a Shareholder are assumed to have been reinvested in either additional shares (for share price total return) or the Company’s assets (for NAV total return).

The share price and NAV total return are calculated as the returns to Shareholders after reinvesting the net dividend in additional shares on the date that the share price goes ex-dividend.

The figures disclosed on pages 5, 14 and 15 of the Annual Report have been calculated at shown below:

		Year Ended 31 March 2024
		LTIT NAV	LTIT Share Price
NAV/Share Price at 31 March 2024	a	£1,206.43	£801.00
Dividend Adjustment Factor*	b	1.02	0.80
Adjusted closing NAV/Share Price	c = a x b	1,231.77	642.40
NAV/Share Price at 31 March 2023	d	£1,056.95	£1,052.50
Total return	((c/d)-1)) x100	+2.1%	-19.8%

* The dividend adjustment factor is calculated on the assumption that the dividends of £51.50 paid by the Company during the year were reinvested into shares or assets of the Company at the cum income NAV per share/share price, as appropriate, at the ex-dividend date.

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 of the Annual Report has been calculated as shown below:

		LTL valuation
Valuation at 31 March 2023	a	£13,212
Valuation at 31 March 2024	b	£10,819
Dividends paid during the year	c	£1,462
Total return	{((b-a)+c)/a}x100	-7.0%

TCFD

Task Force on Climate-Related Financial Disclosures.

Treasury Shares

Shares previously issued by a company that have been bought back from Shareholders to be held by the company for potential sale or cancellation at a later date. Such shares are not capable of being voted and carry no rights to dividends.

2024 Accounts

The figures and financial information for 2024 are extracted from the Annual Report and financial statements for the year ended 31 March 2024 and do not constitute the statutory accounts for the year.  The Annual Report and financial statements include the Report of the Independent Auditor which is unqualified and does not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.  The Annual Report and financial statements have not yet been delivered to the Registrar of Companies.

2023 Accounts

The figures and financial information for 2023 are extracted from the published Annual Report and financial statements for the period ended 31 March 2023 and do not constitute the statutory accounts for that year.  The Annual Report and financial statements have been delivered to the Registrar of Companies and included the Report of the Independent Auditor which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

Annual report and financial statements 

Copies of the Annual Report and financial statements will be posted to shareholders in mid June 2024 and will be available on the Company’s website shortly and in hard copy format from the Company Secretary. 

The Company's Annual Report for the period ended 31 March 2024 has been submitted to the Financial Conduct Authority and will shortly be available for inspection on the National Storage Mechanism (NSM) via https://data.fca.org.uk/#/nsm/nationalstoragemechanism. 

The Annual General Meeting will be held on Wednesday, 4 September 2024.

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

-          END -

For further information please contact

Victoria Hale

Company Secretary

For and on behalf of Frostrow Capital LLP

020 3170 8732

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