Annual Report 2024
Lowland Investment Company plc – Annual Report 2024 JHI9222/2024
Lowland
Investment
Company plc
Lowland Investment Company plc
Registered as an investment company in England and Wales with registration number 670489
Registered office: 201 Bishopsgate, London EC2M 3AE
SEDOL/ISIN number: BNXGHS2/GB00BNXGHS27
London Stock Exchange (TDIM) Code: LWI
Global Intermediary Identification Number (GIIN): 2KBHLK.99999.SL826
Legal Entity Identifier (LEI): 2138008RHG5363FEHV19
Telephone: +44 (0) 20 7818 1818
Email: ITSecretariat@janushenderson.com
www.lowlandinvestment.com
Designed and typeset by 2112 Communications, London. Printed by Pureprint, Sussex. JHI9222/2024
This report is printed on Revive 100 Silk manufactured from FSC
®
Recycled certified fibre
derived from 100% pre and post-consumer waste at a mill certified with ISO 14001
environmental management standard.
The pulp used in this product is bleached using an Elemental Chlorine Free process.
This product is made of material from well-managed FSC
®
– certified forests, recycled
materials, and other controlled sources.
Shareholder
Communication
Awards
2024
Strategic Report
Key Data 2
Historical Performance 3
Chairman’s Statement 5-6
Fund Managers’ Report 8-11
Portfolio Analysis 12-13
Twenty Largest Holdings 14-17
Investment Portfolio 18-20
Environmental, Social
andGovernance Matters 21-23
Business Model 24-27
Biographies 28-29
Corporate Information 30-34
Corporate Report
Report of the Directors 36-37
Statement of Directors’
Responsibilities 38
Directors’ Remuneration
Report 39-41
Corporate Governance
Statement 42-48
Report of the Audit Committee 49-51
Independent Auditor’s Report 52-57
Financial Statements
Income Statement 59
Statement of Changes in Equity 60
Statement of Financial Position 61
Statement of Cash Flows 62
Notes to the Financial
Statements 63-76
Securities Financing
Transactions 77-78
General Shareholder
Information 79-80
Glossary 81
Alternative Performance
Measures 82-83
Notice of Annual General
Meeting (‘AGM’)
Notice of AGM 85-86
Explanation of AGM
resolutions 87-88
Notes explaining AGM
processes 88-90
Please use the camera on your mobile
phone or other device to scan this QR code
to sign up to the latest news from Lowland
to your inbox
Final dividend (2024 financial year) 31 January 2025
First interim dividend 30 April 2025
Second interim dividend 31 July 2025
Third interim dividend 31 October 2025
Final dividend (2025 financial year) 30 January 2026
Half year results Published June
Full year results Published December
Annual General Meeting January
Lowland key dates
Investment Objective
The Company aims to give shareholders ahigher than average
return with growth of both capital and income over the medium
to long-term by investing in a broad spread of predominantly
UKcompanies. The Company measures its performance against
the FTSE All-Share Index Total Return.
Investment Policy
Asset Allocation
The Company invests in a combination of large, medium and
smaller companies listed in the UK. We are not constrained by
the weightings of any index; we limit risk by running a diversified
portfolio, which is constructed on a bottom-up, stock-picking
basis. In normal circumstances up to half the portfolio is invested
in FTSE 100 companies; the remainder is divided between small
and medium-sized companies. The Manager may also invest a
maximum of 15%inother listed trusts.
Dividend
The Company aims to pay a progressive dividend, with each
quarterly dividend equal to or greater than its previous equivalent.
Gearing
The Board believes that debt in a closed-end fund is a valuable
source of long-term outperformance, and therefore the Company
will usually be geared. At the point of drawing down debt, gearing
will not exceed 20% of the portfolio valuation. Borrowing will be
a mixture of short and long-dated debt, depending on relative
attractiveness ofrates.
1
Strategic Report: Key Data
Net Asset Value Total Return
1,8
2024
16.3%
2023
17.2%
Growth in Dividend
2024
2.8%
2023
2.5%
Benchmark Total Return
2
2024
13.4%
2023
13.8%
Dividend for the Year
3
2024
6.425p
2023
6.25p
Year ended
30September
2024
Year ended
30September
2023
NAV per share at year end (debt at par)
4
144.2p 129.3p
NAV per share at year end (debt at fair value)
4,8
146.1p 131.7p
Share price at year end
5
127.0p 113.0p
Market Capitalisation £343m £305m
Dividend per share 6.425p 6.25p
Ongoing Charge
8
0.66% 0.64%
Dividend Yield
6,8
5.1% 5.5%
Gearing at year end
8
11.0% 12.3%
Discount at year end
7,8
13.1% 14.2%
AIC UK Equity Income Sector – Average Discount 5.0% 5.5%
1. Net asset value per share total return (including dividends reinvested) with debt at fair value
2. FTSE All-Share Index (including dividends reinvested)
3. Includes the final dividend of 1.625p per ordinary share for the year ended 30 September 2024 that will be put to shareholders for approval at the Annual General
Meeting on Tuesday 28 January 2025
4. NAV per share for both figures is before deduction of the third interim dividend paid in October of each year
5. Mid-market closing price
6. Based on dividends paid and payable in respect of the financial year and the share price at year end
7. Calculated using year end fair value NAVs including current year revenue
8. Alternative Performance Measures (‘APM’)
Sources: Morningstar Direct, Janus Henderson, Factset
A glossary of terms including Alternative Performance Measures is included on pages 81 to 83
Lowland Investment Company plc Annual Report 2024
2
1. Comparative numbers for 2014 to 2021 have been restated to reflect the ten for one share split which took place on 7 February 2022
2. Includes the final dividend of 1.625p per ordinary share for the year ended 30 September 2024 that will be put to shareholders for approval at the Annual General
Meeting on Tuesday 28 January 2025
3. Alternative Performance Measures. Further details can be found on pages 82 to 83
Strategic Report: Historical Performance
1
Performance
1 year
%
3 years
%
5 years
%
10 years
%
25 years
%
Net asset value
3
16.3 16.1 31.7 62.4 636.7
Share price
3
18.3 12.7 30.3 46.1 696.6
FTSE All-Share 13.4 23.9 32.2 83.6 275.5
Source: Morningstar Direct, all performance on a total return basis
Lowland’s Dividend Growth over the past 25 years as compared to the Retail Price Index
Lowland Dividend (CAGR 6.6%) Retail Price Index (CAGR 3.5%)
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
2020
2019
2021
2024
2023
2022
400
200
100
Total Return basis and shown on a logarithmic scale (30 September 1999 = 100)
Source: Janus Henderson
Historical Performance
Year ended
30September
Dividend per
ordinary share in
pence
1
Total return/(loss)
per ordinary share
in pence
1
Net revenue return
per ordinary share
in pence
1
Total net assets in
£’000
Net asset value per
ordinary share in
pence
1
Share price
per ordinary share
in pence
1
2014 3.700 7.33 3.94 361,856 134.6 135.5
2015 4.100 1.18 4.64 354,563 131.8 128.7
2016 4.500 15.64 4.77 386,910 143.2 133.7
2017 4.900 24.32 4.91 439,896 162.8 150.4
2018 5.400 4.74 5.86 438,934 162.5 151.5
2019 5.950 (13.87) 6.80 385,904 142.8 128.0
2020 6.000 (33.69) 3.38 278,653 103.1 91.4
2021 6.025 48.79 4.27 394,285 145.9 131.5
2022 6.100 (24.00) 6.10 313,036 115.9 104.5
2023 6.250 19.54 6.71 349,345 129.3 113.0
2024 6.425
2
21.30 6.29 389,633 144.2 127.0
3
Lowland Investment Company plc Annual Report 2024
Robert Robertson
Chairman
Chairman’s
Statement
4
Performance
I am pleased to report that, for the second successive year,
Lowland achieved a strong return, both in absolute terms and
compared with its benchmark. Net Asset Value per share
(‘NAV’) rose 16.3% compared with a 13.4% increase in the
FTSE All-Share index, very much in line with the numbers
achieved in 2023. The share price increased by 18.3%.
(Allfigures on a total return basis).
Last year I commented on the fact that the UK market was
undervalued, most especially the mid/small cap space where
Lowland is more invested than its benchmark. While there has
been some improvement in UK valuations, this has not really
affected the smaller sector or, to a major extent, those with
aparticular UK focus. The market continues to bear a
substantial discount to international peers. The outperformance
during the year is predominantly attributable to stock picking.
Take-over activity was helpful, in itself emphasising the
humble valuations prevailing in UK markets, and the Company
also benefitted from gearing, one of the opportunities open to
investment trusts. The Fund Managers explain the attribution
of performance in more detail in their report.
The performance of the revenue account, which reflects
thedividend income, was more muted. Earnings per share
declined 6.3% to 6.29p, reflecting a number of factors.
Lowland has chosen to prioritise longer term gains in growing
capital, which will facilitate income growth in due course, and
steadfastly declined to chase earnings. During this year a
number of highly rewarding investments, such as Marks and
Spencer and Rolls-Royce, had zero or lower dividend yields
but were in this category. Timing was an issue with some
major dividends being paid just after the year-end, and foreign
exchange, interest rates and a trend to replace special
dividends by share buy-backs were also factors.
Dividends
The Company is proposing a final dividend of 1.625p per share.
If approved at the AGM, this will result in total dividends for the
year of 6.425p, a 2.8% increase year-on-year. This dividend is
not quite fully covered, but your Board has confidence that
earnings will resume their upward trajectory, and is committed
to maintaining its quarterly progressive dividend.
Gearing
Lowland has £30m of long-term debt notes, at a fixed 3.15%
rate, due in 2037, as well as a £40m variable rate revolving
credit facility. The benefit of having an element of fixed
long-term debt has been evident during the year, as has been
the overall gearing employed. Lowland does not tend to vary
levels of gearing dramatically; it was little changed during the
year, ending at 11.0% compared to 12.3% a year earlier.
Ongoing Charges
Ongoing Charges are in line with the prior year at 0.66%.
After the year end, the government and the FCA announced
that the cost disclosures for the Key Information Document
(‘KID’) would be changed and will now reflect Ongoing
Charges, calculated in line with AIC methodology, rather than
the potentially misleading disclosures which previously applied.
This is an important win for common sense. Investment Trusts
were at a significant disadvantage compared to open-ended
funds in this regard. The management charge for Investment
Trusts are generally lower than for their counterpart products
inthe open-ended space. It will be helpful if this is clearly
shown when like-for-like comparisons are made.
Discount
During the year the discount varied between 8% and 15%,
with an average of 12%. The Board believes that a discount
control mechanism would not be in shareholders’ interests,
for the reasons set out on page 33.
Investment Trust discounts were volatile over the year, in
response to which a number of trusts undertook programmes
to buy-back their own shares. Nothing we have seen has
encouraged us to change our view.
The Board
We welcomed Mark Lam to the Board during the year.
Originally from Singapore, Mark brings a welcome diversity
ofexperience from his career in technology and
telecommunications.
Mark stands for election at the January AGM for the first time,
and the Board will revert to its normal complement of five,
with my retirement.
Helena Vinnicombe stands for election as Chair at the AGM.
Iam delighted to have such a talented successor.
I will have served as Chair for eight years when I retire. This
has been a privilege. My chairmanship has coincided with
events, not least Brexit, Covid and chaotic British politics,
which have not been helpful to the performance of a company
with our investment policy, I am confident that sticking to our
investment policy has been the right thing to do, and will
reward shareholders in the long term. I am grateful to a
capable Board in helping steer this course, while providing
robust challenge to the Fund Managers, who have embraced
the opportunity for debate and consistently and diligently
pursued shareholder interests. Finally, I am grateful to
shareholders for their support and loyalty.
Strategic Report: Chairman’s Statement
Lowland Investment Company plc Annual Report 2024
5
Strategic Report: Chairman’s Statement (continued)
Contact with Shareholders
I and the Board are always pleased to hear from shareholders.
Please contact me or my successor with comments or
questions via ITSecretariat@janushenderson.com or sign
up for updates on Lowland by using the QR code on the
inside front cover of this report.
AGM
The AGM will be held at the Janus Henderson office on
28January 2025. Full details of the business to be conducted
at the meeting are set out in the Notice which this year is
included at the end of this report. Our Fund Managers,
JamesHenderson and Laura Foll, will be making a
presentation to shareholders. The Board and Fund Managers
always welcome the opportunity to hear from shareholders,
and we encourage as many as possible to attend.
Outlook
A meaningful re-rating of the UK market, and smaller
companies in particular, has not really happened. Lowland’s
portfolio is on a Price Earnings ratio of 10.2 times, or 8.9 on
a‘look-though’ basis, taking our discount into account.
Reflecting the UK focus of our investee companies this is
substantially below the UK market as a whole, and even more
so, international markets. Thankfully, our shareholder’s
patience has been rewarded this year with an attractive
growth in capital and a dividend yield of around 5%.
We had hoped that a decisive UK election result would remove
the uncertainty inherent in a Conservative Government with a
propensity to self-destruct, but the new Labour Government
seems pre-occupied with painting an Armageddon-like
picture of the economy it inherited. Ours is abottom-up
approach to investing, but the economic landscape in which
our companies are operating is disappointing given initial
optimism after the UK election. Thelong build-up to the
budget, and its eventual content, werenot helpful, with
manyfacing substantial cost increases as a result of the
increase in the minimum wage and National Insurance costs.
The prospects for inflation and interest rates are less benign
than they had appeared. Confidence, optimism and economic
growth have suffered, and the uncertainties implicit in the
result of the US election have not helped.
Despite this backdrop, we believe good, well managed UK
companies will continue to prosper. A revaluation of the UK
market, and particularly a portfolio such as ours, may be
further deferred, but should come in time with a material
capital uplift when the fundamentals of UK equities are more
widely appreciated.
Robert Robertson
Chairman
4 December 2024
Lowland Investment Company plc Annual Report 2024
6
James Henderson
Fund Manager
Laura Foll
Fund Manager
Fund
Managers’
Report
7
Strategic Report: Fund Managers’ Report
1 year
%
3 years
%
5 years
%
10 years
%
25 years
%
Lowland
NAV
16.3 16.1 31.7 62.4 636.7
Lowland
Share Price
18.3 12.7 30.3 46.1 696.6
FTSE
All-Share
13.4 23.9 32.2 83.6 275.5
Source: Morningstar Direct, Janus Henderson Investors. All figures shown on a
total return basis
Overview
We are pleased to report on a second successive year of
outperformance relative to the Company’s FTSE All-Share
benchmark, as well as a good absolute return. The UK
economy returned to growth in the second quarter of the
financial year, inflation fell, interest rates started to come down
and company directors began to feel more confident as
shown by the high level of corporate takeover activity.
Thebackground was therefore helpful for Lowland’s portfolio
which has more of the earnings from the underlying
companies coming from the UK economy than is the case
with the benchmark index.
A new government with a large majority was elected during
the summer and this has led to the hope that, after several
years of policy turmoil, economic policy might be more stable.
This is, as yet, unproven. A missing factor in the improving
scenario has been that there has been little pick-up in investor
confidence. The Investment Trust sector has seen substantial
levels of disinvestment. There is a general pessimism about
the UK economy which has resulted in money flowing into
overseas markets and left UK stocks generally at a significant
valuation discount to overseas ones:
UK equity valuations relative to Rest of World (Ratio)
2019201520112007200319991995 2023
MSCI UK 12m Fwd P/E relative to MSCI World Median
+2 Stdev -2 Stdev
0.55
0.60
0.65
0.70
0.75
0.80
0.85
0.90
0.95
1.00
1.05
Source: JP Morgan as at 31 July 2024
The companies in the Lowland portfolio are not a proxy for
theUK economy but they are a collection of well managed
businesses that we believe provide excellent products and
services. The results they have generally reported this year
are evidence of their strength.
Performance Attribution
The Company’s return during the financial year was driven
predominantly by its FTSE 100 and FTSE 250 holdings, with
positive stock selection in both indices (comparing the third
and fifth columns in the table below). There was also positive
stock selection within AIM portfolio holdings, although the
underperformance of AIM more broadly compared to the
main market meant that despite positive stock selection,
ourholdings in this area remained an overall detractor from
relative returns. Within the FTSE SmallCap Index (which is
now a relatively small index, outside of investment companies)
stock selection was negative, driven by the holdings in
Vanquis Banking Group and TT Electronics, on which we
gointo more detail later in this report.
Lowland
weighting
(%)
Lowland
total
return
(%)
FTSE
All-Share
weighting
(%)
Index
total
return
(%)
FTSE 100 44.9 21.6 84.5 12.4
FTSE 250 21.2 22.3 13.5 19.1
FTSE
SmallCap
13.4 1.4 2.0 18.2
FTSE AIM
All-Share
13.4 7.9 – 3.9
Weights for Lowland and the FTSE All-Share are shown as at financial year end.
Note the weights for Lowland do not add up to 100, as there is a small % of the
portfolio held overseas and held in the FTSE Fledgling Index. Lowland portfolio
returns are calculated excluding cash
When viewed through a different lens, what can be seen is that
size allocation of the portfolio (in other words the Company
holding more than its benchmark in small and medium sized
companies) was not a big driver of relative performance this
year, and instead it was stock selection and to a lesser extent
the use of gearing that drove the relative return. Note that in
the below chart, the Company returns are shown with debt at
par, and gross of management fees (this is why the return
differs from the 16.3% NAV total return reported).
Attribution Returns (%)
0
2
4
6
8
10
12
14
16
18
20
CompanyGearingStock
Selection
Size
Allocation
Benchmark
13.4
-0.6
3.6
1.2
17.6
Source: Janus Henderson Investors, Factset
Lowland Investment Company plc Annual Report 2024
8
Strategic Report: Fund Managers’ Report (continued)
Within the FTSE 100, the good performance was driven
predominantly by the holdings in Rolls-Royce and Marks &
Spencer, as well as banks NatWest and Barclays. Rolls-
Royce benefitted from a combination of favourable end
markets and ongoing ‘self-help’ (such as cost cutting and
amore commercial focus on pricing). The position was sold
during the financial year as the valuation had recovered a long
way at the same time as market expectations had become
more realistic. The holding was a good reminder that non-
dividend payers can serve a role within an income portfolio,
as the capital growth from Rolls-Royce can now be
reinvested. M&S continued its recent outperformance as a
result of higher than forecast earnings as well as a higher
valuation, as both sides of its business (food and clothing)
performed well under the new team. We have recently
reduced the holding as its turnaround is now better
understood and reflected in valuations. The banks performed
well in an environment of more ‘normal’ interest rates, where
they can earn a healthier margin between what they charge
for lending and what they pay out for deposits.
Marks & Spencer share price (pence)
since first purchase (%)
Jun 2023Jun 2022Jun 2021Jun 2020 Jun 2024
50
100
150
200
250
300
350
400
Source: Bloomberg as at 30 September 2024
Turning to the FTSE 250, the best performers included pork
and poultry processor Cranswick, contractor Balfour Beatty,
ship broker Clarkson and building products company
Marshalls. While there would be no end market commonality
to these businesses, each would be among the market
leaders in their area with a path to further earnings growth.
For example, in the case of Cranswick, they are already the
market leader in pork and are now investing in chicken, while
in the case of Marshalls there is a need to build more housing
and with this will come greater demand for its products.
Within the FTSE SmallCap index, while there were positions
(such as free-to-air broadcaster STV) that performed well,
there were two key detractors – Vanquis Banking and TT
Electronics. In the case of Vanquis (which is predominantly
aprovider of credit cards), profitability is currently minimal as
the new management team work through a number of issues
(such as higher than expected claims costs and the need to
move prices up in some areas in order to generate a good
return). With respect to the claim costs, higher claims were
largely driven by external claims companies, and the uphold
rate of the complaints has been low, but nevertheless there
isa charge from the financial ombudsman for any complaint
(regardless of whether it is upheld). The holding has been
poor and the company has gone through several phases of
restructuring over a number of years. The valuation is currently
very low relative to the potential returns the company would
earn if the new team do succeed in turning the business
round. In the case of TT Electronics the company substantially
lowered earnings guidance as a result of challenging industrial
end markets. In the period after Covid, due to supply chain
outages there was a period where customers built up stock
levels to much higher than normal levels, in order to ensure
they wouldn’t be caught out by not having a particular
component. What followed were several years of ‘unwinding’,
as stock levels were steadily moved back to normal levels.
Atthe same time higher interest rates have been depressing
demand. For a company such as TT Electronics, if and
whendemand recovers, we would expect a substantial
earnings recovery.
The performance of the AIM index overall has been
disappointing and, as the chart below shows, it has materially
underperformed other areas of the UK market. This has likely
been due to a combination of outflows from the area, weak
sentiment towards domestic UK (to which AIM is more
exposed) and more recently tax uncertainty, both around the
future of inheritance tax relief and for specific sectors such
ascompanies operating in the North Sea. Within Lowland
specifically, Serica Energy was the largest detractor from
absolute returns over the year and this was primarily due to
anextension of the energy profits levy as well as uncertainty
surrounding the level of capital expenditure deductibility
(inother words the extent to which capital spend can be used
toreduce tax). This is not to say, however, that there have not
been successes on AIM, and a position such as Epwin
(amanufacturer of window and door frames) was among the
best performers during the year as it delivered against
conservatively managed expectations.
UK small and medium-sized companies have
underperformed in recent years
Mar
22
Sep
21
Mar
23
Sep
22
Mar
24
Sep
23
Sep
24
FTSE 100 (Top 20)
FTSE All Share
FTSE 100 (Rest)
FTSE 250
FTSE AIM
50
60
70
80
90
100
110
120
130
140
150
Source: Bloomberg as at 30 September 2024. Total return, GBP, rebased to
100 at start date
Lowland Investment Company plc Annual Report 2024
9
Strategic Report: Fund Managers’ Report (continued)
The top ten absolute contributors to performance at the stock
level were:
Company Name
Contribution
to absolute
return (%)
Share price
total return
(%)
1 Rolls-Royce +1.5 +138.7
2 Marks & Spencer +0.9 +59.1
3 NatWest +0.8 +55.7
4 Barclays +0.8 +47.7
5 Aviva +0.8 +33.2
6 DS Smith +0.7 +68.4
7 Epwin +0.7 +58.5
8 Renold +0.7 +76.3
9 Tesco +0.7 +41.3
10 Kingfisher +0.6 +51.6
The top ten absolute detractors from performance at the
stock level were:
Company Name
Contribution
to absolute
return (%)
Share price
total return
(%)
1 Serica Energy -1.0 -38.3
2 Vanquis -0.9 -52.0
3 BP -0.8 -22.4
4 TT Electronics -0.5 -41.1
5 Headlam -0.4 -36.9
6 Prudential -0.2 -20.0
7 Halfords -0.2 -20.2
8 Churchill China -0.2 -26.9
9 Vertu Motors -0.2 -16.8
10 Watkin Jones -0.2 -35.9
Portfolio Activity
While we go into more detail on individual stock purchases
and sales later in the report, at a top-down level the
purchases during the year have almost entirely fallen outside
of the FTSE ‘top 20’ (the largest 20 companies in the UK
suchas Shell and AstraZeneca). The reason we make this
distinction is, as the chart in the attribution section shows, the
FTSE top 20 has meaningfully outperformed in recent years.
This means that the portfolio is increasingly ‘underweight’ the
FTSE top 20, as the next chart shows, and we are now
modestly ‘overweight’ the remainder of the FTSE 100, driven
by purchases such as Sainsbury and Beazley. This deliberate,
but gradual, re-positioning of the portfolio away from the
largest UK companies is because, in our view, the best
valuation opportunities fall outside of that area. Smaller
businesses are, on average, more domestic andhave
therefore been more exposed to weaker sentiment towards
the UK economy as well as outflows from UK equities. Third
party equity investors are not the only buyers ofthese assets
and the companies themselves are increasingly becoming
their own ‘net buyer’ via share buybacks.
Lowland Active Weight (%) in FTSE 20 and FTSE 80
Sep 2023Sep 2022Sep 2020 Sep 2021Sep 2019 Sep 2024
-50
-40
-30
-20
-10
0
10
FTSE 100 top 20 FTSE 100 next 80
Source: Janus Henderson Investors. Active Weight is the Lowland portfolio
weight minus the FTSE All-Share benchmark weight (so a negative number
shown here for the FTSE 100 Top 20 active weight shows that Lowland holds
much less than its benchmark in the largest 20 UK stocks by market cap)
Much of the selling activity during the year was driven by
acquisitions, with seven companies (Alpha Financial Markets
Consulting, Finsbury Food, Wincanton, IDS, Hipgnosis Songs
Fund, Tyman and DS Smith) agreeing takeover offers from a
mixture of private equity or competing firms. In addition the
largest individual sale was the holding in Rolls-Royce, which
was sold on valuation grounds following good performance.
Turning to purchases, within the FTSE 100, new positions
included Beazley, Sainsbury and Smith & Nephew.
Inallcases they are among the market leaders in what they
produce, whether in global cyber security insurance in the
case of Beazley or wound care in the case of Smith &
Nephew. In each case we think there is a strength to the
business that is not currently reflected in the valuation; for
example Sainsbury is now back regaining market share
following a period of price re-setting.
Within small and medium-sized companies, new positions
purchased included property owners Shaftesbury Capital
and Workspace, as well as retailer Dunelm and corporate
restructuring firm FRP Advisory. There is no end market
commonality to these new holdings, but in all cases we can
see a long pathway of future earnings growth, whether that
isfrom rental growth in prime London property in the case
ofShaftesbury or market share growth in homewares in the
case of Dunelm.
Portfolio Valuation
While the UK equity market as a whole trades on a valuation
discount relative to overseas, there remains a subset of UK
shares that trade on a discount to the broader UK market.
Domestic earners in particular have underperformed
substantially since Brexit (although Brexit is not the only culprit
– smaller businesses have also been impacted more by,
forexample, the growing desire for liquidity among fund
managers).
Lowland Investment Company plc Annual Report 2024
10
Strategic Report: Fund Managers’ Report (continued)
As Lowland invests across the breadth of the UK market
(insmall, medium and large companies) it has comparatively
more exposure to these smaller, domestic businesses that
have seen their valuations penalised. This means that the
Lowland portfolio continues to trade at a valuation discount
tothe broad UK market:
Lowland FTSE All-Share
12 month historic P/E 10.2x 12.5x
Source: Janus Henderson Investors as at 30 September 2024
Dividends
The earnings were held back by the strength of sterling in the
second half of the financial year (as some dividends are paid
in overseas currencies such as the US Dollar), as well as the
delay of ex dividend dates to our 2024/25 financial year. It is
also notable that some of our better performing holdings
arelower yielding or are not yet back on the dividend list.
Anexample of this amongst the larger company holdings
would be Rolls-Royce and in the smaller, recovery stock,
Renold. These holdings have provided capital growth and
when that capital is recycled into dividend paying shares they
help Lowland’s income growth. It is capital growth that over
time produces sustainable income growth. There is also a
growing trend for companies to prefer share buybacks rather
than special dividends if they believe they have excess cash
and the graph below shows this increase in share buybacks
reported over the past twenty years.
Number of buybacks reported by UK companies
202320222020 20212019 2024
0
20
40
60
80
100
Source: Panmure Gordon, Janus Henderson as at 30 September 2024,
companies within the FTSE All-Share
Outlook
Satisfactory company results have been achieved over the
past year despite a UK economy that has fluctuated between
modest growth and modest recession (with a general election
and Budget uncertainty thrown in). This is because the
companies held are not a proxy for the UK economy, but
rather a diverse collection of conservatively managed, often
market leading businesses that remain on modest valuations.
As we look to an equally uncertain year ahead for the
UK(andglobal) economy, when we return to company
fundamentals, especially at current valuation levels, we cannot
help but feel optimistic.
James Henderson and Laura Foll
Fund Managers
4 December 2024
Lowland Investment Company plc Annual Report 2024
11
Strategic Report: Portfolio Analysis
Sector
United
Kingdom
%
Overseas
%
Total
30 September
2024
%
FTSE
All-Share
Index 2024
%
Total
30 September
2023
%
Basic Materials Chemicals 1.9 – 1.9 0.5 0.6
Industrial Materials – – – – –
Industrial Metals and Mining 5.0 – 5.0 6.2 4.5
Precious Metals and Mining – – - 0.3 –
6.9 – 6.9 7.0 5.1
Consumer Discretionary Automobiles and Parts 0.6 – 0.6 0.1 –
Consumer Services – – – 1.7 –
Household Goods and Home
Construction 3.0 – 3.0 1.3 2.7
Leisure Goods – – – 0.2 –
Media 2.3 – 2.3 4.1 1.6
Personal Goods – – – 0.1 –
Retailers 4.4 – 4.4 1.8 4.8
Travel and Leisure 0.1 – 0.1 2.0 0.1
10.4 – 10.4 11.3 9.2
Consumer Staples Beverages – – – 2.8 –
Food Producers 1.4 – 1.4 0.7 2.3
Personal Care, Drug and Grocery Stores 5.8 – 5.8 8.1 1.4
Tobacco – – – 3.0 –
7.2 – 7.2 14.6 3.7
Energy Alternative Energy – – – – –
Oil and Gas 5.6 – 5.6 9.3 9.3
5.6 – 5.6 9.3 9.3
Financials Banks 8.6 – 8.6 10.0 10.1
Closed End Investments 1.2 – 1.2 6.0 1.8
Equity Investment Instruments – – – – –
Finance and Credit Services 3.4 – 3.4 2.3 4.2
Investment Banking and Brokerage
Services 3.3 – 3.3 3.3 4.4
Life Insurance 6.9 – 6.9 2.1 6.8
Non-Life Insurance 4.4 1.9 6.3 0.9 6.9
27.8 1.9 29.7 24.6 34.2
Health Care Health Care Providers – – – – –
Medical Equipment and Services 0.9 – 0.9 0.6 –
Pharmaceuticals and Biotechnology 2.4 0.1 2.5 11.1 2.8
3.3 0.1 3.4 11.7 2.8
12
Lowland Investment Company plc Annual Report 2024
Strategic Report: Portfolio Analysis (continued)
Sector
United
Kingdom
%
Overseas
%
Total
30 September
2024
%
FTSE
All-Share
Index 2024
%
Total
30 September
2023
%
Industrials Aerospace and Defence 2.3 – 2.3 4.0 4.2
Construction and Materials 6.0 0.1 6.1 0.5 5.0
Electronic and Electrical Equipment 4.0 – 4.0 1.0 3.7
General Industrials 0.8 – 0.8 1.3 2.5
Industrial Engineering 1.5 0.7 2.2 0.6 2.5
Industrial Support Services 4.4 0.7 5.1 3.5 3.9
Industrial Transportation 2.4 2.0 4.4 1.3 4.9
21.4 3.5 24.9 12.2 26.7
Real Estate Real Estate Investment and Services 0.4 – 0.4 0.4 –
Real Estate Investment Trusts 4.4 – 4.4 2.4 2.9
4.8 – 4.8 2.8 2.9
Technology Software and Computer Services 0.9 – 0.9 1.3 0.7
Technology Hardware and Equipment 0.6 – 0.6 – 1.0
1.5 – 1.5 1.3 1.7
Telecommunications Telecommunications Equipment – – – – –
Telecommunications Service Providers 2.6 – 2.6 1.2 2.2
2.6 – 2.6 1.2 2.2
Utilities Electricity – – – 1.0 –
Gas, Water and Multi-utilities 3.0 – 3.0 3.0 2.2
Waste And Disposal Services – – – – –
3.0 – 3.0 4.0 2.2
Total at 30 September 2024 94.5 5.5 100.0 100.0 –
Total at 30 September 2023 94.3 5.7 – – 100.0
13
Lowland Investment Company plc Annual Report 2024
Strategic Report: Twenty Largest Holdings
Twenty Largest Holdings as at 30 September 2024
The stocks in the portfolio are a diverse mix of businesses operating in a wide range of end markets.
Rank
2024
(2023) Company
% of
portfolio
Approximate
market
capitalisation
Valuation
2023
£’000
Purchases
£’000
Sales
£’000
Appreciation/
(depreciation)
£’000
Valuation
2024
£’000
1 (3) HSBC
The global bank provides international
banking and financial services. The
diversity of the countries it operates in
as well as its exposure to faster growing
economies make it well placed.
2.6 £125.7bn 10,834 – – 408 11,242
2 (4) Standard Chartered
A global bank providing international
banking and financial services, with a
particular focus on emerging markets.
The position provides geographic
diversification for the portfolio as well as
being positively exposed to higher global
interest rates.
2.4 £21.3bn 10,072 – – 463 10,535
3 (2) BP
A vertically integrated oil and gas
business. At the current oil price it
remains highly cash generative, much of
which is being returned to shareholders
via an attractive dividend yield and
ongoing share buyback.
2.2 £64.4bn 13,019 – – (3,424) 9,595
4 (8) Aviva
The company provides a wide range of
insurance and financial services. Under
a new CEO there is heightened focus on
simplifying the business.
2.2 £12.5bn 7,679 – – 1,846 9,525
5 (1) Shell
A vertically integrated oil & gas
company. At the current oil price the
company is capable of generating
substantial amounts of free cash flow.
This cash is being allocated partly to
shareholders (via a growing dividend
and share buybacks) and partly to
investing in the necessary transition
away from fossil fuels.
2.1 £156.0bn 14,333 – (4,357) (882) 9,094
6 (13) Barclays
The company has a strong retail and
corporate lending franchise combined
with an investment bank. Higher interest
rates and improved returns in its
investment bank could allow a period of
better returns generation that in our view
is not reflected in the current valuation.
2.1 £35.1bn 6,358 – – 2,624 8,982
7 (15) Marks & Spencer
The company is a clothing and food
retailer. Under a new management team
it has refreshed its strategy, for example
resetting prices lower and closing loss
making stores. This has allowed it to
gain market share on both sides of the
business and upgrade earnings
expectations.
2.1 £7.8bn 6,270 – (748) 3,420 8,942
14
Lowland Investment Company plc Annual Report 2024
Strategic Report: Twenty Largest Holdings (continued)
Rank
2024
(2023) Company
% of
portfolio
Approximate
market
capitalisation
Valuation
2023
£’000
Purchases
£’000
Sales
£’000
Appreciation/
(depreciation)
£’000
Valuation
2024
£’000
8 (5) GSK
A global pharmaceutical company, which
is among the market leaders in areas
such as HIV and vaccines. Shares have
come under pressure in recent years due
to concerns around legal costs (now
largely resolved) as well as a lack of
significant new product sales. The
shares trade at a low valuation compared
to the broader sector and over time we
can see a route tosubstantial sales and
earnings growth.
2.0 £60.2bn 8,712 – – 144 8,856
9 (10) Irish Continental
1
The group provides passenger
transport, roll-on and roll-off freight
transport and container services
between Ireland, the United Kingdom
and Continental Europe. It is a well
managed business operating in a
duopolistic industry.
2.0 £783.4m 7,306 – – 1,316 8,622
10 (*) Tesco
The company is the largest food retailer
in the UK. By using scale to its
advantage and keeping prices
competitive for the customer, it is
successfully growing sales and earnings.
The cash generative nature of the
business allows an attractive dividend
yield for shareholders as well as a
sharebuyback.
2.0 £24.1bn 5,305 994 – 2,159 8,458
11 (6) M&G
The company is a financial services
provider that was spun out of Prudential
in 2019, providing insurance and asset
management services. The capital
generation of the group allows sizeable
returns to shareholders via dividends
and share buybacks.
1.9 £4.8bn 7,892 – – 400 8,292
12 (7) FBD¹
The company is an Irish insurer with a
focus on insurance coverage for the
agricultural sector. It is a disciplined
underwriter with a history of good
returns generation and pays an
attractive dividend yield.
1.9 £374.3m 7,882 – – 62 7,944
13 (11) International Personal Finance
The company provides consumer
lending services in countries such as
Mexico and Eastern Europe. It has
successfully grown its lending in recent
years while remaining disciplined on
credit quality.
1.8 £294.4m 6,633 – – 1,210 7,843
*Not in the top 20 largest investments last year
1. Overseas listed stock (Ireland)
15
Lowland Investment Company plc Annual Report 2024
Rank
2024
(2023) Company
% of
portfolio
Approximate
market
capitalisation
Valuation
2023
£’000
Purchases
£’000
Sales
£’000
Appreciation/
(depreciation)
£’000
Valuation
2024
£’000
14 (*) BT Group
The company is a provider of fixed and
mobile communication services. Its
ongoing roll-out of fibre to the home in
theUK should allow substantial free
cash flow growth over the long term,
which inour view is not currently
reflected in theshares.
1.6 £14.2bn 4,316 1,096 – 1,539 6,951
15 (*) National Grid
The company is a regulated utility
providing electricity and gas distribution
in the UK and US. It is investing heavily
in the UK electricity network ahead of
the energy transition, providing a route
to future earnings growth as it generates
a return on these investments. The
shares pay an attractive dividend yield.
1.6 £49.0bn 5,063 972 – 839 6,874
16 (19) Phoenix
The company operates primarily in the
UKand specialises in taking over and
managing closed life insurance and
pension funds.
1.6 £5.1bn 5,893 – – 940 6,833
17 (18) Hiscox
The company is a global insurance
provider that is growing well in markets
such as US small business insurance.
1.6 £3.8bn 5,945 – – 828 6,773
18 (12) Rio Tinto
The company is one of the world’s
largest mining businesses with a
particular focus on iron ore, aluminium
and copper. Its mines are well positioned
on the cost curve, often at the lowest
cost quartile globally, meaning that it can
continue to be highly cash generative
despite volatile commodity prices.
Thiscash generation combined with a
strong balance sheet has resulted in
anattractive dividend yield.
1.5 £63.6bn 6,467 – – 156 6,623
19 (16) Anglo American
A diversified mining company with
exposure to commodities including
copper, iron ore, diamonds and
platinum. Its mix of commodity
production means it could be well
positioned to benefit from the need to
decarbonise the global economy. For
example, it is significantly exposed to
copper where demand is likely to grow
driven by its use in electric vehicles as
well as renewable energy.
1.5 £32.9bn 6,117 – – 440 6,557
Strategic Report: Twenty Largest Holdings (continued)
*Not in the top 20 largest investments last year
16
Lowland Investment Company plc Annual Report 2024
Rank
2024
(2023) Company
% of
portfolio
Approximate
market
capitalisation
Valuation
2023
£’000
Purchases
£’000
Sales
£’000
Appreciation/
(depreciation)
£’000
Valuation
2024
£’000
20 (*) Morgan Advanced Materials
The company is a producer of specialist
materials with specific properties (such
as the ability to withstand high
temperatures or high altitude), for use
across a broad range of industries
including transportation, renewable
energy, healthcare and semiconductors.
The company has in recent years
improved its cost competitiveness,
reduced its debt and invested in
newtechnologies.
1.5 £722.0m 5,819 – – 736 6,555
151,915 3,062 (5,105) 15,224 165,096
At 30 September 2024 these investments totalled £165,096,000 or 38.2% of portfolio.
Strategic Report: Twenty Largest Holdings (continued)
*Not in the top 20 largest investments last year
17
Lowland Investment Company plc Annual Report 2024
Strategic Report: Investment Portfolio
30 September
2024
Position Investments Sector
Market value
£’000
% of
Portfolio
1 HSBC Banks 11,242 2.6
2 Standard Chartered Banks 10,535 2.4
3 BP Oil and Gas 9,595 2.2
4 Aviva Life Insurance 9,525 2.2
5 Shell Oil and Gas 9,094 2.1
6 Barclays Banks 8,982 2.1
7 Marks & Spencer Personal Care, Drug and Grocery Stores 8,942 2.1
8 GSK Pharmaceuticals and Biotechnology 8,856 2.0
9 Irish Continental Industrial Transportation (Ireland) 8,622 2.0
10 Tesco Personal Care, Drug and Grocery Stores 8,458 2.0
10 largest 93,851 21.7
11 M&G Investment Banking and Brokerage Services 8,292 1.9
12 FBD Non-Life Insurance (Ireland) 7,944 1.9
13 International Personal Finance Finance and Credit Services 7,843 1.8
14 BT Group Telecommunications Service Providers 6,951 1.6
15 National Grid Gas, Water and Multi-utilities 6,874 1.6
16 Phoenix Life Insurance 6,833 1.6
17 Hiscox Non-Life Insurance 6,773 1.6
18 Rio Tinto Industrial Metals and Mining 6,623 1.5
19 Anglo American Industrial Metals and Mining 6,557 1.5
20 Morgan Advanced Materials Electronic and Electrical Equipment 6,555 1.5
20 largest 165,096 38.2
21 NatWest Banks 6,510 1.5
22 Land Securities Real Estate Investment Trusts 6,505 1.5
23 Epwin¹ Construction and Materials 6,288 1.4
24 Conduit Non-Life Insurance 6,228 1.4
25 Balfour Beatty Construction and Materials 6,059 1.4
26 IMI Electronic and Electrical Equipment 5,950 1.4
27 Senior Aerospace and Defence 5,948 1.4
28 Clarkson Industrial Transportation 5,929 1.4
29 J Sainsbury Personal Care, Drug and Grocery Stores 5,908 1.4
30 Cranswick Food Producers 5,673 1.3
30 largest 226,094 52.3
31 Legal & General Life Insurance 5,655 1.3
32 Hill & Smith Industrial Metals and Mining 5,565 1.3
33 Kingfisher Retailers 5,390 1.2
34 Renold¹ Industrial Engineering 5,243 1.2
35 STV Media 5,096 1.2
36 Henderson Opportunities Trust
Closed End Investments– Investment Trust focusing
primarily on UK smaller companies 4,824 1.1
37 Ibstock Construction and Materials 4,743 1.1
38 Serica Energy¹ Oil and Gas 4,669 1.1
39 ZIGUP (formerly Redde Northgate) Industrial Transportation 4,418 1.0
40 Marshalls Construction and Materials 4,412 1.0
40 largest 276,109 63.8
1. AIM stocks
18
Lowland Investment Company plc Annual Report 2024
Strategic Report: Investment Portfolio (continued)
30 September
2024
Position Investments Sector
Market value
£’000
% of
Portfolio
41 Severn Trent Gas, Water and Multi-utilities 4,358 1.0
42 Johnson Service¹ Industrial Support Services 4,345 1.0
43 Elementis Chemicals 4,309 1.0
44 Vodafone Telecommunications Service Providers 4,291 1.0
45 Workspace Real Estate Investment Trusts 4,219 1.0
46 Prudential Life Insurance 4,166 1.0
47 H&T Group¹ Finance and Credit Services 4,140 1.0
48 Eleco¹ Software and Computer Services 4,131 0.9
49 Springfield Properties¹ Household Goods and Home Construction 4,028 0.9
50 Speedy Hire Industrial Support Services 3,892 0.9
50 largest 317,988 73.5
51 Smith & Nephew Medical Equipment and Services 3,762 0.9
52 FRP Advisory Group¹ Industrial Support Services 3,737 0.9
53 Babcock Aerospace and Defence 3,735 0.9
54 Johnson Matthey Chemicals 3,726 0.9
55 Reach Media 3,655 0.8
56 Chesnara Life Insurance 3,461 0.8
57 Vertu Motors¹ Retailers 3,311 0.8
58 Inchcape Retailers 3,266 0.7
59 Somero Enterprises¹ Industrial Engineering (USA) 3,226 0.7
60 Castings Industrial Metals and Mining 3,176 0.7
60 largest 353,043 81.6
61 DCC Industrial Support Services (Ireland) 3,156 0.7
62 Bellway Household Goods and Home Construction 3,112 0.7
63 Beazley Non-Life Insurance 3,044 0.7
64 Hammerson Real Estate Investment Trusts 3,020 0.7
65 Shaftesbury Capital Real Estate Investment Trusts 2,944 0.7
66 Sabre Insurance Non-Life Insurance 2,794 0.7
67 Dowlais Automobiles and Parts 2,769 0.6
68 Halfords Retailers 2,726 0.6
69 Dunelm Group Retailers 2,594 0.6
70 TT Electronics Technology Hardware and Equipment 2,474 0.6
70 largest 381,676 88.2
71 Vanquis Banking Group Finance and Credit Services 2,467 0.6
72 Midwich¹ Industrial Support Services 2,400 0.6
73 Palace Capital Real Estate Investment Trusts 2,258 0.5
74 Ricardo Construction and Materials 2,187 0.5
75 IP Group Investment Banking and Brokerage Services 2,183 0.5
76 TP ICAP Group Investment Banking and Brokerage Services 2,124 0.5
77 Macfarlane General Industrials 2,072 0.5
78 Smiths News Industrial Support Services 2,016 0.5
79 Oxford Sciences Enterprises² Pharmaceuticals and Biotechnology 1,960 0.4
80 Churchill China¹ Household Goods and Home Construction 1,956 0.4
80 largest 403,299 93.2
1. AIM stocks
2. Unlisted investments
19
Lowland Investment Company plc Annual Report 2024
Strategic Report: Investment Portfolio (continued)
30 September
2024
Position Investments Sector
Market value
£’000
% of
Portfolio
81 Helical Real Estate Investment and Services 1,908 0.4
82 Centrica Gas, Water and Multi-utilities 1,806 0.4
83 RWS Holdings¹ Industrial Support Services 1,780 0.4
84 Kier Group Construction and Materials 1,749 0.4
85 Headlam Household Goods and Home Construction 1,736 0.4
86 Strix¹ Electronic and Electrical Equipment 1,705 0.4
87 XPS Pensions Group Investment Banking and Brokerage Services 1,445 0.4
88 Next 15¹ Media 1,359 0.3
89 Videndum Industrial Engineering 1,326 0.3
90 XP Power Electronic and Electrical Equipment 1,269 0.3
90 largest 419,382 96.9
91 PZ Cussons Personal Care, Drug and Grocery Stores 1,248 0.3
92 Carclo General Industrials 1,226 0.3
93 DFS Furniture Retailers 1,150 0.3
94 Flowtech Fluidpower¹ Electronic and Electrical Equipment 1,028 0.2
95 Ilika¹ Electronic and Electrical Equipment 1,023 0.2
96 Airea¹ Household Goods and Home Construction 990 0.2
97 Card Factory Retailers 876 0.2
98 Ultimate Products Household Goods and Home Construction 846 0.2
99 Severfield Construction and Materials 748 0.2
100 Watkin Jones¹ Household Goods and Home Construction 635 0.2
100 largest 429,152 99.2
101 I3 Energy¹ Oil and Gas 548 0.1
102 Wynnstay¹ Food Producers 528 0.1
103 River & Mercantile Closed End Investments 435 0.1
104 Paypoint Industrial Support Services 392 0.1
105 Jadestone Energy¹ Oil and Gas 389 0.1
106 Quanex Building Products Construction and Materials (USA) 325 0.1
107 Faron Pharmaceuticals¹ Pharmaceuticals and Biotechnology (Finland) 224 0.1
108 Wadworth – Ordinary shares² Travel and Leisure 182 0.1
109 Harbour Energy Oil and Gas 166 –
110 Wadworth – Preference shares² Travel and Leisure 126 –
110 largest 432,467 100.0
111 SIMEC Atlantis Energy¹ Alternative Energy 101 –
112 Indus Gas¹ Oil and Gas 39 –
113 Chamberlin³ Industrial Metals and Mining 9 –
114 Mercantile Ports & Logistics¹ Industrial Transportation 1 –
115 Infrastructure India
2
Closed End Investments – –
116 ACHP³ Non-Life Insurance – –
117 Esken³ Industrial Transportation – –
118 Interserve³ Industrial Support Services – –
119 Studio Retail³ Retailers – –
Total investments 432,617 100.0
1. AIM stocks
2. Unlisted investments
3. In administration
20
Lowland Investment Company plc Annual Report 2024
Our Approach to Environmental, Social and
Governance Matters
The Board believes that integrating environmental, social and
governance (ESG) factors into the investment decision making
and ownership practices is an important element in delivering
the Company’s investment objective. ESG considerations are
a fully integrated component of the investment processes
employed by the Fund Managers and the wider investment
teams at Janus Henderson.
Defining ESG
●
Environmental factors include climate change, energy
efficiency, resource depletion and water and waste
management.
●
Social factors include employee and community relations,
diversity, quality of life, enhancements in knowledge and
advances in supportive technology.
●
Governance factors include risks such as bribery and
corruption, board diversity, executive pay, accounting
standards and shareholder rights, and corporate
behaviour.
Investment Considerations
Business longevity is at the core of the investment strategy of
the Company which includes considerations on ESG issues.
As with managing a business’s operational and financial risks,
those companies with good processes for managing ESG risk
factors outperform. While no sector is specifically excluded
from investment on ESG grounds, the Fund Managers seek to
understand how a company is managing ESG risks through
its policies and processes and where its investments are
targeted to evolve its business models to remain viable over
the longer term.
The analysis of ESG factors is integrated into the stock
selection and monitoring process. As with understanding a
company’s fundamentals and financial health, the evaluation
of ESG risks and opportunities is also integral to determine
the value of a business.
Janus Henderson seeks to understand how investee
companies are managing ESG risks, including climate
change, through their policies and processes and where their
investments are targeted to evolve their business models to
remain resilient over the long term. Janus Henderson engages
actively with companies and their management teams and
uses a variety of sources to help identify and monitor material
ESG risks, including research from their fund managers and
analysts, input from the Janus Henderson Governance and
Responsible Investment team (‘GRI team’) and third-party
data providers.
These issues are important not only as a standalone objective
in order to allocate the capital of the Company to the
companies with the most responsible practices, but are also
an integral part of the investment process.
The Fund Managers’ core principles can be broken down into
three main areas:
1. identifying investment opportunities
2. identifying material risks
3. active engagement and upholding strong governance
standards.
JHI produces product-level Task Force on Climate-Related
Financial Disclosures (‘TCFD’) reports. These reports include
an overview of the climate-related governance, strategy, risk
management, and metrics and targets of JHI and its
portfolios. Product-level metrics include absolute carbon
emissions, carbon footprint, weighted average carbon
intensity, implied temperature rise and climate scenario
analysis (Climate Value at Risk). JHI’s TCFD Report specific
tothe Company is available at www.lowlandinvestment.com,
ESGDisclosure, for further details on how these are applied.
Stewardship and Company Engagement
Stewardship is an integral and natural part of Janus Henderson’s
long-term, active approach to investment management.
Strong ownership practices, such as management
engagement and proxy voting, can help protect and enhance
long-term shareholder value. Janus Henderson entities
support a number of stewardship codes and broader
initiatives around the world including being a founder
signatory of the UN Principles for Responsible Investment.
Theintensive research of the portfolio managers and analysts
involves conducting on an annual basis thousands of
interviews with senior executives and chairmen of companies
throughout the world. These teams naturally develop long-
term relationships with the management of firms in which
theyinvest. Should concerns arise over a firm’s practices
orperformance, they seek to leverage these constructive
relationships by engaging with company management
orexpressing their views through voting on management
orshareholder proposals. Escalation ofthe engagement
activities depends upon a company’s individual circumstances.
Recent Examples of Engagement
Marks & Spencer Group
We engaged with senior management to discuss progress on
supply chain management and specifically on human rights
issues. This was a follow-up meeting to a call we had in
November 2022 to check on progress in increasing monitoring
of tier 2 suppliers. M&S provided excellent detail on progress
made and showed a strong level of pro-active monitoring of
suppliers across both clothing and food.
International Distribution Services
Following news of the takeover approach we engaged with the
Chairman several times to fully understand the implications of
the deal and any concerns among the relevant parties (for
example the views of the regulator, the government and the
trade union). We also worked with the Chair (alongside the
Environmental, Social and Governance Matters
Lowland Investment Company plc Annual Report 2024
21
CEO) to better understand what reform to the universal service
obligation could look like, which in turn helped us to better
understand what the appropriate valuation of the UK business
was within the scope of any takeover offer.
IP Group
We have met several times to discuss strategy. We encouraged
them to abandon their dividend policy and said if they really
wanted to return money to shareholders it would be better to
buy back shares instead. The reason for this is that the shares
trade on a 40% discount to NAV. This may seem strange
given Lowland offers its own shareholders a steady income,
but it is important not to be dogmatic and treat every case
individually. They are not an appropriate vehicle from which
toget regular dividends.
Voting
The Board believes that voting at general meetings is an
important aspect of corporate stewardship and a means of
signalling shareholder views on board policy, practices and
performance. The Board has chosen to delegate responsibility
to Janus Henderson for voting the rights attached to the
shares held in the Company’s equity portfolio and the
Manager actively votes at shareholder meetings and engages
with companies as part of the voting process.
Voting decisions are taken in keeping with the provisions of the
Manager’s ESG Investment Principles. These can be found on
the Manager’s website at www.janushenderson.com.
Corporate governance regimes vary significantly as a function
of factors such as the relevant legal system, extent of
shareholder rights and level of dispersed ownership.
Thevoting and engagement activities vary according to the
market and pay close attention to local market codes of
bestpractice.
However, there are certain core principles that are universal:
●
disclosure and transparency;
●
board responsibilities;
●
shareholder rights; and
●
audit and internal controls.
A key element of the Board’s approach to proxy voting is to
support these principles and to foster the long-term interests
of the Company’s shareholders.
In order to retain oversight of the process, the Board
receives an annual report on how the Manager has voted
the shares held in the Company’s equity portfolio and reviews,
at least annually, the Manager’s ESG Corporate Statement
and ESG Investment Principles.
In the period under review, investee companies held 130
general meetings. The shares held in the Company’s equity
portfolio were voted in respect of 100% of these meetings.
The level of governance in leading global companies is
generally of a high standard in terms of best practice which
has meant that support in favour of the resolutions proposed
by management was warranted. However, out of the 130
meetings held there were 14 where theManager voted
against or abstained from at least one resolution, following
discussion between the Fund Managers and the GRI Team.
Onoccasion, the Manager takes voting decisions after
consultation with the Chairman on behalf of the Board.
In terms of the resolutions not supported, these related
toexecutive remuneration policies, concerns over board
independence, the structure oftakeover or reconstruction
terms, and transparency over audit appointments.
Voting record
98.54% of all resolutions voted
in favour
1.46% of all resolutions voted
against/abstained
The Environment
As an investment company, the Company’s own direct
environmental impact is minimal. The Company 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 Report and
Directors’ Reports) Regulations 2013. For the same reasons,
the Company considers itself to be a low energy user under
the Streamlined Energy & Carbon Reporting (‘SECR’)
regulations and therefore is not required to disclose energy
and carbon information.
Janus Henderson as Manager recognises the importance of
managing its operational activities in a sustainable way and
minimising any adverse impact on the environment. In 2021,
JHI reached its three-year target to reduce its carbon
footprint by 15% per full-time employee (‘FTE’) from 2018
levels. In2022, using guidance from the Science-Based
Target Initiative, JHI set ambitious new five-year reduction
targets versus a 2019 baseline and per full-time employee:
●
reduction target of 29.4% in Scope 1 (fuel) and Scope 2
(electricity) emissions;
●
reduction target of 17.5% in Scope 3 (business travel,
freight, paper, water, waste) emissions; and
●
reduction target of 17.5% on water and waste
consumption by FTEs.
Environmental, Social and Governance Matters
(continued)
Lowland Investment Company plc Annual Report 2024
22
In addition to this, JHI has maintained a CarbonNetural
®
certification since 2007 and offsets all its operational Scope 1,
Scope 2 and Scope 3 operational emissions each year.
Through this process, JHI has invested in a variety of offset
projects around the world, delivering financial support to
essential renewable energy, forestry and resource
conservation projects that support reductions in greenhouse
gas emissions. All projects JHI supports have been classified
as ‘additional’ by an independent third party, meaning they
would not happen without the sale of carbon credits.
JHI discloses its carbon emissions annually through
regulatory and voluntary reporting frameworks, including
SECR and the Carbon Disclosure Project (‘CDP’), as well
asin its 2023 Responsibility Report, which provide
moreinformation.
Business Ethics
As the Company’s operations are delegated to third-party
service providers, the Board seeks assurances, at least
annually, from its service providers that they comply with the
provisions of the UK Modern Slavery Act 2015 and maintain
adequate safeguards in keeping with the provisions of the
Bribery Act 2010 and Criminal Finances Act 2017.
Environmental, Social and Governance Matters
(continued)
Lowland Investment Company plc Annual Report 2024
23
Strategic Report: Business Model
Purpose, Values and Culture
The Company’s purpose is to deliver growth in income and
capital for shareholders by investing in equities. We do this
byfollowing a disciplined process for investment and by
controlling costs and using borrowings to enhance returns.
The Board aspires to follow high standards of governance,
with a culture based on openness, mutual respect, integrity,
constructive challenge and trust. The Board seeks always to
act in the best interests of shareholders, making the most
effective use possible of the diversity of skills and experience
of its members. This culture of openness and constructive
challenge extends to the Board’s interaction with the
Manager, being the Company’s most important service
provider. The Board expects the Manager and all of the
Company’s other service providers to hold values which
alignwith the high standards promoted by the Board.
Our Strategy
We fulfil our purpose by operating as an investment company,
enabling us to delegate operational matters to specialised
third-party service providers. Their performance is monitored
and challenged by a Board of Directors which retains
oversight of the Company’s operations.
The framework of delegation provides a cost-effective
mechanism for delivering operations whilst allowing the
Company to take advantage of the capital gains tax treatment
afforded to investment trusts which are approved under
section 1158/9 of the Corporation Tax Act 2010 as amended
(‘s.1158/9’). The closed-end nature of the Company enables
the Fund Managers to take a longer term view of investments
and supports a fully invested portfolio as the Company has
noredemptions to meet. A significant advantage over other
investment fund structures is the ability to use leverage to
increase returns for shareholders.
The Board is comprised entirely of non-executive Directors
accountable to shareholders, who have the ability to remove
aDirector from office where they deem it to be in the interests
of the Company.
The Company’s Status
The Company is registered as a public limited company,
founded in 1960, and is an investment company as defined
inSection 833 of the Companies Act 2006 (‘the Act’).
TheCompany is not a close company. It operates as an
investment trust in accordance with s.1158/9 and has
obtained approval from HMRC for its status. The Directors are
of the opinion that the Company has conducted its affairs in
compliance with s.1158/9 since approval was granted and
intends to continue to do so.
The Company has a listing in the closed-ended investment
funds category of the FCA’s UK Listing Rules and trades onthe
main market of the London Stock Exchange. The Company
must comply with the UK Listing, Prospectus and Disclosure
Guidance and Transparency Rules of the FCA. TheCompany is
a member of the Association of InvestmentCompanies (‘AIC’).
The Company, and the Board, is governed by its Articles of
Association, amendments to which must be approved by
shareholders by way of special resolution.
Investment Objective
The Company aims to give shareholders a higher than
average return with growth of both capital and income over
the medium to long-term by investing in a broad spread of
predominantly UK companies. TheCompany measures its
performance against the FTSE All-Share Index Total Return.
Investment Policy
Asset Allocation
The Company invests in a combination of large, medium and
smaller companies listed in the UK. We are not constrained by
the weightings of any index; we limit risk by running a diversified
portfolio, which is constructed on a bottom-up, stock-picking
basis. In normal circumstances up to half the portfolio is
invested in FTSE 100 companies; the remainder is divided
between small and medium-sized companies. The Manager
may also invest a maximum of 15% in other listed trusts.
Dividend
The Company aims to pay a progressive dividend, with each
quarterly dividend equal to or greater than its previous equivalent.
Gearing
The Board believes that debt in a closed-end fund is a
valuable source of long-term outperformance, and therefore
the Company will usually be geared. At the point of drawing
down debt, gearing will not exceed 20% of the portfolio
valuation but generally will be around half that level. Borrowing
will be a mixture of short and long-dated debt, depending on
relative attractiveness of rates.
Promoting the Company’s Success
Section 172 statement
The Directors’ overarching duty is to promote the success of
the Company for the benefit of investors, with consideration
ofstakeholders’ interests, as set out in Section 172 of the Act.
The Board regards a well governed business as essential for
the successful delivery of its investment proposition.
Shareholders’ assets are managed taking account of our
stakeholders and their interests. The Board maintains a map
of the Company’s key stakeholders which supports it in
understanding and fostering an appropriate level of interaction
with them.
The Company has no employees, premises, assets other than
financial assets or operations. The Board engages reputable
third-party suppliers with established track records to deliver
day-to-day operations. The most important of these is
Lowland Investment Company plc Annual Report 2024
24
Strategic Report: Business Model (continued)
theManager, in particular the Fund Managers, who are
responsible for the management of the Company’s assets in
linewith the investment objective, the Corporate Secretary,
the Head of Investment Trusts and the Financial Reporting
Senior Manager for Investment Trusts. The Board maintains
aclose working relationship with the Manager and holds it to
account for the smooth running of the Company’s day-to-day
business. There is continuous engagement and dialogue
between Board meetings, with communication channels
remaining open and information, ideas and advice flowing
freely between the Board and the Manager.
The Board retains responsibility for decisions over corporate
strategy, corporate governance, risk and internal control
assessment, determining the overall limits and restrictions
forthe portfolio and in respect of gearing and asset allocation,
investment performance monitoring and setting
marketingbudgets.
The Fund Managers promote the Company with the support
of the Manager’s dedicated investment trust sales team and
the Board makes additional spend available to support
marketing activities aimed at raising the profile of the
Company among retail investors in the UK.
The Manager co-ordinates the delivery of services from the
Company’s third-party suppliers. The Board is confident that
Janus Henderson has developed and maintains good working
relationships with all of the Company’s third-party suppliers.
To ensure the chosen service providers continue todeliver the
expected level of service, the Board receives regular reports
from them, evaluates the control environments in place at
each service provider and formally assesses their appointment
annually. By doing so, the Board seeks to ensure that the key
service providers continue to be appropriately remunerated to
deliver the level of service that it demands ofthem.
The Directors carry out their duties under Section 172 of
theAct to act in good faith to promote the success of the
Company for the benefit of its members as a whole, and in
doing so have regard (amongst other matters) to the likely
consequences of any decisions in the long term, the need to
foster the Company’s business relationships with suppliers,
customers and others, the impact of the Company’s
operations on the community and the environment and the
desirability of the Company maintaining a reputation for high
standards of business conduct.
The Directors are responsive to the views of shareholders
andthe Company’s wider stakeholders. Shareholders may
contact the Board via the Corporate Secretary (please refer
topage 30 for contact details).
For more information about the responsibilities with which
theBoard and its Committees are charged, please refer to
theCorporate Governance Statement (pages 42 to 48),
theAudit Committee Report (pages 49 to 51), the Directors’
Remuneration Report (pages 39 to 41) and the Report of the
Directors (pages36 to 37) in addition to the Strategic Report.
The Schedule of Matters Reserved for the Board as well as
the Terms of Reference for each of the Committees of the
Board can be found on the Company’s website.
Engagement with Stakeholders
The Company’s main stakeholders are its shareholders and
investors, the Manager and other third-party service providers
and the companies in which it invests. Wider stakeholders
include the Company’s lenders and regulatory and legislative
bodies. Interaction is facilitated through meetings (both
face-to-face and via video conferencing and other electronic
means), seminars, presentations, publications and the
Company’s website.
Example stakeholder considerations during
theyear.
The Board is always mindful of the need to act in the best
interests of stakeholders as a whole and to have regard to
other applicable s172 factors and this forms part of the
Board’s decision-making process. The following key decisions
taken by the Board during the year ended 30 September 2024
are examples of this.
●
Buying back the Company’s shares: the Board continually
monitors the discount to NAV at which the Company’s
shares trade, and considers whether share buy-backs
should be undertaken. After careful discussions when
deemed necessary, the Board decided not to undertake
buy-backs during the year.
●
Monitoring portfolio income and consideration of dividend
policy: the Board is conscious that dividend income is
important to shareholders, and has monitored carefully the
level of portfolio income versus proposed dividends. This
prudent approach has allowed the Company to increase
the dividend to shareholders for every year since 2009,
and to have at least maintained the dividend since the
Company’s inception.
Setout below are more general ways in which the Board and
theCompany interacts with its stakeholders and a list of the
principal stakeholders.
Lowland Investment Company plc Annual Report 2024
25
Strategic Report: Business Model (continued)
Stakeholder Engagement
Outcome
Shareholders and
investors
The Board communicates with shareholders
through the annual and half year reports, fact
sheets, press releases, website and videos
recorded by the Fund Managers. The Board meets
with shareholders at the Annual General Meeting,
which will be live-streamed and shareholders
aretherefore able to join the Meeting online if they
cannot attend in person. The Annual General
Meeting includes a Fund Manager presentation
andQ&A session.
The Chairman and Directors make themselves
available to meet with the Company’s shareholders.
TheFund Managers, the Manager’s sales and
marketing team, the broker and external marketing
research providers (Edison) also meet with
shareholders and analysts.
Shareholders are able to make informed decisions
about their investments.
Correspondence from shareholders is shared with
the Chairman immediately and with the Board at
each meeting.
The Board looks forward to meeting with
shareholders at the Annual General Meeting
eachyear.
The presentation from the Fund Managers will also
be available to watch on the Company website
after the Annual General Meeting.
Manager The Fund Managers attend Board meetings.
TheBoard receives timely and accurate information
from the Manager at meetings andengages with the
Fund Managers and Corporate Secretary between
meetings as wellas with other representatives as
and when it is deemed necessary.
In addition to reporting at each meeting, the Board
meets with key representatives of the Manager
throughout the year to develop strategy and assess
internal controls and risk management, e.g. sales
and marketing activities, to promote the success of
the Company and raise its profile. The Board also
meets without the Manager present to ensure it
retains its independence.
The Board places great value on the expertise and
experience of the Fund Managers to execute the
investment objective and deliver returns for
shareholders, andon the Manager’s internal
controls and riskmanagement.
Service providers As an investment company, all services are
outsourced to third-party service providers.
TheBoard considers the Company’s key service
providers to be the Manager, Broker, Depositary,
Registrar, Auditor and Administrator. The Board
regularly considers the support provided by the
service providers, including quality of service,
succession planning and any potential interruption
of service or other risks to provision.
The Board is conscious of the need to foster good
business relationships with its suppliers as well as
its shareholders and others.
The Manager maintains the overall day-to-day
relationship with the service providers and reports
back to the Board on performance at least annually.
The Board meets service suppliers as and when
considered necessary or desirable.
Investee
companies
The Board sets the investment objective and
discusses stock selection and asset allocation
withthe Fund Managers regularly.
On behalf of the Company, the Manager engages
with the investee companies, exercising good
stewardship practices, including a focus on ESG
matters with an approach agreed with the Board.
The Manager has a dedicated Governance and
Responsible Investment Team that the Fund
Managers can use when making investment
decisions and voting. Please also see the section
‘Our approach to Environmental, Social and
Governance Issues’ on pages 21 to 23.
Lenders The Company employs gearing to enhance returns
to shareholders.
The Company confirms compliance with the
covenants of its long- and short-term gearing
facilities on a monthly basis.
The Board makes all material decisions in relation
to this and is kept informed at Board meetings.
The Company maintains a good relationship with
its lenders and is able to raise financing to operate
effectively as an investment trust.
Lowland Investment Company plc Annual Report 2024
26
Strategic Report: Business Model (continued)
Stakeholder Engagement
Outcome
Auditors The Auditor attends at least one Audit Committee
meeting each year.
The Board considers a letter of engagement for the
Auditor and subject to considering the Auditor’s
performance, asks shareholders at each AGM to
appoint/re-appoint the Auditor depending on
where it is in the audit tender cycle.
Shareholders, potential investors and the wider
stakeholders who place reliance on the Company’s
audited Annual Report and financial statements
have the assurance that the audit has been carried
out by an appropriate auditor and that the Board
have reviewed the audit findings.
The Association
of Investment
Companies (‘AIC’)
The Company is a member of the AIC which is
anorganisation that looks after the interests of
investment trusts.
The Board chooses to report under the AIC Code
of Corporate Governance as this better reflects the
unique aspects of an investment trust in the
context of good corporate governance.
Regulatory and
legislative bodies
The Company is listed on the London Stock
Exchange. The Board mandates compliance with
relevant law and regulation and the Company
Secretary supports the Board in effective
management of all legal and compliance
requirements including those of the FCA, HMRC
and the UK government.
The Board also considers necessary regulatory
and compliance issues in making its decisions.
Compliance with law and regulation maintains the
Company’s licence to operate and helps to retain
its reputation for high standards of business
conduct.
Communities and
the environment
The Board mandates the Manager, supported by
its governance function, to engage with investee
companies at the appropriate time on ESG matters
in line with good stewardship practices, including a
focus on ESG matters with an approach agreed
with the Board.
The Board is also conscious of the importance of
providing an investment product which meets the
needs of its investors, including retail investors.
An investment approach that meets the needs
ofinvestors provides a service valuable to the
communities in which the Company operates.
TheBoard is also conscious of the need to take
appropriate account of broader ESG concerns
andto act as a good corporate citizen.
Management
The Company qualifies as an Alternative Investment Fund
(‘AIF’) in accordance with the Alternative Investment Fund
Managers Directive (‘AIFMD’).
The Company has appointed Janus Henderson Fund
Management UK Limited (‘JHFM’) to act as its Alternative
Investment Fund Manager (‘AIFM’) inaccordance with an
agreement which was effective from 22 July 2014 and is
terminable on six months’ notice (or less, in which case
compensation would be payable to the Manager).
TheManager can terminate the agreement on twelve months’
notice. JHFM delegates investment management services
toJanus Henderson Investors UK Limited. Bothentities
areauthorised and regulated by the FCA. References to
JanusHenderson and theManager within thisreport refer
tothe services provided by bothentities.
The fund management team is James Henderson and
LauraFoll. James has been Manager since 1990and
Laurahas been co-Manager since 2016.
Janus Henderson and its subsidiaries provide accounting,
company secretarial and general administrative services.
Some of the administration and accounting services are
carried out, on behalf ofJanus Henderson, by BNPParibas
SA. Helena Harvey ACG acts as CompanySecretary on
behalf of theCorporate Secretary, Janus Henderson
Secretarial Services UK Limited.
Management Fee Arrangements
The management fee is calculated on a tiered basis at the
rateof 0.5% per annum of the first £325m of the average net
chargeable assets with the balance above that charged at a
reduced rate of 0.4% per annum for the financial year under
review. Management fees arecharged50% to revenue and
50% tocapital.
Net chargeable assets are defined as total assets less current
liabilities and without limitation any borrowings atfair value,
less the value of any investment in Janus Henderson Group
plc and the value of any investment inany funds managed by
Janus Henderson.
Lowland Investment Company plc Annual Report 2024
27
Strategic Report: Biographies
Directors
Robert Robertson
Position: Chairman of the Board and of the Nominations
and Management Engagement Committees (Chairman
24January 2017)
Date of appointment: 1 May 2011
Skills and experience: Robert was previously chairman of
WestChina Cement Limited, a director of BlackRock Smaller
Companies Trust plc, Buro Happold Engineers Limited,
Metallon Corporation plc and Mondi Europe and chief
executive of Tarmac Group Limited and Anglo American’s
Industrial Minerals division. His early career was in finance,
working in London, Paris, Johannesburg, NewYork and Rio
de Janeiro. He brings overforty years’ involvement in
companies of all sizes, many sectors and geographies, and
inexecutive and non-executive capacities as well as
investment experience.
Robert has been Chairman of the Board since 2017. He has
adeep knowledge of the Company and many years of
leadership experience both within and outside the Company.
He uses his commercial experience to bring a pragmatic and
objective view to Board discussions.
Current External Appointments: Robert is a director of a
number of private companies.
Duncan Budge
Position: Director
Date of appointment: 14 July 2014
Skills and Experience: Duncan has extensive experience
within the investment trust sector. He was formerly a director
and Chief Operating Officer ofRIT Capital Partners plc, and
adirector ofJ.Rothschild Capital Management Limited
(RIT’smanagement company). Prior to this hespent six years
atLazard Brothers & Co.Limited.
Duncan brings extensive experience in the investment trust
sector which adds strength and technical depth to Board
discussions and allows him to challenge the Fund Managers
on their investment decisions and views.
Current External Appointments: Duncan is Chairman of
Dunedin Enterprise Investment Trust PLC and Artemis Alpha
Trust plc. He is a non-executive director of Biopharma Credit
plc and Asset Value Investors Ltd.
Back row, left to right, Tom Walker, Laura Foll, Duncan Budge, Gay Coley, Mark Lam.
Front row, Helena Vinnicombe, James Henderson.
All Directors are non-executive and considered independent of Janus Henderson and are members of the Audit (except the
Chairman), Nominations, Management Engagement and Insider Committees.
Lowland Investment Company plc Annual Report 2024
28
Strategic Report: Biographies (continued)
(Susan) Gaynor Coley
Position: Director and Chairman of the Audit Committee
(AuditChairman 24 January 2017)
Date of appointment: 1 November 2016
Skills and Experience: Gaynor was previouslythe Chairman
of The Wave Group Ltd, Director ofPublic Programmes at the
Royal Botanic Gardens Kew, Managing Director of the Eden
Projectin Cornwall, and Director of Finance at Plymouth
University. Aqualified chartered accountant, she has over
30years ofexperience inprivate and public sector finance
and governance.
Her broad commercial and finance experience allows her to
consider the investment and financial performance of the
Company with a broader perspective and she also brings a
strong focus on marketing, particularly digital channels.
Current External Appointments: Gaynor is a non-executive
director of Foresight Enterprise VCT plc and a partner in Coley
Hill Consultancy.
Mark Lam
Position: Director
Appointed: 1 January 2024
Skills and Experience: Mark is a FTSE 250 chair and board
director, with commercial experience across a range of
market sectors, including digital, telecommunications, media,
and gaming. He was Chief Technology and Information Officer
of Openreach, responsible for the architecture of the UK’s
fibre network, and previously held senior executive positions
at a number of major technology firms.
Current External Appointments: Mark is currently Chairman
of Games Workshop Group plc and of Royal Free London,
one of Europe’s largest hospital chains.
Helena Vinnicombe
Position: Director
Appointed: 1 May 2021
Skills and Experience: Helena was formerly a senior partner
at Smith & Williamson Investment Management, where she
latterly chaired the Asset Allocation Committee as well as
being a member of the Investment Strategy Group and
Investment Process Committee.
Helena brings extensive experience of asset management,
client relationships and sales, strategy and risk management,
as well as strategic andoperational experience in asset
allocation, investment research and client management.
Current External Appointments: Helena is a director of
TheLindsell Train Investment Trust plc, a Trustee for Child
Health Research CIO and Nesta and a member of the
Advisory Committee for the M&G Charibond, Charifund and
Charity Multi Asset Fund. She also acts as an independent
consultant to charities with Portfolio Review Services.
Thomas Walker
Position: Director
Date of appointment: 1 July 2019
Skills and Experience: Tom is aqualified chartered
accountant and has broad international experience of
managing funds, including investment trusts. Hewas formerly
a Fund Manager with Martin Currie Investment Management,
where latterly he headed up the global long-term unconstrained
team and was also the manager of the global investment trust,
Martin Currie Global Portfolio Trust plc.
His detailed knowledge of investment trusts brings scrutiny
tothe technical aspects of the management of the Company,
as well as the ability to challenge the Fund Managers’ views
and decisions.
Current External Appointments: Tom is a non-executive
director of JPMorgan Japanese Investment Trust plc.
Fund Managers
James Henderson
James Henderson is Director of UK Investment Trusts and
aFund Manager at Janus Henderson Investors, a position
hehas held as part of the Janus Henderson team since 2003.
Hejoined Janus Henderson in 1983 as a trainee fund manager
and, during his tenure with the firm,has been successfully
managing a number of investment trusts, andLowland since
1990. Prior to joining Janus Henderson hewasan accountant
traineeat Binder Hamlyn. James graduated with an MA
(Hons) ineconomics from Cambridge University and has
over40 years offinancial industry experience.
Laura Foll
Laura Foll is a Fund Manager at Janus Henderson Investors,
aposition she has held as part of the Janus Henderson team
since 2014. Laura joined Janus Henderson in 2009 as part of
the graduate scheme. She was subsequently named a global
analyst on the value and income team and later an assistant
fund manager for the global equity income team. Laura
graduated from the London School of Economics with
anhonours degree in economic history with economics.
Sheholds the Chartered Financial Analyst designation
andhas 15 years of financial industry experience.
Lowland Investment Company plc Annual Report 2024
29
Strategic Report: Corporate Information
Registered Office
201 Bishopsgate
London EC2M 3AE
Service Providers
Alternative Investment Fund Manager
Janus Henderson Fund Management UK Limited
201 Bishopsgate
London EC2M 3AE
Corporate Secretary
Janus Henderson Secretarial Services UK Limited
201 Bishopsgate
London EC2M 3AE
Telephone: 020 7818 1818
Email: ITSecretariat@janushenderson.com
Depositary and Custodian
HSBC Bank plc
8 Canada Square
London E14 5HQ
Stockbrokers
J.P. Morgan Cazenove
25 Bank Street
Canary Wharf
London E14 5JP
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Telephone: 0370 707 1057
Independent Auditor
Ernst & Young LLP
25 Churchill Place
London E14 5EY
Financial Calendar
Annual results announced December 2024
Ex dividend date 24 December 2024
Dividend record date 27 December 2024
Annual General Meeting 28 January 2025
Final dividend payable on 31 January 2025
Half year results announced May/June 2025
Information Sources
For more information about Lowland Investment Company
plc, visit the website at www.lowlandinvestment.com.
To sign up for expert insights about investment trusts,
updates from our fund managers as well as AGMs and Trust
TV episodes please visit this page: https://www.
janushenderson.com/en-gb/investor/subscriptions
Follow Janus Henderson Investment Trusts
on LinkedIn
For alternative access to Janus Henderson’s insight you can
now follow on LinkedIn.
Investing
Shares can be purchased in the market via a stockbroker or
through share dealing platforms. They can also be held through
share plans, ISAs or pensions and links to various providers are
included on the website.
Potential investors are reminded that the value of investments
and the income from them may go down as well as up and
investors may not receive back the full amount invested.
Taxbenefits may vary as a result of statutory changes and
their value will depend on individual circumstances.
Nominee Share Code
Where notification has been provided in advance,
theCompany will arrange for copies of shareholder
communications to be provided to the operators of nominee
accounts. Nominee investors may attend General Meetings
and speak at them when invited to do so by the Chairman.
Lowland Investment Company plc Annual Report 2024
30
Strategic Report: Corporate Information (continued)
Managing Risks
The Board, with the assistance of the Manager, has
carriedout a robust assessment of the principal risks and
uncertainties, including emerging risks, facing theCompany
including those that would threaten its business model,
future performance, solvency, liquidity and reputation. The
Board regularly considers the principal risks facing the
Company and has drawn up a matrix of risks. The Board
has put in place a schedule of investment limits and
restrictions, appropriate to the Company’s investment
objective and policy, in order to mitigate these risks as far
as practicable. The principal risks which have been
identified and the steps taken by the Board to mitigate these
are set out in the table below. The principal financial risks
are detailed in note 14 to the financial statements.
At the half year stage, the Board completed a thorough
review of the principal risks and uncertainties facing
theCompany. Itwas not considered necessary to make
changes to the principal risks and uncertainties as a result
ofthis review.
Principal risks Mitigating measure
Market, geopolitical, macroeconomic or environmental
conditions cause a material fall in market value
The wars in Ukraine and Israel and changes in the
international political landscape have heightened tensions
across the world, and significantly increased volatility in
equitymarkets.
Macroeconomic conditions in the UK, including political
uncertainty and rising inflation have led to increased volatility
in the UK equity market.
The Fund Managers maintain close oversight of the
Company’s portfolio, and in particular its gearing levels, and
the performance of investee companies. Regular stress
testing of the revenue account under different scenarios for
dividends is carried out. The Board monitors volatility, and
holds a regular dialogue with the Fund Managers to
understand the impact on the Company’s portfolio.
Global pandemic
The potential impact of further global health crises on the
Company’s investments and its direct and indirect effects,
including the effect on the global economy.
The Fund Managers maintain close oversight of the
Company’s portfolio, and in particular its gearing levels, and
the performance of investee companies. Regular stress
testing of the revenue account under different scenarios for
dividends is carried out. The Board monitors the operations of
the Company and its service providers to ensure that they
continue to be appropriate, effective and properly resourced.
Investment activity and strategy risk
An inappropriate investment strategy, failure to take account
ofclimate risk impacts on the portfolio, or poor execution,
forexample, in terms of asset allocation or level of gearing,
mayresult in underperformance against the Company’s
benchmark index and the companies in its peer group, and
also in the Company’s shares trading on a wider discount to
the net asset value per share.
The Board manages these risks by ensuring a diversification
of investments and a regular review of the extent of
borrowings. Janus Henderson operates in accordance with
investment limits and restrictions and policy determined by
theBoard, which includes limits on the extent to which
borrowings may be employed.
The Board reviews the investment limits and restrictions on a
regular basis and the Manager confirms adherence to them
every month. Janus Henderson provides the Board with
management information, including performance data and
reports and shareholder analyses.
The Board monitors the implementation and results of the
investment process with the Fund Managers at each Board
meeting and monitors risk factors including ESG factors in
relation to climate risk, in respect of the portfolio.
Investment strategy is reviewed at each meeting.
Portfolio and market price
Although the Company invests almost entirely in securities
that are listed on recognised markets, share prices may move
rapidly. The companies in which investments are made may
operate unsuccessfully, or fail entirely. A fall in the market
value of the Company’s portfolio would have an adverse effect
on equity shareholders’ funds.
The Board reviews the portfolio at the five Board meetings
held each year and receives regular reports from the
Company’s brokers. A detailed liquidity report is considered
on a regular basis.
The Fund Managers closely monitor the portfolio between
meetings and mitigate this risk through diversification of
investments. The Fund Managers periodically present the
Company’s investment strategy in respect of current market
conditions. Performance relative to the FTSE All-Share Index,
and other UK equity income trusts is also monitored.
Lowland Investment Company plc Annual Report 2024
31
Strategic Report: Corporate Information (continued)
Principal risks Mitigating measure
Dividend income
A reduction in dividend income could adversely affect the
Company’s dividend record.
The Board reviews income forecasts at each meeting.
TheCompany has revenue reserves of £9.6 million
(beforepayment of the third interim and final dividend)
anddistributable capital reserves of £292.1 million.
Financial risk
The financial risks faced by the Company include market price
risk, interest rate risk, liquidity risk, currency risk and credit
and counterparty risk.
The Company minimises the risk of a counterparty failing
todeliver securities or cash by dealing through
organisationsthat have undergone rigorous due diligence by
JanusHenderson. The Company holds its liquid funds almost
entirely in interest bearing bank accounts in the UK or on
short-term deposit. This, together with a diversified portfolio
which comprises mainly investments in large and medium-
sized listed companies mitigates the Company’s exposure to
liquidity risk. Currency risk is mitigated by the low exposure to
overseas stocks. Please also see note 14 to the accounts.
Gearing risk
In the event of a significant or prolonged fall in equity markets
gearing would exacerbate the effect of the falling market on
the Company’s NAV per share and, consequently, its
shareprice.
At the point of drawing down debt, gearing will not exceed
20% of the portfolio valuation.
The Company minimises the risk by the regular monitoring of
the levels of the Company’s borrowings in accordance with
the agreed limits. The Company confirms adherence to the
covenants of the loan facilities on a monthly basis.
Tax and regulatory
Changes in the tax and regulatory environment could
adversely affect the Company’s financial performance,
including the return on equity.
A breach of s.1158/9 could lead to a loss of investment trust
status, resulting in capital gains realised within the portfolio
being subject to corporation tax. A breach of the UK Listing
Rules could result in suspension of the Company’s shares,
while a breach of the Companies Act 2006 could lead to
criminal proceedings, or financial or reputational damage.
The Manager provides its services, inter alia, through suitably
qualified professionals and the Board receives internal control
reports produced by the Manager on a quarterly basis, which
confirm legal and regulatory compliance. The Fund Managers
also consider tax and regulatory change in their monitoring of
the Company’s underlying investments.
Operational
Disruption to, or failure of, the Manager’s or its administrator’s
(BNP Paribas) accounting, dealing or payment systems or the
Depositary’s records could prevent the accurate reporting and
monitoring of the Company’s financial position. Cyber crime
could lead to loss of confidential data. The Company is also
exposed to the operational risk that one or more of its
suppliers may not provide the required level of service.
The Board monitors the services provided by the Manager
and its other suppliers and receives reports on the key
elements in place to provide effective internal control.
Cyber security is closely monitored and the Audit Committee
receives an annual presentation from Janus Henderson’s
Head of Information Security.
Details of how the Board monitors the services provided by
Janus Henderson and its other suppliers and the key
elements designed to provide effective internal control are
explained further in the Internal Controls section of the
Corporate Governance Statement on page 43.
Emerging risks
In addition to the principal risks facing the Company, the
Board also regularly considers potential emerging risks, which
are defined as potential trends, sudden events or changing
risks which are characterised by a high degree of uncertainty
in terms of the probability of them happening and the possible
effects on the Company. Should an emerging risk become
sufficiently clear, it may be moved to a principal risk.
Viability Statement
The Company is a long-term investor; the Board believes it is
appropriate to assess the Company’s viability over a five-year
period in recognition of our long-term horizon and what we
believe to be investors’ horizons, taking account of the
Company’s current position and the potential impact of the
principal and emerging risks and uncertainties as documented
above in this Strategic Report.
Lowland Investment Company plc Annual Report 2024
32
Strategic Report: Corporate Information (continued)
The assessment has considered the impact of the likelihood
of the principal and emerging risks and uncertainties facing
the Company, in particular investment strategy and
performance against benchmark, whether from asset
allocation or the level of gearing, and market risk, including
climate risk, in severe but plausible scenarios, and the
effectiveness of any mitigating controls in place.
The Board has reviewed three additional model scenarios
which evaluate the impact on the revenue forecast and
reserves. These range from a worst case scenario which
includes a 10% reduction in income and net assets, through
to a scenario where there is no income growth and no
reduction in income or net assets. Increasing dividends to
shareholders could continue under allthree scenarios,
although the Company would need to useits capital reserves
in some cases. None of the results ofthe scenarios used
would therefore threaten the viability oftheCompany.
The Board has taken into account the liquidity of the portfolio
and the gearing in place when considering the viability of the
Company over the next five years and its ability to meet
liabilities as they fall due. This included consideration of the
duration of the Company’s loan facilities and how a breach
ofthe loan facility covenants could impact on the Company’s
liquidity, net asset value and share price.
The Board does not expect there to be any significant change
in the current principal risks and adequacy of the mitigating
controls in place. Also the Directors do not envisage any
change in strategy or objectives or any events that would
prevent the Company from continuing to operate over that
period as the Company’s assets are liquid, its commitments
are limited and the Company intends to continue to operate
as an investment trust. Only a substantial financial crisis
affecting the global economy could have an impact on
thisassessment.
In coming to this conclusion, the Directors have considered
the ongoing impact of the wars in Ukraine and Israel and
changes in the international political landscape in particular
the impact on income and the Company’s ability tomeet its
investment objective. The Board does not believe that these
will have a long-term impact on the viability of the Company
and its ability to continue in operation, notwithstanding the
short-term uncertainty it has caused in the markets.
Based on this assessment, the Directors have a reasonable
expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the next
five-year period. The Directors have also concluded that the
Company has adequate resources to continue in operational
existence for at least twelve months from the date of approval
of these financial statements being 31 December 2025, and it
is therefore appropriate to prepare these financial statements
on a going concern basis.
Key Performance Indicators
In order to measure the success of the Company in
meetingits objectives and to evaluate the performance
ofJanus Henderson, the Directors take into account the
following key performance indicators:
Performance Measured against the Benchmark
The Board reviews and compares, at each meeting, the
performance of the portfolio as well as the net asset value and
share price for the Company and its benchmark, which is the
FTSE All-Share Index Total Return.
Discount/Premium to Net Asset Value
At each Board meeting, the Board monitors the level of
theCompany’s discount/premium to NAV and reviews the
average discount/premium for the Company’s relevant
Association of Investment Companies (‘AIC’) sector (UK
Equity Income).
The Board does not believe that a formal discount control
mechanism is in the interests of shareholders. It would negate
some of the benefits ofa closed-end fund. It might force the
Company to purchase its own shares at a time when it does
not have spare cash; when it maybe inopportune to realise
investments; or when there are good buying opportunities
inthe market. Furthermore itcould shrink the size of the
Company, reducing the audience ofpotential investors,
increase the ongoing charge ratio, and reduce liquidity in
theCompany’s shares. The Board may agree to purchase
Lowland shares opportunistically ifit believes that the benefits
in terms of NAV enhancement are sufficient.
The Board believes that the best way of reducing or
eliminating the discount is to provide superior returns to
shareholders, and to elucidate the attractions of investment
inLowland to as large and diverse an audience aspossible.
The Board is prepared to issue shares at a premium, provided
thetransaction will enhance NAV; and provided that a
premium has prevailed for sufficient time for current
shareholders to have had the opportunity to sell shares
atapremium.The Board would see the advantages as
including NAVenhancement, reducing the bid/offer spread
(the difference in price between which investors can buy and
sell shares), reducing the ongoing charge ratio, growing
theCompany, and increasing liquidity in its shares. The Board
believes that each of these five factors will be in the interests
ofLowland’s shareholders.
The Company publishes a NAV per share figure on a daily
basis, through the official newswire of the London Stock
Exchange. This figure is calculated in accordance with the AIC
formula and includes current financial year revenue items.
Lowland Investment Company plc Annual Report 2024
33
Strategic Report: Corporate Information (continued)
Performance against the Company’s Peer Group
The Company is included in the AIC UK Equity Income sector.
Inaddition to comparison against the stated benchmark, the
Board alsoconsiders the performance against its AIC peer
group and against other metrics, such as blended indices,
which more accurately reflect the composition of the
Company’s portfolio at each Board meeting.
Ongoing Charge
The Ongoing Charge is a measure of the recurring expenses
incurredby the Company expressed as a percentage of
theaverage shareholders’ funds over the year calculated in
accordance with AIC guidance. The Board regularlyreviews
theOngoing Charge and monitors all Company expenses.
The charts and tables on pages 2 and 3 show how the
Company has performed and the Chairman’s Statement and
Fund Managers’ Report give moreinformation on performance.
Borrowings
For the year ended 30 September 2024, theCompany had
acommitted loan facility of up to £40m with BNP Paribas,
London Branch, which allowed it to borrow as and when
appropriate. TheCompany also had a conditional option to
increase thefacility by £20m. This facility, which bore interest
based onthe compounded risk-free rate, is due to expire on
27October 2025.
The maximum amount drawn down in the year under review
was £29.4m (2023:£28.1m), with borrowing costs for the year
totalling £1,272,000 (2023:£1,098,000). £19.2m
(2023:£17.8m) ofthefacility was in use at the year end.
The Company has in issue £30m fixed rate 20 year senior
unsecured loan notes at a fixed sterling coupon rate of 3.15%.
Gearing at 30 September 2024 was 11.0% (2023:12.3%) of
net assetvalue.
Future Developments
The future performance of the Company is dependent on
international financial markets which are subject to various
external factors, including political and economic conditions.
Itis the Board’s intention that the Company will continue to
pursue its stated investment objective and policy. The
Chairman’s Statement and theFund Managers’ Report
provide commentary on the outlook ofthe Company.
Board Diversity and Experience
The Company’s affairs are overseen by a Board comprised
ofsix non-executive Directors – two females and four males.
The UK Listing Rules of the FCA now require companies to
report on whether they have met certain targets on board
diversity, which is included later in this report on page 47.
TheDirectors are diverse in their experience, bringing
knowledge of investment markets, banking and accounting
and auditing expertise to discussions regarding the
Company’s business. The Directors regularly consider
theleadership needs andspecific skills required to achieve
the Company’s investment objective, and are cognisant of
diversity when making appointments to the Board. The
Boardwelcomes therecommendations from the Hampton-
Alexander Review on gender diversity on boards and the
Parker Review aboutethnic representation. The Board
complies with the recommendations of both, and considers all
relevant recommendations when making new appointments.
TheCompany has no employees and therefore has no
furtherdisclosures to make in respect of gender
representation withinthe Company.
Approval
The Strategic Report has been approved by the Board.
Robert Robertson
Chairman
4 December 2024
Lowland Investment Company plc Annual Report 2024
34
Corporate
Report
35
Report of the Directors
The Directors present their report and the audited
financialstatements of the Company for the year ended
30September 2024.
Lowland Investment Company plc (‘the Company’) (registered
in England & Wales with company registration number
670489) was active throughout the year under review and
wasnot dormant.
Results and Dividends
The results for the year are set out in the financial statements.
Three interim dividends of 1.600p each, totalling 4.800p per
share, have been declared and/or paid in respect of the
yearto 30 September 2024. See note 10 on page 68 for
moreinformation. A final dividend of 1.625p per share is
beingproposed for consideration by shareholders at the
forthcoming AGM.
Directors’ Remuneration and Shareholdings
The Directors’ Remuneration Report on pages 39 to 41
provides information on the remuneration and interests of
theDirectors.
Directors’ Conflicts of Interest
The Company’s Articles of Association permit the Board to
consider, and, if it sees fit, to authorise situations where a
Director has an interest that conflicts, or may possibly conflict,
with the interests of the Company (‘situational conflicts’). The
Board has a formal system in place for Directors to declare
situational conflicts to be considered for authorisation by those
Directors who have no interest in the matter being considered.
In deciding whether to authorise a situational conflict, the
non-conflicted Directors must act honestly and in good faith
with a view to the best interests of the Company and they may
impose limits or conditions when giving the authorisation, or
subsequently, if they think this is appropriate. Any situational
conflicts considered, and any authorisations given, are
recorded in the relevant meetings’ minutes. The prescribed
procedures have been followed in deciding whether, and on
what terms, to authorise situational conflicts and the Board
believes that the systems it has in place for reporting and
considering situational conflicts continue to operate effectively.
Share Capital
The Company’s share capital comprises ordinary shares with
a nominal value of 2.5p each. The voting rights of the shares
on a poll are one vote for every share held. There are no
restrictions on the transfer of the Company’s ordinary shares
or voting rights, no shares which carry specific rights with
regard to the control of the Company and no agreement
which the Company is party to that affects its control following
a takeover bid. To the extent that they exist, the revenue
profits of the Company (including accumulated revenue
reserves and realised capital gains) are available for
distribution by way of dividends to the holders of the ordinary
shares. Upon a winding-up, after meeting theliabilities of the
Company, the surplus assets would be distributed to the
shareholders pro rata to their holding of ordinary shares. As at
30September 2024, there were 270,185,650 ordinary shares
in issue (2023:270,185,650). No shares were issued during
the year or in the period up to the date of this report. Atthe
AGM held in January 2024 the Directors were granted
authority to buy-back 40,500,820 shares. At 30September
2024 no shares had been bought back from this authority.
The Directors have remaining authority to purchase
40,500,820 shares. This authority will expire at the conclusion
ofthe2025 AGM.
The Company will seek authority from its shareholders at the
2025AGM to renew the authorisation to allot new shares, to
dis-apply pre-emption rights and to buy-back shares for
cancellation or to be held in Treasury. The main circumstances
in which the Board may choose to exercise these authorities
are set out in the section on Discount/Premium to Net Asset
Value on page 33 (see the Notice of Meeting (included at the
end of this Annual Report)) for more information.
Reappointment of Auditor
Ernst & Young LLP act as the Company’s Auditor. Resolutions
to reappoint Ernst & Young LLP as Auditor and to authorise
the Audit Committee to determine the Auditor’s remuneration
will be put to the AGM.
Holdings in the Company’s Shares
As at 30 September 2024, the Company has been notified
thatSaba Capital Management L.P. has an interest in 5.1%
ofthe Company’s issued share capital. There are no other
declarations of interest as at 30 September 2024 in accordance
with the Disclosure, Guidance and Transparency Rules.
No changes have been notified in the period 1 October 2024
to 3December 2024.
Fund Managers’ Interests
James Henderson, Fund Manager, has a beneficial interest
in924,900 ordinary shares of the Company(2023:924,900).
LauraFoll, Fund Manager, has a beneficial interest in 181,506
ordinary shares of the Company (2023:114,406).
Related Party Transactions
The Company’s current related parties are its Directors and
Janus Henderson. There have been no material transactions
between the Company and its Directors during the year. The
fees and expenses paid to Directors are set out on page 41.
There were no outstanding amounts payable at the year end.
In relation to the provision of services by Janus Henderson,
other than fees payable by the Company in the ordinary
course of business and the provision of sales and marketing
Lowland Investment Company plc Annual Report 2024
36
services, there have been no material transactions with
JanusHenderson affecting the financial position of the
Company during the year under review. More details on
transactions with Janus Henderson, including amounts
outstanding at the year end, are given in note 20 on page 76.
Annual General Meeting (‘AGM’)
The AGM will be held on Tuesday 28 January 2025 at 12.30p.m.
The Notice of Meeting and details of the resolutions to be put
atthe AGM are set out on pages 85 to 86 of this report.
The meeting will be held at the offices of Janus Henderson
at201 Bishopsgate, London EC2M 3AE. It will also be
broadcast live on the internet. If you are unable to attend
inperson, you can watch the meeting by visiting
www.janushenderson.com/lwi-agm.
Corporate Governance
The Corporate Governance Statement set out on pages 42
to48 forms part of the Report of the Directors.
Other Information
Information on future developments and financial risks are
detailed in the Strategic Report and notes to the accounts.
Directors’ Statement as to Disclosure of
Information to the Auditor
Each of the Directors who were members of the Board at the
date ofapproval of this report confirms that to the best of his
or her knowledge and belief, there is no information relevant to
the preparation of the Annual Report of which the Company’s
Auditor isunaware and he or she has taken all the steps a
Director might reasonably be expected to have taken to be
aware of relevant audit information and to establish that the
Company’s Auditor is aware of that information.
UK Listing Rule 6.6.4
UK Listing Rule 6.6.4 requires the Company to include certain
information in a single identifiable section of the Annual Report
or across reference table indicating where the information is
set out. The Directors confirm that there are no disclosures to
be made in this regard.
Approval
The Directors’ Report has been approved by the Board.
Janus Henderson Secretarial Services UK Limited
Corporate Secretary
4 December 2024
Report of the Directors (continued)
Lowland Investment Company plc Annual Report 2024
37
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report
andthe financial statements in accordance with applicable
law andregulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the
Directors have prepared the Company financial statements
inaccordance with United Kingdom Generally Accepted
Accounting Practice comprising FRS 102 ‘The Financial
Reporting Standard applicable in the UK and the Republic
ofIreland’ (United Kingdom Accounting Standards) and
applicable law. Under company law the Directors must not
approve the financial statements unless they are satisfied
thatthey give a true and fair view of the state of affairs of
theCompany and ofthe net return or loss of the Company
forthat year. In preparing thesefinancial statements,
theDirectors are required to:
●
select suitable accounting policies and then apply them
consistently;
●
make judgements and accounting estimates that are
reasonable and prudent;
●
state whether applicable UK Accounting Standards have
been followed, subject to any material departures
disclosed and explained in the financial statements; and
●
prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Company will continue in business.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain the
Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Company
and enable them to ensure that thefinancial statements and
the Directors’ Remuneration Report comply with the
Companies Act 2006. They are also responsible
forsafeguarding the assets of the Company and hence for
taking reasonable steps for the prevention and detection of
fraud and otherirregularities.
The Directors consider that the Annual Report, taken as
awhole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the
Company’s position and performance, business model
andstrategy.
Directors’ Responsibility Statement
Each of the Directors, who are listed on pages 28 and 29,
confirms that, to the best of his/her knowledge:
●
the Company’s financial statements, which havebeen
prepared in accordance with UK Accounting Standards
and applicable law give a true and fair view of the assets,
liabilities, financial position and return of the Company; and
●
the Strategic Report, Report of the Directors and financial
statements include a fair review of the development and
performance of the business and the position of the
Company, together with a description of the principal risks
and uncertainties that it faces.
On behalf of the Board
Robert Robertson
Chairman
4 December 2024
The financial statements are published on the Company’s website, www.lowlandinvestment.com.
The maintenance and integrity of the website is the responsibility of the Manager. The work carried out by the Auditor does
not involve consideration of these matters and, accordingly, the Auditor accepts no responsibility for any changes that may
have occurred to the Annual Report since it was initially presented on the website.
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from
legislation inother jurisdictions.
Lowland Investment Company plc Annual Report 2024
38
Directors’ Remuneration Report
Remuneration Policy
The Remuneration Policy sets out the principles applied in
theremuneration of the Company’s Directors. An ordinary
resolution toapprove the Remuneration Policy was last put
toshareholders at the AGM on 25 January 2023 and will next
be put to them at the AGM in 2026. The Remuneration Policy
has been reviewed to ensure that it meets the requirements of
The Companies (Directors’ Remuneration Policy and
Directors’ Remuneration Report) Regulations 2019. It is also
available on the website: www.lowlandinvestment.com.
The Board’s approach is that fees payable to the Directors
should:
●
reflect the time spent by them on the Company’s affairs;
●
reflect the responsibilities borne by them as Directors;
●
be sufficient to promote the long-term success of the
Company; and
●
not exceed the aggregate limit of £250,000 per annum as
established by the Articles of Association.
Directors are remunerated in the form of fees which are
payable quarterly in arrears.
No Director is eligible to receive bonuses, pension benefits,
share options or other benefits and no long-term incentive
schemes are inplace.
The Directors may be reimbursed for all reasonable and
properly documented expenses incurred in the performance
of their duties. Thelevel of remuneration paid to each Director
is reviewed annually, although such review will not necessarily
result in a change to the rate.
All Directors, including any new appointments to the Board,
are paid at the same rate. The Chairman of the Board and
Chairman of the Audit Committee are paid a higher fee in
recognition of their additional responsibilities.
The Remuneration Policy has been in place since 22 January
2014 and will remain in place unless it is amended by way of an
ordinary resolution put to shareholders at a general meeting. The
Remuneration Policy, irrespective of any changes, should be put
to shareholders at intervals of not more than three years. The
Board may amend the levels of remuneration paid to individual
Directors within the parameters of the Remuneration Policy.
Shareholders’ Views
Any feedback from shareholders on the fees paid to
Directorswould be taken into account by the Board when
reviewing remuneration levels. None was received for the
year under review.
Letters of Appointment
All Directors are non-executive and are appointed under a
letter of appointment, which is an engagement for services
and not a contract for employment. The appointment may
beterminated at any time by written notice with no
compensation payable. The Company has no executive
directors or employees.
Annual Report on Remuneration
The Directors’ Remuneration Report (the ‘Report’) is prepared in
accordance with Schedule 8 of The Large and Medium-sized
Companies and Group (Accounts and Reports) Regulations
2008 as amended in August 2013 (the ‘Regulations’).
A resolution to approve this Report will be put to shareholders
at the AGM to be held on Tuesday 28 January 2025.
Statement from the Chairman
As the Company has no employees and the Board is comprised
entirely of non-executive Directors, the Board hasnot
established aseparate Remuneration Committee. Directors’
remuneration is determined by the Board as a whole, at its
discretion, with an aggregate ceiling of £250,000 per annum.
Directors’ fees for the year under review were £44,100 for
theChairman, £34,650 for the Chairman of the Audit
Committee and£28,875 for the remaining Directors.
The last fee increase took effect from 1 October 2023.
During2024, the Board carried out a review of Directors’
remuneration which included a comparative peer assessment
of Directors’ fees together with external data. The Board
reviewed the assessment and decided to increase the fees
payable. Neither the Chairman nor the Audit Committee
Chairman took any part in the discussion of their own
remuneration. As a result, Directors fees are as follows from
1October 2024: Chairman; £45,000 (2.0% increase): Audit
Committee Chairman; £35,500 (2.5% increase): Directors;
£29,500 (2.2% increase). No changes have been made to the
way in which the policy will be implemented in the next
financial year.
Directors’ Interests in Shares (audited)
The interests of the Directors in the ordinary shares of the
Company at the beginning and end of the financial year under
review are set out in the table below.
Ordinary shares of 2.5p
30 September
2024
1 October
2023
Beneficial:
Robert Robertson 642,250 592,250
Duncan Budge 97,790 97,790
Gaynor Coley 10,450 10,450
Mark Lam 10,000 n/a
Helena Vinnicombe 10,000 10,000
Thomas Walker 80,000 40,000
Non Beneficial:
Robert Robertson 120,000 120,000
There have been no changes to any ofthe Directors’ holdings
in the period 1October 2024 to thedate of this report.
In accordance with the Company’s Articles of Association
no Director is required to hold any shares of the Company
by way of qualification.
Lowland Investment Company plc Annual Report 2024
39
Directors’ Remuneration Report (continued)
Relative importance of Spend on Pay
Annual percentage change in Directors’ remuneration
The table below sets out the annual percentage change in fees for each Director who served during the year ended
30September 2024:
Director
Year ended
30 September
2024
%
Year ended
30 September
2023
%
Year ended
30 September
2022
%
Year ended
30 September
2021
%
Year ended
30 September
2020
%
Robert Robertson 5.0 5.0 2.6 0.0 1.3
Duncan Budge 5.0 4.8 2.9 0.0 2.0
Gaynor Coley 5.0 4.8 3.3 0.0 1.7
Mark Lam
1
n/a n/a n/a n/a n/a
Helena Vinnicombe
2
5.0 4.8 2.9 n/a n/a
Thomas Walker 5.0 4.8 2.9 0.0 2.0
1. Appointed 1 January 2024
2. Appointed 1 May 2021
Comparative percentages reflect changes to the salary which would have been payable for a full year
Expenditure by the Company on remuneration and distributions to shareholders
The table below compares the total level of remuneration paid to Directors to the distributions made to shareholders in each year.
Year ended
30 September
2024
£
Year ended
30 September
2023
£
Change
£
Change
%
Total remuneration paid to Directors
1
187,031 157,500 29,531 18.8
Distributions to shareholders:
– Ordinary dividends 17,291,881 16,481,325 810,556 4.9
– Buyback of ordinary shares – – – –
1. Increases/(decreases) will fluctuate due to the number of Directors in any one year
Performance
The graph below compares the mid-market price of the
Company’s ordinary shares over the ten-year period ended
30September 2024 with the return from the FTSE All-Share
Index Total Return over the same period.
2020201920182017201620152014
£
Lowland Investment Company plc share price total return, assuming
the investment of £1000 on 30 September 2014 and the reinvestment
of all dividends (excluding dealing expenses)
Source: Morningstar, Factset
FTSE All-Share Index Total Return, assuming the notional investment
of £1000 on 30 September 2014 and the reinvestment of all income
(excluding dealing expenses)
800
900
1000
1100
1200
1300
1400
1500
1600
1700
1800
1900
2021 202420232022
Lowland Investment Company plc Annual Report 2024
40
Directors’ Remuneration Report (continued)
Statement of Voting at AGM
A binding ordinary resolution adopting the Directors’
Remuneration Policy was approved at the AGM held on
25January 2023. The votes cast by proxy were as follows:
% of votes cast
For 99.15
Against 0.48
Discretionary 0.37
Votes withheld 281,318
A non-binding ordinary resolution adopting the Directors’
Remuneration Report for the year ended 30 September
2023was approved by shareholders at the AGM held on
24January 2024. Thevotes cast by proxy were as follows:
% of votes cast
For 99.29
Against 0.42
Discretionary 0.29
Votes withheld 548,269
The percentage of votes in the tables above excludes
votes withheld.
On behalf of the Board
Robert Robertson
Chairman
4 December 2024
Directors’ Fees and Expenses (audited)
The remuneration paid to the Directors who served during the years ended 30 September 2024 and 30 September 2023 was as follows:
Year ended
30 September
2024
Total salary and
fees
£
Year ended
30 September
2023
Total salary and
fees
£
Year ended
30 September
2024
Taxable
benefits
£
Year ended
30 September
2023
Taxable
benefits
£
Year
ended
30 September
2024
Total
£
Year
ended
30 September
2023
Total
£
Robert Robertson
1
44,100 42,000 – – 44,100 42,000
Gaynor Coley
2
34,650 33,000 3,205 1,326 37,855 34,326
Duncan Budge 28,875 27,500 – – 28,875 27,500
Thomas Walker 28,875 27,500 523 1,646 29,398 29,146
Helena Vinnicombe 28,875 27,500 – 286 28,875 27,786
Mark Lam
3
21,656 – – – 21,656 –
Total 187,031 157,500 3,728 3,258 190,759 160,758
Notes:
The table above omits other columns set out in the relevant regulations because no payments of other types such as performance related pay, vesting performance–
related pay and pension–related benefits were made
1. Chairman and highest–paid Director 2. Chairman of the Audit Committee 3. Appointed 1 January 2024
HMRC view certain expenses incurred by Directors (primarily travel to/from Board meetings) as a taxable benefit. Directors’
expenses in relation to travel to/from Board meetings are reimbursed as a ‘grossed up’ amount to compensate the affected
Directors for the additional tax cost.
The fees paid to the Directors during the year were: Chairman £44,100, Audit Committee Chairman £34,650 and Directors £28,875.
No other remuneration or compensation was paid or payable by the Company during the year to any of the current or former
Directors or thirdparties specified by any of them.
Lowland Investment Company plc Annual Report 2024
41
Corporate Governance Statement
The Corporate Governance Statement forms part of the
Report of the Directors.
Applicable Corporate Governance Codes
The Company is required by the UK Listing Rules and the
Disclosure Guidance and Transparency Rules issued by
theFCA to disclose how it has applied the principles and
complied with the provisions ofthe corporate governance
code to which it, as an issuer is subject. TheUK Corporate
Governance Code (the ‘UK Code’) issued by the Financial
Reporting Council (‘FRC’) in July 2018 is applicable, along
with the related Code of Corporate Governance issued by
theAIC (the ‘AIC Code’) in February 2019 (together the
‘Governance Codes’).
The AIC Code addresses all of the applicable principles
setout in the UK Code, as well as principles and
recommendations which are of specific relevance to
investment trust companies. The FRC has confirmed that
byfollowing the AIC Code, the boards of investment
companies will meet their obligations in relation to the UK
Code and the disclosure requirements of the Disclosure
Guidance and Transparency Rules.
Copies of the AIC Code and the UK Code can be found
onthe respective organisations’ websites:
www.theaic.co.uk and www.frc.org.uk.
Statement of Compliance
The Board has considered the principles and
recommendations of the Governance Codes and believe
theCompany has complied with the applicable provisions
throughout the period under review and up to the date of
thisreport except as set out below.
The UK Code includes provisions relating to the role of the
chief executive, executive directors’ remuneration and the
need for an internal audit function. For the reasons explained
in the AIC Code, the Board considers these provisions are
notrelevant to the Company as it is an externally managed
investment trust company. TheCompany has no executive
directors, employees or internal operations and has therefore
not reported further inthese respects.
All the Directors are non-executive, and as there is a
Chairman and aChairman of the Audit Committee amongst
them, the appointment of a Senior Independent Director is
considered tobe superfluous but the need for such an
appointment is reviewed every year.
The Board
As at the date of this report, the Board comprises six
non-executive Directors. During the year, there were six
non-executive Directors, one of whom was appointed on
1January 2024, and the rest of whom were in office
throughout the period under review. Biographical details
foreach Director areset out on pages 28 and 29.
Responsibilities of the Board
Board leadership and purpose
The Board is collectively responsible for the success of the
Company. Its role is to provide leadership within a framework
of prudent and effective controls that enable risk to be
assessed and managed. The Board is responsible for setting
the Company’s standards and values and for ensuring that its
obligations to its shareholders and others are understood and
met. The Board sets the Company’s strategic aims, subject to
the Company’s articles of association, and to such approval
by shareholders in general meeting as may be required from
time to time, and ensures that the necessary resources are in
place to enable the Company’s objectives to be met.
Information relating to the Company’s purpose, values and
culture can be found on page 24.
The Chairman, Robert Robertson, is responsible for leading
the Board and ensuring that it addresses all aspects of its
role, promoting a culture of openness, challenge and robust
debate. Robert leads the Board’s relationship and engagement
with the Manager, shareholders and other stakeholders.
The Board meets formally at least five times a year, with
additional Board or committee meetings arranged when
required. The Directors have regular contact with the
FundManagers and other employees of the Manager
inconnection with the delivery of company secretarial,
salesand marketing and other administrative services.
The Board has a formal schedule of matters specifically reserved
for its decision, which includes setting strategy and providing
oversight of performance against agreed measures. It approves
any changes to the structure and capital arrangements for the
Company, has oversight of financial reporting and assesses
the effectiveness of theinternal control framework. The Board
approves communications with shareholders, the appointments
of new Directors, oversees corporate governance matters and
is responsible for determining theremuneration of Directors.
Each meeting follows an agenda agreed with the Chairman and
includes a review of the Company’s investment performance,
financial position, compliance with the investment parameters,
reporting from the Depositary, a review of shareholder
movements along with any sales or marketing activities
undertaken and any otherrelevant business matters in order
toensure that control is maintained over the Company’s affairs.
The Board has delegated contractually to external third-party
service providers the management of the investment portfolio,
the custodial services (which encompasses the safeguarding
of the Company’s assets by the Depositary and, separately,
the Custodian), the day-to-day accounting, company
secretarial, administration and registration services.
Lowland Investment Company plc Annual Report 2024
42
Each of these contracts was entered into after full and proper
consideration by the Board of the quality and cost of the
services offered, including the control systems in operation in
so far as they relate to the affairs of the Company. The Board,
and its committees, maintain oversight of the third-party service
providers through regular and ad hoc reporting addressing
anyspecific areas which the Board has requested.
The Manager ensures that the Directors receive all relevant
management, regulatory and financial information. Employees
of theManager attend each Board meeting enabling the
Directors to probe further on matters of concern. The
Chairman is able to attend meetings of all the chairmen of the
investment trust companies managed by Janus Henderson
which provides a forum to discuss industry matters. The
Directors have access to the advice and services of the
Company Secretary through its designated representative
who is responsible for ensuring that Board and committee
procedures are followed and that the applicable rules and
regulations are complied with. The proceedings of all Board
and committee meetings are minuted, with any particular
concerns raised by the Directors appropriately recorded. The
Board and the Manager operate in a supportive, co-operative
and open environment.
The Company has a procedure for Directors to take
independent professional advice in the furtherance of their
duties at the expense of the Company. In order to enable them
to discharge their responsibilities, all Directors have full and
timely access to relevantinformation.
Internal Controls
The Board has overall responsibility for the Company’s system
of internal control and for reviewing its effectiveness as set out
on the chart on the following page. The Board has established
an ongoing process for identifying, evaluating and managing
the principal risks faced by the Company.
The process accords with the FRC’s guidance on Risk
Management, Internal Control and Related Business and
Financial Reporting published in September 2014. The system
was in operation throughout the year and up to the date of this
report. The system is designed to meet the specific risks faced
by the Company and takes account of the nature of the
Company’s reliance on its service providers and their internal
controls. The system therefore manages rather than eliminates
the risk of failure to achieve the Company’s business
objectives and provides reasonable, but not absolute
assurance against material misstatement or loss.
The key components of the internal control framework include:
●
Clearly defined investment criteria, specifying levels of
authority and exposure limits. The Board reviews reports
on investment performance against and compliance with
the criteria at eachmeeting.
●
Regular financial reporting which allows the Board to assess
the Company’s financial position. The management accounts
and forecasts are reviewed by theBoard at each meeting.
●
Contractual agreements with the Manager and all other
third party service providers. The Board reviews
performance levels and adherence to relevant provisions
in the agreements on a regular basis through reports it
receives and conducts a formal evaluation of the overall
level of service provided at least annually.
●
The review of controls at the Manager and other third party
service providers. The Board receives quarterly reporting
from the Manager and Depositary, and reviews annual
assurance reports on the effectiveness of the control
environments at the Company’s key service providers.
●
Review of additional reporting provided by:
– The Manager’s Risk team on the control environment
in operation at the Manager and their view of the
control environments in place at the third party service
providers used by the Company.
– The Manager’s Internal Audit team on areas of
operation whichare relevant to the Company.
The Audit Committee met with representatives of the
Manager’s risk team to discuss internal controls and risk
management. The discussion included a detailed overview of
the Manager’s internal controls report and went on to provide
a summary of the HSBC Bank, BNP Paribas and
Computershare Investor Services (the Company’s other main
third-party service providers) internal controls reports that
hadalso been reviewed by the Manager’s risk team. The
assurance report for one of the Company’s service providers
was qualified by the respective service auditor. The Audit
Committee reviewed the instances giving rise to the
qualification and received confirmation that appropriate action
to address the issues identified in the report was being taken.
The exceptions identified had no impact on the Company.
The Board has reviewed the effectiveness of the Company’s
systemof internal controls for the year ended 30 September
2024. During the course of its review the Board has not
identified or been advised of any failings or weaknesses
thathave been determined assignificant.
In addition the Audit Committee has considered the cyber-
attack safeguards its third party service providers have in place.
Internal Audit Function
Systems are in operation to safeguard the Company’s assets
and shareholders’ investments, to maintain proper accounting
records and to ensure that financial information used within
the business, orpublished, is reliable. The Company’s
management functions aredelegated to third parties and the
Board monitors the controls inplace with support from the
Manager’s internal audit department. Assuch the Board has
determined that there is currently no need forthe Company
tohave its own internal audit function.
Corporate Governance Statement (continued)
Lowland Investment Company plc Annual Report 2024
43
Corporate Governance Statement (continued)
System of Internal Controls
Principal third-party
service providers
●
receive regular
reporting at meetings;
●
review the annual
assurance report
produced by each
organisation;
●
receive additional
reporting on the
control environment
from the Manager’s
Risk Team;
●
receive reporting from
the Manager’s Internal
Audit Team on areas
relevant to investment
trusts; and
●
formally evaluate
performance on an
annual basis.
Secondary third-party
service providers
●
receive regular
reporting on their
activities at meetings;
and
●
formally evaluate
performance on an
annual basis.
How the system of internal
control operates
The Board delegates contractually
to third-party service providers for
all of the Company’s operational
requirements. It maintains
oversight of these providers
throughout the year by receiving
regular reporting on their activities.
All are considered key
stakeholders.
The Company’s principal
third-party service providers are
the Manager (Janus Henderson);
the Depositary/Custodian (HSBC
Bankplc) and the accountants
(BNPParibas).
In respect of its principal
providers, the Board receives
quarterly reporting on compliance
with the control environment and
assesses the effectiveness of the
control environment through
review of the annual assurance
reports from each organisation.
This reporting is supplemented by
the view of the Manager’s Risk
Team regarding the control
environments in operation at
theproviders.
The Company’s secondary service
providers report regularly to the
Board. A failing in their services is
deemed to have a minimal impact
on the Company’s value and
therefore less stringent reporting
isrequired.
The Management Engagement
Committee formally evaluates the
performance and service delivery
of all third-party service providers
at least annually.
The Audit Committee evaluates
theperformance of the Auditors
on completion of each auditcycle.
J. P. Morgan
Cazenove
(Corporate Broker)
Janus
Henderson
(Investment
management,
company
secretarial,
sales, marketing,
PR and
administration)
Reporting
• Investment
performance
update (at
each meeting)
• Compliance
with
investment
limits and
restrictions
(monthly)
• Internal
controls
report
(quarterly)
• Effectiveness
of control
environment
(annually)
HSBC
(Depositary &
Custodian)
Reporting
• Depositary
report
(quarterly)
• Presentation
from the
Depositary
and
Custodian
(annually)
• Effectiveness
of control
environment
(annually)
BNP Paribas
(Administration
and Accounting
services
(engaged by the
Manager))
Reporting
• Balance sheet
• Liquidity and
gearing
• Revenue
forecasts
• Portfolio
valuation
• Portfolio
transactions
• Effectiveness
ofcontrol
environment
(annually)
Computershare
(Registrar)
Board of Directors
(comprised entirely of non-executive Directors)
Ernst & Young LLP
(Independent Auditors)
Lowland Investment Company plc Annual Report 2024
44
Corporate Governance Statement (continued)
Directors
Appointment, Retirement and Tenure
The Board may appoint Directors and any Director so appointed
will stand for election by shareholders at the next annual general
meeting following appointment, in accordance with the Articles
of Association and the AIC Code. Each Director receives a letter
of appointment that sets out, amongst other matters, what is
expected of them in terms oftime commitment.
In keeping with the provisions of the AIC Code, the Board
hasadopted a policy for all Directors to retire and stand for
re-election annually at each annual general meeting.
Under the Articles of Association, shareholders may remove
aDirector before the end of his or her term by passing an
ordinary resolution at a general meeting.
The Board is anxious to ensure that each Director has
sufficient time to devote to his or her duties, whether in normal
times or in times of crisis. To this end, each Director, actual or
prospective, is required to provide to the Nominations
Committee an account of time commitments to all his or her
professional activities. This procedure is repeated if a Director
seeks the Chairman’s approval to take up an additional post.
With regard to tenure, the Board has a succession plan, which
is reviewed each year to ensure it remains appropriate, and
which intends that one Director be replaced on average every
three years. The Board believes that a combination of directors
with longer and shorter periods of service is of benefit to
shareholders, since this brings the benefit of, on the one hand,
experience of past vicissitudes and, on the other, fresh thought.
It should also facilitate a pool of internal candidates from
which the Chair may be chosen, which is the current intention.
The AIC Code, which has been adopted by the Board, and with
which is it compliant, permits a tenure longer than nine years,
where the Chairman was independent on appointment, and
has not held any position or relationship which would
compromise his or her independence. These conditions apply
to Mr Robertson, who will retire as Chairman at the AGM in
2025. Mrs Vinnicombe will succeed him as Chair.
Independence
The independence of the Directors is determined with
reference tothe AIC Code and is reviewed by the Nominations
Committee atleastannually. The Committee considers each
of the Directors’ other appointments and commitments, as
well as their tenure of service and any connections they may
have with the Manager. Following conclusion of the evaluation
in September 2024, the Committee concluded that all Directors
continued to be independent in character and judgement.
The Chairman and one other Director who served throughout
the year have served longer than nine years as a Director.
Their independence was considered as part of the Board
evaluation.Following an extensive review of their respective
contributions, time commitments and conduct, (the review of
the Chairman was conducted by the Audit Chair separately
from the Board evaluation), both were deemed independent.
There were no contracts subsisting during or at the end
ofthe year in which a Director of the Company is or was
materially interested and which is or was significant in relation
to the Company’s business. No Director has a contract of
service with the Company and there are no agreements
between the Company and itsDirectors concerning
compensation for loss of office.
Induction and Ongoing Training
Newly appointed Directors are offered a bespoke induction
programme which covers the legal and regulatory framework
for investment trust companies and the operations of the
Manager, including the compliance and risk management
frameworks, accounting, sales and marketing, and other
administrative services carried out by the Manager.
Directors are regularly provided with information on the
Company’s policies, regulatory and statutory requirements
affecting the Company, as well as changes to the Directors’
responsibilities asthey arise.
Directors are encouraged to attend external training and industry
seminars, and may do so at the expense of the Company.
Directors’ Insurance and Indemnification
Directors’ and officers’ liability insurance cover is in place
which indemnifies the Directors against certain liabilities
arising from the carrying out of their duties. The Company’s
Articles and the provisions of English law, permit a qualifying
third party provision indemnity to be provided to Directors in
respect of costs which they may incur relating to the defence
of any proceedings brought against them arising out of their
positions as Directors, in which they are acquitted or
judgement is given in their favour by the Court. No indemnity
was given during the year or up until the date of this report.
Meeting Attendance
The attendance of each Director at scheduled meetings is set
out in the table below:
Board AC MEC NC
Number of meetings 5 2 1 1
Robert Robertson
1
5/5 2/2 1/1 1/1
Duncan Budge 5/5 2/2 1/1 1/1
Gaynor Coley 5/5 2/2 1/1 1/1
Helena Vinnicombe 5/5 2/2 1/1 1/1
Mark Lam
2
4/4 1/1 1/1 1/1
Thomas Walker 5/5 2/2 1/1 1/1
1. Mr Robertson is not a member of the Audit Committee but attends its
meetings by invitation
2. Mr Lam appointed 1 January 2024
There were no ad hoc Board meetings during the year, and an
additional Committee of the Board meeting to approve various
items of business including the Company’s half-yearresults.
There were two ad hoc meetings of the Nominations
Committee to recommend the appointment of Mr Lam to the
Board, and to consider the Chair’s succession.
Lowland Investment Company plc Annual Report 2024
45
Corporate Governance Statement (continued)
Performance Evaluation
The Board conducted a review of its own performance,
together with that of its committees and each individual
Director. The evaluation was carried out through the use
ofaquestionnaire. The outcome concluded that the Board
continued to have an appropriate balance of skills and
experience and that each Director continued to make
asignificant contribution to the affairs of the Company.
Ms Coley led the performance evaluation of the Chairman
who was not present for the discussion, takingfeedback from
all Directors after completion of a questionnaire. The review of
the Chairman’s performance concludedthat he had displayed
effective leadership duringtheyear and remained
independent of the Manager.
Committees of the Board
The terms of reference for the Audit, Management
Engagement and Nominations committees are available on the
website www.lowlandinvestment.com.
The Board has also constituted an Insider Committee which
meets when required to assist the Board in discharging its
responsibilities under the Market Abuse Regulation.
Audit Committee
The Audit Committee is responsible for ensuring the integrity
of the Company’s financial reporting, evaluating the
effectiveness of the systems of internal control and risk
management and monitoring theeffectiveness and objectivity
of the external Auditor.
The Committee is chaired by a qualified chartered accountant
and allof the independent non-executive Directors (with the
exception of the Chairman) are members of the Committee.
The Board is satisfied that at least one member has recent
and relevant experience and the Committee as a whole
hascompetence relevant to the sector in which the
Companyoperates.
The Audit Committee Report can be found on pages 49 to 51.
Nominations Committee
The Nominations Committee is responsible for ensuring the
Board retains an appropriate balance of skills, experience and
diversity, has aformal, rigorous and transparent approach to
the appointment of Directors and maintains an effective
framework for succession planning. In all the Nominations
Committee’s activities, consideration is given to diversity.
The Board’s committees
The Board has three principal committees: the Audit Committee, the Management Engagement Committee and the
Nominations Committee.
Board of Directors
Comprised of six independent
non-executive Directors
Audit Committee
Chairman:
Gaynor Coley
Purpose: Ensure the integrity of the
financial reporting, evaluate the
effectiveness of the systems of
internal control and risk management
and oversee the relationship with the
external auditors
Nominations Committee
Chairman:
Robert Robertson
Purpose: Ensure the Board has a
balance of skills, experience and
diversity, has a formal approach to
the appointment of Directors and
maintains an effective framework
for succession planning
Management Engagement
Committee
Chairman:
Robert Robertson
Purpose: Ensure that the
performance of third-party service
providers meets expectations and
their terms of engagement remain
appropriate
Contractually engages third-party service providers to deliver the Company’s operations, principal among them
being the Manager
Janus Henderson Investors
Fund Managers:
James Henderson
Laura Foll
Lowland Investment Company plc Annual Report 2024
46
Corporate Governance Statement (continued)
The Committee is chaired by the Chairman of the Board. All of
theindependent non-executive Directors are members of the
Committee. In discharging its duties over the course of the
year, theCommittee considered:
●
The composition of the Board and each of its committees,
taking account of the skills, experience and knowledge of
each Director and whether the diversity of these continued
to contribute to the success of the Company;
●
The questionnaires completed by each Director and made
conclusions as to the outcomes of the Board performance
evaluation with a view as to whether adjustments should
be made to the number of Directors or knowledge and
skills represented on the Board;
●
The tenure of each of the Directors, giving consideration
as to whether the Board retained a sufficient balance of
length of service without becoming ossified;
●
The independence of the Directors taking account of the
guidelines established by the AIC Code and the Directors’
other commitments; the time commitment of the Directors and
whether this had been sufficient over the course of the year;
●
Succession planning for appointments to the Board taking
account of the provisions of the Articles of Association
regarding the retirement and rotation of Directors and
thetenure of the current Directors;
●
The criteria for the appointment of a new Director, and
evaluation of recruitment consultants to assist with the
recruitment process, none of whom were connected to
the Company;
●
Recommendation of the successful candidate to the Board;
●
The succession of the Chair, taking account of existing
time commitment and experience for the role; and
●
The performance and contribution of the Directors
standing for re-election at the 2025 AGM.
Following completion of its reviews, the Committee concluded
that no changes to the composition ofthe Boardwere
required at present and that each Director continued to
commit sufficient time to fulfilling their duties. Taking account
of the performance of individual Directors, the Committee
recommended to the Board that it should support the
appointment and re-appointment of each of the Directors,
who are retiring andstanding for election or re-election atthe
forthcoming AGM.
The UK Listing Rules now require companies to report on
whether they have met the following targets on board
diversity: that at least 40% of the individuals on the board are
women, at least one of the senior positions on theboard is
held by a woman and at least one member oftheBoard is
from a minority ethnic background. As at 30September 2024,
the Company had met two of these requirements. Two out of
the six Directors (33%) are women and one of the women
holds a senior position, being the Audit Committee Chair.
There is one Director from a minority ethnic background.
Allthree targets will be met following the AGM provided the
relevant resolutions are passed. Asdescribed above, the
Board’s overriding aim in making any new appointments is
toselect the best candidate based on objective criteria and
merit, which it did at the time the current Directors were
selected. The Board actively seeks diversity in candidates for
the Board, whether cognitive, gender or ethnicity, believing
that such diversity adds strength and depth to Board
discussion, and will continue to do so. MarkLam was
appointed as a Director on 1 January 2024. Other than that,
therehave been no changes to the Board orthe roles
ofDirectors since 30September 2024.
The following tables set out the gender and ethnic diversity of
the Board:
Gender diversity
Number of
Board
members
Percentage
of the Board
Number of
senior
positions on
the Board
1
Men 4 67 1
Women 2 33 1
Ethnic diversity
White British 5 83.3 n/a
Asian/Asian British 1 16.7 n/a
1. Senior positions include Chairman and Audit Committee Chair
Management Engagement Committee
The Management Engagement Committee is responsible for
formally evaluating the overall performance of the Manager and
other third-party service providers engaged by the Company.
The Committee ischaired by the Chairman of the Board. All of
the independent non-executive Directors are members of the
Committee. Indischarging its duties over the course of the
year, the Committeeconsidered:
●
The investment performance of the Company, taking
account ofthe benchmark and performance of
competitors in the AIC UKEquity Income sector, the
share price, level of discount andgearing;
●
The quality and experience of the team involved in
managing all aspects of the Company’s business;
●
The fee structures of its closed-end competitors
andother, similar sized investment trust companies;
●
The key clauses of the investment management
agreement, how theManager had fulfilled these and
whether these continued to be appropriate; and
●
The performance and fees of the Company’s other third-
party service providers, including the Broker, Depositary,
Registrar and sales, marketing and research providers.
Following completion of its reviews, the Committee concluded
that the continued appointment of the Manager remained in
the best interests of the Company and the shareholders, and
therefore recommended to the Board the re-appointment of
Janus Henderson for a further year.
Lowland Investment Company plc Annual Report 2024
47
Bribery Act 2010
The Company has no employees. The Board has reviewed
theimplications of the Bribery Act 2010 and confirmed its zero
tolerance to bribery and corruption in its business activities.
Itreceives assurances from the Company’s main contractors
and suppliers that they will maintain adequate safeguards to
protect against any potentially illegal behaviour by their
employees and agents.
Criminal Finances Act 2017
The Board has also considered the changes made by the
Criminal Finances Act 2017, which came into effect in
September 2018, whichintroduced a corporate criminal
offence of failing to takereasonable steps to prevent the
facilitation of tax evasion. TheCompany has received
assurances from theCompany’s main contractors and
suppliers that they maintain a zero tolerance policy towards
the provision of illegal services, including the facilitation of
taxevasion.
Relations with Shareholders
Shareholder relations are given high priority by the Board.
Theprime medium by which the Company communicates
with its shareholders is through the Annual Report and half
year results which aim to provide shareholders with a clear
understanding of the Company’s activities and financial
position. This information is supplemented by the daily
calculation and publication of the NAV per share and a
monthly fact sheet which is available on the website.
TheManager provides information on the Company and
videos of the Fund Managers on the Company’s website.
Shareholders can use the QR code printed on the inside front
cover of this report to sign up for these insights directly.
The Board encourages shareholders toattend and
participate in the AGM. Shareholders have the opportunity
toaddress questions to theChairman of the Board, theFund
Managers and all Directors. Asummary of the proxy votes
received on the resolutions proposed is displayed at the
meeting andeach substantial issue is dealt with in a separate
resolution. Itisthe intention of the Board that the Annual
Report and Notice ofMeeting are issued to shareholders
soas to provide at least 20working days’ notice of the
meeting. These documents are alsoavailable on the
Company’s website.
Shareholders wishing to lodge questions in advance of the
meeting, or raise issues or concerns at any time are invited
todo so by contacting the Chairman at the registered office
orby email at ITSecretariat@janushenderson.com. General
presentations to both shareholders and analysts follow the
publication of the annual results. All meetings between the
Fund Managers and shareholders are reported to the Board.
Corporate Governance Statement (continued)
Lowland Investment Company plc Annual Report 2024
48
Report of the Audit Committee
The Audit Committee is responsible for ensuring the integrity
of the Company’s financial reporting, evaluating the
effectiveness of the systems of internal control and risk
management and monitoring theeffectiveness and objectivity
of the external Auditor.
Membership
The Chairman of the Committee is Gaynor Coley who is an
experienced chartered accountant.
All of the independent non-executive Directors are members
of theCommittee with the exception of the Chairman of the
Board. TheChairman of the Board attends the Committee
meetings in theordinary course of business.
Meetings
The Committee met twice during the year under review and
invited the Auditor to attend as appropriate. The Fund
Managers and the Manager’s designated Financial Reporting
Senior Manager for the Company also attend meetings. Other
representatives of the Manager and BNP Paribas may also
beinvited to attend if deemed necessary by the Committee.
Roles and Responsibilities
The primary responsibilities of the Audit Committee are to
ensure the integrity of the Company’s financial reporting,
including oversight of the preparation and audit of the annual
financial statements; to monitor and review the effectiveness
of the systems of internal control and risk management in
place at the Manager and the Company’s other third-party
service providers; and to monitor the effectiveness and
objectivity of the external Auditors and make
recommendations to the Board regarding their appointment,
re-appointment or removal.
The Audit Committee reports to the Board after each meeting
and its responsibilities are set out in formal terms of reference
which are reviewed at least annually.
In the year under review, the Committee considered the
following matters:
Annual and half-year reports
●
The appropriateness of the Company’s accounting
policies and the quality and effectiveness of the
accounting records and management information
maintained on behalf of the Company.
●
The areas of judgement in the financial statements,
including the valuation of the Company’s unquoted
investments.
●
The disclosures made in the reports in relation to internal
controls and risk management, viability, going concern
and related parties and consideration of whether the
report is fair, balanced and understandable and provides
the information necessary for shareholders to assess the
Company’s position and performance, business model
and strategy in order to make recommendations to
theBoard.
Independent Auditors
●
The nature, scope and cost of the external audit and
reviewing the Auditors’ findings in this respect.
●
The appointment and evaluation of the independence,
effectiveness and objectivity of the Auditors.
Internal controls and management of risk
●
The principal risks facing the Company, including
consideration of emerging risks, the risk management
systems in place and the Company’s risk map.
●
Reports on the effectiveness of the internal controls in
place at Janus Henderson and the Company’s other
principal third-party service providers.
●
The need for the Company to have its own internal
auditfunction.
●
The whistleblowing arrangements in place at the Manager
and other key service providers for their staff to raise
concerns, in confidence, about possible improprieties,
including in relation to the Company.
●
The Manager’s policies in relation to information security
and business continuity, meeting with representatives of
Janus Henderson’s internal audit and risk departments
periodically.
●
The Company’s anti-bribery policy, approach to tax
evasion and the confirmations received from third-party
service providers as to whether they have appropriate
procedures in place in these respects.
●
The annual confirmation from the Company’s Depositary
in respect of the safe-keeping of the Company’s assets.
Appointment and Tenure of the Auditors
As a Public Interest Entity listed on the London Stock Exchange,
the Company is required to put its audit out to tender after a
period of 10 years and to actually change auditor every 20
years. Ernst & Young LLP(‘EY’) were appointed by the Board
following a formal tender process which concluded in 2016.
This is the third year the current audit partner, Mike Gaylor,
hasbeen in place.
The Audit Committee remains satisfied with the effectiveness
of the audit provided by EY. On the basis of the Auditor’s
performance the Audit Committee recommended their
continuing appointment to the Board. The Auditor has
indicated their willingness to continue in office. Accordingly,
resolutions to confirm the re-appointment of EYas Auditor to
the Company and to authorise the Audit Committee
todetermine their remuneration will be proposed at the AGM.
The Committee discusses the audit process with the Auditor
without representatives of Janus Henderson present and
considers the effectiveness of the audit process after each
audit. This is the eighth year EY has audited the Company’s
Annual Report.
Lowland Investment Company plc Annual Report 2024
49
Report of the Audit Committee (continued)
Audit Fees
The fees payable to the Auditor for audit services were
£55,000 (2023:£52,000) (exclusive of VAT). Further detail
canbe found in note 6 on page 66.
Policy on Non-Audit Services
The Committee reviewed the policy on the provision of
non-audit services by the Auditor.
The Company’s Auditor will only be considered for non-audit
work where these are not prohibited by the regulations and
where they do not appear to affect the independence and
objectivity of the Auditor. Such services require approval in
advance by the Audit Committee, or Audit Committee
Chairman, following due consideration of the proposed
services. No non-audit services were provided by the
Auditorduring the year (2023:none).
Audit Independence
The Committee monitors the Auditor’s independence through
three aspects of its work: the approval of a policy regulating the
non-audit services that may be provided by the Auditor to the
Company; assessing the appropriateness of the fees paid to
the Auditor for all work undertaken by it; and by reviewing the
information and assurances provided by the Auditor on its
compliance with the relevant ethical standards. The Auditor
provided no non-audit services during the year.
EY confirmed that all of its partners and staff involved with
theaudit were independent of any links to the Company, and
that these individuals had complied with their ethics and
independence policies and procedures, which are fully
consistent with the FRC’s Ethical Standards. Having considered
the above-mentioned aspects, the performance and behaviour
of the Auditor during the audit process and the assurances
received from EY, the Committee is satisfied that auditor
independence and objectivity are safeguarded. Thecurrent audit
partner, Mike Gaylor, is expected to serve until 2026.
Audit for the Year Ended 30 September 2024
In relation to the Annual Report for the year ended 30 September 2024 the following significant issues were considered by
theCommittee:
Significant issue How the issue was addressed
Valuation and ownership of
the Company’s investments
The Directors have appointed Janus Henderson, who outsource some of the administration and
accounting services to BNP Paribas, to perform the valuation of the assets of the Company in
accordance with its responsibilities under the AIFMD rules. Asrequired under the AIFMD rules,
JanusHenderson has adopted a written valuation policy, which may be modified from time to
time. Actively traded investments are valued using stock exchange prices provided by third party
pricingvendors. Unlisted investments are valued either by periodically published net asset value
or most recently traded price. Ownership of listed investments is verified by reconciliation to the
Custodian’s records and the Audit Committee has received quarterly reports of the Depositary
who has responsibility for overseeing operations of the Company, including verification of
ownership and valuation. Formore information please refertonote 1(c) on page 63.
Recognition of income Income received is accounted for in line with the Company’s accounting policies (asset outin
note 1(e)) on page 63 and is reviewed by the Committee at each meeting. TheCommittee also
considers the treatment of income received from special dividends and the revenue forecast at
each meeting.
Compliance with Section
1158/9 of the Corporation
Tax Act 2010
The Committee regularly considers the controls in place to ensure that the regulations for
ensuring investment trust status are observed at all times, receivingsupporting documentation
from Janus Henderson and BNP Paribas.
Assessment of management
judgements
The Committee reviewed those areas where management applies judgements (which relate
tothe treatment of special dividends and the valuation of unlisted investments). These are
reviewed at every Audit Committee meeting. The Committee also assessed whether there were
areas in which the Auditors challenged management’s judgements. It concluded that there
were few areas where such judgement was applied, and where it did apply, the Auditor
appropriately challenged and evidenced the outcome.
Maintaining internal controls The Committee receives regular reports on internal controls from Janus Henderson,
BNPParibas and HSBC and its delegates and has access to the relevant personnel of
JanusHenderson who have a responsibility for risk management and internal audit.
TheAuditCommittee noted that there were no qualifications from the service auditor in
respectof the assurance report of Janus Henderson. The Audit Committee was satisfied that
the exceptionsnoted across the assurance reports were not considered to have a material
impact on the Company.
Lowland Investment Company plc Annual Report 2024
50
Report of the Audit Committee (continued)
Effectiveness of the External Audit
The Committee’s process for evaluating the effectiveness of
the external audit comprises two components: consideration
is given to the findings of the FRC’s Audit Quality Inspection
Report and a post-audit assessment is carried out led by the
Committee Chairman.
The Auditor is able to present and discuss the findings of
thelatest Audit Quality Inspection Report and report on the
progress made by the firm in addressing the areas identified
for improvement in the prior year’s report.
The Auditor attended two Audit Committee meetings in the
year, when the Committee was considering the half year and
the annual results. The Committee Chair also met with the
Auditor to review the audit results prior to these being
presented to the Audit Committee.
In assessing the effectiveness of the audit process, the
Committee Chairman invites views from the Directors,
theFund Managers and other members of the Manager’s staff
inassessing the robustness of the audit, level of challenge
offered by the audit team, the quality of the audit team and
timeliness of delivering the tasks required for the audit and
reporting to the Committee. The Committee also met privately
with the Audit Partner to discuss how the audit operated from
his perspective. Overall, the Committee considers that the
audit quality for the year ended 30 September 2024 has been
high and that the Manager and EY have worked together to
enhance and improve reporting to shareholders.
Following completion of the assessment, the Committee
remained satisfied with the effectiveness of the audit provided
by EY and therefore recommended to the Board its continuing
appointment. The Auditor has indicated its willingness to
continue in office. Accordingly, resolutions reappointing EY
asAuditor to the Company and authorising the Committee to
determine its remuneration will be proposed at the upcoming
Annual General Meeting.
Annual Report for the year ended
30September 2024
The Audit Committee in conclusion recommended to the
Board that the Annual Report, taken as a whole, was fair,
balanced and understandable and provided the information
necessary for shareholders to assess the Company’s position
and performance, business model and strategy.
Gaynor Coley
Audit Committee Chairman
4 December 2024
Lowland Investment Company plc Annual Report 2024
51
Independent Auditor’s Report to the Members of
Lowland Investment Company plc
Opinion
We have audited the financial statements of Lowland
Investment Company plc (‘the Company’) for the year ended
30 September 2024 which comprise the Income Statement,
Statement of Changes in Equity, Statement of Financial
Position and Statement of Cash Flows and the related notes
1to 20, including a summary of significant accounting
policies. The financial reporting framework that has been
applied in their preparation is applicable law and United
Kingdom Accounting Standards including FRS 102
‘TheFinancial Reporting Standard applicable in the UK and
Republic of Ireland’ (United Kingdom Generally Accepted
Accounting Practice).
In our opinion, the financial statements:
●
give a true and fair view of the Company’s affairs as at
30September 2024 and of its profit for the year then
ended;
●
have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
●
have been prepared in accordance with the requirements
of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit of the
financial statements section of our report. We believe that the
audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Independence
We are independent of the Company in accordance with
theethical requirements that are relevant to our audit of the
financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance
with these requirements.
The non-audit services prohibited by the FRC’s Ethical
Standard were not provided to the Company and we remain
independent of the Company in conducting the audit.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that
the Directors’ use of the going concern basis of accounting
inthe preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Company’s
ability to continue to adopt the going concern basis of
accounting included the following procedures:
●
We confirmed our understanding of the Company’s going
concern assessment process and engaged with the
Directors and the Company Secretary to determine if all
key factors that we have become aware of during our audit
were considered in their assessment.
●
We inspected the Directors’ assessment of going concern,
including the revenue forecast. In preparing the revenue
forecast, the Company has concluded that it is able to
continue to meet its ongoing costs as they fall due.
●
We have reviewed the factors and assumptions, including
the impact of the current economic environment, as
applied to the revenue forecast and the liquidity
assessment of the investments. We considered the
appropriateness of the methods used to calculate the
revenue forecast and the liquidity assessment and
determined, through testing of the methodology and
calculations, that the methods, inputs and assumptions
utilised were appropriate to be able to make an
assessment of the Company.
●
We assessed the risk of breaching the debt covenants
applicable to the Company’s debt arrangements as a
result of a reduction in the value of the Company’s
investment portfolio. We calculated the Company’s
compliance with debt covenants and performed reverse
stress testing in order to identify what factors would lead
to the Company breaching those covenants.
●
We considered the mitigating factors included in the
revenue forecasts and covenant calculations that are
within the control of the Company. We reviewed the
Company’s assessment of the liquidity of investments held
and evaluated the Company’s ability to sell those
investments in order to cover working capital requirements
should revenue decline significantly.
●
We reviewed the Company’s going concern disclosures
included in the annual report in order to assess that the
disclosures were appropriate and in conformity with the
reporting standards.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions
that,individually or collectively, may cast significant doubt
onthe Company’s ability to continue as a going concern to
31December 2025, which is a period of at least twelve
months from the date the financial statements were
authorised for issue.
In relation to the Company’s reporting on how they have
applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the Directors’
statement in the financial statements about whether the
Directors have considered it appropriate to adopt the going
concern basis of accounting.
52
Lowland Investment Company plc Annual Report 2024
Independent Auditor’s Report to the Members of
Lowland Investment Company plc
(continued)
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections
of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the
Company’s ability to continue as a going concern.
Overview of our audit approach
Key audit matters
●
Risk of incomplete or inaccurate revenue recognition,
including classification of special dividends as revenue
orcapital items in the Income Statement.
●
Risk of incorrect valuation or ownership of the
investmentportfolio.
Materiality
●
Overall materiality of £3.89m which represents 1% of
netassets.
An overview of the scope of our audit
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and
our allocation of performance materiality determine our audit
scope for the Company. This enables us to form an opinion
on the financial statements. We take into account size, risk
profile, the organisation of the Company and effectiveness of
controls, the potential impact of climate change and changes
in the business environment when assessing the level of work
to be performed.
Climate change
Stakeholders are increasingly interested in how climate
change will impact the Company. The Company has
determined that the most significant future impacts from
climate change on its operations will be from how climate
change could affect the Company’s investments and overall
investment process. This is explained on page 31 in the
principal risks and uncertainties. This disclosure forms part
ofthe ‘Other information,’ rather than the audited financial
statements. Our procedures on these unaudited disclosures
therefore consisted solely of considering whether they are
materially inconsistent with the financial statements or our
knowledge obtained in the course of the audit or otherwise
appear to be materially misstated, in line with our
responsibilities on ‘Other information’.
Our audit effort in considering climate change was focused
onthe adequacy of the Company’s disclosures in the financial
statements as set out in Note 1(l) and conclusion that there
was no further impact of climate change to be taken into
account as the investments are valued based on market
pricing as required by United Kingdom Generally Accepted
Accounting Practice. We also challenged the Directors’
considerations of climate change in their assessment of
viability and associated disclosures.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
financial statements of the current period and include the
most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters
included those which had the greatest effect on: the overall
audit strategy, the allocation of resources in the audit; and
directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the financial
statements as a whole, and in our opinion thereon, and we
donot provide a separate opinion on these matters.
53
Lowland Investment Company plc Annual Report 2024
Risk Our response to the risk Key observations communicated to the
AuditCommittee
Incomplete or inaccurate revenue
recognition, including the
classification of special dividends
as revenue or capital items in the
Income Statement (as described on
page 50 in the Report of the Audit
Committee and as per the accounting
policy set out on page 63).
The total revenue for the year to
30September 2024 was £19.83m
(2023: £20.78m), consisting primarily
ofdividend income from listed
equityinvestments.
The investment income receivable by
the Company during the year directly
affects the Company’s revenue return.
There is therefore a risk of incomplete
or inaccurate recognition of revenue
through the failure to recognise proper
income entitlements or to apply an
appropriate accounting treatment.
In addition to the above, the Directors
may be required to exercise judgement
in determining whether income
receivable in the form of special
dividends should be classified as
‘revenue’ or ‘capital’ in the Income
Statement.
We have performed the following
procedures:
●
We obtained an understanding of the
processes and controls surrounding
revenue recognition, including the
classification of special dividends, by
performing walkthrough procedures.
●
For 100% of dividends received and
accrued, we recalculated the income
by multiplying the investment holdings
at the ex-dividend date, traced from
the accounting records, by the
dividend per share, which was agreed
to an independent data vendor.
Wealso agreed a sample of dividends
received and accrued to bank
statements.
●
Where dividends were received or
accrued in foreign currency, we
translated the amount into the
reporting currency of the Company
using exchange rates sourced from an
independent data vendor.
●
For all dividends accrued, we reviewed
the investee company announcements
to assess whether the dividend
entitlements arose prior to
30September 2024.
●
To test completeness of recorded
income, we verified that expected
dividends for each investee company
held during the year had been
recorded as income with reference to
investee company announcements
obtained from an independent data
vendor.
●
For all investments held during the
year, we reviewed the type of dividends
paid with reference to an external data
vendor to identify those which were
special. Based on the work performed,
we identified seven special dividends
received during the year, five classed
as revenue and two classed as capital.
For three special dividends above our
testing threshold, we assessed the
appropriateness of management’s
classification as revenue or capital by
reviewing the underlying rationale for
the distribution.
The results of our procedures identified
no material misstatement in relation
toincomplete or inaccurate revenue
recognition, including incorrect
classification of special dividends as
revenue or capital items in the Income
Statement.
Independent Auditor’s Report to the Members of
Lowland Investment Company plc
(continued)
54
Lowland Investment Company plc Annual Report 2024
Independent Auditor’s Report to the Members of
Lowland Investment Company plc
(continued)
Risk Our response to the risk Key observations communicated to the
AuditCommittee
Incorrect valuation or ownership of
the investment portfolio
(as described on page 50 in the Report
of the Audit Committee and as per the
accounting policy set out on page 63).
The valuation of the investment
portfolio at 30 September 2024 was
£432.62m (2023: £392.43m) primarily
consisting of listed investments.
The fair value of quoted investments
isdetermined by reference to stock
exchange quoted market bid prices at
the close of business on the reporting
date. The fair value of unquoted
investments is determined by the
Directors using primary valuation
techniques such as recent transactions
and net assets.
The valuation of the assets held in the
investment portfolio is the primary
driver of the Company’s net asset
value and total return. Incorrect
investment pricing, or a failure to
maintain proper legal title of the assets
held by the Company could have a
significant impact on the portfolio
valuation and the return generated for
shareholders.
We have performed the following
procedures:
●
We obtained an understanding of the
processes and controls surrounding
investment valuation and legal title of
investments by performing
walkthrough procedures.
●
For all investments in the portfolio,
wecompared the market prices and
exchange rates applied to an
independent pricing vendor and
recalculated the investment valuations
as at the year end.
●
For all investments in the portfolio,
weobtained the market prices from
anindependent pricing vendor for five
business days pre and post the year
end date and calculated the day-on-
day movements to identify any stale
prices. We verified that the listed prices
are valid fair values through review of
trading activity.
●
The two unquoted investments are
individually and in aggregate, below
our materiality levels. We reviewed the
valuation methodology and calculation,
agreeing the inputs to underlying
source data.
●
We compared the Company’s
investment holdings at 30 September
2024 to an independent confirmation
received directly from the Company’s
Custodian and Depositary.
The results of our procedures identified
no material misstatement in relation to the
risk of incorrect valuation or ownership of
the investment portfolio.
There have been no changes to the areas of audit focus raised in the above risk table from the prior year.
Our application of materiality
We apply the concept of materiality in planning and
performing the audit, in evaluating the effect of identified
misstatements on the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that,
individually or in the aggregate, could reasonably be expected
to influence the economic decisions of the users of the
financial statements. Materiality provides a basis for
determining the nature and extent of our audit procedures.
We determined materiality for the Company to be £3.89m
(2023: £3.49m), which is 1% (2023: 1%) of net assets.
Webelieve that net assets provides us with amateriality
aligned to the key measure of the Company’s performance.
During the course of our audit, we reassessed initial
materiality and found no reason to alter the basis of
calculation at year end.
Performance materiality
The application of materiality at the individual account or
balance level. It is set at an amount to reduce to an
appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds
materiality.
On the basis of our risk assessments, together with our
assessment of the Company’s overall control environment,
our judgement was that performance materiality was 75%
(2023: 75%) of our planning materiality, namely £2.92m
(2023:£2.62m).
Given the importance of the distinction between revenue and
capital for investment trusts, we have also applied a separate
testing threshold for the revenue column of the Income
Statement of £0.85m (2023: £0.91m) being 5% (2024: 5%) of
the revenue profit before taxation.
55
Lowland Investment Company plc Annual Report 2024
Independent Auditor’s Report to the Members of
Lowland Investment Company plc
(continued)
Reporting threshold
An amount below which identified misstatements are
considered as being clearly trivial.
We agreed with the Audit Committee that we would report
tothem all uncorrected audit differences in excess of £0.19m
(2023: £0.17m), which is set at 5% of planning materiality,
aswell as differences below that threshold that, in our view,
warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the
quantitative measures of materiality discussed above and in
light of other relevant qualitative considerations in forming
ouropinion.
Other information
The other information comprises the information included in
the annual report other than the financial statements and our
auditor’s report thereon. The Directors are responsible for the
other information contained within the annual report.
Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly
stated in this report, we do not express any form of assurance
conclusion thereon.
Our responsibility is to read the other information and, in doing
so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit or otherwise appears to be
materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based
on the work we have performed, we conclude that there is a
material misstatement of the other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the
Companies Act 2006
In our opinion the part of the Directors’ Remuneration Report
to be audited has been properly prepared in accordance with
the Companies Act 2006.
In our opinion, based on the work undertaken in the course
ofthe audit:
●
the information given in the strategic report and the
Directors’ Report for the financial year for which the
financial statements are prepared is consistent with the
financial statements; and
●
the Strategic Report and Directors’ Report have been
prepared in accordance with applicable legal
requirements.
Matters on which we are required to report
by exception
In the light of the knowledge and understanding of the
Company and its environment obtained in the course of the
audit, we have not identified material misstatements in the
Strategic Report or Directors’ Report.
We have nothing to report in respect of the following matters
in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
●
adequate accounting records have not been kept, or
returns adequate for our audit have not been received
from branches not visited by us; or
●
the financial statements and the part of the Directors’
Remuneration Report to be audited are not in agreement
with the accounting records and returns; or
●
certain disclosures of Directors’ remuneration specified by
law are not made; or
●
we have not received all the information and explanations
we require for our audit.
Corporate Governance Statement
We have reviewed the Directors’ statement in relation to going
concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Company’s compliance
with the provisions of the UK Corporate Governance Code
specified for our review by the UK Listing Rules.
Based on the work undertaken as part of our audit, we
haveconcluded that each of the following elements of the
Corporate Governance Statement is materially consistent
withthe financial statements or our knowledge obtained
during the audit:
●
Directors’ statement with regards to the appropriateness
of adopting the going concern basis of accounting and
any material uncertainties identified set out on page 38;
●
Directors’ explanation as to its assessment of the Company’s
prospects, the period this assessment covers and why the
period is appropriate, set out on pages 32 to 33;
●
Directors’ statement on whether it has a reasonable
expectation that the Company will be able to continue in
operation and meet its liabilities, set out on page 63;
●
Directors’ statement on fair, balanced and understandable
set out on page 38;
●
Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out
onpage 31;
●
The section of the annual report that describes the review
of effectiveness of risk management and internal control
systems set out on page 43; and
●
The section describing the work of the audit committee
set out on page 49.
56
Lowland Investment Company plc Annual Report 2024
Independent Auditor’s Report to the Members of
Lowland Investment Company plc
(continued)
Responsibilities of Directors
As explained more fully in the Directors’ Responsibilities
Statement set out on page 38, the Directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the Directors determine is necessary to
enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Company’s ability to continue
asa going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the
Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and
toissue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not
aguarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions
of users taken on the basis of these financial statements.
Explanation as to what extent the audit was
considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect irregularities,
including fraud. The risk of not detecting a material
misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion. The extent to which
our procedures are capable of detecting irregularities,
including fraud is detailed below.
However, the primary responsibility for the prevention and
detection of fraud rests with both those charged with
governance of the Company and management.
●
We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Company and
determined that the most significant are United Kingdom
Generally Accepted Accounting Practice, the Companies
Act 2006, the UK Listing Rules, UK Corporate Governance
Code, the Associate of Investment Companies’ Code and
Statement of Recommended Practice, Section 1158
oftheCorporation Tax Act 2010 and the Companies
(Miscellaneous Reporting) Regulations 2018.
●
We understood how the Company is complying with those
frameworks through discussions with the Audit Committee
and the Company Secretary and review of Board minutes
and the Company’s documented policies and procedures.
●
We assessed the susceptibility of the Company’s financial
statements to material misstatement, including how fraud
might occur by considering the key risks impacting the
financial statements. We identified a fraud risk with respect
to the incomplete or inaccurate revenue recognition
through the incorrect classification of special dividends in
the Income Statement. Further discussion of our approach
is set out in the section on key audit matters above.
●
Based on this understanding we designed our audit
procedures to identify non-compliance with such laws and
regulations. Our procedures involved review of the
reporting to the Directors with respect to the application
ofthe documented policies and procedures and review of
the financial statements to ensure compliance with the
reporting requirements of the Company.
A further description of our responsibilities for the audit of the
financial statements is located on the Financial Reporting
Council’s website at https://www.frc.org.uk/
auditorsresponsibilities. This description forms part of our
auditor’s report.
Other matters we are required to address
●
Following the recommendation from the audit committee,
we were appointed by the Company on 24 January 2017
to audit the financial statements for the year ending
30September 2017 and subsequent financial periods.
●
The period of total uninterrupted engagement including
previous renewals and reappointments is 8 years, covering
the years ending 30 September 2017 to 30 September 2024.
●
The audit opinion is consistent with the additional report
tothe audit committee.
Use of our report
This report is made solely to the Company’s members,
asabody, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s report
and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone
other than the Company and the Company’s members as
abody, for our audit work, for this report, or for the opinions
we have formed.
Mike Gaylor (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
4 December 2024
57
Lowland Investment Company plc Annual Report 2024
Financial
Statements
58
Income Statement
Year ended 30 September 2024 Year ended 30 September 2023
Notes
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Revenue
return
£’000
Capital
return
£’000
Total
£’000
2 Gains on investments held at fair
value through profit or loss – 42,550 42,550 – 36,546 36,546
3 Income from investments 19,666 – 19,666 20,669 – 20,669
4 Other interest receivable and
similar income 160 – 160 107 – 107
Gross revenue and capital gains 19,826 42,550 62,376 20,776 36,546 57,322
5 Management fee (867) (868) (1,735) (856) (857) (1,713)
6 Administrative expenses (802) – (802) (686) – (686)
Net return before finance costs
and taxation 18,157 41,682 59,839 19,234 35,689 54,923
7 Finance costs (1,115) (1,115) (2,230) (1,027) (1,027) (2,054)
Net return before taxation 17,042 40,567 57,609 18,207 34,662 52,869
8 Taxation on net return (37) – (37) (80) – (80)
Net return after taxation 17,005 40,567 57,572 18,127 34,662 52,789
9 Return per ordinary share – basic
and diluted 6.29p 15.01p 21.30p 6.71p 12.83p 19.54p
The total columns of this statement represent the Profit and Loss Account of the Company. The revenue return and capital return
columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.
Allrevenue and capital items in the above statement derive from continuing operations. The Company had no other
comprehensive income. The net return is both the profit for the year and the total comprehensive income.
The notes on pages 63 to 76 form part of these financial statements
59
Lowland Investment Company plc Annual Report 2024
Statement of Changes in Equity
Notes
Year ended
30 September 2024
Called up
share
capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Other
capital
reserves
£’000
Revenue
reserve
£’000
Total
shareholders’
funds
£’000
At 1 October 2023 6,755 61,619 1,007 270,051 9,913 349,345
Net return after taxation – – – 40,567 17,005 57,572
10 Third interim dividend (1.6p) for the year
ended 30 September 2023 paid 31
October 2023 – – – – (4,323) (4,323)
10 Final dividend (1.6p) for the year ended
30September 2023 paid 31 January 2024 – – – – (4,323) (4,323)
10 First interim dividend (1.6p) for the year ended
30 September 2024 paid 30 April 2024 – – – – (4,323) (4,323)
10 Second interim dividend (1.6p) for the year
ended 30 September 2024 paid 31 July 2024 – – – – (4,323) (4,323)
10 Return of unclaimed dividends – – – – 8 8
At 30 September 2024 6,755 61,619 1,007 310,618 9,634 389,633
Notes
Year ended
30 September 2023
Called up
share
capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Other
capital
reserves
£’000
Revenue
reserve
£’000
Total
shareholders’
funds
£’000
At 1 October 2022 6,755 61,619 1,007 235,389 8,266 313,036
Net return after taxation – – – 34,662 18,127 52,789
10 Third interim dividend (1.525p) for the year
ended 30 September 2022 paid
31October 2022 – – – – (4,120) (4,120)
10 Final dividend (1.525p) for the year ended
30 September 2022 paid 31 January 2023 – – – – (4,120) (4,120)
10 First interim dividend (1.525p) for the year
ended 30 September 2023 paid 28 April 2023 – – – – (4,120) (4,120)
10 Second interim dividend (1.525p) for the year
ended 30 September 2023 paid 31July 2023 – – – – (4,120) (4,120)
At 30 September 2023 6,755 61,619 1,007 270,051 9,913 349,345
The notes on pages 63 to 76 form part of these financial statements
60
Lowland Investment Company plc Annual Report 2024
Statement of Financial Position
Notes
As at
30 September
2024
£’000
As at
30 September
2023
£’000
Fixed assets
11 Investments held at fair value through profit or loss:
Listed at market value on the main market 318,802 294,983
Listed at market value on AIM 55,176 52,186
Listed at market value overseas 19,969 15,484
Unlisted 2,277 2,368
Investments on loan 36,393 27,408
432,617 392,429
Current assets
12 Debtors 2,428 2,805
Cash at bank 5,161 2,926
7,589 5,731
13 Creditors: amounts falling due within one year (20,749) (19,003)
Net current liabilities (13,160) (13,272)
Total assets less current liabilities 419,457 379,157
13 Creditors: amounts falling due after one year (29,824) (29,812)
Net assets 389,633 349,345
Capital and reserves
15 Called up share capital 6,755 6,755
Share premium account 61,619 61,619
Capital redemption reserve 1,007 1,007
16 Other capital reserves 310,618 270,051
Revenue reserve 9,634 9,913
Total shareholders’ funds 389,633 349,345
17 Net asset value per ordinary share – basic and diluted 144.2p 129.3p
The financial statements on pages 59 to 76 were approved and authorised for issue by the Board of Directors on
4December 2024 and signed on their behalf by:
Robert Robertson
Chairman
The notes on pages 63 to 76 form part of these financial statements
61
Lowland Investment Company plc Annual Report 2024
Statement of Cash Flows
Year ended
30 September
2024
£’000
Year ended
30 September
2023
£’000
Cash flows from operating activities
Net return before taxation 57,609 52,869
Add back: finance costs 2,230 2,054
Add: gains on investments held at fair value through profit or loss (42,550) (36,546)
Withholding tax on dividends reclaimed 16 41
Decrease/(increase) in other debtors 324 (1,697)
Increase/(decrease) in other creditors 541 (496)
Net cash inflow from operating activities 18,170 16,225
Cash flows from investing activities
Purchase of investments (78,497) (56,075)
Sale of investments 80,668 52,572
Net cash inflow/(outflow) from investing activities 2,171 (3,503)
Cash flows from financing activities
Equity dividends paid (net of refund of unclaimed distributions and reclaimed distributions) (17,284) (16,480)
Loans drawn down 37,736 55,092
Loans repaid (36,378) (55,796)
Interest paid (2,177) (1,996)
Net cash outflow from financing activities (18,103) (19,180)
Net increase/(decrease) in cash and cash equivalents 2,238 (6,458)
Cash and cash equivalents at start of year 2,926 9,395
Effect of foreign exchange rates (3) (11)
Cash and cash equivalents at end of year 5,161 2,926
Comprising:
Cash at bank 5,161 2,926
5,161 2,926
Cash inflow from dividends net of taxation was £19,961,000 (2023: £18,934,000) and interest received was £75,000 (2023: £62,000)
The notes on pages 63 to 76 form part of these financial statements
62
Lowland Investment Company plc Annual Report 2024
Notes to the Financial Statements
1 Accounting Policies
a) Basis of preparation
The company is a registered investment company as defined in section 833 of the Companies Act 2006 and is
incorporated in the United Kingdom. It operates in the United Kingdom and is registered at the address on page 30.
The financial statements have been prepared in accordance with the Companies Act 2006, FRS 102 – The Financial
Reporting Standard applicable in the UK and Republic of Ireland and with the Statement of Recommended Practice:
Financial Statements of Investment Trust Companies and Venture Capital Trusts (‘the SORP’) issued in July 2022 by the
Association of Investment Companies.
The principal accounting policies applied in the presentation of these financial statements are set out below. These
policies have been consistently applied to all the years presented.
The Financial Statements have been prepared under the historical cost basis except for the measurement of fair value of
investments. In applying FRS102, financial instruments have been accounted for in accordance with Section 11 and 12 of
the standard. All of the Company’s operations are of a continuing nature.
b) Going Concern
The Directors have considered the liquidity of the portfolio and concluded that the assets of the Company consist of
securities that are readily realisable. They have also considered the impact of the war in Ukraine and Israel and changes
inthe international political landscape including revenue forecasting, and a review of covenant compliance including the
headroom above the most restrictive covenants. They have concluded that they are able to meet their financial obligations
as they fall due until 31 December 2025, which is a period of at least twelve months from the date of approval of these
financial statements. Having assessed these factors, the principal risks and other matters discussed in connection with
the viability statement, the Directors considered it appropriate to adopt the going concern basis of accounting in
preparing the financial statements.
c) Investments held at Fair Value through Profit or Loss
Listed investments, including AIM stocks are held at fair value through profit or loss and accordingly are valued at fair
value, deemed to be the quoted bid price or the last trade price depending on the convention of the exchange on which
the investment is quoted.
Unlisted investments have also been classified as held at fair value through profit or loss and are valued by the Directors
using primary valuation techniques such as recent transactions and net assets.
Changes in the fair value of investments held at fair value through profit or loss and gains and losses on disposal are
recognised in the Income Statement as ‘gains or losses on investments held at fair value through profit or loss’. Also
included in this are transaction costs incurred on the purchase and disposal of investments. All purchases and sales
areaccounted for on a trade date basis.
d) Foreign Currency
The results and financial position of the Company are expressed in pounds sterling, which is the functional and
presentational currency of the Company. Sterling is the functional currency because it is the currency of the primary
economic environment in which the Company operates.
Transactions recorded in overseas currencies during the year are translated into sterling at the appropriate daily exchange
rates. Monetary assets and liabilities and equity investments held at fair value through profit or loss which are
denominated in foreign currencies at the Statement of Financial Position date are translated into sterling at the exchange
rates ruling at that date.
Any gains or losses on the translation of foreign currency balances, whether realised or unrealised, are taken to the capital
or to the revenue return of the Income Statement, depending on whether the gain or loss is of a capital or revenue nature.
e) Income
Dividends receivable on equity shares are taken to the revenue return on an ex-dividend basis except where, in the
opinion of Directors, the dividend is capital in nature in which case it is taken to the ‘gains/(losses) on investments’ in the
capital return column. The ordinary element of scrip dividends received in lieu of cash dividends is recognised as revenue.
Any enhancement above the cash dividend is treated as capital. Income distributions from UK Real Estate Investment
Trusts will be split into two parts: a Property Income Distribution (‘PID’) made up of rental revenue; and a non-PID
element, consisting of non-rental revenue. The PID element is subject to corporation tax as schedule A revenue, while the
non-PID element will be treated as franked revenue.
63
Lowland Investment Company plc Annual Report 2024
Notes to the Financial Statements (continued)
1 Accounting Policies (continued)
e) Income (continued)
Bank interest is accounted for monthly on an accruals basis and shown in the revenue return based on amounts to which
the Company is entitled.
Fees earned from stock lending are accounted for monthly on an accruals basis and shown in the revenue return after
deduction of amounts withheld by the counterparty arranging the stock lending facility.
f) Management Fees, Administrative Expenses and Finance Costs
All expenses and finance costs are accounted for on an accruals basis. All administrative expenses except the
management fee and finance costs are charged to the revenue return of the Income Statement. The management fee and
finance costs are charged 50% to the capital return of the Income Statement and50% to the revenue return of the
Income Statement.
g) Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on the taxable profit for the year. Taxable profit differs from return before taxation as
reported in the Income Statement because it excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The Company’s liability for current tax is
calculated using the applicable rate of corporation tax for the accounting period.
In line with the recommendations of the AIC SORP, the allocation method used to calculate tax relief on expenses
presented against capital returns in the supplementary information in the Income Statement is the ‘marginal basis’. Under
this basis, if taxable income is capable of being offset entirely by expenses presented in the revenue return column of the
Income Statement, then no tax relief is transferred to the capital return column.
Deferred taxation is provided on all timing differences that have originated but not reversed by the Statement of Financial
Position date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there
will be suitable profits from which the future reversal of timing differences can be deducted. Any liability to deferred tax is
provided at the average rate of tax expected to apply based on tax rates and laws that have been enacted or
substantively enacted at the Statement of Financial Position date. Deferred tax assets and liabilities are not discounted to
reflect the time value of money.
h) Borrowings
Interest bearing bank loans and overdrafts are recorded initially at fair value, being the proceeds received, less direct
issue costs. They are subsequently re-measured at amortised cost. Finance costs including interest payable, premiums
on settlement or redemption and direct issue costs, are accounted for on an accruals basis in the Income Statement
using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they are
not settled in the period in which they arise.
Senior unsecured notes are recorded initially at proceeds received, less direct issue costs. They are subsequently
re-measured at amortised cost. The issue costs will be amortised over the life of the loan notes. Finance costs, including
interest payable, are accounted for on an accruals basis in the Income Statement using the effective interest rate method.
i) Dividends Payable to Shareholders
Dividends payable to shareholders are recognised in the financial statements when they are paid, or in the case of final
dividends, when they are approved by shareholders. Dividends are dealt with in the Statement of Changes in Equity.
j) Capital and Reserves
Called up share capital represents the nominal value of ordinary shares issued.
The share premium account represents the premium above nominal value received by the Company on issuing shares
net of issue costs.
The revenue reserve represents accumulated revenue profits retained by the Company that have not currently been
distributed to shareholders as a dividend.
The capital redemption reserve represents the nominal value of ordinary shares that have been repurchased and cancelled.
Other capital reserves are split into two components, the capital reserve arising on investments sold and the capital
reserve arising on investments held. The following analyses what is accounted for in each of these components.
64
Lowland Investment Company plc Annual Report 2024
Notes to the Financial Statements (continued)
1 Accounting Policies (continued)
j) Capital and Reserves (continued)
Capital reserve arising on investments sold
The following are accounted for in this reserve:
●
gains and losses on the disposals of investments;
●
realised foreign exchange differences of a capital nature;
●
cost of repurchasing ordinary share capital; and
●
expenses and finance costs allocated to capital net of tax relief.
Capital reserve arising on revaluation of investments held
The following are accounted for in this reserve:
●
increases and decreases in the valuation of investments held at the year end; and
●
unrealised foreign exchange differences of a capital nature.
k) Distributable Reserves
The Company’s capital reserve arising on investments sold (which may be restricted by unrealised losses on investments
held) and revenue reserve may be distributed by way of a dividend.
l) Significant Accounting Judgements and Estimates
The preparation of the Company’s financial statements on occasion requires the Directors to make judgements, estimates
and assumptions that affect the reported amounts in the primary financial statements and the accompanying disclosures.
These assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of
assets or liabilities affected in the next financial year.
The Directors do not believe that any accounting judgements or estimates have been applied to this set of financial
statements that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities.
Nordo they believe that there are any estimates that have a significant risk of causing a material adjustment to the carrying
amount of assets and liabilities within the next financial year. In line with UK GAAP investments are valued at fair value
which are predominantly quoted prices for the investments in active markets and therefore reflect participants’ views of
climate change risk.
2 Gains on investments held at fair value through profit or loss
2024
£’000
2023
£’000
Gains on the sale of investments based on historical cost 8,158 7,085
Less: revaluation (losses)/gains recognised in previous years (5,289) 3,499
Gains on investments sold in the year based on carrying value at previous Statement
of Financial Position date 2,869 10,584
Revaluation gains on investments held at 30 September 39,684 25,973
Exchange losses (3) (11)
42,550 36,546
65
Lowland Investment Company plc Annual Report 2024
Notes to the Financial Statements (continued)
3 Income from Investments
2024
£’000
2023
£’000
UK dividends:
Listed investments 16,441 17,210
Unlisted – 13
Property income dividends 731 615
17,172 17,838
Non UK dividends:
Overseas dividend income 2,494 2,831
2,494 2,831
19,666 20,669
4 Other Interest Receivable and Similar Income
2024
£’000
2023
£’000
Stock lending commission 74 42
Income from underwriting 8 –
Bank interest 78 65
160 107
Stock lending commission has been shown net of brokerage fees of £19,000 (2023: £11,000).
5 Management fees
2024 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Management fee 867 868 1,735 856 857 1,713
A description of the basis for calculating the management fee is given in the Strategic Report on page 27 and further
detailed in note 20 on page 76.
6 Administrative Expenses
2024
£’000
2023
£’000
Directors’ fees and expenses (see Directors’ Remuneration Report on page 41)
1
191 161
Auditors’ remuneration – for audit services 55 52
AIC subscriptions 21 21
Directors’ and Officers’ liability insurance 28 28
Listing fees (Stock Exchange, newspapers and internet) 38 39
Safe custody and bank charges 22 22
Loan facility fees 91 106
Printing and postage 22 27
Registrar’s fees 21 20
General expenses and marketing expenses payable to Janus Henderson 137 56
Depositary fees 32 31
Other expenses 76 71
Irrecoverable VAT 68 52
802 686
1. All transactions with Directors, as disclosed in the Directors’ Remuneration Report, are related party transactions
66
Lowland Investment Company plc Annual Report 2024
Notes to the Financial Statements (continued)
7 Finance Costs
2024 2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
On bank loans and overdrafts repayable within one year 636 636 1,272 549 549 1,098
On senior unsecured loan notes 479 479 958 478 478 956
1,115 1,115 2,230 1,027 1,027 2,054
The allocation between revenue return and capital return is explained in note 1(f) on page 64.
8 Taxation on Net Return
Analysis of tax charge for the year
2024 2023
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Overseas tax suffered 37 – 37 80 – 80
Total taxation for the year 37 – 37 80 – 80
Factors affecting the tax charge for the year
2024 2023
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Net return before taxation 17,042 40,567 57,609 18,207 34,662 52,869
Corporation tax at effective rate of 25%
1
4,261 10,142 14,403 4,006 7,626 11,632
Effects of:
Non-taxable UK dividends (4,110) – (4,110) (3,789) – (3,789)
Other non-taxable income (624) – (624) (623) – (623)
Overseas tax suffered 37 – 37 80 – 80
Excess management expenses 442 466 908 406 414 820
Corporate interest restriction 31 29 60 – – –
Currency losses – 1 1 – 2 2
Non-taxable/deductable capital gains – (10,638) (10,638) – (8,042) (8,042)
Total tax charge 37 – 37 80 – 80
1. The UK corporation tax rate is 25% (2023: effective rate of 22%). The tax charge for the year is lower than the corporation tax rate
No provision for deferred taxation has been made in the current or prior accounting year. The Company has not provided
deferred tax on capital gains or losses arising on the revaluation and disposal of investments as it is exempt from tax on
these items because of its investment trust status. The Company can offset management fees, other administrative
expenses and interest costs against taxable income to eliminate any tax charge on such income. The tax legislation refers
to these as management expenses (management fees and other administrative expenses) and non-trade loan relationship
deficits (interest costs) and these are captured together under the heading ‘Excess management expenses’ in the table
above. Where these are not fully utilised, they can be carried forward to future years. As the Company is unlikely to
generate future taxable profits to utilise these amounts, the Company cannot recognise an asset to reflect them, but must
still disclose the deferred tax amount carried forward arising from utilised amounts. Consequently, the Company has not
recognised a deferred tax asset totalling £18,397,000 (2023: £17,488,000) arising as a result of having unutilised
management expenses and unutilised non-trade loan relationship deficits totalling £73,587,000 (2023: £69,954,000), and
based on a prospective tax rate of 25% (2023: 25%).
67
Lowland Investment Company plc Annual Report 2024
Notes to the Financial Statements (continued)
9 Return per Ordinary Share – Basic and Diluted
The return per ordinary share is based on the net return attributable to the ordinary shares of £57,572,000 (2023: net return of
£52,789,000) and on 270,185,650 ordinary shares (2023: 270,185,650) being the weighted average number of ordinary shares
in issue during the year. The return per ordinary share can be further analysed between revenue and capital, as below.
2024
£’000
2023
£’000
Net revenue return 17,005 18,127
Net capital return 40,567 34,662
Net total return 57,572 52,789
Weighted average number of ordinary shares in issue during the year 270,185,650 270,185,650
2024
Pence
2023
Pence
Revenue return per ordinary share 6.29 6.71
Capital return per ordinary share 15.01 12.83
Total return per ordinary share 21.30 19.54
The Company does not have any dilutive securities, therefore the basic and diluted returns per share are the same.
10 Dividends Paid and Payable on the Ordinary Shares
Dividends on ordinary shares Record date Payment date
2024
£’000
2023
£’000
Third interim dividend (1.525p) for the year ended
30September 2022 30 September 2022 31 October 2022 – 4,120
Final dividend (1.525p) for the year ended
30September 2022 30 December 2022 31 January 2023 – 4,120
First interim dividend (1.525p) for the year ended
30September 2023 31 March 2023 28 April 2023 – 4,120
Second interim dividend (1.525p) for the year ended
30September 2023 30 June 2023 31 July 2023 – 4,120
Third interim dividend (1.6p) for the year ended
30September 2023 28 September 2023 31 October 2023 4,323 –
Final dividend (1.6p) for the year ended
30 September 2023 28 December 2023 31 January 2024 4,323 –
First interim dividend (1.6p) for the year ended
30September 2024 11 April 2024 30 April 2024 4,323 –
Second interim dividend (1.6p) for the year ended
30September 2024 27 June 2024 31 July 2024 4,323 –
Return of unclaimed dividends (8) –
17,284 16,480
The third interim dividend and the final dividend for the year ended 30 September 2024 have not been included as a liability
in these financial statements. The total dividends payable in respect of the financial year, which form the basis of the
retention test under Section 1158 of the Corporation Tax Act 2010, are set out below.
2024
£’000
Revenue available for distribution by way of dividends for the year 17,005
First interim dividend (1.6p) for the year ended 30 September 2024 (4,323)
Second interim dividend (1.6p) for the year ended 30 September 2024 (4,323)
Third interim dividend (1.6p) for the year ended 30 September 2024 (4,323)
Final dividend 1.625p for the year ended 30 September 2024 (based on 270,185,650,000 ordinary shares in
issue at 3December 2024) (4,391)
Transfer from reserves (355)
1
1. The residual will be transferred from the revenue reserve (2023: £1,241,000 transferred to the revenue reserve)
68
Lowland Investment Company plc Annual Report 2024
Notes to the Financial Statements (continued)
11 Investments held at Fair Value through Profit or Loss
2024
£’000
2023
£’000
Cost at start of year 408,325 397,448
Investment holding losses at start of year (15,896) (45,367)
Valuation at start of year 392,429 352,081
Analysis of transactions made during the year
Additions at cost 78,304 56,363
Disposal proceeds received (80,668) (52,572)
Unrealised gains on investments 34,394 29,472
Realised gains on investments 8,158 7,085
Valuation at end of year 432,617 392,429
Cost at end of year 414,118 408,325
Investment holding gains/(losses) at end of year 18,499 (15,896)
Valuation at end of year 432,617 392,429
Included in the total investments are unlisted investments shown at the Directors fair value of £2,268,000 (2023: £2,368,000).
At 30 September 2024 the total value of securities on loan by the Company for stock lending purposes was £36,393,000
(2023: £27,408,000). The maximum aggregate value of securities on loan at any time during the year ended 30 September
2024 was £42,921,000 (2023: £45,900,000). The Company’s agent holds collateral comprising FTSE 100 stocks, gilts,
overseas equities and overseas government bonds with a collateral value of £38,477,000 (2023: £28,864,000) amounting
to a minimum of 106% (2023: 105%) of the market value of any securities on loan.
Purchase transaction costs for the year ended 30 September 2024 were £337,000 (2023: £232,000). These comprise mainly
stamp duty and commission. Sale transaction costs for the year ended 30 September 2024 were £32,000 (2023:£19,000).
The Company received £80,668,000 (2023: £52,572,000) from investments sold in the year. The book cost of these
investments when they were purchased was £72,510,000 (2023: £45,487,000). These investments have been revalued over
time and until they were sold any unrealised gains/losses were included in the fair value of the investments.
As at 30 September 2024, the Company holds 3% or more of any class of capital in 11 investee companies (2023: 11).
Within the 11, there were 6 whose valuation represented more than 1% of the value of the total investment portfolio held by
the Company, which are:
2024
Valuation
£’000
2024
% of share
capital
2023
Valuation
£’000
2023
% of share
capital
Eleco 4,131 3.8 – –
Epwin 6,288 4.4 4,007 4.2
Henderson Opportunities Trust 4,824 5.7 3,760 5.1
Renold 5,243 4.4 – –
Springfield 4,028 3.2 – –
STV Group 5,096 4.5 – –
12 Debtors
2024
£’000
2023
£’000
Prepayments and accrued income 2,415 2,739
Taxation recoverable 13 66
2,428 2,805
69
Lowland Investment Company plc Annual Report 2024
Notes to the Financial Statements (continued)
13 Creditors
Amounts falling due within one year
2024
£’000
2023
£’000
Unsecured sterling bank loans 19,176 17,818
Purchases for future settlement 95 288
Other creditors 1,478 897
20,749 19,003
The Company entered into a three year revolving loan facility of up to £40m with BNP Paribas (London Branch) on
27October 2022. As at 30 September 2024 £19.2m (2023: £17.8m) repayable in October and December 2024 of the facility
was drawn down. This facility is due toexpire on 27 October 2025.
Amounts falling due after more than one year
2024
£’000
2023
£’000
3.15% senior unsecured loan notes 2037 29,824 29,812
On 5 January 2017 the Company issued £30m 3.15% senior unsecured notes due 2037, net of costs totalling £255,000.
The issue costs will be amortised over the life of the notes.
The £30m senior unsecured notes are redeemable at par on 5January 2037.
14 Financial Risk Management Policies and Procedures
As an investment trust, the Company invests in equities and other investments for the long-term so as to secure its
investment objective and policy as stated on page 24. In pursuing its investment objective and policy, the Company is
exposed to a variety of financial risks that could result in either a reduction in the Company’s net assets or a reduction in
the profits available for distribution by way of dividends.
These financial risks, including market risk (comprising market price risk, currency risk and interest rate risk), liquidity risk
and credit and counterparty risk, and the Directors’ approach to the management of these risks, are set out below and
have not changed from the previous accounting period. The Board and Janus Henderson co-ordinate the Company’s risk
management and there are various risk management systems in place as detailed below:
●
straight-through processing via a deal order and management system (‘OMS’) is utilised for securities, with
connectivity to third-party affirmation and trade repository services;
●
portfolio modelling and investment management functions (including order-raising, dealing and trade execution) are
performed using one of, or a combination of, the following third-party software applications: Charles River
Development, OMS and/or Imagine;
●
fund pricing and accounting services are outsourced to a third-party administrator (currently BNP Paribas) which
utilises HiPortfolio software; and
●
the IT tools to which the Janus Henderson risk, compliance and operations teams have access for independent
monitoring and risk measurement purposes include:
– Charles River Compliance module for investment restrictions monitoring;
– SAI Global Bwise operational risk database;
– Riskmetrics, UBS Delta, Style Research, Cognity and Barra for market risk measurement;
– Bloomberg for market data and price-checking; and
– HiPortfolio for portfolio holdings and valuations.
These are supplemented by in-house developments: derivatives risk and compliance database (‘DRAC’) and counterparty
exposure (‘CER’) reports.
14.1 Market Risk
The fair value of a financial instrument held by the Company may fluctuate due to changes in market prices. This market
risk comprises market price risk (see note 14.1.1), currency risk (see note 14.1.2) and interest rate risk (see note 14.1.3). The
Board reviews and agrees policies for managing these risks. Janus Henderson assesses the exposure to market risk when
making each investment decision, and monitors the overall level of market risk on the whole of the investment portfolio on
an ongoing basis.
70
Lowland Investment Company plc Annual Report 2024
Notes to the Financial Statements (continued)
14 Financial Risk Management Policies and Procedures (continued)
14.1.1 Market Price Risk
Market price risk (i.e. changes in market prices other than those arising from interest rate risk or currency risk) may affect
the fair value of listed and unlisted investments.
The Company’s exposure to market price risk at 30 September 2024 is represented by its investments held on the
Statement of Financial Position under the heading ‘Investments held at fair value through profit or loss’ on page 61.
Management of the Risk
The Board manages the risks inherent in the investment portfolio by ensuring full and timely access to relevant information
from Janus Henderson. The Board meets regularly and at each meeting reviews investment performance. The Board
monitors Janus Henderson’s compliance with the Company’s objectives, and is directly responsible for investment strategy
and asset allocation.
Concentration of Exposure to Market Price Risks
An analysis of the Company’s investment portfolio is shown on pages 12 to 20. This shows that the majority of the
investments’ value is in UK listed companies. Accordingly, there is a concentration of exposure to market price risk, though
it is recognised that an investment’s country of domicile or of listing does not necessarily equate to its exposure to the
economic conditions in that country.
Market Price Risk Sensitivity
The following table illustrates the sensitivity of the total return after taxation for the year and the net assets to an increase or
decrease of 20% (2023: 20%) in the fair values of the Company’s investments including the impact on the management fee.
This level of change is considered to be reasonably possible based on observation of market behaviour in the last few
years.
Sensitivity analysis – Market prices if prices change by 20%
2024 2023
If prices go
up
£’000
If prices go
down
£’000
If prices go
up
£’000
If prices go
down
£’000
Investments at year end 432,617 432,617 392,429 392,429
Impact on income statement:
Revenue return (173) 173 (157) 157
Capital return 86,350 (86,350) 78,329 (78,329)
Impact on net assets and total return (excluding gearing) 86,177 (86,177) 78,172 (78,172)
14.1.2 Currency Risk
A proportion of the Company’s assets, liabilities and income are denominated in currencies other than sterling (the
Company’s functional currency and presentational currency). As a result, movements in exchange rates may affect the
sterling value of those items. As the Company’s investments are predominantly in sterling denominated securities its
exposure to currency risk is not considered material and no sensitivity analysis has been presented. Investments held in
currencies other than sterling were £16,891,000 (2023: £15,188,000) representing 3.9% (2023: 3.9%) of the total
investments of the Company.
Management of the Risk
Janus Henderson monitors the Company’s exposure to foreign currencies on a daily basis and reports to the Board at
each Board meeting. Janus Henderson measures the risk to the Company of the foreign currency exposure by considering
the effect on the Company’s net asset value and total return of a movement in the exchange rates to which the Company’s
assets, liabilities, income and expenses are exposed.
Investment income denominated in foreign currencies is converted into sterling on receipt. The Company does not use
financial instruments to mitigate the currency exposure in the period between the time that income is included in the
financial statements and its receipt.
71
Lowland Investment Company plc Annual Report 2024
Notes to the Financial Statements (continued)
14 Financial Risk Management Policies and Procedures (continued)
14.1.3 Interest Rate Risk
Interest rate movements may affect:
●
the fair value of investments in fixed interest securities;
●
the level of income receivable from interest-bearing securities and cash at bank and on deposit; and
●
the interest payable on the Company’s variable rate borrowings.
Management of the Risk
The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into
account when making investment decisions and borrowing under the loan facility. The Company, generally, does not hold
significant cash balances, with short term borrowings being used when required. The Company finances part of its
activities through borrowings at levels approved and monitored by the Board. Derivative contracts have not been used
during the year to hedge against the exposure to interest rate risk.
Interest Rate Exposure
The Company’s exposure to floating interest rates can be found on the Statement of Financial Position under the heading
‘Cash at bank’ and in note 13 under the heading ‘Unsecured sterling bank loans’.
Interest receivable and finance costs are at the following rates:
●
Interest received on cash balances, or paid on bank overdrafts, is at a margin linked to SONIA; and
●
Interest paid on borrowings under the loan facility is at a margin over SONIA for the type of loan. The weighted average
interest rate of these is 6.21% as at 30 September 2024 (2023: 6.29%).
The Company had fixed interest rate asset exposure at 30 September 2024 on the holding in Wadworth at £126,000
(2023:£126,000). The Company also had fixed interest rate liability exposure through the senior unsecured loan notes.
Interest Rate Risk Sensitivity
The Company is primarily exposed to interest rate risk through its loan facility. From 27 October 2022 this was with BNP
Paribas London Branch (previously, Industrial and Commercial Bank of China (London branch)). The sensitivity is as follows:
●
Borrowings vary throughout the year as a result of the Board’s borrowing policy. Borrowings (net of cash) at the year
end were £14,015,000 (2023: £14,892,000) and if that level of borrowing was maintained for a full year, then a 200 basis
points change in SONIA (up or down) would decrease or increase net revenue and total net return after taxation by
approximately £280,000 (2023: £298,000).
14.2 Liquidity Risk
This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.
Management of the Risk
Liquidity risk is not significant as the majority of the Company’s assets are investments in quoted securities that are readily
realisable. The Company had unsecured sterling loan facilities totalling £60,000,000 (2023: £60,000,000) and an overdraft
facility with the custodian, the extent of which is determined by the custodian on a regular basis by reference to the value of
the securities held by it on behalf of the Company. The facilities are subject to regular review.
The Board gives guidance to Janus Henderson as to the maximum amount of the Company’s resources that should be
invested in any one company. The policy is that the Company should generally remain fully invested and that short-term
borrowings be used to manage short-term cash requirements.
The contractual maturities of the financial liabilities at 30 September based on the earliest date on which payment can be
required are as follows:
At 30 September 2024
Due within
1 year
£’000
Due within
1-5 years
£’000
Due after
5 years
£’000
Bank loans
1
19,379 – –
Senior unsecured notes
2
945 3,780 37,088
Other creditors 1,215 – –
21,539 3,780 37,088
72
Lowland Investment Company plc Annual Report 2024
Notes to the Financial Statements (continued)
14 Financial Risk Management Policies and Procedures (continued)
At 30 September 2023
Due within
1 year
£’000
Due within
1-5 years
£’000
Due after
5 years
£’000
Bank loans
1
17,989 – –
Senior unsecured notes
2
945 3,780 38,033
Other creditors 867 – –
19,801 3,780 38,033
1. Includes the interest payable to maturity
2. The above figures show interest payable over the remaining term of the senior unsecured notes. The figures in the ‘due after 5 years’ column also include
the capital to be repaid. Details of the repayment are set out on page 70
14.3 Credit and Counterparty Risk
The failure of the counterparty to a transaction to discharge its obligations under that transaction could result in the
Company suffering a loss.
Management of the Risk
The risk is managed as follows:
●
Investment transactions are carried out with a large number of brokers, whose credit standard is reviewed periodically
by Janus Henderson, and limits are set on the amount that may be due from any one broker; and
●
Cash at bank is held only with reputable banks with high quality external credit ratings.
The table below summarises the credit risk exposure of the Company at year end.
2024
£’000
2023
£’000
Fixed interest securities 126 126
Cash 5,161 2,926
Debtors:
– prepayments and accrued income 2,369 2,701
7,656 5,753
14.4 Fair Values of Financial Assets and Financial Liabilities
Except as noted below, the financial assets and financial liabilities are either carried in the Statement of Financial Position at
their fair value (investments) or the Statement of Financial Position amount is a reasonable approximation of fair value (due
from brokers, dividends and interest receivable, due to brokers, accruals, cash at bank, bank overdrafts and amounts due
under the loan facilities). The senior unsecured loan notes are carried in the Statement of Financial Position at amortised cost.
At 30 September 2024, the fair value of the senior unsecured loan notes was estimated to be £24,672,000
(2023:£23,224,000). The fair value of the senior unsecured loan notes is calculated using a discounted rate which reflects
the yield on a UK Gilt of similar maturity plus a suitable credit spread.
14.5 Fair Value Hierarchy Disclosures
The table below analyses fair value measurements for investments held at fair value through profit or loss. These fair value
measurements are categorised into different levels in the fair value hierarchy based on the valuation techniques used and
are defined as follows under FRS 102:
73
Lowland Investment Company plc Annual Report 2024
Notes to the Financial Statements (continued)
14 Financial Risk Management Policies and Procedures (continued)
14.5 Fair Value Hierarchy Disclosures (continued)
Categorisation within the hierarchy has been determined on the basis of the lowest level of input that is significant to the fair
value measurement of the relevant asset as follows:
Level 1 – valued using quoted prices in active markets for identical assets.
Level 2 – valued by reference to valuation techniques using observable inputs other than quoted prices included within Level 1.
Level 3 – valued by reference to valuation techniques using inputs that are not observed on observable market data.
Financial assets at fair value through profit or loss at 30 September 2024
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Investments 430,340 – 2,277 432,617
Financial assets at fair value through profit or loss at 30 September 2023
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Investments 390,061 – 2,368 392,429
Chamberlin has transferred from level 1 to level 3 after it entered administration and its shares were suspended from trading.
A reconciliation of movements within Level 3 is set out below:
2024
£’000
2023
£’000
Opening balance 2,368 2,908
Transfers in 9 –
Total loss included in the Income Statement – on investments held (100) (540)
Closing balance 2,277 2,368
The Company’s holdings in Oxford Sciences Enterprises and Wadworth were revalued downward during the year (2023:
Oxford Science Enterprises and Wadworth downward).
14.6 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 the revenue and capital return to its equity shareholders. This is achieved through an appropriate balance of
equity capital and debt.
The Company’s capital at 30 September 2024 comprises its equity share capital, reserves and loans that are shown in the
Statement of Financial Position at a total of £438,633,000 (2023: £396,975,000).
The Board, with the assistance of Janus Henderson, monitors and reviews the structure of the Company’s capital on an
ongoing basis. This review includes the planned level of gearing.
The Company is subject to several externally imposed capital requirements:
●
borrowings under the bank facility are not to exceed 30% of the adjusted net asset value;
●
net asset value not to be less than £150,000,000;
●
total borrowings not to exceed 35% of the net asset value;
●
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 by way of dividends, the Company has to be
able to meet the capital restriction tests imposed on investment companies by company law.
The Company has complied with these requirements.
74
Lowland Investment Company plc Annual Report 2024
Notes to the Financial Statements (continued)
15 Called Up Share Capital
Number of
shares entitled
to dividend
Total number
of shares
Nominal value
of shares
£’000
At 30 September 2024 and 2023 270,185,650 270,185,650 6,755
No shares were allotted or bought back during the year (2023: nil).
16 Other Capital Reserves
Capital reserve
arising on revaluation
of investments held
£’000
Capital reserve
arising on
investments sold
£’000
Other capital
reserves total
£’000
At 1 October 2023 (15,918) 285,969 270,051
Transfer on disposal of investments (5,289) 5,289 –
Net gains on investments 39,684 2,869 42,553
Expenses and finance costs allocated to capital – (1,983) (1,983)
Exchange differences – (3) (3)
At 30 September 2024 18,477 292,141 310,618
The capital reserve arising on revaluation of investments held at 30 September 2024 includes a gain of £884,000
(2023:£984,000) based on historical book cost, in respect of the revaluation of unlisted investments.
Capital reserve
arising on revaluation
of investments held
£’000
Capital reserve
arising on
investments sold
£’000
Other capital
reserves total
£’000
At 1 October 2022 (45,390) 280,779 235,389
Transfer on disposal of investments 3,499 (3,499) –
Net gains on investments 25,973 10,584 36,557
Expenses and finance costs allocated to capital – (1,884) (1,884)
Exchange differences – (11) (11)
At 30 September 2023 (15,918) 285,969 270,051
17 Net Asset Value per Ordinary Share
The net asset value per ordinary share of 144.2p (2023: 129.3p) is based on the net assets attributable to the ordinary shares
of £389,633,000 (2023: £349,345,000) and on 270,185,650 (2023: 270,185,650) shares in issue on 30 September 2024.
The movements during the year of the assets attributable to the ordinary shares were as follows:
2024
£’000
2023
£’000
Total net assets at start of year 349,345 313,036
Total net return after taxation 57,572 52,789
Net dividends paid in the year:
Ordinary shares (17,284) (16,480)
Net assets attributable to the ordinary shares at 30 September 389,633 349,345
75
Lowland Investment Company plc Annual Report 2024
Notes to the Financial Statements (continued)
18 Net Debt Reconciliation
Cash and cash
equivalents
£’000
Bank loans and
overdraft
repayable within
one year
£’000
Other debt
repayable after
more than
one year
£’000
Total
£’000
Net debt at 1 October 2023 2,926 (17,818) (29,812) (44,704)
Cash flows 2,238 (1,358) – 880
Exchange movements (3) – – (3)
Non cash flow:
Amortisation of issue costs – – (12) (12)
Net debt at 30 September 2024 5,161 (19,176) (29,824) (43,839)
Cash and cash
equivalents
£’000
Bank loans and
overdraft
repayable within
one year
£’000
Other debt
repayable after
more than
one year
£’000
Total
£’000
Net debt at 1 October 2022 9,395 (18,522) (29,802) (38,929)
Cash flows (6,458) 704 – (5,754)
Exchange movements (11) – – (11)
Non cash flow:
Amortisation of issue costs – – (10) (10)
Net debt at 30 September 2023 2,926 (17,818) (29,812) (44,704)
19 Capital Commitments and Contingent Liabilities
Capital Commitments
There were no capital commitments as at 30 September 2024 (2023: £nil).
Contingent Liabilities
There were no contingent liabilities as at 30 September 2024 (2023: £nil).
20 Transactions with the Manager and related parties
Under the terms of an agreement effective from 22 July 2014, the Company has appointed Janus Henderson to provide
investment management, accounting, administrative and secretarial services. Janus Henderson has contracted with
BNP Paribas to provide accounting and administration services.
The management fee is calculated on a tiered basis at the rate of 0.5% per annum of the first £325m of the average net
chargeable assets with the balance above that charged at a reduced rate of 0.4% per annum for the financial year under
review and are invoiced on a quarterly basis. Further details of the fee arrangements for these services including the
definition of net chargeable assets are given in the Strategic Report on page 27. The total of the management fees paid
or payable to Janus Henderson under this agreement in respect of the year ended 30 September 2024 was £1,735,000
(2023: £1,713,000). The amount outstanding at 30 September 2024 was £876,000 (2023: £411,000).
In addition to the above services, Janus Henderson facilitates marketing activities with third parties which are recharged to
the Company. Janus Henderson also provided sales and marketing services. The total amounts paid to JanusHenderson
in respect of marketing for the year ended 30 September 2024 amounted to £137,000 (2023: £56,000).
Details of fees paid to Directors are included in the Directors’ Remuneration Report on page 41 and in note 6 on page66.
76
Lowland Investment Company plc Annual Report 2024
Securities Financing Transactions
The Company engages in Securities Financing Transactions (as defined in Article 3 of Regulation (EU) 2015. Securities financing
transactions include repurchase transactions, securities or commodities lending and securities or commodities borrowing,
buy-sell back transactions or sell-buy back transactions and margin lending transactions). In accordance with Article 13 of the
Regulation, the Company’s involvement in and exposures related to securities lending for the year ended 30 September 2024 are
detailed below.
Global Data
The amount of securities on loan as a proportion of total lendable assets and the Company’s net assets as at 30 September are
disclosed below:
Stock lending 2024
Market value of securities on loan £’000 % of lendable assets % of assets under management
36,393 8.41 9.34
Concentration Data
The ten largest collateral issuers across all the securities financing transactions as at 30 September are disclosed below:
Issuer
2024
Market value
of collateral
received
£’000
US Treasury 9,993
Philips 1,112
Sanofi 1,112
Zurich 1,112
Kirin 1,112
LVMH 1,111
Bridgestone 1,111
Japan Tobacco 1,110
Canon 1,110
Kao 1,110
19,993
The top nine counterparties of each type of securities financing transactions as at 30 September are disclosed below:
Counterparty
2024
Market value
of securities
on loan
£’000
Natixis 10,489
Morgan Stanley 9,310
Bank of Nova Scotia 9,211
Barclays 5,523
BNP Paribas 1,144
HSBC 451
JP Morgan 150
Citigroup 95
UBS 20
36,393
All counterparties have been included.
77
Lowland Investment Company plc Annual Report 2024
Securities Financing Transactions (continued)
Aggregate Transaction Data
The following table discloses a summary of aggregate transaction data related to the collateral received from securities on loan
as at 30 September:
Stock lending 2024
Counterparty
Counterparty country
of origin Type Quality
Collateral
currency
Settlement
basis Custodian
Market value of
collateral
received £’000
Natixis France Equity Main Market Listing JPY Tri-part y HSBC 6,673
Equity Main Market Listing EUR Tri-par ty HSBC 3,335
Equity Main Market Listing CHF Tri-par ty HSBC 1,111
Morgan Stanley United States Government Debt Investment Grade USD Tri-par ty HSBC 9,675
Equity Main Market Listing SGD Tri-par ty HSBC 103
Bank of Nova Scotia Canada Equity Main Market Listing GBP Tri-part y HSBC 7,328
Equity Main Market Listing USD Tri-par ty HSBC 1,253
Government Debt Investment Grade GBP Tri-par ty HSBC 1,072
Equity Main Market Listing EUR Tri-par ty HSBC 85
Equity Main Market Listing CAD Tri-par t y HSBC 16
Barclays United Kingdom Equity Main Market Listing JPY Tri-par t y HSBC 5,621
Government Debt Investment Grade USD Tri-par ty HSBC 219
Government Debt Investment Grade JPY Tri-part y HSBC 13
BNP Paribas France Equity Main Market Listing EUR Tri-par ty HSBC 478
Equity Main Market Listing GBP Tri-par t y HSBC 467
Equity Main Market Listing HKD Tri-par ty HSBC 148
Equity Main Market Listing USD Tri-par ty HSBC 121
HSBC Hong Kong Equity Main Market Listing USD Tri-part y HSBC 306
Equity Main Market Listing GBP Tri-par t y HSBC 132
Equity Main Market Listing GBP Bilateral HSBC 36
Government Debt Investment Grade GBP Tri-par ty HSBC 4
JP Morgan United States Equity Main Market Listing GBP Tri-par ty HSBC 134
Equity Main Market Listing EUR Tri-par ty HSBC 26
Citi United States Government Debt Investment Grade USD Tri-par ty HSBC 100
UBS Switzerland Equity Main Market Listing SGD Tri-par ty HSBC 14
Equity Main Market Listing GBP Tri-par t y HSBC 3
Equity Main Market Listing JPY Tri-par t y HSBC 2
Equity Main Market Listing USD Tri-par ty HSBC 2
38,477
Re-use of Collateral
The Company does not engage in any re-use of collateral.
Return and Cost
The return and cost of engaging in securities lending by the Company and the securities lending agent in absolute terms and as
a percentage of overall returns are disclosed below:
Total gross amount of securities
lending income
Direct and indirect costs and fees
deducted by securities lending agent
% return of the securities
lending agent
Net securities lending income
received by the Company % return of the Company
£93,000 £19,000 20% £74,000 80%
78
Lowland Investment Company plc Annual Report 2024
General Shareholder Information
AIFMD Disclosures
In accordance with the Alternative Investment Fund Managers
Directive (‘AIFMD’), information in relation to the Company’s
leverage (leverage is considered in terms of the Company’s
overall exposure to financial or synthetic gearing and includes
any method by which its exposure is increased whether
through borrowing of cash or securities, foreign currency
holdings, leverage embedded in derivative positions or by
anyother means) and remuneration of Janus Henderson Fund
Management UK Limited, as the Company’s Alternative
Investment FundManager (‘AIFM’) are required to be made
available to investors. These disclosures, including those on
the AIFM’s remuneration policy, are contained inaseparate
document called ‘AIFMD Disclosures’ which can be found on
the Company’s website.
BACS
Dividends can be paid to shareholders by means of BACS
(Bankers’ Automated Clearing Services); mandate forms for
this purpose are available from the Registrar, Computershare
Investor Services PLC. Alternatively, shareholders can write to
the Registrar (the address is given on page 30) to give their
instructions; these must include the bank account number,
the bank account title and the sort code of thebank to which
payments are to be made.
Common Reporting Standard
With effect from 1 January 2016 tax legislation under
TheOrganisation for Economic Co-operation and
Development Common Reporting Standard for Automatic
Exchange of Financial Account Information was introduced.
The legislation requires the Company toprovide personal
information to HMRC on certain investors who purchase
shares in investment trusts. This information will have to
beprovided annually to the local tax authority of the tax
residencies of anumber of non-UK based certificated
shareholders and corporate entities.
Equality Act
Copies of this report and other documents issued by the
Company are available from the Company Secretary.
Ifneeded, copies can be made available in a variety of
formats, including Braille or larger type as appropriate.
You may also go through a ‘typetalk’ operator (provided by
the Royal National Institute for Deaf People) dial 18001
followed by the number you wish to dial.
General Data Protection Regulation (‘GDPR’)
The General Data Protection Regulation (‘GDPR’) came into
force on 25 May 2018. It aims to protect and empower
individual data privacy and reshape the way organisations
approach data privacy. A privacy statement can be found
onthe website www.janushenderson.com.
ISA
The Company intends to continue to manage its affairs in
order to qualify as an eligible investment for a stocks and
shares ISA.
Key Information Document
Information in relation to the Company is contained in
a‘KeyInformation Document’ which can be found on
theCompany’s website.
Non-Mainstream Pooled Investment
(‘NMPI’)Status
The Company currently conducts its affairs so that its
ordinary shares of 2.5p each can be recommended by IFAs
to ordinary retail investors in accordance with the FCA Rules
in relation to non-mainstream investment products and
intends to continue to do so forthe foreseeable future.
Theshares are excluded from the FCA’s restrictions which
apply to non-mainstream investment products because they
are shares in an investment trust.
Performance Details/Share Price Information
Details of the Company’s share price and NAV can be found on
thewebsite. The address is www.lowlandinvestment.com.
TheCompany’s NAV is published daily.
Shareholder Details
Shareholders who hold their shares in certificated form can
check their shareholding with the Registrar, Computershare
Investor Services PLC, via www.computershare.com.
Please note that to gain access to your details on the
Computershare site you will need the holder reference
number shown on your share certificate.
Share Price Listings
The market price of the Company’s ordinary shares is
published daily in The Financial Times. The Financial Times
also shows figures for the estimated NAV and the discount.
The market price of the Company’s shares can be found
inthe London Stock Exchange Daily Official List.
Lowland Investment Company plc Annual Report 2024
79
General Shareholder Information (continued)
Taxonomy Regulation
Regulation (EU) 2020/852 establishes the basis for the EU
taxonomy. The EU taxonomy is a classification system,
establishing a list of environmentally sustainable economic
activities to provide companies, investors and policymakers
with appropriate definitions for which economic activities can
be considered environmentally sustainable. In accordance
with the Taxonomy Regulation, the Company confirms that the
investments underlying this financial product do not take into
account the EU criteria for environmentally sustainable
economic activities.
Voting at shareholder meetings
If you hold your shares in your own name, you will receive
notices of shareholder meetings with details of how to vote.
Ifyou hold shares via a nominee or platform, please see the
helpful information on the AIC website on how you can vote
your shares, https://www.theaic.co.uk/how-to-vote-
your-shares.
Warning to Shareholders
Many companies are aware that their shareholders have received unsolicited phone calls or correspondence concerning
investment matters. These are typically from overseas based ‘brokers’ who target UK shareholders offering to sell them
what often turn out tobe worthless or high risk shares in US or UK investments. They can be very persistent and extremely
persuasive. Shareholders are therefore advised to be very wary of any unsolicited advice, offers to buy shares at a discount
or offers of free company reports.
Please note that it is very unlikely that either the Company or the Company’s Registrar, Computershare Investor Services
PLC, would make unsolicited telephone calls to shareholders and that any such calls would relate only to official
documentation already circulated to shareholders and never in respect of investment ‘advice’.
If you are in any doubt about the veracity of an unsolicited phone call,please call the Company Secretary at the number
provided onpage 30.
Lowland Investment Company plc Annual Report 2024
80
Glossary
Alternative Investment Fund Managers
Directive (‘AIFMD’)
Agreed by the European Parliament and the Council of the
European Union and transposed into UK legislation, the AIFMD
classifies certain investment vehicles, including investment
companies, as Alternative Investment Funds (‘AIFs’) and requires
them to appoint an Alternative Investment Fund Manager (‘AIFM’)
and Depositary to manage and oversee the operations of the
investment vehicle. The Board of the Company retains
responsibility for strategy, operations and compliance and
theDirectors retain a fiduciary duty to shareholders.
Association of Investment Companies (‘AIC’)
The Company is a member of the AIC which is the trade body
for investment companies and represents the industry in relation
to various matters which impact the regulation of such entities.
Benchmark
An index against which performance is compared. For the
Company this is the FTSE All-Share Index Total Return.
Custodian
The Custodian is responsible for ensuring the safe custody of
the Company’s assets and that all transactions in the underlying
holdings are transacted in an accurate and timely manner.
Depositary
With effect from 22 July 2014 all AIFs were required to appoint
a Depositary which has responsibility for overseeing the
operations of the Company including safekeeping, cash
monitoring and verification of ownership and valuation of the
underlying holdings. The Depositary is strictly liable for the
loss of any investments or other assets in its custody unless
ithas notified that it has discharged its liability in certain
markets. The Depositary has confirmed that it has not
discharged liability in relation to any of the Company’s assets.
Derivative
A contract between two or more parties in relation to an
underlying security. The value of a derivative will fluctuate in
accordance with the value of the security and is a form of
gearing as the fluctuations in value are usually greater than
the fluctuations in the underlying security’s value. Examples
of derivatives are put and call options, swapcontracts,
futures and contracts for difference. Foreign exchange,
interest rates and commodities may also be traded
usingderivative contracts. The Company did not use
derivatives intheyear under review.
Dividend Dates
When declared or recommended, each dividend will have
three keydates applied to it. The payment date is the date on
which shareholders will receive their dividend, either by BACS
transfer or by receipt of a dividend cheque. The record date
applied to the dividend is used as a cut-off for the Company’s
registrars to know which shareholders should be paid a
dividend. Only shareholders on the register of members at the
close of business on the record date will receive the dividend.
The ex-dividend date is the business day before the record
date and is the date upon which the Company’s net asset
value will be disclosed ex-dividend.
Investment Trusts
Investment trusts are public limited companies, listed on
theLondon Stock Exchange, which provide shareholders
with a professionally managed portfolio of investments.
Investment trusts are exempt fromtax on the capital gains
arising on their investments subject tomeeting certain
criteria. Income, net of expenses and tax, is substantially
distributed to shareholders. Investment trusts are
alsoknown as investment companies, although the tax
legislation retains the reference to investment trusts.
Initial Public Offering (‘IPO’)
The first time that the stock of a private company is offered
tothepublic.
Liquidity
In the context of the liquidity of shares in the stock market,
this refers to the availability of buyers in the market for the
share in question. Where the market in a particular share
isdescribed as liquid, that share will be in demand and
holders wishing to sell their shares shouldfind ready
buyers. Conversely, where the market in a share isilliquid
the difficulty of finding a buyer will tend to depress the
price that might be negotiated for a sale.
Market Capitalisation (‘Market Cap’)
The market value of a company, calculated by multiplying the
mid-market price per share by the number of shares in issue.
Retail Price Index
An inflationary indicator that measures the change in the cost
of afixed basket of retail goods.
Lowland Investment Company plc Annual Report 2024
81
The Company uses the following alternative performance measures (‘APMs’) throughout the Annual Report, financial statements
and notes to the financial statements. The APMs are reconciled to the financial statements through the narrative below. The
Board believes that each of the APMs, which are typically used within the investment trust sector, provide additional useful
information to shareholders to help assess the Company’s performance against its peer group.
Capital Return per Ordinary Share
The capital return per share is the capital profit/(loss) for the year (see Income Statement) divided by the weighted average
number of ordinary shares in issue during the year (see note 9 on pages 67 to 68).
Discount or Premium
The amount by which the market price per share of an investment trust is either higher (premium) or lower (discount) than the
NAV per share, expressed as a percentage of the NAV per share.
NAV with Debt
at fair value
NAV with Debt
at par Share price
(Discount)/
premium to fair
value NAV
(Discount)/
premium to par
value NAV
At 30 September 2024 146.1p 144.2p 127.0p (13.1%) (11.9%)
At 30 September 2023 131.7p 129.3p 113.0p (14.2%) (12.6%)
NAV with debt at par and fair value
2024
£’000
2023
£’000
Investments held at fair value through profit or loss (see note 11) 432,617 392,429
Current assets (see page 61) 7,589 5,731
Creditors amounts falling due within one year (see note 13) (20,749) (19,003)
Creditors amounts falling due after one year (see note 13) (29,824) (29,812)
NAV with debt at par (A) 389,633 349,345
Less: fair value of senior unsecured notes (see note 14.4) (24,672) (23,224)
Add back: amortised cost of senior unsecured notes 29,824 29,812
NAV with debt at fair value (B) 394,785 355,933
Ordinary shares in issue (see note 15) (C) 270,185,650 270,185,650
NAV per ordinary share with debt at par (see page 61) (A/C x 100) (p) 144.2 129.3
NAV per ordinary share with debt at fair value (B/C x 100) (p) 146.1 131.7
The aggregate NAV is also referred to as Total shareholders’ funds in the Statement of Financial Position. The NAV per ordinary
share is published daily and the year end NAV can be found on page 3 and further information is available on page 75 in note 17
within the notes to the financial statements.
Gearing/(Net Cash)
Gearing represents the excess amount above shareholders’ funds of total investments, expressed as a percentage of the
shareholders’ funds. If the amount calculated is negative, this is a ‘net cash’ position and there is no gearing.
2024 2023
Investments held at fair value through profit or loss (page 61) (£’000) (A) 432,617 392,429
Net assets (page 61) (£’000) (B) 389,633 349,345
Gearing (C = A/B -1) (%) (C) 11.0 12.3
Alternative PerformanceMeasures
82
Lowland Investment Company plc Annual Report 2024
Alternative PerformanceMeasures (continued)
Ongoing Charge
The ongoing charge ratio has been calculated in accordance with the guidance issued by the AIC as the total investment management
fees and administrative expenses and expressed as a percentage of the average daily net asset values throughout the year.
2024
£’000
2023
£’000
Management fee (Note 5) 1,735 1,713
Other administrative expenses (note 6) 802 686
Less: non-recurring expenses (94) (127)
Ongoing charges 2,443 2,272
Average net assets
1
372,669 355,221
Ongoing charge ratio 0.66% 0.64%
1. Calculated using the average daily net asset value
Revenue Return per Ordinary Share
The revenue return per ordinary share is the revenue return for the year (see Income Statement) divided by the weighted average
number of ordinary shares in issue during the year (see note 9 on pages 67 to 68).
Total Return
The return on the share price or NAV with debt at fair value taking into account both the rise and fall of NAV/share prices and
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). Dividends paid and payable are set
out in note 10 on page 68.
NAV per share Share price
NAV/Share price per ordinary share at 30 September 2023 (pence) 131.7 113.0
NAV/Share price per ordinary share at 30 September 2024 (pence) 146.1 127.0
Change in the year (%) 10.9 12.4
Impact of dividends reinvested (%) 4.7 5.3
Total return for the year 16.3 18.3
Yield
The yield is the annual dividend expressed as a percentage of the year end share price.
30 September
2024
30 September
2023
Annual dividend (pence) (A) 6.425 6.250
Share price (pence) (B) 127.0 113.0
Yield (C = A/B) (%) (C) 5.1 5.5
83
Lowland Investment Company plc Annual Report 2024
Notice of Annual
General Meeting
84
Notice is hereby given that the Annual General Meeting of
Lowland Investment Company plc (the ‘Company’) will be
held on Tuesday 28 January 2025 at 12.30pm to consider
and, if thought fit, pass the following resolutions:
Ordinary resolutions
1 To receive the Annual Report and audited financial
statements for the year ended 30 September 2024.
2 To approve the Directors’ Remuneration Report for the
year ended 30 September 2024.
3 To approve the final dividend of 1.625p.
4 To elect Mark Lam as a Director.
5 To re-elect Duncan Budge as a Director.
6 To re-elect Susan Gaynor Coley as a Director.
7 To re-elect Helena Vinnicombe as a Director.
8 To re-elect Thomas Walker as a Director.
9 To re-appoint Ernst & Young LLP as Statutory Auditor to
the Company.
10 To authorise the Directors to determine the Auditor’s
Remuneration.
11 THAT in substitution for all existing authorities the Directors
be generally and unconditionally authorised pursuant to
section 551 of the Companies Act 2006 (‘the Act’) to
exercise all the powers of the Company to allot ordinary
shares in the capital of the Company (‘ordinary shares’)
and to grant rights to subscribe for, or to convert any
security into, ordinary shares up to an aggregate nominal
amount of £675,464 (or such other amount as shall be
equivalent to 10% of the issued share capital at the date of
passing of the resolution) for a period expiring (unless
previously renewed, varied or revoked by the Company in
general meeting) on the earlier of the date falling 15
months after the passing of this resolution and at the
conclusion of the Annual General Meeting of the Company
in 2026, but that the Directors may make an offer or
agreement which would or might require relevant
securities to be allotted or rights to be granted after expiry
of this authority and the Directors may allot relevant
securities in pursuance of that offer or agreement as if the
authority conferred hereby had not expired.
Special resolutions:
12 THAT in substitution for all existing authorities and subject
to the passing of resolution 11 the Directors be
empowered pursuant to section 570 and/or section 573
of the Companies Act 2006 (‘the Act’) to allot ordinary
shares for cash pursuant to the authority conferred by
resolution 11 and to sell ordinary shares held by the
Company immediately before the sale as Treasury shares
for cash as if section 561(1) of the Act did not apply,
provided that this power shall be limited:
(a) to the allotment of equity securities whether by way of
a rights issue, open offer or otherwise to ordinary
members and/or holders of any other securities in
accordance with the rights of those securities where
the equity securities respectively attributable to the
interests of all ordinary members and/or such holders
are proportionate (or as nearly as may be) to the
respective numbers of ordinary shares and such equity
securities held by them (or are otherwise allotted in
accordance with the rights attaching to such equity
securities) subject in either case to such exclusions or
other arrangements as the Directors may deem
necessary or expedient in relation to fractional
entitlements or local or practical problems under the
laws of, or the requirements of, any regulatory body or
any stock exchange in any territory or otherwise
howsoever;
(b) to the allotment or sale (otherwise than pursuant to
sub-paragraph (a) above) of ordinary shares up to a
maximum aggregate nominal value of £675,464 (or
such other amount as shall be equivalent to 10% of the
issued ordinary share capital at the date of passing of
the resolution); and
(c) to the allotment or sale of equity securities at a price
not less than the Net Asset Value per share;
and shall expire on the earlier of the date falling 15 months
after the passing of this resolution and at the conclusion of
the Annual General Meeting of the Company in 2026 (unless
previously renewed, varied or revoked, by the Company in
general meeting), save that the Directors may before such
expiry make an offer or agreement which would or might
require ordinary shares to be allotted or sold after such expiry
and the Directors may allot ordinary shares in pursuance of
such an offer or agreement as if the power conferred hereby
had not expired.
13 THAT in substitution for all existing authorities the
Company be and is hereby generally and unconditionally
authorised in accordance with section 701 of the
Companies Act 2006 (‘the Act’) to make market purchases
(within the meaning of section 693 (4) of the Act) of ordinary
shares in the capital of the Company on such terms and in
(an investment company within the meaning of section 833 of the Companies Act 2006, incorporated in England and Wales
with registered number 670489).
Notice of Annual General Meeting
Lowland Investment Company plc
Lowland Investment Company plc Annual Report 2024
85
such manner as the Directors may from time to time
determine provided that:
(a) the maximum number of ordinary shares which may
be purchased is 14.99% of the Company’s issued
ordinary share capital at the date of the passing of this
resolution (equivalent to £1,012,520 nominal value at
the date of this Notice);
(b) the maximum price (exclusive of expenses) which may
be paid for an ordinary share shall not exceed the
higher of:
(i) 105% of the average of the middle market
quotations for an ordinary share as taken from the
London Stock Exchange Daily Official List for the
five business days immediately preceding the date
of purchase; and
(ii) the higher of the last independent trade and the
highest current independent bid on the London
Stock Exchange.
(c) the minimum price (exclusive of expenses) which may
be paid for a share shall be the nominal value per
ordinary share;
(d) the authority hereby conferred shall expire on the
earlier of the date falling 15 months after the passing
of this resolution and the conclusion of the Annual
General Meeting of the Company in 2026 unless
previously renewed, varied or revoked, by the
Company in general meeting;
(e) the Company may make a contract to purchase
ordinary shares under the authority hereby conferred
which will or may be executed wholly or partly after
the expiration of such authority and may make a
purchase of ordinary shares pursuant to any such
contract; and
(f) any ordinary shares so purchased shall be cancelled
or, if the Directors so determine, be held, sold,
transferred or otherwise dealt with as Treasury shares
in accordance with the provisions of the Act.
14 THAT a general meeting other than an Annual General
Meeting may be called on not less than 14 clear days’
notice, such authority to expire at the conclusion of the
Annual General Meeting in 2026.
15 THAT the Board be authorised to convene a general
meeting of the Company via electronic or hybrid means.
By Order of the Board
Janus Henderson Secretarial Services UK Limited
Corporate Secretary
4 December 2024
Registered Office:
201 Bishopsgate London EC2M 3AE
Annual General Meeting venue
Notice of Annual General Meeting (continued)
MOORGATE
BISHOPSGATE
PRIM ROSE ST.
WORSH IP STREET
201 Bishopsgate
London EC2M 3AE
LIVERPOOL
STREET
STATION
APPO LD ST.
SUN STREET
BROADGATE
CIRCLE
FINS BURY PAVE.
EARL ST.
WORSHIP STREET
ROPEM AKER ST REET
LIVERPOOL ST
LONDON WALL
WILSON ST.
BISHOPSGATE
GREAT EASTERN ST.
COMMERCIAL ST.
SHOREDITCH
HOUNDSDITCH
AL DGATE
MIDDLESEX
STREET
CHISWELL ST REET
SOUTH PLACE
ELDON ST.
FINSBU RY
CIRCUS
CITY ROAD
FINS BURY SQ .
FINS BURY SQ .
CLIF TON ST.
SPITALFIELDS
MARKET
FOLGATE ST.
NORTON
MIDDLESEX ST.
BRUS HFIELD STRE ET
APPO LD ST.
The 2025 AGM will be held at 201 Bishopsgate,
London EC2M 3AE. It is a few minutes’ walk from
Liverpool Street Station and from Moorgate Station.
Lowland Investment Company plc Annual Report 2024
86
Explanation of the Resolutions:
The information set out below is an explanation of the business
to be considered at the 2025 Annual General Meeting (‘AGM’).
Resolutions 1 to 11 are proposed as ordinary resolutions.
This means that for each of those resolutions to be passed,
more than half of the votes cast must be in favour of the
resolution. Resolutions 12 to 15 are proposed as special
resolutions. This means that for each of those resolutions to
be passed, at least three-quarters of the votes cast must be
in favour of the resolution.
Resolution 1: Annual Report and audited financial
statements (ordinary resolution)
The Directors are required to present to the meeting the Annual
Report and audited financial statements, including the Strategic
Report, Directors’ Report, Independent Auditor’s Report and
the Directors’ Remuneration Report in respect of the financial
year ended 30 September 2024. Shareholders will be given an
opportunity at the Meeting to ask questions on these items.
Atthe end of the discussion members will be invited to receive
the Annual Report and audited financial statements.
Resolution 2: Approval of the Directors’
Remuneration Report (ordinary resolution)
Shareholders are asked to approve the Directors’
Remuneration Report which is set out on pages 39 to 41 of
the Annual Report. The vote on this resolution is advisory and
does not affect the remuneration payable to any individual
Director. However, the Board will take feedback from
shareholders regarding remuneration and incorporate this
into any future remuneration discussions.
Resolution 3: Approval of Final Dividend
(ordinary resolution)
A final dividend of 1.625p per ordinary share will, if approved
by shareholders at the AGM, be paid on 31 January 2025
tothose shareholders on the Register of Members on
27December 2024.
Resolutions 4 to 8: Election and re-election of
Directors (ordinary resolutions)
Under the AIC Code of Corporate Governance, as endorsed by
the Financial Reporting Council, directors are expected to
stand for election (first) or re-election (subsequent) AGMs
annually. At its meeting in September 2024, the Nomination
Committee reviewed the performance, contribution and time
commitment of the members of the Board and concluded that
each Director standing for election or re-election brought
extensive, current and relevant business experience that allows
each to contribute effectively to the leadership of the Company.
The biographies of each Director, including their skills,
experience and qualifications relevant for the sustainable
success of the Company are set out on pages 28 to 29 of the
Annual Report. Mark Lam was appointed on 1 January 2024.
All other Directors standing for re-election held office
throughout the year under review.
Resolutions 9 and 10: Appointment and
Remuneration of the Auditor (ordinary resolutions)
In accordance with Sections 489 and 492 of the Companies
Act 2006, shareholders are required to approve the
appointment of the Company’s Auditor each year. Under the
Act, Directors are authorised to determine the Auditor’s
remuneration. Ernst & Young LLP have expressed their
willingness to continue as Auditor to the Company.
Resolution 11: Authority to Allot Shares
(ordinary resolution)
On 24 January 2024 the Directors were granted authority to
allot ordinary shares up to an aggregate nominal value of
£675,464. No shares have been allotted under this authority,
which will expire at the forthcoming AGM in January 2025.
An ordinary resolution to renew this authority will be
proposed at the AGM, which will allow the Directors to allot
shares up to a maximum of 10% of the issued share capital
at the date of the AGM, which at the date of this notice was
27,018,565 shares having an aggregate nominal value of
£675,464. The resolution is set out in full in the Notice on
page 85. If renewed, the authority will expire at the earlier of
the date falling 15 months after the passing of the resolution
and the conclusion of the AGM in 2026. New shares would
not be issued at a discount to net asset value. No shares
were held in Treasury at the date of this Notice.
Resolution 12: Power to Disapply Pre-Emption
Rights (special resolution)
At the AGM on 24 January 2024, the Directors were also
empowered to allot securities of a limited value for cash
without first offering them to existing shareholders in
accordance with statutory pre-emption procedures.
TheDirectors have not allotted any shares using this
authority, which will expire at the forthcoming AGM in
January 2025.
Resolution 12 will give the Directors power to allot or sell
shares out of Treasury for cash on a non pre-emptive basis
up to a maximum aggregate nominal amount of 10% of the
issued share capital at the date of the AGM, which at the
date of this notice was £675,464 (or 27,018,565 shares).
The resolution is set out in full in the Notice on page 85 to 86.
Ifrenewed, the power will expire on the earlier of the date
falling 15 months after the passing of this resolution and
atthe conclusion of the AGM in 2026.
The Directors do not intend to allot or sell shares pursuant to
resolutions 11 and 12 other than to take advantage of
opportunities in the market as they arise and only if they
believe it to be advantageous to the Company’s existing
shareholders to do so and when it would not result in any
dilution of net asset value per share (i.e. shares will only be
issued or sold when there is unfulfilled demand and at a
premium to net asset value).
Notice of Annual General Meeting (continued)
Lowland Investment Company plc Annual Report 2024
87
Resolution 13: Repurchase of the Company’s
Ordinary Shares (special resolution)
On 24 January 2024 the Directors were granted authority
torepurchase 40,500,820 ordinary shares (with a nominal
value of £1,012,520) for cancellation or to be held in Treasury.
The Directors have not bought back any shares under this
authority and therefore at the date of this Notice of AGM
theDirectors have remaining authority to repurchase
40,500,820 shares.
Resolution 13 seeks to renew the Company’s authority to buy
back shares. The authority under this resolution is limited to
the purchase of a maximum of 14.99% of the ordinary shares
in issue at the date of the passing of this resolution.
The Company may cancel or hold in Treasury any shares
bought back under this authority. No shares were held in
Treasury at the date of this Notice.
The Company may use the authority to purchase shares by
either a single purchase or a series of purchases when
market conditions allow, with the aim of maximising the
benefit to shareholders. This proposal does not indicate that
the Company will purchase shares at any particular time or
price, nor imply any opinion on the part of the Directors as to
the market or other value of the Company’s shares.
The Directors believe that, from time to time and subject to
market conditions, it will continue to be in the shareholders’
interests to have the ability to buy back the Company’s
shares when they are trading at a discount to the underlying
net asset value per share. The authority being sought
provides an additional source of potential demand for the
Company’s shares.
This authority was last used by the Company over twenty
years ago, however it is market consensus that an investment
trust should have within its corporate powers the ability to
buy back shares. Shares would be bought, in line with the
Company’s stated policy, when the Board deems it to offer
sufficient value to shareholders and is demonstrably in
shareholders’ best interests.
This authority will expire at the earlier of the date falling 15
months after the passing of this resolution and the conclusion
of the AGM in 2026 and it is the present intention of the
Directors to seek a similar authority annually.
Resolution 14: Notice of General Meetings
(specialresolution)
Changes made to the Companies Act 2006 by the
Shareholders’ Rights Regulations increase the notice period
required for general meetings of the Company to 21 clear
days ‘unless shareholders approve a shorter notice period,
which cannot however be less than 14 clear days’. (AGMs will
continue to be held on at least 21 clear days’ notice).
The Companies Act 2006 (‘the Act’) and the Company’s
articles of association provide that all general meetings (other
than AGMs) can be convened on 14 clear days’ notice.
However, one of the requirements of the Shareholder Rights
Directive is that all general meetings must be held on 21 clear
days’ notice, unless shareholders agree to a shorter notice
period. The Board is of the view that it is in the Company’s
interest to have a shorter notice period which complies with
the provisions of the Act and the Company’s articles allow all
general meetings (other than an annual general meeting) to
be called on not less than 14 clear days’ notice. The passing
of resolution 14 would constitute shareholders’ agreement for
the purposes of the Shareholder Rights Directive (which
agreement is required annually) and would therefore preserve
the Company’s ability to call general meetings (other than an
annual general meeting) on 14 clear days’ notice. The Board
would use this authority to provide flexibility when merited
and would not use it as a matter of routine. The Board
intends to seek a renewal of such authority at subsequent
annual general meetings.
Resolution 15: The holding of virtual or hybrid
meetings (special resolution)
During the restrictions imposed by the Covid pandemic,
many companies realised that they did not have sufficient
powers in their articles of association to hold virtual or hybrid
meetings (virtual meetings are those held by electronic
means, hybrid means a combination of the traditional
shareholder meeting with some electronic participation).
Atthe AGM in 2021, the Company put a proposal to
shareholders to change the articles so that the Company was
able to offer shareholders this flexibility going forward. In
order to maintain high standards of corporate governance
and shareholder engagement, the changes stipulated that
the ability to hold such meetings would be subject to an
annual shareholder vote of approval each year. This
resolution seeks such authority. The Company’s intention is
always to hold a physical meeting when possible, and virtual
meetings would only be held when it is impracticable to hold
a physical meeting.
Notes to the Notice of Annual General
Meeting
1. Voting Record Date
Only members registered in the Register of Members of the
Company at close of business on 24 January 2025 shall be
entitled to attend and vote at the AGM in respect of the
number of voting rights registered in their name at that time.
Changes to entries on the Register of Members after close
ofbusiness on 24 January 2025 shall be disregarded in
determining the rights of any person to attend and vote at
themeeting.
Notice of Annual General Meeting (continued)
Lowland Investment Company plc Annual Report 2024
88
Notice of Annual General Meeting (continued)
If the AGM is adjourned then the voting record date will be the
close of business on the day which is two days (excluding
non-working days) before the day of the adjourned meeting or,
if the Company gives notice of the adjourned meeting, at any
time specified in that notice.
2. Rights to Attend and Vote
Members are entitled to attend, speak and vote at the
forthcoming Annual General Meeting or at any
adjournment(s)thereof.
On a poll each member has one vote for every one share held.
In the case of joint holders of a voting right, the vote of the
senior who tenders a vote, whether in person or by proxy,
shall be accepted to the exclusion of the votes of the other
joint holders and, for this purpose, seniority shall be
determined by the order in which the names stand in the
Register of Members in respect of the joint holding.
3. Right to Appoint Proxies
Pursuant to section 324 of the Companies Act 2006, a
member entitled to attend and vote at the meeting may
appoint more than one proxy, provided that each proxy is
appointed to exercise the rights attached to different shares
held by him. A proxy need not be a member of the Company.
A Form of Proxy is enclosed. The completion of the Form of
Proxy or any CREST proxy instruction (as described in Note 6)
will not preclude a shareholder from attending and voting in
person at the Meeting.
If the total number of voting rights that the Chairman will be
able to vote (taking into account any proxy appointments from
shareholders over which he is given discretion and any voting
rights in respect of his own shares) is such that he will have a
notifiable obligation under the Financial Conduct Authority’s
Disclosure Guidance and Transparency Rules, the Chairman
will make the necessary notifications to the Company and to
the Financial Conduct Authority. Therefore, any Member
holding 3% or more of the voting rights in the Company who
grants the Chairman a discretionary proxy in respect of some
or all of those voting rights and so would otherwise have a
notification obligation under the Disclosure
Guidance and Transparency Rules, need not make a
separate notification to the Company and to the Financial
Conduct Authority. However, any Member holding 3% or
more of the voting rights in the Company who appoints a
person other than the Chairman as proxy will need to ensure
that both the Member and the proxy comply with their
respective disclosure obligations under the Disclosure
Guidance and Transparency Rules.
Section 324 does not apply to persons nominated to receive
information rights pursuant to section 146 of the Companies
Act 2006. Persons nominated to receive information rights
under section 146 of the Companies Act 2006 have been sent
this Notice of Meeting and are hereby informed, in accordance
with section 149(2) of the Companies Act 2006, that they may
have the right under an agreement with the registered
member by whom they are nominated to be appointed, or to
have someone else appointed, as a proxy for this meeting.
Ifthey have no such right or do not wish to exercise it, they
may have a right under such an agreement to give instructions
to the Member as to the exercise of voting rights.
Nominated persons should contact the registered member by
whom they were nominated in respect of these arrangements.
The statement of rights of shareholders in relation to the
appointment of proxies in this paragraph does not apply to
nominated persons.
4. Proxies’ rights to vote at the Meeting
On a vote on a show of hands, each Member or proxy has
one vote.
If a proxy is appointed by more than one Member and all
such Members have instructed the proxy to vote in the same
way, the proxy will only be entitled on a show of hands to
vote ‘for’ or ‘against’ as applicable. If a proxy is appointed by
more than one Member, but such Members have given
different voting instructions, the proxy may on a show of
hands vote both ‘for’ and ‘against’ in order to reflect the
different voting instructions.
On a poll all or any of the voting rights of the Member may be
exercised by one or more duly appointed proxies. However,
where a Member appoints more than one proxy, Section
285(4) of the Act does not permit the exercise by the proxies
taken together of more extensive voting rights than could be
exercised by the member in person.
5. Voting by Corporate Representatives
Corporate representatives are entitled to attend, speak and
vote on behalf of the corporate member in accordance with
section 323 of the Companies Act 2006.
6. Receipt and Termination of Proxies
A Form of Proxy is enclosed and to be valid must be lodged
with the Company’s Registrars before 12.30pm on
24January 2025.
A member may terminate a proxy’s authority at any time before
the commencement of the meeting. Termination must be
provided in writing and submitted to the Company’s Registrar.
In accordance with the Company’s Articles of Association, in
determining the time for delivery of proxies, no account shall
be taken of any part of a day that is not a working day.
Lowland Investment Company plc Annual Report 2024
89
7. Communication with the Company
Members may not use any electronic address provided either
in the Notice or any related documents (including the form of
proxy) to communicate with the Company for any purpose
other than those expressly stated.
8. Electronic Receipt of Proxies
To appoint one or more proxies or to give an instruction to a
proxy (whether previously appointed or otherwise via the
CREST system), CREST messages must be received by the
Company’s agent (ID number 3RA50) no later than the
deadline specified in Note 6. For this purpose, the time of
receipt will be taken to be the time (as determined by the
timestamp generated by the CREST system) from which the
issuer’s agent is able to retrieve the message. The Company
may treat as invalid a proxy appointment sent by CREST in
the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
Instructions on how to vote through CREST can be found on
the website www.euroclear.com/CREST.
9. Questions at the Annual General Meeting
Section 319A of the Companies Act 2006 requires the Directors
to answer any question raised at the AGM which relates to the
business of the meeting, although no answer need be given:
(a) if to do so would interfere unduly with the preparation of the
meeting or involve disclosure of confidential information;
(b) if the answer has already been given on the Company’s
website; or
(c) if it is undesirable in the best interests of the Company or the
good order of the meeting that the question be answered.
10. Website
Members satisfying the thresholds in section 527 of the
Companies Act 2006 can require the Company to publish a
statement on its website setting out any matter relating to:
(a) the audit of the Company’s accounts (including the
Auditor’s Report and the conduct of the audit) that are to
be laid before the meeting; or
(b) any circumstances connected with an Auditor of the
Company ceasing to hold office since the last Annual
General Meeting, that the members propose to raise at
the meeting.
The Company cannot require the members requesting the
publication to pay its expenses. Any statement placed on the
website must also be sent to the Company’s auditors no later
than the time it makes its statement available on the website.
The business which may be dealt with at the meeting
includes any statement that the Company has been required
to publish on its website.
The Company’s Annual Report, which contains this
Noticeofthe Annual General Meeting, including these
explanatory notes, is included on the Company’s website,
www.lowlandinvestment.com.
11. Documents Available for Inspection
Copies of the Directors’ letters of appointment (no Director
has a contract of service with the Company) may be
inspected at the registered office of the Company during
normal business hours on any day (Saturdays, Sundays and
public holidays excepted) and will be available at the AGM
from 15 minutes prior to the commencement of the Meeting
until its conclusion.
12. Total Voting Rights at Date of Notice
As at 3 December 2024 (being the latest practicable date
prior to the publication of this Notice) the total number of
voting rights in the Company is 270,185,650.
Notice of Annual General Meeting (continued)
Lowland Investment Company plc Annual Report 2024
90
Strategic Report
Key Data 2
Historical Performance 3
Chairman’s Statement 5-6
Fund Managers’ Report 8-11
Portfolio Analysis 12-13
Twenty Largest Holdings 14-17
Investment Portfolio 18-20
Environmental, Social
andGovernance Matters 21-23
Business Model 24-27
Biographies 28-29
Corporate Information 30-34
Corporate Report
Report of the Directors 36-37
Statement of Directors’
Responsibilities 38
Directors’ Remuneration
Report 39-41
Corporate Governance
Statement 42-48
Report of the Audit Committee 49-51
Independent Auditor’s Report 52-57
Financial Statements
Income Statement 59
Statement of Changes in Equity 60
Statement of Financial Position 61
Statement of Cash Flows 62
Notes to the Financial
Statements 63-76
Securities Financing
Transactions 77-78
General Shareholder
Information 79-80
Glossary 81
Alternative Performance
Measures 82-83
Notice of Annual General
Meeting (‘AGM’)
Notice of AGM 85-86
Explanation of AGM
resolutions 87-88
Notes explaining AGM
processes 88-90
Please use the camera on your mobile
phone or other device to scan this QR code
to sign up to the latest news from Lowland
to your inbox
Final dividend (2024 financial year) 31 January 2025
First interim dividend 30 April 2025
Second interim dividend 31 July 2025
Third interim dividend 31 October 2025
Final dividend (2025 financial year) 30 January 2026
Half year results Published June
Full year results Published December
Annual General Meeting January
Lowland key dates
Annual Report 2024
Lowland Investment Company plc – Annual Report 2024 JHI9222/2024
Lowland
Investment
Company plc
Lowland Investment Company plc
Registered as an investment company in England and Wales with registration number 670489
Registered office: 201 Bishopsgate, London EC2M 3AE
SEDOL/ISIN number: BNXGHS2/GB00BNXGHS27
London Stock Exchange (TDIM) Code: LWI
Global Intermediary Identification Number (GIIN): 2KBHLK.99999.SL826
Legal Entity Identifier (LEI): 2138008RHG5363FEHV19
Telephone: +44 (0) 20 7818 1818
Email: ITSecretariat@janushenderson.com
www.lowlandinvestment.com
Designed and typeset by 2112 Communications, London. Printed by Pureprint, Sussex. JHI9222/2024
This report is printed on Revive 100 Silk manufactured from FSC
®
Recycled certified fibre
derived from 100% pre and post-consumer waste at a mill certified with ISO 14001
environmental management standard.
The pulp used in this product is bleached using an Elemental Chlorine Free process.
This product is made of material from well-managed FSC
®
– certified forests, recycled
materials, and other controlled sources.
Shareholder
Communication
Awards
2024