1
Personal Assets Trust plc
Annual Report
For the year ended 30 April 2024
Patplc.co.uk
2
About Personal Assets Trust plc
Our policy is to protect and increase (in that order) the value of shareholders’ funds per share
over the long term.
What We Do
Personal Assets Trust plc (the ‘Company’) is what its name implies. It is an investment trust run for
private investors, who range from first time savers to experienced investors, many of whom have
entrusted a significant part of their portfolio to the Company.
Our Approach
From its inception, the Company has sought to emphasise capital preservation and absolute returns. It
is conservatively managed, with low portfolio turnover. It takes a long-term, long-only approach and
has the flexibility to invest in a broad range of asset classes – primarily developed market equities and
bonds, gold-related investments, and also cash and short-dated treasury bills.
Dividend Policy
The Company aims to pay as consistent and sustainable a dividend as is compatible with protecting and
increasing the value of its shareholders’ funds per share and maintaining its investment flexibility.
Dividends are paid in January, April, July and October of each year.
Investment Manager
The Company has appointed Troy Asset Management (‘Troy’) as its Investment Manager and is
managed by Sebastian Lyon with the assistance of Charlotte Yonge and the help of Troy’s wider
investment team.
Discount Management
The Company’s discount and premium control policy is enshrined in its Articles of Association. The
Company’s policy is to ensure that its shares always trade close to net asset value. This is achieved
through a combination of share buybacks at a small discount to net asset value or the issue of shares at
a small premium to net asset value where demand exceeds supply.
The Board
The Company is overseen by an independent Board of non-executive Directors. Our Board members
and Managers are significant shareholders in the Company.
Share Price Performance Versus RPI and CPI Since 30 April 1990
GRAPH
3
Contents
Overview
Key Features 2
Record 1990 – 2024 3
Chairman’s Statement 4
Investment Manager’s Report 6
Portfolio 8
Geographic Analysis of Investments and Currency Exposure 9
Contribution to Performance 9
Ten Year Performance 10
Annual Performance since 30 April 2000 11
Volatility and Share Price Total Return Performance since 30 April 2000 11
The Board 12
Strategic Report 14
Governance Report
Responsible Investment 20
Directors’ Report 22
Corporate Governance 26
Directors’ Remuneration Report 30
Report of the Audit and Risk Committee 33
Independent Auditor’s Report 35
Financial Statements
Income Statement 43
Statement of Financial Position 44
Statement of Changes in Equity 45
Cash Flow Statement 46
Notes to the Accounts 47
Notice of Annual General Meeting 60
Shareholder Information
Glossary of Terms and Alternative Performance Measures 64
Corporate Information 66
4
Key Features
(All figures at 30 April)
2024
2023
2021
2019
2014
1990
(1)
Market Capitalisation
£1,653.4m
£1,883.5m
£1,522.7m
£976.0m
£570.0m
£5.9m
Shareholders’ Funds
£1,667.3m
£1,884.4m
£1,503.9m
£968.6m
£573.2m
£8.5m
Shares Outstanding
342,325,372
391,570,200
323,292,900
(4)
239,227,500
(4)
171,744,700
(4)
14,931,300
(4)
Allocation of Portfolio
Equities
27.5%
24.0%
45.7%
36.0%
44.0%
88.2%
US TIPS
36.5%
33.9%
32.6%
27.8%
16.6%
–
US Treasuries
11.6%
14.8%
–
3.8%
–
–
UK Index-Linked
Bonds
3.3%
–
–
3.3%
4.6%
–
UK Gilts
7.0%
13.6%
–
–
–
–
UK T-Bills
–
–
8.1%
18.7%
–
–
Gold Bullion
12.5%
9.5%
8.9%
8.1%
10.7%
–
Property
0.1%
0.1%
0.1%
–
–
–
UK Cash
1.8%
2.6%
4.7%
2.4%
19.2%
5.7%
Overseas Cash
0.0%
0.0%
0.0%
0.0%
–
–
Net current
(liabilities)/assets
(0.3%)
1.5%
(0.1%)
(0.1%)
4.9%
6.1%
Share Price
483.00p
481.00p
471.00p
(4)
408.00p
(4)
331.90p
(4)
39.50p
(4)
NAV per Share
(2)
487.05p
481.23p
465.19p
(4)
404.88p
(4)
333.77p
(4)
56.67p
(4)
FTSE All-Share Index
4,430.25
4,283.83
3,983.85
4,067.98
3,619.83
1,043.16
(Discount)/Premium to
NAV
(2)
(0.8%)
(0.0%)
1.2%
0.8%
(0.6%)
(30.3%)
Revenue Return per
Share
(2)
8.77p
9.48p
4.53p
(4)
4.97p
(4)
4.78p
(4)
1.09p
(4)
Ordinary Dividend per
Share
(2)
5.60p
(3)
5.60p
(3)
5.60p
(4)
5.60p
(4)
5.60p
(4)
1.00p
(4)
Ongoing Charges
(2)
0.65%
0.65%
0.73%
0.80%
0.86%
2.00%
(1) The Company became self-managed in 1990.
(2) Alternative Performance Measure. Please see pages 64 and 65 for a glossary of terms and definitions.
(3) In addition a special dividend of 1.60p per Ordinary share will be paid in relation to the year ended 30 April 2024 (2023: special dividend
of 2.10p per Ordinary share).
(4) Adjusted for the 100 for one share split of the Ordinary shares on 1 August 2022.
Percentage Changes
1 Year
3 Years
5 Years
10 Years
Since
1990
(1)
Share Price
0.4
2.5
18.4
45.5
1,122.8
NAV per Share
(2)
1.2
4.7
20.3
45.9
759.5
FTSE All-Share Index
3.4
11.2
8.9
22.4
324.7
Share Price Relative to FTSE All-
Share
(2.9)
(7.8)
8.7
18.9
187.9
Share Price Total Return
(2)
2.1
7.0
26.7
67.9
2,247.0
NAV per Share Total Return
(2)
1.3
9.2
28.7
68.3
1,441.4
Retail Price Index (RPI)
3.3
27.9
33.6
50.6
207.8
Consumer Price Index (CPI)
2.4
21.3
24.1
33.4
142.1
FTSE All-Share Total Return
7.5
23.9
30.1
75.8
1,298.8
Share Price Total Return relative to
FTSE All-Share Total Return
(5.0)
(13.6)
(2.6)
(4.5)
67.8
Share Price Total Return relative to
RPI
(1.2)
(16.3)
(5.2)
11.5
662.5
Share Price Total Return relative to
CPI
(0.3)
(11.8)
2.1
25.9
869.4
(1) The Company became self-managed in 1990.
(2) Alternative Performance Measure. Please see pages 64 and 65 for a glossary of terms and definitions.
5
Record 1990-2024
Date
30
April
Share-
holders’
Funds
(£’million)
Liquidity
(%)
Shares
Outstanding*
Net asset
value
per share
(p)
Share
Price
(p)*
FTSE
All-Share
Index
Earnings
per share
(1)
(p)
Ordinary
dividend
per share
(p)
Dividend
Growth
(2)
(%)
Inflation
(RPI)
(%)
1990
(3)
8,462
11.8
14,931,300
56.67
39½
1,043.16
1.09
1.00
n/a
n/a
1991
9,006
2.6
14,931,300
60.32
48½
1,202.75
1.45
1.50
50.0
6.4
1992
10,589
0.0
14,931,300
70.92
66
1,282.75
1.67
1.60
6.7
4.3
1993
11,441
2.7
15,218,700
75.18
81½
1,388.88
2.52
1.80
12.5
1.3
1994
12,987
12.0
15,218,700
85.34
89½
1,580.44
2.12
1.95
8.3
2.6
1995
13,939
6.2
15,218,700
91.59
87
1,578.67
2.00
2.00
2.6
3.3
1996
19,473
15.9
16,917,300
115.11
118½
1,914.61
2.90
2.20
10.0
2.4
1997
27,865
24.5
20,811,400
133.89
141¼
2,135.31
3.01
2.30
4.5
2.4
1998
48,702
34.7
27,025,000
180.21
199½
2,788.99
3.57
2.45
6.5
4.0
1999
65,200
37.8
32,396,600
201.26
202½
3,028.40
3.67
2.55
4.1
1.6
2000
73,751
45.3
36,912,100
199.80
202
3,001.92
2.98
2.62½
2.9
3.0
2001
78,000
47.1
37,675,000
207.03
208½
2,869.04
3.27
2.70
2.9
1.8
2002
92,430
48.9
45,447,200
203.38
209½
2,512.04
3.88
2.80
3.7
1.5
2003
104,324
24.5
55,992,500
186.32
193¾
1,891.50
3.40
2.90
3.6
3.1
2004
134,770
31.4
64,125,300
210.17
214½
2,237.34
3.98
3.10
6.9
2.5
2005
149,834
35.4
67,718,500
221.26
224¾
2,397.05
3.41
3.40
9.7
3.2
2006
189,351
40.8
73,923,400
256.14
259¼
3,074.26
3.78
3.70
8.8
2.6
2007
192,416
50.7
72,692,100
264.70
266
3,355.60
4.95
4.10
10.8
4.5
2008
188,664
100.2
73,305,100
257.37
258¼
3,099.94
5.59
4.60
12.2
4.2
2009
171,132
29.9
74,523,100
229.64
233
2,173.06
5.34
5.00
8.7
(1.2)
2010
233,785
34.4
81,528,100
286.75
289½
2,863.35
4.61
5.20
4.0
5.3
2011
310,000
45.4
98,480,300
314.78
318
3,155.03
5.68
5.40
3.8
5.2
2012
463,473
50.0
138,065,900
335.69
340
7
/
10
2,984.67
7.23
5.55
2.8
3.5
2013
593,245
56.5
168,590,100
351.89
357
3,390.18
5.69
5.60
0.9
2.9
2014
573,237
56.0
171,744,700
333.77
331
9
/
10
3,619.83
4.78
5.60
0.0
2.5
2015
609,745
59.9
174,295,600
349.83
350
7
/
10
3,760.06
3.65
5.60
0.0
0.9
2016
640,624
56.0
174,484,200
367.15
372½
3,421.70
4.78
5.60
0.0
1.3
2017
781,499
54.3
196,012,700
398.70
405
4
/
10
3,962.49
6.20
5.60
0.0
3.5
2018
858,893
61.6
221,243,300
388.21
392
4,127.68
5.23
5.60
0.0
3.4
2019
968,579
64.0
239,227,500
404.88
408
4,067.98
4.97
5.60
0.0
3.0
2020
1,160,966
55.3
272,300,300
426.36
433
3,262.51
5.86
5.60
0.0
1.5
2021
1,503,936
54.3
323,292,900
465.19
471
3,983.85
4.53
5.60
0.0
2.9
2022
1,814,360
62.2
368,806,900
491.95
503
4,185.12
8.36
5.60
(4)
0.0
11.1
2023
1,884,352
76.0
391,570,200
481.23
481
4,283.83
9.48
5.60
(4)
0.0
11.4
2024
1,667,281
72.5
342,325,372
487.05
483
4,430.25
8.77
5.60
(4)
0.0
3.3
Compound growth rates per annum
(%)
(5)
(%)
(5)
(%)
(5)
(%)
(%)
(2)
(%)
3 Years
1.5
0.8
3.6
24.4
0.0
8.5
5 Years
3.8
3.4
1.7
11.9
0.0
6.0
10 Years
3.9
3.8
2.0
6.2
0.0
4.2
Since 30 April 1990
6.5
7.6
4.3
6.3
5.2
3.4
* Shares outstanding and per share values have been adjusted for the 1 for 100 consolidation of Ordinary shares in January 1993, the 100 for
one share split of the Ordinary shares in August 2022 and exclude shares held in Treasury.
(1) Based on the weighted average number of shares in issue during the year.
(2) Excludes special dividends.
(3) Personal Assets became self-managed in 1990.
(4) In addition a special dividend of 1.60p per Ordinary share will be paid in relation to the year ended 30 April 2024 (2023: 2.10p; 2022:
1.40p*).
(5) Capital only.
6
Chairman’s Statement
“The Investment Manager’s focus remains on the avoidance of permanent capital loss (our
preferred definition of risk) and on growing the real value of the Company’s capital over the
long run”
We continue to live in a world of great uncertainty and increasing volatility with little expectation for
improvement in the immediate future. We still have a war raging in Europe, particularly poignant as
we commemorate the 80th anniversary of ‘D-Day’, and we now have a very intractable conflict in the
Middle East. There are obvious growing international tensions across the globe and the outcome of the
election in the United States will have literally ‘world changing’ ramifications. In the UK we are now
in the General Election process and by the time of our AGM in July we will know the outcome. Most
pundits are predicting a change of government. This is the challenging context in which we seek to
deliver our core investment proposition, which is to protect and increase (in that order) the value of
shareholders’ funds per share (also known as net asset value (‘NAV’) per share) over the long term.
The Directors and our Investment Managers at Troy Asset Management Limited (‘Troy’), Sebastian
Lyon and Charlotte Yonge, are shareholders in the Company. As such, we are all strongly aligned and
are advocates for this investment proposition. As Directors, we work closely with the Troy team,
bringing our collective experience to complement, inform, challenge and support. This close but
independent relationship is particularly important when we are seeking to navigate uncertain and
turbulent markets together.
We track the performance of the Company from 1990. Since then, the NAV has grown at an annual
compound rate of +6.5% compared to +3.4% for the UK Retail Price Index and +4.3% for the FTSE
All-Share Index, our two main comparators. We also track the degree of risk experienced in achieving
our financial performance. The results are tabulated in the Key Features section on page 2 and the
volatility experienced is indicated on the chart on page 11. This shows that over the last 24 years the
Company has been less volatile than equities in general and also less volatile than the AIC Flexible
Investment Sector. Whilst this combination of above comparator financial performance and below-
sector volatility is the outcome of a focus on capital preservation, these metrics are by no means a
target. The Investment Manager’s focus remains on the avoidance of permanent capital loss (our
preferred definition of risk) and on growing the real value of the Company’s capital over the long run.
In his report on pages 6 and 7, Sebastian Lyon, our Investment Manager, provides further details of our
investment performance and describes the particular challenges of the last year.
The Company aims to pay as consistent and sustainable a dividend as is compatible with protecting and
increasing the value of its shareholders’ funds and maintaining its investment flexibility. The Board
remains committed to paying an annual dividend of 5.60p per share in line with this policy. High levels
of inflation during the year, particularly in the United States, mean that the Company has again this
year earned significantly more income on its holding of US TIPS than in previous years. Accordingly,
in order to meet the investment trust distribution requirements, the Board has resolved to pay an
additional special dividend for the year to 30 April 2024 of 1.60p per share. This dividend will be paid
to shareholders in July 2024 alongside the first interim dividend of 1.40p per share for the year to 30
April 2025.
During the year we bought back 49,244,828 Ordinary shares into Treasury under the Company’s
discount control policy, for a net outflow of £232 million. As at 30 April 2024 we had 342,325,372
Ordinary shares in issue, with 50,479,828 Ordinary shares in Treasury. It is the policy of the Company
to aim to ensure that, in normal market conditions, its Ordinary shares always trade at or close to NAV
and this policy is enshrined in the Articles of Association. It is reassuring to report that since
November 1999, when investment trusts were empowered to use capital to buy back shares and hence
control the discount to NAV at which their shares trade, the Company’s share price has closely tracked
the NAV both through periods of significant issuance and as demonstrated in the last year through a
period of sustained buy back. Given the persistence of discounts for investment trusts generally,
buyback activity throughout the year has been pronounced across the industry more widely. For the
7
Company, the year ending 30 April 2024 will be the first since 2007 when the number of shares in
issue has declined year on year.
The Board membership has enjoyed a further year of stability and I am grateful for the continuing
commitment and wise counsel of my colleagues. We appointed Jennifer Thomas to the Board with
effect from 1 May 2024. She brings more than 25 years of experience in leading communications in
several international companies and we look forward to her contribution to our work. During 2022
Board Level Partners conducted an independent review of the performance of the Board and its
Committees. Whilst this did not highlight any material weaknesses or concerns, it did identify some
areas for further focus. These include planning for Board member succession, development of
shareholder communications and closer monitoring of our relationships with our key service providers,
Troy and Juniper Partners Limited (‘Juniper’). During 2023 and 2024 we conducted internal reviews,
and it is pleasing to record that we have made significant progress in each of the focus areas. Further
detail can be found on page 29.
As part of our oversight of our key service providers, we introduced a more formal annual review
process with Troy in 2023 and this has been repeated in 2024. The review process is led by Mandy
Clements and includes open discussions with all the Directors and several members of the senior team
at Troy. We have all found this to be a positive and helpful exercise. In summary, our relationship with
Troy continues to be excellent and we are increasingly benefitting from access to the shared resources
and focused support from the wider Troy team. We now hold two Board meetings each year in the
Troy offices in London which is helping us to get to know more members of the Troy team and to
deepen our relationship on a broader base. As our shareholder funds continue to be above £1.5 billion,
we are benefitting from the revised fee structure agreed in 2021. Details of the fee structure are shown
on page 15. We also pay particular attention to ensuring the competitiveness of our ongoing charges
ratio, which was 0.65% for the year ended 30 April 2024, having reduced from 0.89% in 2013 and
remains in line with last year’s figure.
We had adopted a similar annual review process with Juniper in 2022 and have now completed our
third review cycle. As with Troy, this process is led by Mandy Clements. Our relationship with
Juniper, which provides our administrative, company secretarial, AIFM and discount control services,
continues to be excellent with a very open and supportive culture. Juniper provides a first-class service
to the Company and works in close association with Troy to provide a seamless service to the PAT
Board and shareholders.
We recognise the continuing evolution of the Company’s shareholder base and the increasing number
of investors holding shares through retail platforms who may not have direct access to communications
with the Company. This is a challenge which is often discussed by the Board as we seek to improve
communication and interaction with investors. We hope that our website (www.patplc.co.uk), our
Quarterlies, our Annual and Interim Reports and our monthly Factsheet are providing investors with
easy and effective access to information about PAT and we will continue to seek innovative ways of
improving our dialogue with shareholders and with potential shareholders.
We are looking forward to holding the AGM on Friday 19 July 2024 at The Kimpton Charlotte Square
Hotel in Edinburgh. The Investment Manager’s presentation will also be made available on our website
following the AGM for those who cannot attend in person. I would encourage all shareholders to
submit any questions for the AGM to our Company Secretary by email in advance of the meeting at
cosec@junipartners.com by Tuesday, 16 July 2024. In the meantime, I wish you all good health and
thank you for entrusting your investment to PAT.
Iain Ferguson CBE
Chairman
18 June 2024
8
Investment Manager’s Report
“We have been taken aback by investors’ willingness to speculate so soon after the profitless tech
boom of 2020/21, which quickly turned to bust. Whether history will repeat itself is open to
question”
Over the year to 30 April 2024, the net asset value per share (‘NAV’) of Personal Assets Trust (the
‘Company’) rose by 1.2% while our traditional comparator, the FTSE All-Share Index rose by 3.4%.
The UK Retail Price Index (‘RPI’), which we also use as a comparator (see the inside front cover of
this Report and Key Features and Record 1990-2024 on pages 2 and 3 respectively), rose by 3.3%.
Over the past five years the NAV (total return) per share rose by 28.7% compared to FTSE All-Share
return which rose by 30.1% and RPI which rose by 33.6%. The Company’s NAV and share price
(thanks to the discount control policy) continued to demonstrate below-average volatility compared to
peers and the stock market.
A year ago, we wrote about the burgeoning effects of rising interest rates and our expectation of slower
economic growth combined with the risks of a recession. Signs of stress in the banking sector abated
following the collapse of Silicon Valley Bank and Credit Suisse. The sting of tighter monetary policy
has, thus far, largely been offset by aggressive fiscal stimulus, especially in the United States.
Nevertheless, monetary policy always works with a lag, usually of 12 to 24 months, so with interest
rates having peaked as recently as the summer of 2023, we are unlikely to have experienced their full
effect. In the meantime, equity markets have been buoyed by the excitement surrounding generative
Artificial Intelligence (‘AI’) and large language models such as ChatGPT-4. We have been taken aback
by investors’ willingness to speculate so soon after the profitless tech boom of 2020/21, which quickly
turned to bust. Whether history will repeat itself is open to question. However, the scale of investment
in capacity is reminiscent of the investment made in fibre during the dotcom boom. How sustainable
this is, and whether such investment ultimately earns an economic return, remains to be seen but
benefits are likely to accrue to more sustainable and recurring business models, such as Microsoft and
Alphabet, which the Company continues to have exposure to.
Despite renewed speculation in some parts of the equity market, bond markets have continued to
disappoint. The secular bear market in bonds, which began in 2020 when yields troughed during the
pandemic, has continued with rising yields (and falling prices). It is becoming clear that we have
entered a new era of upward yield pressure and a commensurate rising cost of capital. While western
bond markets have performed poorly, this may take time to be reflected in equity valuations, which
remain high by historic levels. This new regime is the reverse of the 2010s, when benign inflation and
low growth meant rate hike expectations were continuously dashed and bond yields ground ever lower.
At the beginning of 2024, the consensus forecast was for no less than six interest rate cuts over the
coming year from the US Federal Reserve and the Bank of England. Yet four months on, interest rate
cuts have not been forthcoming. Fewer cuts, when they eventually arrive, may imply interest rates
bottom at a higher level than many expect, with further implications for long-dated bonds and equities.
As a result, we continue to keep duration risk low, which served us well in 2022 where we avoided
material drawdowns from rising yields. We suspect there is a need to acclimatise to this new
environment. Despite easy comparisons from price levels of a year ago, inflation has remained stickier
than expected with core levels still stubbornly above targets in the US and the UK. This plays into our
preference for holding inflation-linked bonds, which offer positive real yields.
Our equity selection made a positive contribution to returns despite our modest exposure. Alphabet,
American Express, Microsoft and Visa performed well. In contrast, consumer staples Diageo and
Nestlé detracted. We continue to have confidence in the long-term prospects for these companies,
which have a track record of providing strong returns to their shareholders over time. Portfolio activity
was relatively modest, as is our natural proclivity, but we did add to the Company’s holdings in
Diageo, following its profit warning in November.
During the year we acquired a new holding in Heineken. Heineken’s shares have been weak, and the
valuation now sits around the same level as its 2020 low. This follows difficult macroeconomic
9
conditions in some of the company’s emerging markets, particularly Vietnam. We have been following
Heineken for several years and are enthusiastic about its prospects. Heineken operates in the growing
premium segment of the attractive beer category, with a strong portfolio of brands distributed over a
diversified range of geographic exposures. Around 70% of its profits come from fast-growing
emerging markets. Current management are still in the early stages of their tenure and are bringing
renewed dynamism to the company’s productivity, pricing and digitisation efforts. This combines with
the company’s long-term approach to capital allocation, supported by an ongoing history of family
ownership, and should lead to attractive value creation over the long run.
Since 2017, the Company has been invested in Franco-Nevada, a gold-focused royalty and streaming
company. Franco-Nevada had an excellent track record in allocating capital to mining projects without
the complexity, or capital, required to run the mining operation, providing its shareholders with geared
exposure to the price of gold. This model worked well when Franco-Nevada was smaller but as the
company has grown it has become harder to find investments that ‘move the needle’. This has resulted
in increased concentration across a handful of larger investments, most notably in the Panamanian gold
and copper mine Cobre Panama, which comprises just under 20% of Franco-Nevada’s assets. Growing
social pressures in Panama led the government to question the constitutionality of the mine’s
concession agreement and to suspend its operations. We reduced our holding in December 2022 when
these pressures first reared their head. After an apparent resolution in early 2023, the issue resurfaced,
and we sold the remainder of our shares in November 2023. Franco-Nevada generated good returns
and provided helpful diversification for the Company over the life of the investment. We sold the
shares at an average price of $130, versus an average entry price of $65 in 2017. Its sale from the
portfolio reflects a change in the facts and highlights our approach to managing stock-specific risk.
Despite the sale of Franco-Nevada, gold remains essential portfolio insurance and provides
diversification for the Company. During the financial year, the price of the yellow metal rose by +15%
to $2,295oz. (+16% in Sterling). This strength has caught many investors by surprise as higher interest
rates implied a higher opportunity cost for holding a zero-yielding asset like gold. Yet gold has
outperformed the S&P 500 US equity index this century, demonstrating its substance and scarcity in an
increasingly febrile and financialised world. Heightened geopolitical tensions and the gradual reversal
of globalisation explain the continued attraction of an asset that is no one’s liability, as well as
sustained demand from central banks seeking to diversify their reserve assets away from western
currencies, a process described as ‘de-dollarisation’. Savers may also be seeking protection from sticky
and stubborn inflation. Those with long memories will recall that higher interest rates and bond yields
did not stop the price of gold rising in the 1970s. With ballooning deficits, in a post-Covid world,
politicians have long forgotten fiscal rectitude. The US government debt situation no longer looks
sustainable and yet warnings are being ignored by both presidential candidates. It is not entirely
surprising that international investors are seeking to diversify into the longest standing reserve asset.
The Chairman’s Statement highlights the continued share buybacks, which began in March 2023,
following a prolonged period of share issuance. We retain an intentionally liquid portfolio, which we
can liquidate in a few days in normal market conditions. During a difficult period for the investment
trust sector, which has witnessed a material widening of trust discounts to net asset values (NAV), our
shareholders continue to be protected from PAT’s discount widening.
The Company’s cautious asset allocation has not rewarded shareholders over the last year, but ample
liquidity and the portfolio’s defensive positioning provide a solid platform if we enter more
challenging times. Grounds for caution remain. There is evidence of retail investor speculation
including participation in cryptocurrencies and ‘meme’ stocks. Meanwhile the most recent Bank of
America global fund manager survey highlights that fund managers are at their most bullish since the
last equity market peak in November 2021. This is a time for patience and prudence, not ebullience.
Sebastian Lyon
Investment Manager, Troy Asset Management
18 June 2024
10
Portfolio
Security
Country
Equity Sector
Shareholders’
Funds
30 April
2024
%
Valuation
30 April
2024
£’000
Shareholders’
Funds
30 April
2023
%
Valuation
30 April
2023
£’000
Equities
Unilever
UK
Food Producer
3.9
64,625
3.7
69,263
Visa
USA
Financial Services
3.1
51,210
2.8
53,606
Nestlé
Switzerland
Food Producer
2.6
43,860
3.0
55,685
Diageo
UK
Beverages
2.5
41,672
2.4
45,891
Microsoft
USA
Technology
2.2
37,292
1.8
33,490
Alphabet
USA
Technology
2.2
36,539
1.5
27,886
American Express
USA
Financial Services
2.2
36,214
1.3
24,820
Becton Dickinson
USA
Pharmaceuticals
1.8
29,395
1.7
32,918
Procter & Gamble
USA
Household Products
1.6
26,968
1.4
25,679
Heineken
Netherlands
Beverages
1.5
25,561
–
–
Agilent Technologies
USA
Healthcare
1.0
16,593
0.9
16,301
Pernod-Ricard
France
Beverages
0.8
13,097
1.1
19,845
Heineken Holding
Netherlands
Beverages
0.8
12,805
–
–
Experian
UK
Industrial
0.7
12,489
0.6
10,815
Moody’s
USA
Financial Services
0.6
9,474
0.3
7,963
Franco-Nevada
Canada
Mining
–
–
1.5
27,442
Total Equities
27.5
457,794
24.0
451,604
Other Investments
US TIPS
USA
36.5
608,415
33.9
639,348
Gold Bullion
12.5
208,874
9.5
178,392
US Treasuries
USA
11.6
193,377
14.8
279,369
UK Gilts
UK
7.0
116,636
13.6
257,220
UK Index-linked Bonds
UK
3.3
55,536
–
–
Property
0.1
1,730
0.1
1,730
Total Other Investments
71.0
1,184,568
71.9
1,356,059
Total Investments
98.5
1,642,362
95.9
1,807,663
UK cash
1.8
29,436
2.6
49,732
Overseas cash
0.0
39
0.0
282
Net current (liabilities)/assets
(0.3)
(4,556)
1.5
26,675
Total Portfolio
100.0
1,667,281
100.0
1,884,352
11
Geographic Analysis of Investments and Currency Exposure
at 30 April 2024
UK
%
USA
%
France
%
Switzerland
%
Netherlands
%
Total
%
Equities
7.1
14.7
0.8
2.6
2.3
27.5
Index-linked Bonds
3.3
36.5
–
–
–
39.8
Gilts
7.0
–
–
–
–
7.0
Treasuries
–
11.6
–
–
–
11.6
Gold Bullion
–
12.5
–
–
–
12.5
Property
0.1
–
–
–
–
0.1
Cash
1.8
–
–
–
–
1.8
Net current liabilities
(0.3)
–
–
–
–
(0.3)
Total
19.0
75.3
0.8
2.6
2.3
100.0
Net currency exposure
57.1
37.2
0.8
2.6
2.3
100.0
Contribution to Performance
at 30 April 2024
Asset class contribution to performance 30 April 2023 to 30 April 2024
GRAPH
Source: FactSet and Troy Asset Management Limited, 30 April 2024. Past performance is not a guide to future performance. Contribution to
return is provided as gross absolute returns in local currency and does not include charges and fees. Currency exchange rates will impact the
return of non-GBP securities. Asset allocation and holdings are subject to change. Reference to specific securities in this slide is not intended
as a recommendation to purchase or sell any investment.
Top 5 equity contributors
%
Alphabet
0.8
American Express
0.7
Microsoft
0.5
Visa
0.4
Experian
0.1
Bottom 5 equity contributors
%
Becton Dickinson
-0.2
Franco-Nevada
-0.3
Pernod Ricard
-0.3
Nestlé
-0.6
Diageo
-0.6
12
Ten Year Performance
Share Price versus FTSE All-Share Index (based to 100)
GRAPH
Share Price Total Return versus FTSE All-Share Index Total Return (based to 100)
GRAPH
13
Annual Performance since 30 April 2000
The first chart on this page is designed to show the share price volatility of the Company compared to
that of the FTSE All-Share Index. The chart shows how, with the exception of 2013-2014, 2017-2018
and 2022-2023, the Company’s capital performance has tended to be less volatile than that of the All-
Share but, even taking all the above periods into account, the Company’s long-term price gain of
139.1% since April 2000 has comfortably exceeded the All-Share’s 47.6%.
Annual percentage change in Share Price and FTSE All-Share Index to 30 April
GRAPH
Volatility and Share Price Total Return Performance since 30 April 2000
Note: The Scatter Graph shows the share price total return performance of the Company (very large
blue dot) compared to the FTSE All-Share Index, the FTSE UK Conventional Gilts All Stocks TR
Index and the AIC Flexible Investment Sector. These are shown in terms of share price return (vertical
axis) and annualised price volatility (horizontal axis) since 30 April 2000.
Volatility Compared to Peer Group since 30 April 2000
GRAPH
14
The Board
Iain Ferguson CBE
Chairman
Shares held: 476,901
Iain joined the Board as a non-executive Director in 2017 and became Chairman in 2020. Iain is also
Chairman of Crest Nicholson Holdings plc and Genus plc. He was previously Chairman of Berendsen
plc, Stobart Group Limited and Senior Independent Director and Chairman of the Remuneration
Committee at Balfour Beatty plc. Until 2009 he was Chief Executive of Tate & Lyle. Prior to joining
Tate & Lyle in 2003, he spent 26 years at Unilever in a succession of roles culminating in his
appointment as senior vice president, corporate development. He holds a BSc (Hons) in Chemistry &
Psychology from St Andrews University and has the Harvard Business School Advanced Management
Programme.
Jean Sharp
Chair of the Audit and Risk Committee
Shares held: 69,100
Jean joined the Board as a non-executive Director in 2016. She is also a non-executive Director and
Chair of the Audit Committee of Flood Re Limited and FBD Holdings plc. Until December 2019 she
was Chief Taxation Officer of Aviva and its predecessor companies, a role she had held since 1998.
She is a Chartered Accountant and a former partner of EY LLP. She holds a BComm and a MAcc from
University College Dublin.
Paul Read
Senior Independent Director
Shares held: 540,000
Paul joined the Board as a non-executive Director in 2017. Until his retirement in December 2021,
Paul Read co-lead Invesco’s Henley based fixed income team. He began his investment career in 1986
in investment banking fixed income sales and trading, first with UBS (Securities) Ltd and later with
Merrill Lynch International. He holds a BA in Economics and History from the University of Toronto
and also has an MBA from INSEAD.
Mandy Clements (nee Pike)
Non-executive Director
Shares held: 12,301
Mandy joined the Board as a non-executive Director in 2020. Until December 2019 Mandy was CEO
of legal entities responsible for £300 billion of assets at Aberdeen Standard Investments, having
worked at the group for 19 years. She also oversaw the dealing function globally for over 14 years and
has held dealing roles at F&C Asset Management (Foreign and Colonial), Brewin Dolphin and BNP
Capital Markets, having started her career at Grieveson Grant Stockbrokers in 1983.
15
Gordon Neilly
Non-executive Director
Shares held: 197,443
Gordon joined the Board as a non-executive Director in 1997 and has considerable experience and
knowledge of investment trusts. Gordon is Executive Chairman of WhiteStar Asset Management
Europe, a director of Clearlake Capital Group UK Limited and a non-executive director of Montanaro
European Smaller Companies Trust plc. He was previously Chief of Staff at Standard Life Aberdeen.
Prior to this he was Head of Strategy and Corporate Activity at Aberdeen Standard Investments, Co-
Chief Executive Officer of Cantor Fitzgerald Europe, Chief Executive of Intelli Corporate Finance and
Finance and Business Development Director of Ivory & Sime.
Jennifer Thomas
Non-executive Director
Shares held: nil
Jennifer joined the Board as a non-executive Director on 1 May 2024. Jennifer is a prominent diversity
and inclusion and communications specialist with over 25 years’ experience in leading external and
internal communications strategies within various organisations. She is currently the Global Head of
Equity, Diversity and Inclusion (EDI), leading the EDI strategy and agenda for the London Stock
Exchange Group plc (LSEG). Jennifer was previously the Head of Communications for the Data and
Analytics division of LSEG and prior to that she consulted at GSK plc on their global diversity and
inclusion strategy.
Previous other roles include Director of Internal Communications, Experience and Sustainability and
Director of Financial Communications at Direct Line Group. Jennifer is also the Senior Independent
Director for England Netball and UK Athletics.
Robbie Robertson
Non-executive Director
Shares held: 30,000
Robbie joined the Board as a non-executive Director in 2020. During a 37 year career in investment
trust broking, Robbie gained extensive experience of investment trust sales, research and corporate
advisory services. He worked as an investment trust analyst for Laurence Prust and Wood Mackenzie,
and then headed the investment companies teams at Dresdner Kleinwort Wasserstein and Canaccord
Genuity. Robbie holds an M.A. in English Literature from Edinburgh University and an M.Litt from
Oxford University.
16
Strategic Report
For the year to 30 April 2024
Introduction
Personal Assets Trust plc (the ‘Company’) is what its name implies. It is an investment trust run for
private investors, who range from first time savers to experienced investors, who may often have
entrusted a significant part of their portfolio to the Company. The Company’s investment policy is to
protect and increase (in that order) the value of shareholders’ funds per share over the long term. It
differs from other investment trusts in that its activities are defined not by any particular portfolio
specialisation or investment method but by a desire to satisfy the personal requirements of those who
invest in it. This is reflected in the Board’s statement that ‘our specialisation will be our shareholders’.
Principal Activities and Status
The Company is incorporated in Scotland (registered number SC074582). It is an investment company
as defined by Section 833 of the Companies Act 2006. It carries on the business of an investment trust
and has been approved as such by HM Revenue & Customs.
Business Model and Strategy for Achieving Objectives
The Company is run by its Board of Directors which, with the appointment of Jennifer Thomas to the
Board on 1 May 2024, now comprises seven non-executive Directors. Four of the Directors are male
and three are female. The Board is responsible for the overall stewardship of the Company, including
investment objectives and strategy, dividends, corporate governance procedures and risk management.
Biographies of the Directors can be found on pages 12 and 13.
The Directors have a duty to promote the success of the Company. The Directors believe that the best
way of achieving this, as well as delivering the Company’s objective, is to maintain the strong working
relationship with the Investment Manager, Troy Asset Management Limited (‘Troy’ or the ‘Investment
Manager’). Troy acted as Investment Adviser to the Company since 2009 and with effect from 1 May
2020 was appointed as the Company’s Investment Manager. Troy operate within an investment
universe, including bands and ranges, which has been agreed by the Board.
The Board has appointed Juniper Partners Limited (‘Juniper’) as its AIFM. The day-to-day
management of the portfolio has been delegated by the AIFM to the Investment Manager, and is the
responsibility of Sebastian Lyon, the Founder and Chief Investment Officer of Troy, in particular.
Juniper also provide company secretarial, administration and discount and premium control services to
the Company.
Troy’s investment approach is conservative, attention being paid first and foremost to the downside
risk of any investment. Troy regard risk as permanent loss of an investor’s capital rather than
performance relative to a particular benchmark.
The Investment Manager employs a long-term, long-only approach to investing and has the ability to
invest globally. Whilst asset allocation will vary, in general the investment universe comprises high
quality, developed market equities, developed market government bonds, gold bullion, cash and money
market instruments (such as treasury bills) which the Board believes aligns with its long term
investment strategy. Troy judge the safety and attractiveness of asset classes not just relative to each
other but also relative to the asset classes’ histories. When allocating the Company’s assets Troy
incorporate valuation measures, inflation expectations, and monetary and fiscal conditions into their
decision-making process from both a top-down perspective and a stock-specific perspective.
Investment Policy
The Company is an investment trust with the ability to invest globally. Its investment policy is to
protect and increase (in that order) the value of shareholders’ funds per share over the long term. While
the Company uses the FTSE All-Share Index (the ‘All-Share’) as a comparator for the purpose of
monitoring performance and risk, the composition of the All-Share has no influence on investment
decisions or the construction of the portfolio. As a result, the Company’s investment performance is
17
likely to diverge from that of the All-Share. Our definition of ‘risk’ is fundamentally different from that
commonly used by other global investment trusts and the industry at large (ours being ‘risk of losing
money’ rather than ‘volatility of returns relative to an index’). Taking this as our definition of risk, the
Board will usually, although not invariably, prefer the Company’s portfolio as a whole to have a lower
level of risk than the All-Share.
The Company will invest in equities and fixed income securities and it may also hold cash and cash
equivalents and gold. The Company may use derivatives as a way of increasing or reducing its
investment exposure and to enhance and protect investment positions. The Company may also from
time to time make use of currency hedging.
The Company has no predetermined maximum or minimum levels of exposure to asset classes,
currencies or geographic areas but these exposures are reported to, and monitored by, the Board in
order to ensure that adequate diversification is achieved. The Company’s equity portfolio is typically
concentrated in a short list of stocks and turnover tends to be low. No holding in an individual
company will represent more than 10% by value of the Company’s total assets at the time of
acquisition.
The Company is prepared to make use of both gearing and liquidity, the former by using short-term
borrowed funds or derivatives such as FTSE 100 Futures. The Company’s gearing will not exceed 50%
of shareholders’ funds in aggregate. In exceptional circumstances, the Company’s liquidity could be as
high as 100% of shareholders’ funds. These limits would not be exceeded without
shareholder approval.
The Company may also invest in other investment trusts, especially as a way of gaining exposure to a
region or industry in which the Company preferred not to invest directly. The Company’s policy is not
to invest more than 15% of its total assets in other investment trusts and other listed investment
companies.
An analysis of the investment portfolio at 30 April 2024 can be found on page 8.
Investment Manager
Troy provides investment management services to the Company pursuant to a delegation agreement
between the Company, the AIFM (Juniper) and Troy. The Investment Management Agreement may be
terminated on six months’ notice. No compensation is payable to the Investment Manager in the event
of termination of the agreement over and above payment in respect of the required six months’ notice.
The fee payable to Troy in accordance with the Investment Management Agreement, which is based on
the Company’s shareholders’ funds, is: 0.65% on the first £750 million; 0.5% between £750 million
and £1,500 million; and 0.45% thereafter, payable quarterly in arrears. The investment management fee
is reduced by the amount payable by the Company to Juniper for its AIFM services, which is
calculated on the basis of 0.015% of shareholders’ funds.
During the year the Board has reviewed the appropriateness of Troy’s appointment. In carrying out its
review the Board considered the investment performance of the Company since the appointment of
Troy and its capability and resources to deliver satisfactory investment performance. It also considered
the length of the notice period of Troy and the fees payable to it.
Following this review the Directors are confident of the Investment Manager’s ability to deliver
satisfactory investment performance. It is therefore their opinion that the continuing appointment of the
Investment Manager, on the terms agreed, is in the interests of shareholders.
At 30 April 2024 Sebastian Lyon had an interest in 2,574,799 (2023: 2,527,499 ) shares of the
Company. Charlotte Yonge, Assistant Manager, had an interest in 57,008 (2023: 57,004) shares of the
Company. Since the year end Mr Lyon has acquired an interest in a further 262,617 shares.
Dividend Policy
The Company aims to pay as consistent and sustainable a dividend as is compatible with protecting and
increasing the value of its shareholders’ funds and maintaining its investment flexibility.
18
Discount and Premium Control Policy
Investment trusts have long suffered from volatile discounts to net asset value. Sometimes, too, the
shares of individual investment trusts may sell temporarily at a significant premium to net asset value.
This can put those investing regularly at a disadvantage, because they may find themselves buying
shares at a sizeable premium which almost certainly will not be sustained and which will therefore
have an adverse effect on the return from their investment.
In view of the disadvantages to shareholders of such discount and premium fluctuations, the
Company’s policy is to ensure that its shares always trade at close to net asset value through a
combination of share buy-backs at a small discount to net asset value where supply exceeds demand
and the issue of new or Treasury shares at a small premium to net asset value where demand exceeds
supply. This discount and premium control policy is enshrined in the Articles of Association of the
Company.
The Board has convened a general meeting to be held on 9 July 2024 to renew the buy-back authority
and ensure the continued operation of this policy.
Key Performance Indicators
The Board assesses its performance in meeting the Company’s objectives against the following Key
Performance Indicators, details of which can be found in the Key Features on page 2 or, in the case of
the volatility of the share price, on page 11 under the heading Volatility and Share Price Total Return
Performance, since 30 April 2000, being the year end closest to the peak of the great 1990s bull
market:
● volatility of the share price total return compared to the total returns of the FTSE All-Share
Index, the AIC Flexible Investment Sector and the FTSE UK Conventional Gilts All Stocks TR
Index;
● share price and net asset value total return per share against the total return of the RPI, CPI, and
the FTSE All-Share Index over the long term whilst aiming to protect and increase (in that
order) the value of shareholders’ funds per share in accordance with the Company’s investment
objective; and
● the range and volatility of the discount or premium to net asset value at which the Company’s
shares trade, in order to ensure compliance with its discount and premium control policy
enshrined in the Articles of Association of the Company.
Competitive and Regulatory Environment
The Company is an investment trust quoted on the London Stock Exchange and is a member of
the AIC.
The Company operates so as to comply with Section 1158 of the Corporation Tax Act 2010, which
allows it to be exempted from capital gains tax on realised investment gains.
In addition to publishing annual and interim reports the Company announces net asset values per
Ordinary share daily and provides more detailed statistical information on a monthly basis to the AIC
in order to enable investors to compare its performance and other relevant information with those of its
peer group, the AIC Flexible Investment Sector.
The Company also publishes quarterly reports on subjects of investment interest to shareholders
together with portfolio information and performance statistics.
19
Principal Risks and Risk Management
The Board has carried out a careful assessment of the principal risks facing the Company, including the
ongoing current geopolitical risks and the ongoing impacts of inflation levels and heightened interest
rates. The Board has established and maintains, with the assistance of the Company Secretary, a risk
matrix which identifies the key risks to the Company. This register is formally reviewed on a regular
basis. Emerging risks that could impact the Company are considered and discussed at each Board
meeting, or on an ad hoc basis as required, along with any proposed mitigating actions.
The principal risks and uncertainties facing the Company, together with a summary of the mitigating
action the Board takes to manage these risks and how these risks have changed over the period, are set
out below.
The arrows denote if the relevant risk has increased, decreased or remained the same during the year
after considering the mitigating actions.
Emerging
Risk
The conflicts in Ukraine and the Middle East
continue to bring risk to economic growth and
investors’ risk appetites and consequently can
impact the valuation of companies in the
portfolio. There is also an increasing awareness of
the challenges and emerging risks posed by
climate change as well as the impact and pace of
technological developments on the companies in
the investment universe.
Mitigation
The Board seeks to mitigate these emerging risks
through maintaining a broadly diversified global
equity portfolio and appropriate asset and
geographical allocation. In respect of climate
change risks, the investment process considers
ESG factors, as set out in the Strategic Review.
Overall the specific potential effects of climate
change and developing technology are difficult, if
not impossible, to predict and the Board and
Investment Manager will continue to monitor
developments in this area. The Board is in regular
communication with the Investment Manager on
emerging matters which may impact on the
portfolio.
↑ Increased risk
Economic
Risk
The Board believes that the principal risk to
shareholders and the Company’s investments are
events or developments, including the emerging
risks noted above, which can affect the general
level of share prices and oth
er securities within
the portfolio. These include for instance, inflation
or deflation, economic recessions and movement
in interest rates and currencies which could cause
losses within the portfolio.
Mitigation
The Board regularly monitors the investment
environment and the management of the
Company’s investment portfolio, and applies the
principles detailed in the guidance provided by the
Financial Reporting Council. Further details on the
Company’s financial risks are contained in the
Notes to the Accounts on pages 47 to 59.
The Company’s strategy is reviewed formally on
at least an annual basis considering investment
performance, market developments and
shareholder communication. The Board receives
regular updates on the composition of the
Company’s portfolio. Investment performance
and the portfolio composition has been monitored
specifically in the light of the emerging risks
noted above.
↑ Increased risk
20
Operational
Risk
The Company is reliant on service providers
including Troy as Investment Manager, Juniper as
AIFM, Company Secretary, Administrator and
discount and premium control provider, J.P.
Morgan as Depositary and Custodian a
nd Equiniti
as Registrar. Failure of the internal control
systems of these parties, including in relation to
cybersecurity measures, could result in losses to
the
Company.
Mitigation
The Board formally reviews the Company’s
service providers on an annual basis, including
reports on their internal controls where available.
As part of the annual review the Board considers
the business continuity plans in place with each of
its key suppliers and the measures taken to
mitigate cyber threats. The Company’s internal
controls are described in more detail on pages 33
and 34.
→ Risk remains relatively unchanged
Legal and Regulatory
Risk
Breach of legal and regulatory rules could lead to
the suspension of the Company’s Stock Exchange
listing, financial penalt
ies, or a qualified audit
report. Breach of Section 1158 of the Corporation
Tax Act 2010 could lead to the Company being
subject to tax on realised capital gains.
Mitigation
Compliance with the Company’s regulatory
obligations is monitored on an ongoing basis by
the AIFM, the Investment Manager and other
professional advisers as required who report to the
Board regularly.
→ Risk remains relatively unchanged
Discount and Premium Control
Risk
The share price could be impacted by a number of
external factors which could cause significant
discount and premium fluctuations.
Mitigation
The Company’s discount and premium control
policy, which is enshrined in the Articles of
Association, is to ensure that shares always trade
at close to net asset value. The level of share
buybacks or issuance under the policy is reported
via an RIS on an ongoing basis.
→ Risk remains relatively unchanged
Duty to Promote the Success of the Company
The Directors have a duty to promote the success of the Company for the benefit of its shareholders as
a whole. The Directors are required to include a report explaining how they have considered all the
requirements and discharged their duties under Section 172(1) of the Companies Act 2006, taking into
account the likely long-term consequences of decisions taken, the need to foster relationships with all
stakeholders in the Company and the impact of the Company’s operations on the environment. The
report includes specific matters the Board has considered during the year. The Company being an
investment trust, the key stakeholders comprise its shareholders, the Investment Manager and its other
third-party service providers (including the Company Secretary and Administrator, Registrar,
Depositary and Custodian).
21
Key Stakeholders
How do we engage
Specific Example of Stakeholder Consideration
Shareholders
The Board welcomes the views of
shareholders and places considerable
importance on communications with
them and the need to act fairly between
all shareholders.
The Investment Manager reports back
regularly to the Board on meetings with
shareholders and the Chairman and other
Directors are available to meet
shareholders if required.
The Annual General Meeting of the
Company and Troy’s Annual Investment
Trust Seminar in London provide a
formal forum for shareholders to meet
and discuss issues with the Board.
Shareholder lunches are also held on a
regular basis to allow discussion of
matters on a more informal basis.
The Board incorporates the views of
shareholders when making key decisions
in relation to promoting the long term
success of the Company both for the
benefit of existing shareholders as a
whole and to continue to attract new
investors to the Company. During the
year the Board undertook a search for an
additional non-executive Director who
would enhance the overall skills and
experience of the Board and its
Committees. Jennifer Thomas was
subsequently appointed a non-executive
Director of the Company 1 May 2024.
During the year the Company completed
the cancellation of its share premium
account. The Board believes that the
conversion of the share premium account
to a distributable reserve will provide a
significant pool of reserves which can be
used in future, if required, to fund share
buybacks or other returns of capital in
accordance with the applicable law. The
cancellation will therefore facilitate the
continued effective operation of the
discount and premium control policy and
provides the Company with more
flexibility in how the reserves are
established for future events.
Investment Manager
One of the Company’s primary business
relationships is with its Investment
Manager, Troy. The Board seeks to
maintain high standards of business
conduct within all its business
relationships and continues to work
closely with the Investment Manager to
ensure such standards are met.
The Directors, Sebastian Lyon, Charlotte
Yonge and their respective families have
substantial shareholdings in the Company
(see pages 12, 13, 15 and 30) and those
who run the Company therefore have a
common interest with those who invest in
it.
The Board continues to be mindful of
ESG matters and believes it is in
shareholders’ interests to consider such
matters when selecting and retaining
investments. The Board supports and
encourages the Investment Manager’s
positive engagement approach with the
underlying investee companies. Further
details on this approach can be found in
the Strategic Report on pages 20 and 21.
During the year the Board has continued
to consider ESG matters and in particular
has considered the increasing awareness
placed on climate change risks on the
portfolio at its quarterly Board meetings.
The Board continues to work closely with
the Investment Manager to understand
the ESG considerations that impact on
the portfolio. The Company has
published a public ESG policy which is
available on the AIC website.
22
Key Stakeholders
How do we engage
Specific Example of Stakeholder Consideration
Third Party Service
Providers
The Company’s other primary business
relationships is with its AIFM, Company
Secretary, Administrator and discount
and premium control provider, Juniper.
The Board seeks to maintain high
standards of business conduct within all
its business relationships and continues to
work closely with Juniper to ensure such
standards are met.
Juniper seeks to maintain constructive
relationships with the Company’s other
third-party suppliers, for example the
Registrar, the Depositary and the
Custodian, on behalf of the Board
typically through regular communication
and provision of information.
The Management Engagement
Committee has continued its enhanced
review process in respect of its two key
suppliers, Troy and Juniper. For both
parties this process is led by Mandy
Clements and is designed to give the
Board more in depth oversight of the
effectiveness of the internal processes
and controls and to continue to improve
the direct information flows between the
Company and the relevant teams.
23
Responsible Investment
In prioritising capital preservation, the Investment Manager pays significant attention to the downside
risk of any investment. It is Troy’s fiduciary duty to assess the drivers of long-term value in the
investment process.
An important part of this is a consideration of the material environmental, social and governance
(‘ESG’) factors that can impact the long-term success of an investment. Responsible investment efforts
include the fundamental integration of material ESG factors into investment analysis, portfolio
construction and stewardship activities (voting and engagement). The Investment Manager’s
responsible investment approach therefore aims to ensure alignment with the Company’s investment
objectives.
Research Process
A core part of the Investment Manager’s research process is understanding and assessing the material
financial and non-financial risks and opportunities that may impact the long-term returns of an
investment. It is in this context that Troy’s investment team seeks to integrate the consideration of ESG
factors into fundamental analysis during all stages of the research process.
Troy may seek to either mitigate the adverse impact or improve the positive impact of investments on
the environment or society if doing so is aligned with improving the risk and return profile of the
investment. The Investment Manager would only do so if this does not run contrary to the investment
objectives of the Company.
Since materiality is dynamic, Troy does not seek to limit the categories that ESG encompasses. Rather,
the aim is to facilitate the analysis and appreciation of relevant and material ESG factors specific to
each company. The Investment Manager therefore does not employ a prescriptive checklist, nor score
holdings on ESG criteria. Instead, a qualitative assessment is carried out to assess the risks and
opportunities of each relevant ESG factor.
Analysis is materiality-driven and the factors considered will depend on the ESG risks and
opportunities each company is exposed to, as well as the industry and geographies they operate in. The
ESG factors Troy may consider are outlined below, though this does not comprise an exhaustive list of
all factors considered.
Climate Change
Natural Capital
Product Safety
& Responsibility
Human Capital
Corporate Governance
● Carbon pricing
● Energy mix
● Technological ●
disruption
● Net zero alignment
● Physical risk
● Natural resource
management
● Biodiversity
● Pollution
● Waste
● Circularity
● Product use and
harm
● Chemical use
● Data privacy
● Cyber security
● Human rights
● Workplace
culture
● Employee
treatment and
empowerment
● Board
effectiveness
● Management
capability
● Corporate
behaviour
● Business ethics
Climate Change
The Investment Manager believes climate change to be one of the most significant and complex
systemic risks facing the world today. As a result, Troy assesses all equity holdings for their exposure
to climate-related risks and opportunities which includes an assessment of both transition and physical
risks (and opportunities where relevant). Troy’s annual TCFD Report further outlines how climate-
related considerations are integrated into the investment process and includes climate related metrics to
the Company, is published on the Troy website (www.taml.co.uk).
Time Horizon: The Investment Manager aims to invest in stocks that can be held for the long term
(five years or more). This time horizon clearly extends into the time frame over which one can
reasonably expect the impact of climate change to be felt. As such the management of climate risk is
implemented within the investment process.
24
Transition Risk: The Investment Manager assesses that the risks associated with a transition to a
lower carbon economy fall well with Troy’s investment time horizon of more than five years. Whilst
Troy’s investment process favours capital-light investments, and the Company has limited exposure to
the most carbon-intensive sectors, the analysis of transition risk at the individual stock and portfolio
level remains an important part of the investment process.
Physical Risk: The risks associated with a warming climate, including from rising sea levels, extreme
weather and wildfire events, are extremely difficult to model and are risks that impact almost all
companies. The understanding of how physical climate risk might impact financial markets and asset
prices is in its infancy but Troy continues to develop its understanding of this and apply it to the
analysis of companies.
Monitoring of and Engagement with Investee Companies
Whilst the Company seeks to invest in companies whose business strength and corporate governance
policies mean they generally do not require significant shareholder intervention, the Investment
Manager does recognise that engagement is an important aspect of fiduciary duty. Engagement is
generally conducted proactively and as part of an investee company’s decision-making process; Troy is
also willing to engage reactively where a company has taken a course of action that conflicts with its
standpoint. The impetus to engage may stem from a breach by the company of generally accepted
business practice norms, Troy’s proxy voting process or integrated ESG analysis. Any engagement
would be expected to meet the following criteria:
● there is a clear objective in engaging with a company;
● the matter for engagement must be material; and
● the engagement with the company is constructive.
Voting and Disclosure of Activity
The Company considers (proxy) voting an important part of its stewardship activities and investment
process and aims to use its voting rights to both safeguard the interests of shareholders and encourage
environmental and social sustainability (where these objectives are aligned). The Investment Manager
will seek to instruct votes, on behalf of investors, on all resolutions for which it has voting authority.
Troy conducts analysis of each management or shareholder resolution ahead of voting. Votes are then
cast in line with what is deemed to be in the best long-term interest of shareholders. Environmental and
social sustainability are considered alongside governance factors in this analysis.
Whenever possible, voting on any resolution is incorporated as part of the wider engagement with
management. Troy’s preferred course of action would be to have dialogue with any company ahead of
casting a vote against management. Where appropriate Troy may also seek to engage with a company
following a vote against management.
UN Principles for Responsible Investment
As part of the Investment Manager’s commitment to responsible investing, Troy became a signatory to
the United Nations’ Principles for Responsible Investment in September 2016.
25
Directors’ Report
The Directors have pleasure in presenting their Annual Report together with the audited
financial statements of the Company for the year to 30 April 2024.
Results
A review of the Company’s returns during the financial year, the position of the Company at the year
end and the outlook for the coming year is contained within the Chairman’s Statement and Investment
Manager’s Report on pages 4 to 7.
Board of Directors
At the year end the Board comprised six non-executive Directors. Jennifer Thomas was subsequently
appointed to the Board on 1 May 2024. The biographies of the Board are set out on pages 12 and 13.
Activities
A review of the Company’s activities during the year can be found in the Strategic Report on pages 14
to 19 and in the Chairman’s Statement and Investment Manager’s Report.
Responsibility Statement
The Directors are responsible for preparing the Annual Report and the financial statements in
accordance with applicable law and regulation.
Company law requires the Directors to prepare financial statements for each financial year. Under that
law the Directors have prepared the financial statements in accordance with UK-adopted international
accounting standards.
Under company law, Directors must not approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the Company and of the profit or loss of the
Company for that period. In preparing the financial statements, the Directors are required to:
● select suitable accounting policies and then apply them consistently;
● state whether applicable UK-adopted international accounting standards have been followed,
subject to any material departures disclosed and explained in the financial statements;
● make judgements and accounting estimates that are reasonable and prudent; 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 safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are also responsible for keeping adequate accounting records that are sufficient to show
and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial
position of the Company and enable them to ensure that the financial statements and the Directors’
Remuneration Report comply with the Companies Act 2006.
The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation
in the United Kingdom governing the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
Responsibility Statements under the Disclosure Guidance and Transparency Rules
Each of the Directors listed on pages 12 and 13 confirms that to the best of her or his knowledge:
● the financial statements, prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Company; and
26
● the Strategic Report includes a fair review of the development and performance of the business
and the position of the Company together with a description of the principal risks and
uncertainties that it faces.
Corporate Governance
Full details are given in the Corporate Governance statement on pages 26 to 29. The Corporate
Governance statement forms part of this Directors’ Report.
Going Concern
The Directors believe, in the light of the controls and review processes reported in the Report of the
Audit and Risk Committee on pages 33 and 34 and bearing in mind the nature of the Company’s
business and assets, which are considered to be readily realisable if required, that the Company has
adequate resources to continue operating for at least 12 months from the date of approval of the
financial statements. For this reason, they continue to adopt the going concern basis in preparing the
accounts.
As part of the going concern assessment a sensitivity analysis was performed. If the market dropped by
25% and no dividend income became available the Company would be able to continue operating for
the foreseeable future.
Viability Statement
The Board considered its obligation to assess the viability of the Company over a period longer than
the 12 months from the date of approval of the financial statements required by the ‘going concern’
basis of accounting.
The Board considers the Company, with no fixed life, to be a long term investment vehicle but, for the
purposes of this viability statement, has decided that a period of five years is an appropriate period over
which to report. The Board considers that this period reflects a balance between looking out to a long
term horizon and the inherent uncertainties of looking out further than five years.
When deciding on this period the Directors considered the nature of the Company’s portfolio of liquid
investments comprising listed global equities, US TIPS, US Treasuries, UK Index-Linked Bonds, UK
Gilts, UK T-Bills, Gold Bullion and cash and cash equivalents. The Directors also considered the
Company’s ability to fulfil the stated dividend policy and the operation of its discount and premium
control policy.
The Directors have also carried out an exhaustive assessment of the principal and emerging risks as
noted in the Strategic Report on pages 16 and 17 and discussed in note 14 to the financial statements
that are facing the Company over the period of the review, including those that would threaten its
business model, future performance, solvency or liquidity.
Based on the results of this analysis, 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 five year period of their
assessment.
Duty to Promote the Success of the Company
A summary explaining how the Directors have discharged their duties under section 172 of the
Companies Act 2006 and considered the views of the Company’s key stakeholders in regard to any key
decisions taken throughout the period is contained in the Strategic Report on pages 18 and 19.
Capital Structure
At 30 April 2024 there were 392,805,200 Ordinary shares of 12.50p each in issue of which 50,479,828
Ordinary shares are held in Treasury.
During the year 49,244,828 shares were bought back and held in Treasury at a cost of £232,467,000.
27
The revenue profits of the Company (including accumulated revenue reserves) and realised capital
profits are available for distribution by way of dividends to the holders of the Ordinary shares
(excluding any Ordinary shares held in Treasury, which have no entitlement to dividends).
Voting rights and deadlines for exercising voting rights can be found in the Notes for the Annual
General Meeting (‘AGM’) which can be found on pages 62 and 63.
Results and Dividend
The results for the year are set out in the Income Statement on page 43. The Company pays quarterly
dividends in January, April, July and October. The Company paid four quarterly interim dividends of
1.40 pence per share and will pay a special dividend of 1.60 pence per share to shareholders in respect
of the year ended 30 April 2024. The special dividend will be paid on 31 July 2024 to shareholders on
the register on 28 June 2024. The ex-dividend date will be 27 June 2024.
Ongoing Charges
The unaudited Ongoing Charges for the year ended 30 April 2024 was 0.65% (2023 unaudited:
0.65%).
Substantial Interests
At 30 April 2024 the Board is aware of the following holdings representing (directly or indirectly)
three per cent. or more of the voting rights attaching to the issued share capital of the Company:
Substantial Holder
Shares Held
Percentage
Interactive Investor
62,352,708
18.2%
RBC Brewin Dolphin
46,322,421
13.5%
Hargreaves Lansdown
35,511,395
10.4%
Rathbones
18,650,247
5.4%
AJ Bell
18,509,675
5.4%
Charles Stanley
13,441,579
3.9%
Source: RD:IR
There have been no changes notified in respect of the above holdings, and no new holdings notified,
since the end of the year.
Financial Instruments
Information on the Company’s financial instruments can be found in the Notes to the Accounts on
pages 47 to 59.
Principal Risks and Risk Management
Information on the principal risks to shareholders and management of these risks can be found in the
Strategic Report on pages 16 and 17 and in note 14 to the Accounts on pages 55 to 58.
Directors’ Indemnity
The Company’s Articles of Association entitle any Director or Officer of the Company to be
indemnified out of the assets of the Company against any loss or liability incurred by her or him in the
execution of her or his duties in relation to the Company’s affairs to the extent permitted by law.
Directors’ and officers’ liability insurance cover is in place in respect of the Directors and was in place
throughout the year under review.
Modern Slavery Statement
The Modern Slavery Act 2015 requires certain companies to prepare a slavery and human trafficking
statement. As the Company has no employees and does not supply goods and services, it does not fall
within the scope of The Modern Slavery Act and therefore no slavery or human trafficking statement is
required to be included in the Annual Report. However, the Company has chosen to make an annual
28
statement available on its website as a matter of good corporate governance and its commitment to
high business standards throughout its supply chains.
Carbon Emissions
As an externally managed investment trust with no employees, the Company’s greenhouse gas
emissions are negligible. Streamlined Energy and Carbon Reporting applies to all large companies.
However, as the Company did not consume more than 40,000 kWh of energy during the past year, it
qualifies as a low energy user and is exempt from reporting under these regulations.
Charitable Donations
The Company has agreed to make an annual donation of £50,000 per annum to the Personal Assets
Foundation. The Foundation is run independently of the Company and its objective is to promote and
advance the financial education of younger people wishing to pursue careers within or related to the
investment and finance industries.
The Directors meet with the Trustees of the Foundation on an annual basis to receive an update on its
activities and to review the ongoing donation.
Independent Auditors
PricewaterhouseCoopers LLP have indicated their willingness to continue in office as Auditors and a
resolution proposing their re-appointment will be proposed at the AGM.
Statement of Disclosure of Information to Auditors
As far as the Directors are aware, there is no relevant audit information of which the Auditors are
unaware, and each Director has taken all the steps that he or she ought to have taken as a Director in
order to make herself or himself aware of any relevant audit information and to establish that the
Auditors are aware of that information.
Annual General Meeting
The Annual General Meeting (‘AGM’) of the Company will be held at The Kimpton Charlotte Square
Hotel, Edinburgh EH2 4HQ on Friday 19 July 2024 at 12 noon. The Board would welcome your
attendance at the AGM as it provides shareholders with an opportunity to ask questions of both the
Board and the Investment Manager.
Resolutions to be proposed at the AGM
Resolutions 1, 2 and 4 to 11 inclusive are self-explanatory and will be proposed as ordinary
resolutions.
Resolution 3 – Dividend Policy
As a result of the timing of the payment of the Company’s quarterly dividends in January, April, July
and October the Company’s shareholders are unable to approve a final dividend each year. As an
alternative the Board puts the Company’s dividend policy to shareholders for approval on an annual
basis.
Resolution 3, which will be proposed as an ordinary resolution, relates to the approval of the
Company’s dividend policy which is as follows:
Dividends on the Ordinary shares are payable quarterly in January, April, July and October. The
Company aims to pay as consistent and sustainable a dividend as is compatible with protecting and
increasing the value of its shareholders’ funds and maintaining its investment flexibility. The Company
has the ability in accordance with its Articles of Association to make distributions from capital.
Resolution 12 – Aggregate Directors’ Fees
The Articles of Association currently provide that Directors’ fees shall not, in aggregate, exceed
£302,500 per annum. Although there are currently no plans to make any further changes to the levels of
29
fees paid to the non-executive Directors, save for those increases disclosed in the remuneration report,
the Board wishes to propose an increase to the fee limit contained in the Articles of Association to
reflect the increased size of the Board and to allow for the recruitment of additional non-executive
Directors as part of the continued refreshment of the Board. It is proposed that the fee limit be
increased to £332,750 per annum in aggregate. Directors’ remuneration will continue to be paid in
accordance with the approved Directors’ remuneration policy.
Resolution 13 – Authority to allot Ordinary shares
Resolution 13 seeks shareholder approval to authorise the Directors to issue new Ordinary shares up to
an aggregate nominal amount of £9,820,130, being equivalent to 78,561,040 Ordinary shares and 20%
of the total issued shares at 17 June 2024.
Treasury Shares
Under UK company law investment trusts are able to acquire their own shares to hold in Treasury for
re-issue. The Directors consider that this facility gives the Company more flexibility in managing its
share capital. At 30 April 2024 there were 50,479,828 Ordinary shares held in Treasury.
Resolution 14 – Dis-application or pre-emption rights
Resolution 14 seeks shareholder authority for the Company to allot shares for cash without first
offering them to existing shareholders. The Company is seeking authority to allot up to 78,561,040
Ordinary shares through the issuance of new Ordinary shares or the re-issuance of shares from
Treasury, being 20% of the total issued shares at 17 June 2024.
The Directors issue new shares or re-issue shares from Treasury only when they believe it is
advantageous to the Company’s shareholders to do so and for the purpose of operating the Company’s
discount and premium control policy. Shares will be issued or re-issued at a premium to the net asset
value at the time of sale and in no circumstances would such issue of new Ordinary shares or re-issue
of shares from Treasury result in a dilution to the net asset value per share.
Resolution 15 – Authority to repurchase Ordinary shares
The Company’s current authority to make market purchases of up to 14.99% of the issued Ordinary
shares expires at the AGM. 49,244,828 Ordinary shares were bought back under this authority during
the year to 30 April 2024. The Board has convened a general meeting to be held on 9 July 2024 to
renew the buy-back authority until the upcoming AGM.
Resolution 15, which will be proposed as a special resolution, seeks shareholder approval to renew the
Company’s power to purchase its own Ordinary shares for a further period until the conclusion of the
Company’s AGM in 2025 or on the expiry of 15 months from the passing of this resolution, whichever
is the earlier.
The minimum price (excluding expenses) which may be paid for each Ordinary share on exercise of
the authority will not be less than the nominal value of each share or greater than the higher of (a)
105% above the average middle market quotation of those shares over the five business days before the
shares are purchased and (b) the higher of the last independent trade and the highest current
independent bid on the London Stock Exchange. The authority, which may be used to buy back shares
either for cancellation or to be held in Treasury, will be used to purchase shares only if, in the opinion
of the Directors, a purchase would be in the best interests of the shareholders as a whole and would
result in an increase in the net asset value per share for the remaining shareholders. There are no
outstanding options or warrants to subscribe for equity shares in the capital of the Company.
Resolutions 14 and 15 would provide the Directors with the authority they need to manage Treasury
shares. Treasury shares will be re-issued only at a premium to the net asset value of the shares at the
time of sale.
30
Resolution 16 – Notice period for General Meetings
The Company’s Articles of Association enable the Company to call General Meetings (other than an
AGM) on 14 clear days’ notice. In order for this to be effective, shareholders must also approve
annually the calling of meetings other than AGMs on 14 days’ notice. Resolution 16 will be proposed
at the AGM to seek such approval. The approval will be effective until the Company’s next AGM,
when it is intended that a similar resolution will be proposed.
The Company meets the requirements for electronic voting under the Companies Act 2006, offering
facilities for all shareholders to vote by electronic means. The Directors believe it is in the best
interests of the shareholders for the shorter notice period to be available to the Company, although it is
intended that this flexibility will be used only for early renewals of the Board’s authorities to issue or
buyback shares and only where merited in the interests of shareholders as a whole.
Recommendation
The Board considers that the resolutions to be proposed at the AGM are in the best interests of the
shareholders as a whole and recommends that they vote in favour of such resolutions, as the Directors
intend to do in respect of their own beneficial holdings.
By Order of the Board
Juniper Partners Limited
Company Secretary
28 Walker Street
Edinburgh EH3 7HR
18 June 2024
31
Corporate Governance
Introduction
The Company is run by its Board, which takes all major decisions collectively. All of the Directors
regard themselves and one another as equal in the duties and responsibilities they owe to shareholders
and accordingly work together as a unitary Board within which the Chairman (who is elected by the
Directors from among their own number) acts as primus inter pares.
The Directors are elected by the shareholders and regard corporate governance and accountability to
shareholders as fundamental. They therefore place considerable emphasis on running the Company in
the way they believe to be best suited to the successful management of an investment trust on behalf of
its shareholders.
Arrangements appropriate to an investment trust in respect of corporate governance have been made by
the Board. The Board has considered the principles and recommendations of the AIC’s Code of
Corporate Governance (the ‘AIC Code’). The AIC Code addresses all the principles set out in the UK
Corporate Governance Code issued by the Financial Reporting Council (the ‘UK Code’), as well as
setting out additional principles and recommendations which are of specific relevance to investment
trusts.
The Board considers that reporting against the principles and recommendations of the AIC Code,
which has been endorsed by the Financial Reporting Council, provides more relevant information to
shareholders than if it had adopted the UK Code.
The AIC Code can be obtained from the AIC’s website at www.theaic.co.uk. It includes an explanation
of how the AIC Code adapts the principles and provisions set out in the UK Code to make them
relevant for investment companies.
Compliance
The Company has complied throughout the year, and continues to comply, with all of the
recommendations of the AIC Code and the relevant provisions of the UK Code.
Directors
All of the Directors are considered to be independent in character and judgement and, in the opinion of
the Board, there are no relationships or conflicts of interest which are likely to affect the judgement of
any Director. Gordon Neilly has served for more than nine years. However, the Board subscribes to the
view expressed within the AIC Code that long-serving Directors should not be prevented from forming
part of an independent majority, and does not consider that a Director’s length of tenure reduces her or
his ability to act independently.
The Board believes that continuity is extremely important to our shareholders and the experience
Gordon brings is invaluable.
Directors’ fees are determined within the limits set out in the Company’s Articles of Association. The
approval of shareholders in a General Meeting is required to change this limit.
Director
Date of
Appointment
Due date for
Re-election/
election
Iain Ferguson (Chairman)
1 December 2017
AGM 2024
Mandy Clements
18 September 2020
AGM 2024
Gordon Neilly
30 April 1997
AGM 2024
Paul Read
1 December 2017
AGM 2024
Robbie Robertson
18 September 2020
AGM 2024
Jean Sharp
21 July 2016
AGM 2024
Jennifer Thomas
1 May 2024
AGM 2024
Any new Directors appointed during the year must stand for election at the first Annual General
Meeting following their appointment. All Directors retire annually and, where appropriate, stand for re-
32
election. There is no notice period and no provision for compensation on early termination of
appointment.
Individual Directors may, after having obtained the consent of any other Director, seek independent
professional advice at the Company’s expense on any matter that concerns the furtherance of their
duties. Details of the Directors’ authority in relation to the issue and buying back by the Company of
its shares can be found in the Directors’ Report. Similarly, details of those persons with significant
holdings in the Company are set out in the Directors’ Report.
Diversity and Inclusion
The Directors consider diversity, including balance of skills, knowledge, gender, social and ethnic
backgrounds, cognitive and personal strengths and experience, amongst other factors when reviewing
the composition of the Board. The current Directors have a range of relevant business, financial and
asset management skills and experience. Brief biographical details of the members of the Board are
shown on pages 12 and 13. The Directors believe that ensuring that the Board and its Committees are
comprised of the best combination of individuals to promote the success of the Company for
shareholders over the long term is the priority. However, it is conscious of the diversity targets set out
in the FCA Listing Rules and the AIC Code in appointing appropriately diverse, independent non-
executive directors who set the operational and moral standards of the Company and aims to have an
appropriate level of diversity on the Board.
In accordance with Listing Rule 9.8.6R (9), (10) and (11) the Board has provided the following
information in relation to its diversity as at 30 April 2024, being the financial year-end of the
Company. The information included in the tables below has been obtained following confirmation
from the individual Directors. As shown in the tables, the Company did not meet the FCA ethnic or
gender diversity target as at 30 April 2024 but following Jennifer Thomas’s appointment on 1 May
2024 will meet the targets for the financial year ending 30 April 2025.
Although the Chair of the Audit and Risk Committee is not considered to be a senior Board position
for the purposes of the rules, the Board consider this to be an equivalent senior position for an
investment trust and this position is held by a woman.
Board gender as at 30 April 2024(1)
Number of
Board
members
Percentage
of the
Board
Number of
senior
positions on
the Board
(2)
Men
4
66.7%
2
Women
2
33.3%
–
Prefer not to say
–
–
–
Board ethnic background as at 30 April 2024(1)
Number of
Board
members
Percentage
of the
Board
Number of
senior
positions on
the Board
(2)
White British or other white (including minority-white
groups)
6
100.0%
2
Mixed/multiple ethnic groups
–
–
–
Asian/Asian British
–
–
–
Black/African/Caribbean/Black British
–
–
–
Other ethnic group, including Arab
–
–
–
Prefer not to say
–
–
–
(1) The Company does not disclose the number of Directors in executive management as this is not applicable for an investment trust.
(2) The rules state that the senior board positions consist of Chair, CEO, SID or Chief Financial Officer. As an externally managed
investment trust the Company does not have the rôles of CEO or Chief Financial Officer. However, the Chair of the Audit and Risk
Committee, which the Board consider to be an equivalent senior position for an investment trust is held by a woman.
33
Conflicts of Interest
The Companies Act 2006 requires that a Director of the Company must avoid a situation in which he
or she has, or might have, an interest that conflicts, or may conflict, with the interests of the Company.
Each Director submits a list of potential conflicts prior to each meeting. The other Directors consider
these and recommend whether or not each potential conflict should be authorised. No situation arose
during the year whereby an interest of a Director conflicted with the interests of the Company.
Meetings
This year the Board agreed to refresh its committees and these are now the Nomination and
Remuneration Committee, the Management Engagement Committee and the Audit and Risk
Committee.
During the year there were five formal Board meetings, each of which was attended by all of the
Directors, save for Jean Sharp who did not attend the July meeting. There were three Audit and Risk
Committee meetings, one Nomination and Remuneration Committee meeting and one Management
Engagement Committee meeting held during the year. All of these meetings were attended by all of the
respective committee members.
Under the terms of the contracts with the AIFM and the Investment Manager, the following matters
have been expressly reserved to the Board: (a) the introduction of gearing and gearing levels thereafter;
(b) matters relating to share issues and buybacks; (c) matters relating to shareholder communication;
(d) matters relating to the property at 28 Walker Street, Edinburgh; (e) investments in any new asset
classes not already represented in the portfolio; and (f) such other matters as the Board may reasonably
intimate from time to time. However, the Board is required to engage in active dialogue with the
Investment Manager in relation to the matters referred to at item (c) above.
The Board holds three of its meetings in Edinburgh and two in London each year.
The following diagram highlights various matters considered by the Board during the past year:
DIAGRAM
Voting Policy
As an essential part of its approach to active ownership, the Investment Manager exercises all votes in
relation to the Company’s investments, updating the Board regularly on how votes have been cast.
Following careful analysis of each AGM item, the Investment Manager submits votes in the direction
which it believes best reflects the interests of shareholders. The Investment Manager invests only in a
select universe of stocks and, as such, is able to take a considered decision on all items for voting at
investee company AGMs.
Communication with Shareholders
The Board welcomes the views of shareholders and places considerable importance on
communications with them. The Investment Manager reports back to the Board on meetings with
shareholders and the Chairman and other Directors are available to meet shareholders if required. The
AGM of the Company and presentations held in London provide a forum, both formal and informal,
for shareholders to meet and discuss issues with the Board.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee, chaired by Paul Read and comprising Mr Read, Mandy
Clements, Iain Ferguson, Robbie Roberston, Jean Sharp and Jennifer Thomas, considers the
appointment of new Directors and the fees paid to Directors. Although the Company does not have a
formal policy on diversity, consideration of Board diversity forms part of the responsibilities of the
Nomination and Remuneration Committee. The Board believes in the benefits of having a diverse
34
range of skills and backgrounds, including gender and length of service, on its board of Directors. All
appointments will continue to be based on merit. The Nomination and Remuneration Committee meets
at least annually.
New Directors appointed to the Board are given an induction meeting with the Company Secretary and
are provided with all relevant information regarding the Company and their duties as a Director.
Thereafter, regular briefings are provided on changes in regulatory requirements that could affect the
Company and the Directors. Professional advisers report from time to time and Directors will, if
necessary, attend seminars covering relevant issues and developments.
Management Engagement Committee
The Management Engagement Committee, chaired by Iain Ferguson and comprising Mr Ferguson,
Mandy Clements, Paul Read, Robbie Robertson, Jean Sharp and Jennifer Thomas (who joined the
Board on 1 May 2024), is responsible for reviewing the performance of the Investment Manager and
making recommendations to the Board about the continued appointment of the Investment Manager on
an annual basis. The Committee also reviews the Company’s other service providers annually.
The Management Engagement Committee has continued its enhanced review process in respect of its
two key suppliers, the Investment Manager and Juniper. For both parties this process is led by Mandy
Clements and is designed to give the Board more in depth oversight of the effectiveness of the internal
processes and controls and to continue to improve the information flows between the Board and the
relevant teams.
Performance Review of the Board and its Committees
During the year the performance of the Board, the Audit and Risk Committee, the Nomination and
Remuneration Committee, the Management Engagement Committee and individual Directors was
evaluated through a discussion-based assessment process led by the Chairman. The performance of the
Chairman was evaluated by the other Directors. The Board concluded that the Chairman and each
Director contributed effectively and demonstrated commitment to her or his role. The Board also
concluded that the performance of the Board as a whole and its committees was effective. The AIC
Code requires the Company to engage an external facilitator for the Board evaluation at least every
three years. An external review was conducted in 2022 and therefore the next external review will be
completed in the 2025 financial year.
Additional Information
The Company’s Articles of Association may be amended only by a special resolution passed at a
General Meeting of shareholders.
By Order of the Board
Juniper Partners Limited
Company Secretary
28 Walker Street
Edinburgh EH3 7HR
18 June 2024
35
Directors’ Remuneration Report
Statement by the Chairman
This report has been prepared in accordance with the requirements of the Companies Act 2006. An
Ordinary resolution for the approval of this report will be put to shareholders at the forthcoming
Annual General Meeting. The Company’s remuneration policy requires to be approved at every third
AGM or otherwise when there has been any change to the policy. The remuneration policy was
approved by shareholders at the Company’s AGM in July 2023 (the resolution received 99.49% of
votes for, 0.34% against, and 0.17% of votes cast were withheld).
Nomination and Remuneration Committee
The Nomination and Remuneration Committee, chaired by Paul Read and comprising Mr Read, Mandy
Clements, Iain Ferguson, Robbie Roberston, Jean Sharp and Jennifer Thomas, reviews the Directors’
fees on an annual basis. The terms of reference of the Nomination and Remuneration Committee
clearly define the Committee’s responsibilities. These terms are reviewed annually and are available
for inspection on the Company’s website.
Directors’ Remuneration Policy
The Board’s policy is that fees should be sufficient to attract and retain Directors capable of managing
the Company on behalf of its shareholders. No shareholder views were sought in setting the
remuneration policy although any comments received from shareholders are considered. This policy
was approved by shareholders at the Company’s AGM in 2023 and it is intended that it will continue
until it is put to shareholders at the AGM in 2026. Non-executive Directors do not have service
contracts but on being appointed are provided with a letter of appointment.
Directors do not receive any pension benefits, share options, long-term incentive schemes or other
benefits.
Annual Report on Remuneration
The fees paid to the Directors for the year ended 30 April 2024 were £63,000 for the Chairman,
£42,000 for the Audit and Risk Committee Chair and £31,500 for each of the other Directors per
annum. During the year the Remuneration Committee reviewed the level of fees paid to the Directors.
This review included an analysis of the fees against the rate of increase in the Retail Price Index,
payments made by other investment trusts of a similar size and structure and returns to shareholders.
The Committee also considered the independent research conducted by Trust Associates on fees paid
to non-executive Directors in the investment company sector.
The Directors are conscious of the continued need for Board refreshment and have a desire to attract
and retain the best candidates to fulfil such rôles and represent shareholders’ interests. Following this
review it was concluded that the fees paid to the Directors were not competitive taking into account
various factors. Accordingly, the conclusion of this review was that the fees payable to the Directors
for the year to 30 April 2025 should increase to £67,000 for the Chairman, £45,000 for the Audit and
Risk Committee Chair and £35,000 for each of the other Directors per annum.
The Board remains committed to ensuring that the Company is run efficiently and on a cost effective
basis for shareholders as whole. Given the increased size of the Company the proposed increases to the
Directors’ fees will have no impact on the Company’s ongoing charges.
The annual limit on Directors’ fees is set out in the Company’s Articles of Association. The present
limit is £302,500 in aggregate per annum and the approval of shareholders is required to change this
limit. As noted on page 24, a resolution will be proposed at the AGM to increase this limit to £332,750.
Directors’ Interests (Audited)
The Directors at the end of the year and their interests in the shares of the Company at 30 April 2024
and 30 April 2023 were as follows:
36
Director
Interest
2024
2023
Iain Ferguson (Chairman)
Beneficial
476,901
406,986
Mandy Clements
Beneficial
12,301
11,756
Gordon Neilly
Beneficial
197,443
197,009
Paul Read
Beneficial
540,000
540,000
Robbie Robertson
Beneficial
30,000
30,000
Jean Sharp
Beneficial
69,100
69,100
There have been no changes in the above holdings between 1 May 2024 and 18 June 2024.
Directors’ Remuneration for the Year (Audited)
In accordance with The Companies (Directors’ Remuneration Policy and Directors’ Remuneration
Report) Regulations 2019, the following table has been included to show the annual percentage change
over the preceding financial year by comparison to the current financial year in respect of each
Director. The Board will publish this annual percentage change cumulatively each year going forward
until there is an annual percentage change over the five financial years preceding the financial year
(with effect from 30 April 2021) in accordance with this regulation. The Directors do not receive any
other payments or taxable benefits in respect of carrying out their duties.
The single total figure of remuneration for each Director is detailed below, with year on year changes
since the year ended 30 April 2021.
Year ended 30 April 2024
Year ended 30 April 2023
Year ended 30 April 2022
Year ended 30 April 2021
Director
Fees
% Change
Fees
% Change
Fees
% Change
Fees
% Change
Iain Ferguson
(1)
£63,000
5.0%
£60,000
20.0%
£50,000
17.4%
£42,580
–
Mandy Clements
(2)
£31,500
5.0%
£30,000
20.0%
£25,000
42.6%
£17,529
–
Gordon Neilly
£31,500
5.0%
£30,000
20.0%
£25,000
0.0%
£25,000
–
Paul Read
£31,500
5.0%
£30,000
20.0%
£25,000
0.0%
£25,000
–
Robbie Robertson
(2)
£31,500
5.0%
£30,000
20.0%
£25,000
42.6%
£17,529
–
Jean Sharp
£42,000
5.0%
£40,000
38.0%
£29,000
0.0%
£29,000
–
Robin Angus
(3)
–
–
–
–
–
–
–
–
Hamish Buchan
(4)
–
–
–
–
–
–
£15,046
–
Total
£231,000
5.0%
£220,000
22.9%
£179,000
4.3%
£171,684
–
(1) Iain Ferguson was appointed Chairman on 18 September 2020.
(2) Mandy Clements and Robbie Robertson were appointed on 18 September 2020.
(3) Robin Angus retired as Executive Director on 18 September 2020. Prior to his retirement he received a salary of £77,260 for the year
ended 30 April 2021 and no additional fees or payments.
(4) Hamish Buchan retired as a non-Executive Director on 18 September 2020.
The rates of Directors’ fees for the year ended 30 April 2024 were set out in the Directors’
Remuneration Report contained in the Company’s 2023 Annual Report.
Relative Importance of Directors’ Fees
2024
£’000
2023
£’000
%
change
Directors’ fees and salaries
231
220
+5.0
Expenses
11,289
11,964
-5.6
Dividends paid
28,812
26,919
+7.0
Share buybacks
232,467
10,187
+2,182.0
Directors’ fees and salaries as a percentage of:
2024
%
2023
%
Expenses
2.0
1.8
Dividends paid
0.8
0.8
Share buybacks
0.1
2.2
Further details of the Company’s expenses can be found in note 3 on page 50 and of dividends paid in
note 7 on page 51.
37
Approval
Voting on the resolution to approve the Directors’ Remuneration Report at the Company’s AGM on
13 July 2023 was as follows:
Resolution
%
For
%
Against
%
Withheld*
Approve Directors’ Remuneration Report
99.60
0.25
0.15
* A vote ‘withheld’ is not a vote in law, which means that the votes are not counted in the calculation of the votes for or against the
resolution.
Performance Graph
The Company’s investment policy is to protect and increase (in that order) the value of shareholders’
funds per share over the long term. While the Company uses the FTSE All-Share Index (the ‘All-
Share’) as a comparator for the purpose of monitoring performance and risk, the composition of the
All-Share has no influence on investment decisions or the construction of the portfolio.
The graph below requires to be included by the regulations and compares, for the ten financial years
ended 30 April 2024, the share price total return (assuming all dividends were reinvested) to Ordinary
shareholders in each period compared to the total shareholder return on a notional investment in the
All-Share. A more detailed explanation of the performance of the Company for the year ended 30 April
2024 is given in the Chairman’s Statement and Investment Manager’s Report on pages 4 to 7.
GRAPH
On behalf of the Board
Paul Read
Director
18 June 2024
38
Report of the Audit and Risk Committee
Audit and Risk Committee
The Audit and Risk Committee, chaired by Jean Sharp and comprising Ms Sharp, Mandy Clements,
Paul Read, Robbie Robertson and Jennifer Thomas (who joined the Board on 1 May 2024), meets at
least twice yearly to coincide with the annual and interim reporting cycle. The principal rôle of the
Audit and Risk Committee is to review the annual and interim financial statements, the Accounting
Policies applied therein and to ensure compliance with financial and regulatory reporting requirements.
The Audit and Risk Committee discusses and agrees the scope of the audit plan for the year ahead and
the Auditors’ Report on their findings at the conclusion of the audit. The terms of reference of the
Audit and Risk Committee clearly define the Committee’s responsibilities. These terms are reviewed
annually and are available for inspection on the Company’s website.
The Audit and Risk Committee also reviews the system of internal controls, the terms of appointment
of the Auditors (including their remuneration), the objectivity of the Auditors and the terms under
which they are appointed to perform non-audit services. The Audit and Risk Committee also received a
report from the Auditors identifying to its satisfaction how their independence and objectivity is
maintained when providing these non-audit services. There were no such fees or services for the year
ended 30 April 2024 (2023: £nil).
The Audit and Risk Committee assessed the effectiveness of the audit, the quality of the team and
advice received from them through reviewing interaction with the Auditors, reports received from them
and discussion with management. The Audit and Risk Committee is satisfied with the effectiveness of
the work provided by PricewaterhouseCoopers LLP (‘PwC’) and that PwC remain objective and
independent.
At the request of the Board, the Audit and Risk Committee considered whether the 2024 Annual
Report was fair, balanced and understandable and whether it provided the necessary information for
shareholders to assess the Company’s performance, business model and strategy. The Audit and Risk
Committee is satisfied that the Annual Report is fair, balanced and understandable. The Audit and Risk
Committee reached this conclusion based on a detailed review of the financial statements and
subsequent discussion on whether these are fair, balanced and understandable by all members of the
Committee.
Audit
The Company confirms that it complied with the provisions of The Statutory Audit Services for Large
Companies Market Investigation (Mandatory Use of Competitive Tender Processes and Audit
Committee Responsibilities) Order 2014 during the financial year ended 30 April 2024.
Following a formal tender process, the Company’s external Auditors, PwC, were appointed on 19 July
2018. The Audit Engagement Partner rotates every five years in accordance with ethical guidelines and
2024 is the first year for the current partner.
Internal Controls
The Board is responsible for the Company’s system of internal controls and for reviewing its
effectiveness. The Board has therefore established an ongoing process designed to meet the particular
needs of the Company in managing the risks to which it is exposed, consistent with the internal control
guidance issued by the Financial Reporting Council. The process relies principally on a risk-based
system of internal control whereby a test matrix is created that identifies the key functions carried out
by the Company and other service providers, the individual activities undertaken within those
functions, the risks associated with each activity and the controls employed to manage those risks.
A formal annual review of the Company’s risk-based system of internal controls is carried out by the
Board and includes consideration of internal control reports issued by the Investment Manager and
other service providers.
39
Such review procedures have been in place throughout the financial year and up to the date of approval
of the Annual Report, and the Board is satisfied with their effectiveness. These procedures are designed
to manage, rather than eliminate, risk and, by their nature, can provide only reasonable, not absolute,
assurance against material misstatement or loss. At each Board Meeting the Board reviews the
Company’s activities since the previous Board Meeting to ensure that the Investment Manager adheres
to the agreed investment policy and approved investment guidelines and, if necessary, the Board
approves changes to the guidelines.
Juniper acts as the Company’s AIFM for the purposes of the AIFM Directive and provides secretarial,
administrative and discount control services to the Company.
The Company does not have an internal audit function as the Audit and Risk Committee believes that
the Company’s straightforward structure does not warrant such a function. This is reviewed by the
Committee annually.
Significant Accounting Matters
The significant issue considered by the Audit and Risk Committee during the year in relation to the
financial statements of the Company was the existence and valuation of investments. The AIFM
reconciles the portfolio holdings to confirmations from the Company’s Custodian on a daily basis and
carries out testing of the prices obtained from the independent pricing source. Based on confirmation
from the AIFM that these procedures have operated correctly at 30 April 2024 and based on
conversations with and written reporting from the Depositary, the Committee is satisfied that there is
no material misstatement in the context of the Annual Report.
Committee Performance Review
The activities of the Audit and Risk Committee were considered as part of the Board appraisal process
as summarised on page 29. The process found that the Committee functioned well, with the right
balance of membership, skills and experience.
Jean Sharp
Director
18 June 2024
40
Independent Auditors’ Report to the Members of Personal Assets Trust plc
Report on the audit of the financial statements
Opinion
In our opinion, Personal Assets Trust plc’s financial statements:
● give a true and fair view of the state of the Company’s affairs as at 30 April 2024 and of its
return and cash flows for the year then ended;
● have been properly prepared in accordance with UK-adopted international accounting standards;
and
● have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report, which comprise: the
Statement of Financial Position as at 30 April 2024; the Income Statement, the Statement of Changes
in Equity and the Cash Flow Statement for the year then ended; and the notes to the financial
statements, comprising material accounting policy information and other explanatory information.
Our opinion is consistent with our reporting to the Audit and Risk Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (‘ISAs (UK)’)
and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’
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 remained independent of the Company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard,
as applicable to listed public interest entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s
Ethical Standard were not provided.
We have provided no non-audit services to the Company in the period under audit.
Our audit approach
Overview
Audit scope
● The Company is a standalone Investment Trust Company and engages Troy Asset Management
Limited (the ‘Manager’) to manage its assets.
● We conducted our audit of the financial statements using information from Juniper Partners
Limited (the ‘AIFM’) and J.P. Morgan Chase Bank N.A. (the ‘Custodian’) to whom the Board
has delegated the provision of certain administrative functions.
● We tailored the scope of our audit taking into account the types of investments within the
Company, the involvement of the third parties referred to above, the accounting processes and
controls, and the industry in which the Company operates.
● We obtained an understanding of the control environment in place at Juniper Partners Limited,
and adopted a fully substantive testing approach using reports obtained from the Administrator.
41
Key audit matters
● Valuation and existence of investments
● Income from investments
Materiality
Overall materiality: £16.7m (2023: £18.7m) based on 1% of Net Assets.
Performance materiality: £12.5m (2023: £14.0m).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the financial statements. In particular, we looked at where the Directors made
subjective judgements, for example in respect of significant accounting estimates that involved making
assumptions and considering future events that are inherently uncertain.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most
significance in the 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) identified by the
auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of
resources in the audit; and directing the efforts of the engagement team. These matters, and any
comments we make on the results of our procedures thereon, were addressed in the context of our audit
of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
The key audit matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Valuation and existence of investments
Refer to the Report of the Audit and Risk
Committee, the Accounting Policies and Notes to
the Accounts.
The investment portfolio at the year end
principally comprised equity investments, fixed
interest investments and gold bullion valued at
£1,641 million.
We focused on the valuation and existence of
investments because investments represent the
principal element of the net asset value as
disclosed on the Statement of Financial Position
in the financial statements.
We tested the valuation of the equity investments, fixed
interest investments and gold bullion by agreeing the prices
used in the valuation to independent third-party sources.
We tested the existence of the investment portfolio by
agreeing investment holdings to an independent
custodian confirmation.
No material misstatements were identified from this testing.
42
Key audit matter
How our audit addressed the key audit matter
Income from investments
Refer to the Report of the Audit and Risk
Committee, the Accounting Policies and Notes to
the Accounts.
ISAs (UK) presume there is a risk of fraud in
income recognition. We considered this risk to
specifically relate to the risk of overstating
investment gains and the misclassification of
dividend income as capital rather than revenue
due to the pressure management may feel to
achieve capital growth in line with the objective
of the
Company.
We focused on the valuation of investments with
respect to gains on investments and the accuracy
and occurrence of dividend income recognition
and its presentation in the Income Statement as
set out in the requirements of The Association of
Investment Companies’ Statement of
Recommended Practice (the ‘AIC SORP’).
We found that the accounting policies implemented were in
accordance with accounting standards and the AIC SORP
and that income from investments has been accounted for in
accordance with the stated accounting policy.
We understood and assessed the design and implementation
of key controls surrounding income recognition.
The gains and losses on investments held at fair value
comprise realised and unrealised gains and losses. For
unrealised gains and losses, we tested the valuation of the
portfolio at the year-end (see Valuation and existence of
investments Key Audit Matter), together with testing the
reconciliation of opening and closing investments and
agreeing the year end holdings to independent confirmation.
For realised gains and losses, we tested a sample of disposal
proceeds by agreeing the proceeds to bank statements and we
re-performed the calculation of a sample of realised gains
and losses.
In addition, we tested the accuracy of dividend receipts by
agreeing the dividend rates from all investments to
independent third party sources.
We tested the allocation and presentation of dividend income,
including special dividends, between income and capital by
assessing the treatment in the context of the underlying facts
and circumstances of the dividends obtained from third party
sources.
To test for completeness of dividend income, we tested that
the appropriate dividends had been received in the year by
reference to independent data of dividends declared for all
dividends during the year.
We also tested fixed interest income by recalculating the
coupon interest, using the opening and closing portfolios and
coupon rates and maturity dates. We also agreed a sample of
coupon rates and maturity dates to independent third party
sources.
To test the accuracy of the indexation recognised during the
period, we obtained a detailed transactional breakdown and
recalculated the indexation adjustment with reference to
relevant index data obtained independently.
The amortisation recognised was tested by validating data
inputs and recalculating the expected adjustment for a sample
of holdings.
To test for completeness of fixed interest income, for a sample
of investment holdings in the portfolio, we tested that all fixed
interest income earned by investment holdings had been
recorded.
We tested occurrence of fixed interest income by testing that
all fixed interest income recorded in the year had been earned
and by tracing a sample of fixed interest income received to
bank statements.
No material misstatements were identified from this testing.
43
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial statements as a whole, taking into account the structure of the Company, the
accounting processes and controls, and the industry in which it operates.
All audit procedures were conducted by a UK audit team. We tested and examined information using
sampling and other auditing techniques, to the extent we considered necessary to provide a reasonable
basis for us to form our own judgements.
The impact of climate risk on our audit
In conducting our audit, we made enquiries of the Directors and the Investment Manager to understand
the extent of the potential impact of climate change risk on the Company’s financial statements. The
Directors and Investment Manager concluded that the impact on the measurement and disclosures
within the financial statements is not material because the majority of the Company’s investment
portfolio is made up of level 1 investments which are valued at fair value based on market prices. We
found this to be consistent with our understanding of the Company’s investment activities. We also
considered the consistency of the climate change disclosures included in the Strategic Report with the
financial statements and our knowledge from our audit.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative
thresholds for materiality. These, together with qualitative considerations, helped us to determine the
scope of our audit and the nature, timing and extent of our audit procedures on the individual financial
statement line items and disclosures and in evaluating the effect of misstatements, both individually
and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole
as follows:
Overall Company materiality
£16.7m (2023: £18.7m)
How we determined it
1% of Net Assets
Rationale for benchmark applied
We have applied this benchmark, which is a generally
accepted auditing practice for investment trust audits.
We use performance materiality to reduce to an appropriately low level the probability that the
aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we
use performance materiality in determining the scope of our audit and the nature and extent of our
testing of account balances, classes of transactions and disclosures, for example in determining sample
sizes. Our performance materiality was 75% (2023: 75%) of overall materiality, amounting to £12.5m
(2023: £14.0m) for the Company financial statements.
In determining the performance materiality, we considered a number of factors – the history of
misstatements, risk assessment and aggregation risk and the effectiveness of controls – and concluded
that an amount at the upper end of our normal range was appropriate.
We agreed with the Audit and Risk Committee that we would report to them misstatements identified
during our audit above £833,000 (2023: £935,000) as well as misstatements below that amount that, in
our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Company’s ability to continue to adopt the going
concern basis of accounting included:
● evaluating the Directors’ updated risk assessment and considering whether it addressed relevant
threats;
44
● evaluating the Directors’ assessment of potential operational impacts, considering their
consistency with other available information and our understanding of the business and assessed
the potential impact on the financial statements;
● reviewing the Directors’ assessment of the Company’s financial position in the context of its
ability to meet future expected operating expenses, their assessment of liquidity as well as their
review of the operational resilience of the Company and oversight of key third-party service
providers; and
● assessing the implication of significant reductions in Net Assets as a result of market
performance on the ongoing ability of the Company to operate.
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the Company’s
ability to continue as a going concern for a period of at least twelve months from when the financial
statements are authorised for issue.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern
basis of accounting in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a
guarantee as to the Company’s ability to continue as a going concern.
In relation to the Directors’ 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 considered it appropriate to adopt the going concern
basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are
described in the relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial
statements and our auditors’ report thereon. The Directors are responsible for the other information.
Our opinion on the financial statements does not cover the other information and, accordingly, we do
not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form
of assurance thereon.
In connection with our audit of the financial statements, 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 audit, or otherwise appears to be materially
misstated. If we identify an apparent material inconsistency or material misstatement, we are required
to perform procedures to conclude whether there is a material misstatement of the financial statements
or a material misstatement of the other information. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that
fact. We have nothing to report based on these responsibilities.
With respect to the Strategic Report and the Directors’ Report, we also considered whether the
disclosures required by the UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to
report certain opinions and matters as described below.
Strategic Report and the Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the
Strategic Report and the Directors’ Report for the year ended 30 April 2024 is consistent with the
financial statements and has been prepared in accordance with applicable legal requirements.
45
In light of the knowledge and understanding of the Company and its environment obtained in the
course of the audit, we did not identify any material misstatements in the Strategic Report and the
Directors’ Report.
Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly
prepared in accordance with the Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the Directors’ statements 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. Our
additional responsibilities with respect to the corporate governance statement as other information are
described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following
elements of the corporate governance statement is materially consistent with the financial statements
and our knowledge obtained during the audit, and we have nothing material to add or draw attention to
in relation to:
● The Directors’ confirmation that they have carried out a robust assessment of the emerging and
principal risks;
● The disclosures in the Annual Report that describe those principal risks, what procedures are in
place to identify emerging risks and an explanation of how these are being managed or
mitigated;
● The Directors’ statement in the financial statements about whether they considered it
appropriate to adopt the going concern basis of accounting in preparing them, and their
identification of any material uncertainties to the Company’s ability to continue to do so over a
period of at least twelve months from the date of approval of the financial statements;
● The Directors’ explanation as to their assessment of the Company’s prospects, the period this
assessment covers and why the period is appropriate; and
● The Directors’ statement as to whether they have a reasonable expectation that the Company
will be able to continue in operation and meet its liabilities as they fall due over the period of its
assessment, including any related disclosures drawing attention to any necessary qualifications
or assumptions.
Our review of the Directors’ statement regarding the longer-term viability of the Company was
substantially less in scope than an audit and only consisted of making inquiries and considering the
Directors’ process supporting their statement; checking that the statement is in alignment with the
relevant provisions of the UK Corporate Governance Code; and considering whether the statement is
consistent with the financial statements and our knowledge and understanding of the Company and its
environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the
following elements of the corporate governance statement is materially consistent with the financial
statements and our knowledge obtained during the audit:
● The Directors’ statement that they consider the Annual Report, taken as a whole, is fair,
balanced and understandable, and provides the information necessary for the members to assess
the Company’s position, performance, business model and strategy;
● The section of the Annual Report that describes the review of effectiveness of risk management
and internal control systems; and
● The section of the Annual Report describing the work of the Audit and Risk Committee.
46
We have nothing to report in respect of our responsibility to report when the Directors’ statement
relating to the Company’s compliance with the Code does not properly disclose a departure from a
relevant provision of the Code specified under the Listing Rules for review by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the Directors for the financial statements
As explained more fully in the Responsibility Statement, the Directors are responsible for the
preparation of the financial statements in accordance with the applicable framework and for being
satisfied that they give a true and fair view. The Directors are also responsible for such internal control
as they determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either intend to liquidate the Company or to
cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.
Based on our understanding of the Company and industry, we identified that the principal risks of non-
compliance with laws and regulations related to breaches of section 1158 of the Corporation Tax Act
2010, and we considered the extent to which non-compliance might have a material effect on the
financial statements. We also considered those laws and regulations that have a direct impact on the
financial statements such as the Companies Act 2006. We evaluated management’s incentives and
opportunities for fraudulent manipulation of the financial statements (including the risk of override of
controls), and determined that the principal risks were related to posting inappropriate journal entries to
increase the Company’s net asset value position. Audit procedures performed by the engagement team
included:
● holding discussions with the Directors, the investment manager and the administrator including
consideration of known or suspected instances of non-compliance with laws and regulations and
fraud;
● understanding the controls implemented by Troy Asset Management Limited (the ‘Manager’),
J.P. Morgan Chase Bank N.A. (the ‘Custodian’), and J.P. Morgan Europe Limited (the
‘Depositary’) designed to prevent and detect irregularities;
● assessing the Company’s compliance with the requirements of section 1158 of the Corporation
Tax Act 2010, including recalculation of numerical aspects of the eligibility conditions;
● identifying and testing journal entries, in particular year end journal entries posted by the
Administrator during the preparation of the financial statements;
● reviewing relevant meeting minutes, including those of the Audit and Risk Committee; and
● designing audit procedures to incorporate unpredictability around the nature, timing or extent of
our testing.
47
There are inherent limitations in the audit procedures described above. We are less likely to become
aware of instances of non-compliance with laws and regulations that are not closely related to events
and transactions reflected in the financial statements. Also, 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.
Our audit testing might include testing complete populations of certain transactions and balances,
possibly using data auditing techniques. However, it typically involves selecting a limited number of
items for testing, rather than testing complete populations. We will often seek to target particular items
for testing based on their size or risk characteristics. In other cases, we will use audit sampling to
enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the
FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’
report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a
body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We
do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where expressly agreed by
our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
● we have not obtained all the information and explanations we require for our audit; or
● adequate accounting records have not been kept by the Company, or returns adequate for our
audit have not been received from branches not visited by us; or
● certain disclosures of Directors’ remuneration specified by law are not made; 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.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit and Risk Committee, we were appointed by the members
on 19 July 2018 to audit the financial statements for the year ended 30 April 2019 and subsequent
financial periods. The period of total uninterrupted engagement is six years, covering the years ended
30 April 2019 to 30 April 2024.
Gillian Alexander (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Edinburgh
18 June 2024
48
Income Statement
Year ended 30 April 2024
Year ended 30 April 2023
Notes
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Revenue
return
£’000
Capital
return
£’000
Total
£’000
Investment income
Calculated using the
effective interest rate
method
2
17,456
–
17,456
27,819
–
27,819
Other investment income
2
27,410
–
27,410
20,455
–
20,455
Other operating income
2
991
–
991
1,107
–
1,107
Gains/(losses) on
investments held at fair
value through profit or loss
8,9
–
20,816
20,816
–
(54,976)
(54,976)
Foreign exchange
(losses)/gains
8
–
(4,132)
(4,132)
–
9,419
9,419
Total income/(loss)
45,857
16,684
62,541
49,381
(45,557)
3,824
Expenses
3
(5,047)
(6,242)
(11,289)
(5,304)
(6,660)
(11,964)
Return before taxation
40,810
10,442
51,252
44,077
(52,217)
(8,140)
Taxation
5,6
(8,552)
1,560
(6,992)
(7,436)
1,290
(6,146)
Return for the year
32,258
12,002
44,260
36,641
(50,927)
(14,286)
Return per share
8.77p
3.26p
12.03p
9.48p
(13.18)p
(3.70)p
The ‘Return for the Year’ is also the ‘Total Comprehensive Income for the Year’, as defined in IAS1
(revised), and no separate Statement of Comprehensive Income has been presented.
The Total column of this statement represents the Company’s Income Statement, prepared in
accordance with International Financial Reporting Standards.
The Revenue return and Capital return columns are supplementary to this and are prepared under
guidance published by the Association of Investment Companies.
Return per share (both basic and diluted) is calculated on 367,849,279 (2023: 386,416,856) shares,
being the weighted average number in issue (excluding Treasury shares) during the year.
The Notes to the Accounts on pages 47 to 59, including the material accounting policies on pages 47 to
49, form part of these accounts.
49
Statement of Financial Position
Notes
30 April
2024
£’000
30 April
2023
£’000
Non-current assets
Investments held at fair value through profit or loss
8
1,640,632
1,805,933
Property
9
1,730
1,730
Total non-current assets
1,642,362
1,807,663
Current assets
Receivables
10
6,209
6,159
Corporation tax receivable
10
1,069
–
Financial assets held at fair value through profit or loss
10
–
24,070
Cash and cash equivalents
29,475
50,014
Total current assets
36,753
80,243
Total assets
1,679,115
1,887,906
Current liabilities
Financial liabilities held at fair value through profit or loss
11
(8,733)
–
Corporation tax payable
11
–
(692)
Other payables
11
(3,101)
(2,862)
Total liabilities
(11,834)
(3,554)
Net assets
1,667,281
1,884,352
Capital and reserves
Ordinary share capital
12
49,100
49,100
Share premium
–
1,349,680
Capital redemption reserve
219
219
Special reserve
1,372,145
22,517
Treasury share reserve
(238,314)
(5,847)
Capital reserve – unrealised
198,806
202,745
Capital reserve – realised
262,501
246,560
Revenue reserve
22,824
19,378
Total equity
1,667,281
1,884,352
Shares in issues at year end
12
342,325,372
391,570,200
Net asset value per Ordinary share
487.05p
481.23p
The financial statements on pages 43 to 59 were approved and authorised for issue by the Board of
Directors and signed on its behalf on 18 June 2024 by:
Iain Ferguson
Chairman
The Notes to the Accounts on pages 47 to 59, including the material accounting policies on pages 47 to
49, form part of these accounts.
50
Statement of Changes in Equity
Distributable reserves
(3)
For the year ended
30 April 2024
Ordinary
share
capital
£’000
Share
premium
£’000
Capital
redemption
reserve
£’000
Capital
reserve
unrealised
£’000
Treasury
share
reserve
£’000
Special
reserve
£’000
Capital
reserve
realised
£’000
Revenue
reserve
£’000
Total
£’000
Balance at 1 May 2023
49,100
1,349,680
219
202,745
(5,847)
22,517
246,560
19,378
1,884,352
Return for the year
–
–
–
(3,939)
–
–
15,941
32,258
44,260
Dividends paid
(1)
–
–
–
–
–
–
–
(28,812)
(28,812)
Share buybacks
(2)
–
–
–
–
(232,467)
–
–
–
(232,467)
Reduction &
reclassification of Share
premium account
(4)
–
(1,349,680)
–
–
–
1,349,680
–
–
–
Cost of reduction and
reclassification of Share
premium account
–
–
–
–
–
(52)
–
–
(52)
Balance at 30 April 2024
49,100
–
219
198,806
(238,314)
1,372,145
262,501
22,824
1,667,281
Distributable reserves
(3)
For the year ended
30 April 2023
Ordinary
share
capital
£’000
Share
premium
£’000
Capital
redemption
reserve
£’000
Capital
reserve
unrealised
£’000
Treasury
share
reserve
£’000
Special
reserve
£’000
Capital
reserve
realised
£’000
Revenue
reserve
£’000
Total
£’000
Balance at 1 May 2022
46,100
1,235,636
219
324,095
–
22,517
176,137
9,656
1,814,360
Return for the year
–
–
–
(121,350)
–
–
70,423
36,641
(14,286)
Dividends paid
(1)
–
–
–
–
–
–
–
(26,919)
(26,919)
Issue of Ordinary shares
(2)
3,000
114,044
–
–
4,340
–
–
–
121,384
Share buybacks
(2)
–
–
–
–
(10,187)
–
–
–
(10,187)
Balance at 30 April 2023
49,100
1,349,680
219
202,745
(5,847)
22,517
246,560
19,378
1,884,352
(1) See Note 7.
(2) See Note 12.
(3) These reserves represent distributable reserves available and intended for distribution as and when required.
(4) On 24 April 2024 the Court of Session in Scotland (the ‘Court’) approved the reduction of the Company’s share premium account and the
crediting of an equivalent amount to the Company’s distributable reserves. The Order of the Court approving the reduction became
effective on 26 April 2024 when it was registered with the Registrar of Companies.
Share premium. The share premium represents the difference between the nominal value of new
Ordinary shares issued and the consideration the Company receives for these shares.
Capital redemption reserve. The capital redemption reserve represents the nominal value of Ordinary
shares bought back for cancellation since authority to do this was first obtained at a General Meeting in
April 1999.
Special reserve. The cost of any shares bought back for cancellation is deducted from the special
reserve, which was created from the share premium, following General Meetings in April 1999 and in
January 2024 and the subsequent Court approvals.
Treasury share reserve. The net cost of any shares bought back and held in treasury.
Capital reserve unrealised. Increases and decreases in the valuation of investments held at the year end
and unrealised exchange differences of a capital nature are accounted for in this Reserve.
Capital reserve realised. Gains and losses on the realisation of investments, realised exchange
differences of a capital nature and returns of capital are accounted for in this Reserve.
Revenue reserve. Any surplus/deficit arising from the revenue return for the year is taken to/from this
Reserve.
The Notes to the Accounts on pages 47 to 59, including the material accounting policies on pages 47 to
49, form part of these accounts
51
Cash Flow Statement
Notes
Year ended
30 April
2024
£’000
Year ended
30 April
2023
£’000
Cash flows from operating activities
Return before taxation
51,252
(8,140)
Income calculated using the effective interest rate method
(17,456)
(27,819)
(Gains)/losses on investments
(20,816)
54,976
Foreign exchange losses/(gains)
4,132
(9,419)
Operating cash flow before movements in working capital
17,112
9,598
Increase in accrued income, prepayments and other
receivables
(51)
(4,792)
Decrease in other payables
(244)
(38)
Net cash from operating activities before taxation
16,817
4,768
Taxation
(8,752)
(6,914)
Net cash inflow/(outflow) from operating activities
8,065
(2,146)
Cash flows from investing activities
Purchase of investments – equity shares
(45,766)
(15,793)
Purchase of investments – fixed interest and other investments
(355,442)
(1,251,794)
Disposal of investments – equity shares
22,785
260,144
Disposal of investments – fixed interest and other investments
581,996
965,581
Settled forward foreign exchange gains/(losses)
28,571
(39,670)
Net cash inflow/(outflow) from investing activities
232,144
(81,532)
Cash flows from financing activities
Equity dividends paid
7
(28,812)
(26,919)
Issue of Ordinary shares
–
120,090
Cost of share buybacks
(231,984)
(10,187)
Cost of share premium cancellation
(52)
–
Issue of shares from Treasury
–
4,340
Net cash (outflow)/inflow from financing activities
(260,848)
87,324
(Decrease)/increase in cash and cash equivalents
(20,639)
3,646
Cash and cash equivalents at the start of the year
50,014
47,944
Effect of exchange rate changes
100
(1,576)
Cash and cash equivalents at the year end
29,475
50,014
Net cash inflow from operating activities includes the
following:
Dividends received
8,050
10,831
Interest received
20,199
9,974
The Notes to the Accounts on pages 47 to 59, including the material accounting policies on pages 47 to
49, form part of these accounts
52
Notes to the Accounts
1. Material Accounting Policies
Basis of Accounting
The financial statements of the Company have been prepared in accordance with UK-adopted
International Accounting Standards and with the requirements of the Companies Act 2006 as
applicable to companies reporting under those standards. This change constitutes a change in
accounting framework. However, there is no impact on recognition or disclosure in the period reported
as a result of the change in framework.
Substantially all of the assets of the Company consist of securities that are readily realisable and,
accordingly, the Directors are satisfied that the Company has adequate resources to continue in
operational existence for a period of at least twelve months from the date of approval of the Financial
Statements and therefore consider the going concern assumption to be appropriate. The Directors have
reviewed the income and expense projections and the liquidity of the investment portfolio in making
their assessment.
The financial statements are presented in Sterling and all values are rounded to the nearest thousand
pounds (£’000) except where otherwise indicated.
The financial statements have been prepared on the historical cost basis, modified by revaluation of
financial assets and financial liabilities held at fair value. The principal accounting policies adopted are
set out below. These have been applied consistently, other than where new policies have been adopted.
Where the presentational guidance set out in the Statement of Recommended Practice (the ‘SORP’) for
investment trusts issued by the Association of Investment Companies (the ‘AIC’) in July 2022 is
consistent with the requirements of IFRSs, the Directors have sought to prepare the financial
statements on a basis compliant with the recommendation of the SORP.
Presentation of Income Statement
In order better to reflect the activities of an investment trust company, and in accordance with guidance
issued by the AIC, supplementary information which analyses the Income Statement between items of
a revenue and capital nature has been presented alongside the Income Statement.
Income
Dividends are recognised as income when the shareholders’ right to receive payment has been
established, normally the ex-dividend date.
Dividends receivable on equity shares where no ex-dividend date is quoted are recognised when the
Company’s right to receive payment is established.
Where the Company has received its dividends in the form of additional shares rather than cash, the
cash equivalent of the additional shares is recognised as income.
Dividends from overseas companies are shown gross of withholding tax.
Special dividends are classified as either revenue or capital depending on their nature.
Fixed interest returns on non-equity securities (fixed interest securities) are recognised on a time
apportionment basis so as to reflect the effective yield on the investment, being amortisation of
premium/accretion of discount spread over the life of the investment. For the holdings in US TipS and
UK Index-linked bonds, any US/UK inflationary movement in the year is also recognised.
All other interest income and other income, is accounted for on an accruals basis.
Expenses
All expenses are accounted for on an accruals basis. Expenses are charged to revenue except those
incurred in the maintenance and enhancement of the Company’s assets and taking account of the
expected long-term returns, as follows:
53
Investment management fees have been allocated 35% to revenue and 65% to capital.
Transaction costs incurred on the acquisition or disposal of investments are expensed to capital.
Taxation
In accordance with the SORP, the marginal rate of tax is applied to taxable net revenue.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying
amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the
computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred
tax liabilities are recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be available against which
deductible temporary differences can be utilised.
Investments
Investments are recognised and derecognised on the trade date where a purchase or sale is under a
contract the terms of which require delivery within a period of time established by the market
concerned, and are measured at fair value being the consideration payable or receivable.
Investments are designated in terms of IFRSs as ‘‘investments held at fair value through profit or
loss’’, and are measured at subsequent reporting dates at fair value, which is either the bid price or the
last traded price, depending on the convention of the exchange on which the investment is quoted.
Investments in Gold Bullion are valued using the London Bullion Market Association gold price which
is the global benchmark price for unallocated gold delivered in London. Investments in unit trusts or
OEICs are valued at the closing price released by the relevant investment manager.
Any gain or loss arising from a movement in investments is included as a gain or loss on investments
in the income statement as a capital item.
Property
Property is included at fair value. Any gain or loss arising from changes in the fair value is included in
the Income Statement as a capital item.
Foreign Currency
Transactions denominated in foreign currencies are recorded at the actual exchange rate at the date of
the transaction. Monetary assets, non-monetary assets and liabilities denominated in foreign currencies
at the year end are carried at fair value by using the rate of exchange prevailing at the balance sheet
date. The currencies to which the Company was exposed during the year to 30 April 2024 were Euros,
Swiss Francs and US Dollars. The exchange rates applying against Sterling at 30 April were as
follows:
2024
2023
Euro
1.1709
1.1394
Swiss Franc
1.1482
1.1231
US Dollar
1.2490
1.2567
Forward currency contracts are classified as financial assets or liabilities held at fair value through
profit or loss and are reported at fair value at the year end by using the forward rate of exchange
prevailing at the year end. The change in fair value is recognised in the Income Statement as a capital
item. The forward rates of exchange of the Company’s US Dollars to Sterling contracts at 30 April
2024, were as follows:
54
Maturity date
Rate
2024
15 May 2024
1.2670
17 June 2024
1.2802
16 July 2024
1.2511
2023
15 May 2023
1.2572
15 June 2023
1.2580
14 July 2023
1.2586
Any gain or loss arising from a movement in exchange rates subsequent to the date of the transaction is
included as an exchange gain or loss in the Income Statement as a revenue or capital item depending
on the nature of the gain or loss.
Cash and Cash Equivalents
Cash comprises cash in hand and demand deposits. Cash equivalents are short-term, highly liquid
investments that are readily convertible to known amounts of cash and are subject to an insignificant
risk of changes in value.
Financial Liabilities and Equity
Financial liabilities and equity instruments are classified according to the substance of the contractual
arrangements entered into. An equity instrument is a contract that evidences a residual interest in the
assets of the Company after deducting all of its liabilities. Financial liabilities and equity instruments
are initially recorded at the proceeds received, net of issue costs. Subsequently financial liabilities are
carried at either fair value through profit or loss or at amortised cost.
Judgements and Sources of Estimation Uncertainty
In the application of the Company’s material accounting policies, the Directors are required to make
judgements, estimates and assumptions about carrying values of assets and liabilities that are not
always readily apparent from other sources. The estimates and associated assumptions are based on
historical experience and any other factors that are considered relevant. Actual results may vary from
these estimates. The Directors do not consider that there are any such items in these financial
statements.
Capital Management
The Company’s capital management objectives are to ensure that it will be able to continue as a going
concern (the going concern analysis is detailed in the Directors’ Report on page 22) and to protect and
increase (in that order) the value of shareholders’ funds per share over the long term.
The Company’s capital is represented by its capital and reserves as presented in the Statements of
Financial Position on page 44.
The capital of the Company is managed in accordance with its investment policy, in pursuit of its
business model and strategy for achieving objectives, both of which are detailed in the Strategic Report
on pages 14 to 19 and the Board, with the assistance of the Investment Manager, monitors and reviews
the broad structure of the Company’s capital on an ongoing basis.
Buyback of Shares Into Treasury and Subsequent Re-issue
The cost of buying back shares into Treasury, including the related stamp duty and transaction costs, is
accounted for in the Treasury share reserve. Share repurchase transactions are accounted for on a trade
date basis. Where shares held in Treasury are subsequently cancelled, the nominal value of those shares
is transferred out of ordinary share capital and into capital redemption reserve.
The sales proceeds from the re-issue of treasury shares, less any profit or loss over the cost of acquiring
the shares, is accounted for in the Treasury share reserve. Any profit or loss created from the sales
proceeds over the purchase price is transferred to share premium.
55
2. Income
2024
£’000
2023
£’000
Effective interest rate calculated interest
Indexation from fixed interest securities
17,456
27,819
17,456
27,819
Other income from investments
Franked investment income
3,423
3,457
Fixed interest securities
18,866
11,461
Overseas dividends
5,121
5,537
27,410
20,455
Other operating income
Deposit interest
910
1,057
Other income
81
50
991
1,107
Total income
45,857
49,381
3. Expenses
2024
Revenue
£’000
2024
Capital
£’000
2024
Total
£’000
2023
Revenue
£’000
2023
Capital
£’000
2023
Total
£’000
Investment Management fee
(1)
3,361
6,242
9,603
3,586
6,660
10,246
Secretarial fees
455
–
455
514
–
514
Directors’ fees
231
–
231
220
–
220
Other expenses
218
–
218
146
–
146
Depositary fees
165
–
165
164
–
164
London Stock Exchange and
regulatory fees
161
–
161
131
–
131
Custody fees
136
–
136
125
–
125
Savings scheme expenses
105
–
105
128
–
128
Registrar’s fees
74
–
74
116
–
116
Printing and postage
47
–
47
54
–
54
Irrecoverable VAT
47
–
47
50
–
50
Auditors’ remuneration for audit
47
–
47
45
–
45
Office costs
–
–
–
25
–
25
5,047
6,242
11,289
5,304
6,660
11,964
(1) An amount of £2,359,000 was payable to Troy at the year end (2023: £2,610,000).
Details of the Company’s ongoing charges can be found at www.patplc.co.uk.
4. Directors’ Remuneration
2024
£’000
2023
£’000
Directors’ fees and salaries
231
220
Employer’s national insurance
19
25
250
245
5. Taxation
2024
£’000
2023
£’000
Foreign tax suffered
486
955
Corporate tax
6,506
5,191
Total tax charge
6,992
6,146
The Company had no deferred tax asset as at 30 April 2024 in respect of unutilised expenses (2023:
nil).
56
Capital expenses of £6,242,000 (2023: £6,660,000) have been used to offset the Company’s tax
position.
6. Factors Affecting Tax Charge for Year
The tax charge for the year is lower (2023: higher) than the standard rate of corporation tax in the UK.
The differences are explained below:
2024
£’000
2023
£’000
Return before tax
51,252
(8,140)
Corporation tax at standard rate of 25% (2023: 19.49%)
12,813
(1,586)
Effect of:
Capital (gains)/losses not subject to taxation
(4,171)
8,878
Investment income not subject to taxation
(2,136)
(2,101)
Foreign tax suffered
486
955
Total tax charge (note 5)
6,992
6,146
7. Dividends
2024
£’000
2023
£’000
Amounts recognised as distributions to equity holders per Ordinary share
First interim dividend of 1.40p (2023: 1.40p) paid on 28 July 2023
5,431
5,278
Special dividend of 2.10p (2023: 1.40p) paid on 28 July 2023
8,146
5,278
Second interim dividend of 1.40p (2023: 1.40p) paid on 6 October 2023
5,290
5,416
Third interim dividend of 1.40p (2023: 1.40p) paid on 24 January 2024
5,064
5,448
Fourth interim dividend of 1.40p (2023: 1.40p) paid on 16 April 2024
4,881
5,499
28,812
26,919
All dividends were paid from the Company’s revenue reserves.
8. Investments
2024
£’000
2023
£’000
Listed on a recognised investment exchange:
Investments
1,431,758
1,627,541
Gold Bullion
208,874
178,392
1,640,632
1,805,933
2024
Listed
UK
£’000
Listed
Overseas
£’000
Total
£’000
Opening book cost
354,594
1,272,250
1,626,844
Opening unrealised appreciation
28,595
150,494
179,089
Opening valuation
383,189
1,422,744
1,805,933
Movements in the year
Purchases at cost
185,701
215,507
401,208
Effective yield adjustment
(1)
6,201
11,255
17,456
Sales proceeds
(273,527)
(331,254)
(604,781)
Sales – realised losses on sales
(1,140)
(6,908)
(8,048)
Unrealised (losses)/gains on the fair value of investments
during the year
(9,465)
38,329
28,864
Total movement during the year
(92,230)
(73,071)
(165,301)
Closing valuation
290,959
1,349,673
1,640,632
57
Listed
UK
£’000
Listed
Overseas
£’000
Total
£’000
Closing book cost
271,829
1,160,850
1,432,679
Closing unrealised appreciation
19,130
188,823
207,953
290,959
1,349,673
1,640,632
(1) See Income section of Material Accounting Policies for a fuller description.
2023
Listed
UK
£’000
Listed
Overseas
£’000
Total
£’000
Opening book cost
381,704
1,058,430
1,440,134
Opening unrealised appreciation
23,811
326,869
350,680
Opening valuation
405,515
1,385,299
1,790,814
Movements in the year
Purchases at cost
765,556
502,031
1,267,587
Effective yield adjustment
(1)
4,386
23,433
27,819
Sales proceeds
(796,716)
(429,009)
(1,225,725)
Sales – realised (losses)/gains on sales
(336)
117,366
117,030
Unrealised gain/(loss) on the fair value of investments during
the year
4,784
(176,376)
(171,592)
Total movement during the year
(22,326)
37,445
15,119
Closing valuation
383,189
1,422,744
1,805,933
Listed
UK
£’000
Listed
Overseas
£’000
Total
£’000
Closing book cost
354,594
1,272,251
1,626,845
Closing unrealised appreciation
28,595
150,493
179,088
Closing valuation
383,189
1,422,744
1,805,933
(1) See Income section of Material Accounting Policies for a fuller description.
2024
£’000
2023
£’000
Represented by:
Equities
457,794
451,604
US TIPS
608,415
639,348
US Treasuries
193,377
279,369
UK Gilts
116,636
257,220
UK Index-linked Bonds
55,536
–
Gold Bullion
208,874
178,392
1,640,632
1,805,933
Realised (losses)/gains on sales
(8,048)
117,030
Unrealised gains/(losses) on the fair value of investments during the year
28,864
(171,592)
Realised gains/(losses) on foreign exchange
28,671
(41,237)
Unrealised (losses)/gains on foreign exchange
(32,803)
50,656
Gains/(losses) on investments
16,684
(45,143)
Transaction costs
During the year the Company incurred transaction costs of £187,198 (2023: £32,802) on the purchase
of investments and £27,124 (2023: £104,650) on the sale of investments.
58
9. Property
2024
£’000
2023
£’000
Opening cost
2,144
2,144
Acquisitions
–
–
Closing cost
2,144
2,144
Opening revaluation
(414)
–
Revaluation in year
–
(414)
Closing valuation
1,730
1,730
The property is used as the Company’s offices.
10. Current Assets
2024
£’000
2023
£’000
Financial Assets
Fair value of forward currency contracts
–
24,070
Receivables
Accrued income
6,076
6,044
Tax receivable
1,069
–
Prepayments and other receivables
133
115
7,278
6,159
11. Current Liabilities
2024
£’000
2023
£’000
Financial Liabilities
Fair value of forward currency contracts
8,733
–
Payables
Corporation tax payable
–
692
Due to brokers
484
–
Other payables
2,617
2,862
3,101
3,554
12. Ordinary Share Capital
Number
£’000
Allotted, called-up and fully paid Ordinary shares of 12.50p
each:
Balance at 1 May 2022
368,806,900
46,100
Shares issued during the year
23,998,300
3,000
Shares bought back and held in Treasury
(2,160,000)
–
Treasury shares re-issued
925,000
–
Balance at 1 May 2023
391,570,200
49,100
Shares bought back and held in Treasury
(49,244,828)
–
Balance at 30 April 2024
342,325,372
49,100
As at 30 April 2024, the total number of Ordinary shares of 12.50p of the Company in issue were
392,805,200, of which 50,479,828 Ordinary shares are held in Treasury. Therefore, the total number of
ordinary shares with voting rights in the Company is 342,325,372.
During the year 49,244,828 shares were bought back and held in Treasury at a cost of £232,467,000.
13. Business Instruments
The Directors are of the opinion that the Company is engaged in the single business of investing in
equity shares, fixed interest securities and other investments.
59
14. Financial Instruments
The Company holds investments in listed companies, fixed interest securities and physical gold, holds
cash balances and has receivables and payables. It may from time to time also invest in FTSE 100
Futures and enter into forward currency contracts. Cash balances are held for future investment and
forward currency contracts are used to manage the exchange risk of holding foreign investments.
Further information is given in the Strategic Report for the Year to 30 April 2024 on pages 14 to 19.
The fair value of the financial assets and liabilities of the Company at 30 April 2024 and at 30 April
2023 is not different from their carrying value in the financial statements.
The Company is exposed to various types of risk that are associated with financial instruments. The
most important types are credit risk, liquidity risk, interest rate risk, market price risk and foreign
currency risk.
The Board reviews and agrees policies for managing its risk exposures. These policies are summarised
below and have remained unchanged for the year under review.
Credit Risk
Credit risk is the risk that an issuer or counterparty will be unable or unwilling to meet a commitment
that it has entered into with the Company.
The Company’s principal financial assets are investments, cash balances and other receivables, the
carrying value of which represents the Company’s maximum exposure to credit risk in relation to
financial assets.
The Company is exposed to potential failure by counterparties to deliver securities for which the
Company has paid, or to pay for securities which the Company has delivered. A list of pre-approved
counterparties used in such transactions is maintained and regularly reviewed by the Company, and
transactions must be settled on a basis of delivery against payment. Broker counterparties are selected
based on a combination of criteria, including credit rating, balance sheet strength and membership of a
relevant regulatory body. Risk relating to unsettled transactions is considered to be small because of
the short settlement period involved and the credit quality of the brokers used.
All of the assets of the Company, other than cash deposits and receivables, are held by J.P. Morgan
Chase Bank N.A., the Company’s Custodian, acting as a delegate of J.P. Morgan Europe Limited
which has been appointed as the Company’s Depositary.
Bankruptcy or insolvency of the Custodian might cause the Company’s rights with respect to the
securities held by the Custodian to be delayed or limited. The Board monitors the Company’s risk by
reviewing the Custodian’s internal control reports on a regular basis.
The credit risk on cash balances and derivative financial instruments is limited because the
counterparties are banks with high credit ratings, rated A or higher, assigned by international credit
rating agencies. Bankruptcy or insolvency of such financial institutions might cause the Company’s
ability to access cash placed on deposit to be delayed or limited. Credit risk and exposure is spread
between three counterparties, with a maximum limit of 4% of the Company’s net assets to be held at
each, subject to an overall limit of 10% of the Company’s net assets.
Market Price Risk
The fair value of equity and other financial securities held in the Company’s portfolio fluctuates with
changes in market prices. Prices are themselves affected by movements in currencies and interest rates
and by other financial issues including the market perception of future risks. The Company’s strategy
for the management of market price risk is driven by the Company’s investment policy as outlined
within the Strategic Report on pages 14 to 19. The Board sets policies for managing this risk and meets
regularly to review full, timely and relevant information on investment performance and financial
results. The management of market price risk is part of the fund management process and is
fundamental to investment. The portfolio is managed with an awareness of the effects of adverse price
movements in markets with an objective of maximising overall returns to shareholders. Investment and
60
portfolio performance are discussed in more detail in the Investment Manager’s Report and the
investment portfolio is set out on page 8.
Any changes in market conditions will directly affect the profit or loss reported through the Income
Statement. For instance, a 30% increase in the value of the investment exposure at 30 April 2024
would have increased net return and net assets for the year by £492,190,000 (2023: a 30% increase in
the value of the investment exposure would have increased net return by £541,780,000). A decrease of
30% (2023: 30%) would have had an equal but opposite effect. These calculations are based on
investment valuations at the respective balance sheet date and are not representative of the year as a
whole.
Liquidity Risk
Liquidity risk is the risk that the Company will encounter in realising assets or otherwise raising funds
to meet financial commitments. The risk of the Company not having sufficient liquidity at any time is
not considered by the Board to be significant, given the liquid nature of the portfolio of investments
and the level of cash and cash equivalents ordinarily held. The Investment Manager reviews liquidity at
the time of each investment decision. The Board reviews liquidity exposure at each meeting.
All of the Company’s financial liabilities at 30 April 2024 had a maturity period of less than three
months.
Interest Rate Risk
Some of the financial instruments held by the Company are interest bearing. As such, the Company is
exposed to interest rate risk resulting from fluctuations in the prevailing market rate.
Floating Rate
When the Company holds cash balances, such balances are held on overnight deposit accounts and call
deposit accounts. The benchmark rate which determines the interest payments received on cash
balances is the bank base rate, which at 30 April 2024 was 5.25% in the UK (2023: 4.25%).
Floating interest rate exposure at 30 April:
2024
£’000
2023
£’000
Sterling
29,436
49,732
US Dollar
39
282
29,475
50,014
Considering effects on cash balances, an increase of 100 basis points (2023: 100 basis points) in
interest rates would have increased net assets and income for the period by £295,000 (2023: £500,000).
A decrease of 100 basis points (2023: 100 basis points) would have had an equal but opposite effect.
The calculations are based on the cash balances at the Statement of Financial Position date and are not
representative of the year as a whole.
Fixed rate and zero rate
The Company may from time to time hold fixed interest or zero interest investments. As at 30 April
2024, the Company held none of these type of investments (2023: none).
Maturity profile
The maturity profile of the Company’s fixed interest or zero interest investments at the Statement of
Financial Position date was as follows:
61
At 30 April 2024:
Within
1 year
£’000
Within
1-5 years
£’000
More
than
5 years
£’000
US TIPS
96,725
291,936
219,754
US Treasuries
193,377
–
–
UK Index-linked Bonds
–
55,536
–
UK Gilts
21,163
95,473
–
311,265
442,945
219,754
At 30 April 2023:
Within
1 year
£’000
Within
1-5 years
£’000
More
than
5 years
£’000
US TIPS
67,337
264,818
307,193
US Treasuries
279,369
–
–
UK Gilts
211,349
45,871
–
558,055
310,689
307,193
Foreign Currency Risk
The Company invests in overseas securities and holds cash in overseas currencies.
Gross currency exposure at 30 April:
2024
£’000
2023
£’000
Euros
51,463
19,845
Swiss Francs
43,860
55,685
US Dollars
(1)
1,254,390
1,347,496
(1) At 30 April 2024 the Sterling cost of a portion of the US Dollar denominated assets (including US Treasury Inflation Protected Securities
(‘TIPS’) and US equities) was protected by a forward currency contract. The fair value of negative £8,733,000 (2023: fair value of
positive £24,070,000) on the US$792,299,000 (2023: US$851,395,000) sold forward against £625,456,000 (2023: £700,944,000) is
included in financial liabilities (2023: financial assets). All foreign exchange contracts in place at 30 April 2024 were due to mature within
three months. The exposure to US Dollars as shown above also includes Gold Bullion. At 30 April 2024 the net exposure to US Dollars
was £620,600,000 (2023: £670,623,000) including Gold Bullion and £411,326,0000 (2023: £492,231,000) excluding Gold Bullion.
Foreign Currency Sensitivity
The following table illustrates the sensitivity of the total return for the year and net assets in relation to
the Company’s overseas monetary financial assets and financial liabilities. It assumes a 10%
depreciation of Sterling against the Euro, Swiss Franc and US Dollar. The sensitivity analysis is based
on the Company’s monetary foreign currency financial instruments held at each balance sheet date.
If Sterling had weakened by 10% against the currencies shown, this would have had the following
positive effect:
Income Statement – return on ordinary activities after taxation:
2024
2023
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Euros
122
5,146
5,268
44
1,985
2,029
Swiss Francs
144
4,386
4,530
146
5,569
5,715
US Dollars
2,936
62,893
65,829
3,619
64,655
68,274
Canadian Dollars
12
–
12
–
–
–
3,214
72,425
75,639
3,809
72,209
76,018
A 10% strengthening of Sterling against the above currencies would have had an equal but opposite
effect on the return after taxation.
62
15. Financial Instruments Measured at Fair Value
2024
2023
Description
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Investments
1,640,632
–
–
1,640,632
1,805,933
–
–
1,805,933
Financial (liabilities)/assets
–
(8,733)
–
(8,733)
–
24,070
–
24,070
Total
1,640,632
(8,733)
–
1,631,899
1,805,933
24,070
–
1,830,003
Level 1 reflects financial instruments quoted in an active market. The Company’s investment in Gold
Bullion has been included in this level.
Level 2 reflects financial instruments the fair value of which is evidenced by comparison with other
observable current market transactions in the same instrument or based on a valuation technique the
variables of which include only data from observable markets. The Company’s forward currency
contract has been included in this level as fair value is achieved using the foreign exchange spot rate
and forward points which vary depending on the duration of the contract.
Level 3 reflects financial instruments the fair value of which is determined in whole or in part using a
valuation technique based on assumptions that are not supported by prices from observable market
transactions in the same instrument and not based on available observable market data.
There have been no changes to valuation technique over the year.
16. Related Party Transactions
Investment management services are provided by Troy Asset Management Limited. The fee for the
year ended 30 April 2024 was £9,603,000 (2023: £10,246,000). An amount of £2,359,000 was
outstanding to the Investment Manager at 30 April 2024 (2023: £2,610,000).
Directors of the Company received fees for their services. An amount of £19,000 was outstanding to
the Directors at 30 April 2024 (2023: £18,000). Further details are provided in the Directors’
Remuneration Report on pages 30 to 32. The Directors’ shareholdings are also detailed on pages 12, 13
and 26.
17. Alternative Investment Fund Managers Directive (‘AIFMD’) (unaudited)
In accordance with the AIFMD, information in relation to the Company’s leverage and the
remuneration of the Company’s AIFM, Juniper, is required to be made available to investors. In
accordance with the Directive, the AIFM’s remuneration policy and remuneration disclosures in
respect of the year ended 30 April 2024 are available from Juniper on request.
The Company’s maximum and actual leverage levels at 30 April are shown below:
Gross
Method
Commitment
Method
2024
Maximum limit
200%
200%
Actual
136%
138%
2023
Maximum limit
200%
200%
Actual
133%
136%
There have been minor amendments to the Company’s investor disclosure document in the year to
30 April 2024. The investor disclosure document and all additional periodic disclosures required in
accordance with the requirements of the FCA Rules implementing the AIFMD in the UK are made
available on the Company’s website (www.patplc.co.uk).
63
Notice of Annual General Meeting
Notice is hereby given that the forty-third Annual General Meeting (‘AGM’) of Personal Assets Trust
Public Limited Company will be held at The Kimpton Charlotte Square Hotel, 38 Charlotte Square,
Edinburgh EH2 4HQ on Friday 19 July 2024 at 12 noon.
Shareholders will be asked to consider, and, if thought fit, pass resolutions 1 to 13 which will be
proposed as ordinary resolutions, and resolutions 14 to 16 which will be proposed as special
resolutions.
1. That the Report and Accounts for the year to 30 April 2024 be received.
2. That the Directors’ Remuneration Report for the year to 30 April 2024 be approved.
3. That the Dividend Policy of the Company as set out in the Annual Report be approved.
4. That Iain Ferguson, who retires from office annually, be re-elected as a Director.
5. That Gordon Neilly, who retires from office annually, be re-elected as a Director.
6. That Paul Read, who retires from office annually, be re-elected as a Director.
7. That Jean Sharp, who retires from office annually, be re-elected as a Director.
8. That Mandy Clements, who retires from office annually, be re-elected as a Director.
9. That Robbie Robertson, who retires from office annually, be re-elected as a Director.
10. That Jennifer Thomas be elected as a Director.
11. That PricewaterhouseCoopers LLP be reappointed as Auditors and that the Directors be
authorised to determine their remuneration.
12. To increase the aggregate limit on Directors’ remuneration from £302,500 to £332,750 per
annum.
13. Authority to allot Ordinary shares
That, in substitution for any existing authority, but without prejudice to the exercise of any such
authority prior to the date hereof, the Directors of the Company be and they are hereby generally
and unconditionally authorised in accordance with Section 551 of the Companies Act 2006 (the
‘Act’) to exercise all the powers of the Company to allot shares in the Company and to grant
rights to subscribe for or to convert any security into shares in the Company (‘Securities’)
provided that such authority shall be limited to the allotment of shares and the grant of rights in
respect of shares with an aggregate nominal value of up to £9,820,130 (being approximately
20% of the nominal value of the issued share capital of the Company as at 17 June 2024), such
authority to expire at the conclusion of the next Annual General Meeting of the Company after
the passing of this resolution or on the expiry of 15 months from the passing of this resolution,
whichever is the earlier, unless previously revoked, varied or extended by the Company in a
general meeting, save that the Company may at any time prior to the expiry of this authority
make an offer or enter into an agreement which would or might require Securities to be allotted
or granted after the expiry of such authority and the Directors shall be entitled to allot or grant
Securities in pursuance of such an offer or agreement as if such authority had not expired.
14. Disapplication of pre-emption rights
That, in substitution for any existing power but without prejudice to the exercise of any such
power prior to the date hereof, the Directors of the Company be and they are hereby generally
empowered, pursuant to Section 570 and/or Section 573 of the Companies Act 2006 (the ‘Act’),
to allot equity securities (within the meaning of Section 560 of the Act), for cash pursuant to the
authority given by Resolution 13 above or by way of a sale of treasury shares for cash as if
Section 561(1) of the Act did not apply to any such allotment of equity securities, provided that
this power:
64
(a) expires at the conclusion of the next Annual General Meeting of the Company after the
passing of this resolution or on the expiry of 15 months from the passing of this
resolution, whichever is the earlier, save that the Company may, before such expiry,
make an offer or agreement which would or might require equity securities to be allotted
after such expiry and the Directors may allot equity securities or sell treasury shares in
pursuance of any such offer or agreement as if the power conferred hereby had not
expired; and
(b) shall be limited to the allotment of equity securities up to an aggregate nominal value of
£9,820,130 (being approximately 20% of the nominal value of the issued share capital of
the Company as at 17 June 2024).
15. Authority to repurchase Ordinary shares
That, in substitution for any existing authority but without prejudice to the exercise of any such
authority prior to the date hereof, the Company be and is hereby generally and unconditionally
authorised, pursuant to and 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 fully paid
Ordinary shares in the capital of the Company (either for retention as Treasury shares for future
re-issue, resale or transfer or for cancellation), provided that:
(a) the maximum aggregate number of Ordinary shares hereby authorised to be purchased is
50,452,348, representing 14.99% of the issued Ordinary share capital of the Company
(excluding shares held in treasury) as at 17 June 2024, being the latest practicable date
before this notice, or if lower, such number of Ordinary shares equal to 14.99% of the
issued Ordinary share capital as at the date of the passing of this resolution;
(b) the minimum price (excluding expenses) which may be paid for each Ordinary share
shall be the nominal value of that share;
(c) the maximum price (excluding expenses) which may be paid for each Ordinary share
shall not be greater than the higher of:
(i) 105% above the average middle market quotation on the London Stock Exchange
of an Ordinary share over 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; and
(d) unless previously varied, revoked or renewed by the Company in a General Meeting, the
authority hereby conferred shall expire at the conclusion of the Company’s next Annual
General Meeting or on the expiry of 15 months from the passing of this resolution,
whichever is the earlier, save that the Company may, prior to such expiry, enter into a
contract to purchase Ordinary shares under such authority which will or might be
completed or executed wholly or partly after the expiration of such authority and may
make a purchase of Ordinary shares pursuant to any such contract.
16. Notice of General Meetings
That a General Meeting of the Company other than an Annual General Meeting may be called
on not less than 14 clear days’ notice provided that this authority shall expire at the conclusion
of the next Annual General Meeting of the Company.
By Order of the Board
Juniper Partners Limited
Company Secretary
28 Walker Street
Edinburgh EH3 7HR
18 June 2024
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Notes
1. A shareholder who is entitled to attend, speak and vote at the meeting is entitled to appoint one
or more proxies to attend, speak and vote on her or his behalf. Such proxy need not also be a
shareholder of the Company. If appointing more than one proxy, each proxy must be appointed
to exercise rights attaching to different shares held by the shareholder.
2. A proxy form for use by shareholders at the meeting is enclosed with this document. Proxies
must be lodged with the Company’s registrar, Equiniti Limited, Aspect House, Spencer Road,
Lancing, West Sussex BN99 6DA, not less than 48 hours (excluding non-working days) before
the time appointed for the meeting together with any power of attorney or other authority (if
any) under which it is signed. Completion of the proxy form will not prevent a shareholder from
attending the meeting and voting in person.
3. As an alternative to completing the hard copy proxy form you can appoint a proxy electronically
at www.sharevote.co.uk. For an electronic proxy appointment to be valid, your appointment
must be received by the Company’s registrar not less than 48 hours (excluding non-working
days) before the time of the meeting.
4. Only those shareholders having their names entered on the Company’s share register not later
than 6.30 pm on 17 July 2024 or, if the meeting is adjourned, 6.30 pm on the day which is two
days (excluding non-working days) prior to the date of the adjourned meeting, shall be entitled
to attend and vote at the meeting in respect of the number of shares registered in their name at
that time. Changes to the entries on the Company’s share register after that time shall be
disregarded in determining the rights of any shareholder to attend, speak and vote at the
meeting, notwithstanding any provision in any enactment, the Articles of Association of the
Company or other instrument to the contrary.
5. Any corporation which is a shareholder may appoint one or more corporate representatives who
may exercise on its behalf all of its powers as a shareholder provided that such corporate
representatives do not do so in relation to the same shares.
6. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy
appointment service may do so for the meeting and any adjournment(s) thereof by using the
procedures described in the CREST Manual, and by logging on to the website
www.euroclear.com. CREST personal members or other CREST sponsored members, and those
CREST members who have appointed a voting service provider(s), should refer to their CREST
sponsor or voting service provider(s), who will be able to take the appropriate action on their
behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the
appropriate CREST message (a ‘CREST Proxy Instruction’) must be properly authenticated in
accordance with Euroclear UK & Ireland Limited’s specifications, and must contain the
information required for such instruction, as described in the CREST Manual. The message,
regardless of whether it constitutes the appointment of a proxy or is an amendment to the
instruction given to a previously appointed proxy, must, in order to be valid, be transmitted so as
to be received by the Company’s Registrar, Equiniti Limited (ID RA19), by no later than 12
noon on 17 July 2024. No such message received through the CREST network after this time
will be accepted. For this purpose, the time of receipt will be taken to be the time (as determined
by the timestamp applied to the message by the CREST application host) from which the
Company’s Registrar is able to retrieve the message by inquiry to CREST in the manner
prescribed by CREST. After this time any change of instructions to proxies appointed through
CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service providers
should note that Euroclear UK & Ireland Limited does not make available special procedures in
CREST for any particular messages. Normal system timings and limitations will therefore apply
in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST
member concerned to take (or, if the CREST member is a CREST personal member, or
sponsored member, or has appointed a voting service provider(s), to procure that her or his
66
CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure
that a message is transmitted by means of the CREST system by any particular time. In this
connection, CREST members and, where applicable, their CREST sponsors or voting system
providers are referred, in particular, to those sections of the CREST Manual concerning practical
limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in
Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
7. The right to appoint a proxy does not apply to persons whose shares are held on their behalf by
another person and who have been nominated to receive communications from the Company in
accordance with Section 146 of the Companies Act 2006 (‘Nominated Persons’). Nominated
Persons may have a right under an agreement with the member who holds the shares on their
behalf to be appointed (or to have someone else appointed) as a proxy. Alternatively, if
Nominated Persons do not have such a right, or do not wish to exercise it, they may have a right
under such an agreement to give instructions to the person holding the shares as to the exercise
of voting rights. The statement of the rights of members in relation to the appointment of
proxies in notes 1 and 2 above does not apply to Nominated Persons. The rights described in
these notes can be exercised only by members of the Company.
8. If you are an institutional investor you may be able to appoint a proxy electronically via the
Proxymity platform, a process which has been agreed by the Company and approved by the
Registrar. For further information regarding Proxymity, please go to www.proxymity.io. Your
proxy must be lodged by 12 noon on 17 July 2024 in order to be considered valid. Before you
can appoint a proxy via this process you will need to have agreed to Proxymity’s associated
terms and conditions. It is important that you read these carefully as you will be bound by them
and they will govern the electronic appointment of your proxy.
9. At 17 June 2024, the latest practicable date prior to publication of this document, the Company’s
issued share capital comprised 392,805,200 Ordinary shares of 12.50p each of which 56,231,828
Ordinary shares are held in Treasury. Therefore, the total number of shares with voting rights in
the Company is 336,573,372.
10. Any person holding 3% of the total voting rights in the Company who appoints a person other
than the Chairman as her or his proxy must ensure that both he or she and such third party
comply with their respective disclosure obligations under the Disclosure Guidance and
Transparency Rules.
11. Information regarding the meeting, including information required by Section 311A of the
Companies Act 2006, is available from the Company’s website, www.patplc.co.uk.
12. Under Section 319A of the Companies Act 2006, the Company must answer any question
relating to the business being dealt with at the meeting put by a member attending the meeting
unless:
(a) answering the question would interfere unduly with the preparation for the meeting or
involve the disclosure of confidential information;
(b) the answer has already been given on a website in the form of an answer to a question; or
(c) it is undesirable in the interests of the Company or the good order of the meeting that the
question be answered.
13. Shareholders are advised that, unless otherwise stated, any telephone number, website or e-mail
address which may be set out in this notice of meeting or in any related documents (including
the proxy form) is not to be used for the purposes of serving information or documents on, or
otherwise communicating with, the Company for any purposes other than those expressly stated.
14. The members of the Company may require the Company (without payment) to publish, on its
website, a statement (which is also to be passed to the Auditors) setting out any matter relating
to the audit of the Company’s accounts, including the Auditors’ report and the conduct of the
67
audit. The Company will be required to do so once it has received such requests from either
members representing at least 5% of the total voting rights of the Company or at least 100
members who have a relevant right to vote and hold shares in the Company on which there has
been paid up an average sum per member of at least £100. Such requests must be made in
writing and must state the sender’s full name and address and be sent to the Company’s
registered address at 28 Walker Street, Edinburgh EH3 7HR.
15. The letters of appointment of the Directors will be available for inspection at the registered
office of the Company during normal business hours on any weekday (Saturdays, Sundays and
public holidays excepted) from the date of this notice and at the location of the meeting for at
least 15 minutes prior to the meeting and during the meeting.
16. Members meeting the threshold requirements set out in the Companies Act 2006 have the right
(a) to require the Company to give notice of any resolution which can properly be, and is to be,
moved at the meeting pursuant to section 338 of the Companies Act 2006; and/or (b) to require
the Company to include a matter in the business to be dealt with at the meeting, pursuant to
section 338A of the Companies Act 2006.
68
Glossary of Terms and Alternative Performance Measures
The European Securities and Markets Authority (‘ESMA’) has published guidelines on Alternative
Performance Measures (‘APM’). APMs are defined as being a ‘financial measure of historical or future
financial performance, financial position, or cash flows, other than a financial measure defined or
specified in the applicable accounting framework.
The APMs where detailed below are used by the Board to assess the Company’s performance against a
range of criteria and are viewed as particularly relevant for an investment trust.
Alternative Investment Fund
An Alternative Investment Fund (‘AIF’) is a collective investment undertaking, including investment
compartments thereof, which (a) raises capital from a number of investors, with a view to investing it
in accordance with a defined investment policy for the benefit of those investors; and (b) does not
require authorisation under the UCITS regime. The Company is an AIF.
Alternative Investment Fund Manager
An Alternative Investment Fund Manager (‘AIFM’) is an entity that provides certain investment
services, including portfolio and risk management services. The Company has appointed Juniper
Partners Limited as its AIFM.
Benchmark Index
A Benchmark Index is a standard against which the performance of a security, investment company, or
investment manager can be measured. The Company uses the FTSE All-Share Index, RPI and CPI as
comparators for the purpose of monitoring performance and risk. However, the composition of the
FTSE All-Share Index has no influence on investment decisions or the construction of the portfolio.
Discount or Premium (APM)
The amount, expressed as a percentage, by which the Company’s share price is less than (discount) or
greater than (premium) the net asset value per share of the Company.
30 April 2024
30 April 2023
Closing NAV per share
(a)
487.05p
481.23p
Closing share price
(b)
483.00p
481.00p
(Discount)/premium c = (b – a) ÷ a
(c )
(0.8%)
(0.0%)
Earnings per Share
Earnings per share are calculated by dividing the net income return attributable to equity shareholders
by the weighted average number of shares in issue (excluding shares held in Treasury) during the year.
Middle Market Price
The middle market price is the mid-point between the buy and the sell prices of the Company’s shares.
Net Asset Value (‘NAV’) per Share (APM)
The value of the Company’s net assets (total assets less total liabilities) divided by the number of
shares in issue (excluding shares held in Treasury).
NAV/Share Price Total Return (APM)
NAV/Share price total return measures the increase/(decrease) in NAV per share/share price including
any dividends paid in the period, which are assumed to be reinvested at the time that the share price is
quoted ex-dividend.
69
2024
2023
NAV
Share
price
NAV
Share
price
Closing NAV per share/share price
(a)
487.05p
483.00p
481.23p
481.00p
Dividend adjustment factor†
(b)
1.00090
1.01677
1.01307
1.01437
Adjusted closing NAV per share/share
price
(c=a x b)
487.49p
491.10p
487.52p
487.91p
Opening NAV per share/share price
(d)
481.23p
481.00p
491.95p
503.00p
Total Return (c ÷ d) -1
1.3%
2.1%
(0.9%)
(3.0%)
† Based on total dividends paid for the year ended 30 April 2024 of 7.70p* per share (2023: 7.00p*).
Ongoing Charges Ratio (APM)
The sum of the management fee and all other administrative expenses expressed as a percentage of the
average daily net assets during the year.
30 April 2024
£’000
30 April 2023
£’000
Management fee
9,603
10,246
Other administrative expenses
1,686
1,718
Total
(a)
11,289
11,964
Average daily net assets
(b)
1,745,924
1,842,393
Ongoing charges c = (a ÷ b) x 100
(c)
0.65%
0.65%
Ordinary Dividend per Share (APM)
A distribution of earnings by the Company to its shareholders. Details of the Company’s historical
dividend payments are shown on page 3.
Treasury Shares
Ordinary shares of the Company that have been repurchased by the Company and not cancelled but
held in Treasury. These shares do not pay dividends, have no voting rights, and are excluded from the
NAV per share calculation.
70
Corporate Information
Board of Directors
Iain Ferguson CBE (Chairman)
Mandy Clements
Gordon Neilly
Paul Read
Robbie Robertson
Jean Sharp
Jennifer Thomas
Registered Office
28 Walker Street
Edinburgh EH3 7HR
Telephone: 0131 378 0500
Company Secretary
Juniper Partners Limited
28 Walker Street
Edinburgh EH3 7HR
Telephone: 0131 378 0500
Alternative Investment Fund Manager
Juniper Partners Limited
28 Walker Street
Edinburgh EH3 7HR
Investment Manager
Troy Asset Management Limited
33 Davies Street
London W1K 4BP
www.taml.co.uk
Custodian
J.P. Morgan Chase Bank N.A.
25 Bank Street
Canary Wharf
London E14 5JP
Depositary
J.P. Morgan Europe Limited
25 Bank Street
Canary Wharf
London E14 5JP
Solicitor
Dickson Minto WS
16 Charlotte Square
Edinburgh EH2 4DF
Data Protection
The Company is committed to ensuring the
privacy of any personal data provided to it.
Further details of the Company’s privacy policy
can be found on the Company’s website
www.patplc.co.uk
Shareholder Information
Website: www.patplc.co.uk
Telephone: 0131 378 0500
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Telephone: +44 (0)371 384 2459*
Website: www.shareview.co.uk
Stockbroker
J.P. Morgan Cazenove
25 Bank Street
Canary Wharf
London E14 5JP
Independent Auditor
PricewaterhouseCoopers LLP
Atria One
144 Morrison Street
Edinburgh EH3 8EX
Identification Codes
SEDOL: BM8B5H0
ISIN: GB00BM8B5H06
Bloomberg: PNL LN
EPIC: PNL
Global Intermediary Identification
Number (GIIN)
2W8KH5.99999.SL.826
Legal Entity Identifier (LEI)
213800Z7ABM7RLQ41516
* Lines open 8:30am to 5:30pm, Monday to Friday.
71
Personal Assets Trust plc, 28 Walker Street, Edinburgh EH3 7HR
Shareholder Telephone: 0131 378 0500 Website: www.patplc.co.uk