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Job no.
270979
Proof no.
7
Date
20.05.2025
strictly private & confidential
tel 020 7562 2200
address 21 Worship Street, London EC2A 2DW
email typesetting@perivan.com
website www.perivan.com
Perivan Limited. Registered in England No. 12066149
ISO27001 & ISO14001 registered, Certificate No. 4147
Clean proof
Proof No. Blackline level Date
1 0 02.05.2025
2 1 06.05.2025
3 2 08.05.2025
4 3 14.05.2025
4 3 15.05.2025
5 4 15.05.2025
6 5 19.05.2025
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Proof No. Blackline level Date
THE EDINBURGH INVESTMENT TRUST PLC ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 MARCH 2025
MANAGED BY
Edinburgh Investment Trust plc
First Floor
9 Haymarket Square
Edinburgh
EH3 8RY
Telephone +44 (0)20 7412 1700
Email LionTA@liontrust.co.uk
edinburgh-investment-trust.co.uk
TRUST IN A STYLE TO LAST THROUGH THE AGES
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED 31 MARCH 2025
The Company is a
member of
CONTENTS
STRATEGY
OVERVIEW
Financial Information and Performance Statistics 2
Chair’s Statement 5
STRATEGIC REPORT
Portfolio Managers’ Report 9
The Portfolio Managers’ Core Investment Beliefs 14
Business Review 15
Investments in Order of Valuation 18
Portfolio Analysis 19
Principal Risks and Uncertainties 20
Viability Statement 24
Section 172 Statement, Company Sustainability and Stakeholders 25
GOVERNANCE
The Directors 31
The Company’s Corporate Governance Framework 33
Corporate Governance Statement 34
Audit Committee Report 35
Directors’ Report 38
Statement of Directors’ Responsibilities 46
Directors’ Remuneration Report 47
FINANCIAL REVIEW
Independent Auditors’ Report 52
Income Statement 59
Balance Sheet 60
Statement of Changes in Equity 61
Cash Flow Statement 62
Notes to the Financial Statements 63
OTHER INFORMATION FOR SHAREHOLDERS
Notice of Annual General Meeting 78
Shareholder Information 84
Advisors and Principal Service Providers 85
Glossary of Terms and Alternative Performance Measures 86
Alternative Investment Fund Managers’ Directive Disclosures 90
If you wish to contact members of the Edinburgh Investment Trust Board then please
get in touch with the Company Secretary on +44 (0)20 3697 5770. Alternatively,
please email the Board via the Company Secretary at EIT@nsm.group. If you have any
enquiries for the Manager, please contact them on +44 (0)20 7412 1700.
www.edinburgh-investment-trust.co.uk
THE EDINBURGH INVESTMENT TRUST PLC / OVERVIEW / 1
INVESTMENT OBJECTIVES
The Edinburgh Investment Trust plc (‘the Company’) is an investment trust whose
investment objective is to invest primarily in UK securities with the long-term objective
of achieving:
1. an increase of the Net Asset Value per share in excess of the growth in the FTSE
All-Share Index; and
2. growth in dividends per share in excess of the rate of UK inflation.
The Company will generally invest in companies quoted on a recognised stock exchange
in the UK. The Company may also invest up to 20% of the portfolio in securities listed on
stock exchanges outside the UK. The portfolio is selected on the basis of assessment of
fundamental value of individual securities and is not structured on the basis of industry
weightings.
NATURE OF THE COMPANY
The Company is a public listed Investment Company whose shares are traded on the
London Stock Exchange (‘LSE’). The business of the Company consists of investing its
assets according to a specified investment objective and policy (set out on page15),
with the aim of spreading investment risk and generating a return for shareholders.
The Company uses borrowing to enhance returns to shareholders. This increases the
risk to shareholders should the value of investments fall.
The Company has contracted an external manager, Liontrust Fund Partners LLP, (‘LFP’ or
‘the Manager’ or ‘Portfolio Managers’ as Alternative Investment Fund Manager (‘AIFM’))
to manage its investments. Other administrative functions are contracted to external
services providers. The Company has a Board of non-executive directors who oversee
and monitor the activities of the Portfolio Managers and other service providers on
behalf of shareholders and ensure that the investment objective and policy are adhered
to. The Company has no employees.
The Company’s ordinary shares are mainstream investment products suitable for
both retail and professional investors. The Company’s ordinary shares are eligible for
investment in an ISA.
£1,126m
NET ASSETS
(2024: £1,135m)
740.00p
SHARE PRICE
(2024: 690.00p)
3.9%
DIVIDEND YIELD*
(2024: 3.9%)
(9.4)%
DISCOUNT*
(2024: (11.5)%)
0.51%
ONGOING CHARGES
RATIO* (2024: 0.53%)
5.0%
GEARING (NET)*
(2024: 3.1%)
*Alternative Performance
Measures as defined on
pages 86 to 89.
OVERVIEW
2 / OVERVIEW / THE EDINBURGH INVESTMENT TRUST PLC
FINANCIAL INFORMATION AND
PERFORMANCE STATISTICS
Total Return
(1)(2)(3)
(all with dividends reinvested)
Year Ended
31 March 2025
Year Ended
31 March 2024
Net asset value
(1)
(NAV) – debt at fair value +8.3% +13.4%
Share price
(4)
+11.3% +8.9%
FTSE All-Share Index
(4)
+10.5% +8.4%
The Company’s benchmark is the FTSE All-Share Index.
Capital Return
(1)(3)
At 31 March 2025 At 31 March 2024 Change %
Net asset value - debt at fair value 817.16p 779.97p +4.8
Share price
(4)
740.00p 690.00p +7.2
FTSE All-Share Index
(4)
4,623.62 4,338.05 +6.6
Discount
(1)(2)(3)
– debt at fair value (9.4)% (11.5)%
Gearing (debt at fair value)
(1)(2)(3)
– gross gearing 5.6% 6.2%
– net gearing 5.0% 3.1%
Revenue and Dividends
(2)
Year Ended
31 March 2025
Year Ended
31 March 2024 Change %
Revenue return per ordinary share 25.02p 23.93p +4.6
Dividends – first interim 6.90p 6.70p
– second interim 6.90p 6.70p
– third interim 7.50p 6.90p
– proposed final 7.50p 6.90p
– total dividends 28.80p 27.20p +5.9
Consumer Price Index
(3)(4)
– annual change 2.3% 3.2%
Dividend Yield
(1)(2)(3)
3.9% 3.9%
Ongoing Charges Ratio
(1)(2)(3)
0.51% 0.53%
Notes:
(1) These terms are defined in the Glossary of Terms and Alternative Performance Measures, including reconciliations, on pages 86 to 89. NAV
with debt at fair value is widely used by the investment company sector for the reporting of performance, premium or discount, gearing and
ongoing charges.
(2) Key Performance Indicator.
(3) Alternative Performance Measures.
(4) Source: LSEG Data & Analytics.
THE EDINBURGH INVESTMENT TRUST PLC / OVERVIEW / 3
TEN YEAR HISTORICAL
INFORMATION
Year ended
31 March
Per ordinary share
Ordinary
shareholders’
funds
£m
Shares
(bought
back)/
issued
m
Revenue
return
p
Dividend
rate
p
Net asset
value
(debt at
fair
value)
p
Share
price
p
Discount
(debt at
fair
value)
%
Gross
gearing
(debt at
fair
value)
%
Net
gearing
(debt at
fair
value)
%
2016 1,392 0.55 26.66 24.35 695.30 665.00 (4.4) 15.5 15.3
2017 1,535 – 27.94 25.35 768.81 713.50 (7.2) 15.9 15.7
2018 1,400 – 29.25 26.60 703.34 642.00 (8.7) 12.1 11.8
2019 1,382 (0.19) 28.66 28.00 696.91 644.00 (7.6) 11.0 10.8
2020 872 (20.80) 27.83 28.65 490.40 434.00 (11.5) 13.4 8.3
2021 1,091 (2.50) 16.21 28.65
(1)
628.29 600.00 (4.5) 10.1 7.1
2022 1,176 (1.10) 22.41 24.80 686.69 634.00 (7.7) 10.3 4.4
2023 1,139 (5.60) 25.99 26.20 713.75 660.00 (7.5) 6.6 4.7
2024 1,135 (13.99) 23.93 27.20 779.97 690.00 (11.5) 6.2 3.1
2025 1,126 (7.17) 25.02 28.80 817.16 740.00 (9.4) 5.6 5.0
(1) including special dividend of 4.65p.
Capital Returns (excluding dividends paid) to 31 March 2025
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 3yr 5yr 10yr
NAV (debt at fair
value) (%)
1.3 10.6 -8.5 -0.9 -29.6 28.1 9.3 3.9 9.3 4.8 19.0 66.6 19.1
Share Price (%) 0.5 7.3 -10.0 0.3 -32.6 38.2 5.7 4.1 4.5 7.2 16.7 70.5 11.8
FTSE All-Share Index (%) -7.3 17.5 -2.4 2.2 -21.9 23.3 9.3 -0.7 4.3 6.6 10.4 48.8 26.2
Source: LSEG Data & Analytics.
Total Returns (with dividends reinvested) to 31 March 2025
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 3yr 5yr 10yr
NAV (debt at fair
value) (%)
5.0 14.7 -5.9 2.9 -26.7 34.8 14.1 7.9 13.4 8.3 32.6 103.9 75.1
Share Price (%) 4.0 11.2 -6.7 4.6 -29.4 46.4 10.6 8.4 8.9 11.3 31.4 112.7 69.5
FTSE All-Share Index (%) -3.9 22.0 1.2 6.4 -18.5 26.7 13.0 2.9 8.4 10.5 23.3 76.5 81.7
Source: LSEG Data & Analytics.
4 / OVERVIEW / THE EDINBURGH INVESTMENT TRUST PLC
TEN YEAR HISTORICAL INFORMATION / CONTINUED
Capital Returns Over Ten Years
Rebased to 100 at 31 March 2015
50
100
150
2025
200
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Share price
Net Asset Value – debt at fair value FTSE All-Share Index
Source: LSEG Data & Analytics.
Total Returns Over Ten Years
Rebased to 100 at 31 March 2015
Share price Net Asset Value - debt at fair value FTSE All-Share Inde
x
202520242015 2016 2017 2018 2019 2020 20212022 2023
50
100
150
200
250
Source: LSEG Data & Analytics.
One Year Three Years
Cumulative Dividend Growth
-10%
0%
40%
10%
20%
30%
Five Years Ten Years
to 31 March 2025
36.9%
20.8%
25.7%
16.6%
2.6%
0.5%
5.9%
16.1%
Dividends (excluding specials) Inflation (CPI)
Source: LSEG Data & Analytics.
Source: Consumer Price Inflation - Office for National Statistics.
THE EDINBURGH INVESTMENT TRUST PLC / OVERVIEW / 5
DEAR SHAREHOLDERS,
The end of the Company’s financial year
was an important milestone, as it was the
fifth anniversary of the appointment of our
management team. Most importantly, the strong
investment performance over these five years
has been encouraging. We have also made a
series of other improvements to the Company
over this period, including reducing the
investment management fee, therefore helping
to lower the ongoing cost ratio to 0.51%, putting
in place attractive new long-term borrowing
arrangements and more recently returning the
dividend back to getting ahead of inflation. The
Company also enjoys an increasingly high brand
profile. All of this leaves us very well placed to
develop and grow the Company further in the
years ahead.
While the Company has enjoyed a strong
period of operation, there have been significant
challenges to the broader investment trust sector
in the last twelve months and beyond. The issues
faced have included corporate activity seeking
to exploit wide discounts, as well as an evolving
regulatory approach towards cost disclosure
that has had the unintended consequence of
making the sector less attractive to some wealth
managers.
As a Board we remain alert to all these challenges
in the sector. For the Company specifically, while
the five year NAV and share price returns are
comfortably in excess of the benchmark, the
share price discount to NAV has remained at or
around 10% for the last year. The challenge within
the investment trust sector is an imbalance of
supply and demand for shares. The Company
has sought to address this by buying back a
significant number of shares over the period,
17.4% cumulatively since March 2020, including
4.7% in the last twelve months. Idiscuss this and
other initiatives to address the discount later in
this statement.
INVESTMENT OBJECTIVE AND POLICY
One initiative we have undertaken recently is
to seek to simplify our investment objective
and investment policy. In particular we propose
that the investment objective is set out in one
clear statement. We are recommending: ‘The
Company aims to exceed the total return on the
FTSE All-Share Index and grow its dividend faster
than UK inflation. This objective will be assessed
over the long term and performance against
the FTSE All-Share Index will be measured on
a NAV total return basis. These changes to the
wording of our investment objective and policy
will change neither the manner in which the
Company’s portfolio is managed nor what the
Company is seeking to achieve. But we do hope
they will resonate with investors.
You can see this described in more detail in the
Business Review section on page 15 and we seek
your approval to the changes at our upcoming
AGM – see resolution 12 in the notice of the AGM
on page 78.
PERFORMANCE
The Company’s NAV rose 8.3% over the twelve
months under review. The share price rose
11.3%. Both these returns compare with the
FTSE All-Share Index return of 10.5%. The
underperformance of the NAV over the year was
primarily a function of share price weakness in
a small number of holdings, which the Portfolio
Managers explore further in their statement. More
generally, it is encouraging that the UK equity
market has had a better year compared with
other equity markets, particularly the US. The
MSCI US Index returned 7.8% over the period and
the MSCI All Country World Index returned 4.9%.
The returns of the UK market illustrate why
we remain enthusiastic about the strength of
the UK-listed businesses in the portfolio. As
a Board we regularly discuss the challenges
facing the UK equity market with the Portfolio
Managers and shareholders – these include
a shrinking universe of stocks (in common
with many other markets) and some biases in
the composition of the benchmark towards
sectors such as pharmaceuticals and extractive
industries. However, as the returns of the last
year demonstrate, and with three and five year
returns for UK equities now much closer to global
equity market returns, we remain confident that
the Portfolio Managers’ diversified portfolio
of deeply researched stocks should underpin
attractive future returns to shareholders.
Overall, it is encouraging to record that the
Company’s NAV and share price returns are
ahead of the benchmark over three and five
years to 31 March 2025. Over ten years the
CHAIR’S STATEMENT
ELISABETH STHEEMAN
CHAIR
6 / OVERVIEW / THE EDINBURGH INVESTMENT TRUST PLC
NAV is marginally behind the benchmark and the share
price marginally ahead. Over the three years, the Company’s
NAV return has been 32.6%, with the Company’s benchmark
returning 23.3% over the same period. Over the past five
years, the NAV return has been 103.9%, compared with the
benchmark returning 76.5%. Over the past ten years, the NAV
return has been 75.1%, compared with the benchmark returning
81.7%. In all these cases, the NAV is stated after deducting debt
at fairvalue.
DIVIDENDS
Last month, we declared the third interim dividend of 7.5 pence
per share. As a Board we are proposing the same payment of
7.5 pence per share for the final dividend, which is paid this
summer. Assuming this proposal is approved by shareholders
at July’s AGM, total dividends for the financial year as a whole
will be 28.8 pence per share. This will represent an increase of
5.9% compared with the previous year and is comfortably in
excess of the rate of UK inflation which was 2.3%, ensuring that
we meet the second of our investment objectives.
This year’s dividend is funded largely by the portfolio’s natural
underlying income. Overall, the Company generated earnings
per share of 25.0 pence. We are content that a modest draw on
capital is sustainable.
Additionally, as the Portfolio Managers note in their report,
the headline level of portfolio income understates the overall
distributions by portfolio holdings to shareholders including
Edinburgh, as many companies also return surplus capital
through share buybacks. Overall, the company’s income
generation and dividend paying capabilities are in strong shape
– as the 5.9% increase indicates.
BORROWINGS
The Company has £120m of long-term debt (the ‘par’ value)
which was negotiated in 2021. The blended fixed annual coupon
across the four tranches of debt is 2.4% and the average period
to maturity is 23 years. Given our high expectations for portfolio
returns over time, we expect this debt to be additive to the
Company’s returns. This was the case in the year under review,
as is set out in the table on page 2.
At the end of the financial year the Company had cash balances
of 0.6%, meaning that net debt at par as a percentage of
NAV was 10.0%. However, it is the general convention in the
investment trust sector to look at the fair value of debt, which
takes account of the change in bond yields. Such changes can
have dramatic effects on the value of long-term debt such as
ours. Indeed, as bond yields have risen since we negotiated the
borrowings in 2021, the fair value of the debt has fallen from
£120m to £67m. Once cash is deducted, net borrowing at fair
value as a percentage of NAV is 5.0%. This is the figure quoted
at the front of this report and in factsheets.
SHARE PRICE DISCOUNT TO NET ASSET VALUE
The Company’s discount averaged 10% over the year, having
started at 11.5% and finishing at 9.4%. At the time of signing
this statement, it had narrowed to 7.5%. We took advantage
of the discount over the year, with an active share buyback
programme, buying back 4.7% of the opening share count. This
has enhanced the NAV by 0.4% over the period – again this
is shown in the table on page 2. Over the last five years, we
have bought back a cumulative 17% of shares in issue, which has
enhanced the NAV by 1.7%. As a Board we have considered the
scale of the buyback and whether we should go further with a
view to achieving a tighter discount. We have also considered
other measures that might help narrow the discount, such as
continuation votes and tenders. For now, with strong long-term
NAV total returns, including the dividend growth described
above, as well as the marketing of the Company described
below, we are confident that our approach will move market
perceptions in Edinburgh’s favour and allow the discount to
tighten further. The Board will continue its strong focus on this
and will keep all options under close consideration.
MARKETING
We continue to execute a marketing plan to raise the profile
of the Company and drive demand from new and existing
shareholders. Initiatives have included podcasts, videos,
apublication reviewing the last five years, and attendance at
a range of events including a major AJ Bell investment trust
conference in London. The management team have been
quoted and interviewed in a range of publications over the
year, including the Financial Times, Sunday Times and Daily
Mail, and I was interviewed by the influential Money Makers
podcast. We also hosted in-person events for shareholders in
London in addition to the AGM in Edinburgh. The cost of this
marketing is carefully assessed by the Board against a series of
Key Performance Indicators (KPIs), to ensure value for money.
BOARD AND GOVERNANCE
There have been no changes to the composition of the
Board over the year. It has operated well throughout with all
Directors making significant contributions to our discussions.
As per the AIC Corporate Governance Code (the ‘AIC Code’)
recommendations, an internal Board review was undertaken,
covering performance of the Board, individual directors and the
Chair. The overall results were good, providing useful insight for
the Board. The Board continues to meet the FCA Listing Rules
targets on gender diversity, female representation in senior
roles and ethnic representation on the Board. All Directors also
conform with the UK Corporate Governance Code’s guidance
on board tenure. I thank all my fellow Directors for their hard
work on behalf of shareholders over the last year.
CHAIR’S STATEMENT / CONTINUED
THE EDINBURGH INVESTMENT TRUST PLC / OVERVIEW / 7
ANNUAL GENERAL MEETING (‘AGM’)
This year’s AGM will take place on Tuesday 22 July 2025 at
11:00a.m. at the Balmoral Hotel in Edinburgh. The Board looks
forward to meeting as many shareholders there as possible.
As usual there will be votes on resolutions as set out on
pages 78 to 83 of this report. I encourage shareholders to vote
in person at the AGM or through the proxy facility on the voting
card. The holders of shares on investment ‘platforms’ should
be able to vote through their service provider. After the voting,
there will be a presentation by the Portfolio Managers. There
will also be an informal lunch and a chance to meet a range
of colleagues and advisors that manage the Company on a
day-to-day basis. For those unable to attend in person, the AGM
will be streamed online, with the ability to post questions live
into the meeting. The link for electronic access will be displayed
prominently on the Company’s website.
LONDON SHAREHOLDER EVENT
We will host a presentation to shareholders on Wednesday
8October 2025 at 11:00 a.m.. This will be another chance to
meet the Board, Portfolio Managers and other members of the
team. Further details will be posted on the Company’s website
in due course. We look forward to meeting shareholders at this
event and at the AGM.
OUTLOOK
At the time of writing, equity markets have recovered much
of the ground that was lost in early April after President
Trump’s tariff plans were announced. The scale of any tariffs
is yet to be confirmed and therefore the actual economic
impact hard to predict. Nonetheless, the volatility in markets
that followed the tariff announcements is another reminder
of the short-term challenges that investors face as the global
economic order evolves. We feel more strongly than ever that
a stock-driven and flexible investment process, focusing on
delivering attractive long-term total returns, is the best way
of navigating the geopolitical and macroeconomic challenges
to the advantage of shareholders. With the companies held in
the portfolio in strong shape, we are confident that Edinburgh
Investment Trust is well placed to deliver attractive returns to its
shareholders in the years ahead.
ELISABETH STHEEMAN / Chair / 20 May 2025
STRATEGIC REPORT
THE EDINBURGH INVESTMENT TRUST PLC / STRATEGIC REPORT / 9
DEAR SHAREHOLDERS,
It has been a great pleasure to complete our
first full year as the Portfolio Managers of your
Company, since taking over from colleagues
on the Global Fundamental team at Liontrust.
Over the year we have attended a range of
in-person shareholder events, explaining
to attendees how we execute our day-to-
day responsibilities. We have enjoyed the
opportunity to discuss how we are stewarding
the Company’s assets. We have also posted a
series of updates on our investment views on
the Company’s website and on social media
and trust that these have also been helpful.
We are looking forward to another year of
engagement with shareholders, starting
with the Annual General Meeting this July in
Edinburgh, and then a shareholder update
in London in October. We hope as many
shareholders as possible will attend these
events.
Our approach is rooted in bottom-up
fundamental analysis with the vast majority
of our time spent on in-depth stock
research. We identify companies we think
are underappreciated by the market through
in-depth research. These companies can be
across the style spectrum but generally we
believe the best medium to long-term returns
are found in businesses that have a durable
economic moat and exposure to structural
growth.
However, no company operates in a vacuum;
it is important to understand what is going
on in the macroeconomic environment.
We do this through both a more traditional
macroeconomic overlay, but most importantly
in the approach we call ‘Macro from the Micro’,
where we build a macroeconomic picture from
the ground up, by speaking to a broad range of
companies and understanding what they are
seeing at the coalface.
The end result is the construction of a
portfolio of high quality stocks, adopting a
flexible investment style to produce an ‘all
weather’ portfolio aiming to outperform in
different economic and market environments.
We manage the portfolio with a total return
approach, with the income generated by the
portfolio supporting the dividends that the
Company pays to its shareholders.
RETURNS
Over the financial year the NAV total return was
8.3% and the share price total return was 11.3%.
These compare with a rise in the Company’s
benchmark, the FTSE All-Share index, of 10.5%.
Operationally, the portfolio has had a strong
year with the profit and dividend growth of the
holdings closely matching our expectations.
However, the NAV return was modestly behind
the index, primarily because of share price
weakness in a small number of holdings such as
Greggs (the value ‘food to go’ operator, which
has seen a slow down in sales and has reported
weak consumer confidence), Spirax (the
specialist engineering group, which is exposed
to slowing global industrial production and
challenges within its thermal solutions division)
and Dunelm (the UK homewares leader,
also exposed to slowing retail demand). The
portfolio also had only a small position in HSBC,
which in common with several other banking
stocks, had a strong year. This was an additional
significant hinderance of the portfolio’s return
relative to that of theindex.
Positive contributors to returns included
NatWest Group, Verisk (the US insurance
focused data and analytics company) and
Baltic Classifieds Group (classifieds business)
with Verisk and Baltic Classifieds new positions
in the portfolio. NatWest’s share price
responded to strong capital generation and
cash returns to shareholders, combined with
improving sentiment as the UK government’s
stake – dating back to the financial crisis of
2008 – significantly reduced over the year.
Having no holdings in either Diageo (alcoholic
drinks) or Glencore (mining), both of which we
have had concerns about the growth outlook,
also helped relative performance as the share
prices of these large stocks fell.
The Company’s share price return was ahead
of the index over the year. This was principally
because the share price discount to NAV
narrowed, from 11.5% to 9.4%.
PORTFOLIO MANAGERS’ REPORT
FOR THE YEAR ENDED 31 MARCH 2025
IMRAN SATTAR
PORTFOLIO MANAGER
EMILY BARNARD
DEPUTY PORTFOLIO
MANAGER
10 / STRATEGIC REPORT / THE EDINBURGH INVESTMENT TRUST PLC
Turning to the detail behind the dividend, the Company’s
earnings per share rose from 23.9p to 25.0p, an increase
of 4.6%. Top line revenues were £40.7m, and as such, the
approximate headline portfolio yield is 3.4%. As we flagged in
this report last year, the revenues generated by the portfolio
understate the distributions made by investee companies
as some choose to return cash to shareholders through
share buybacks. We estimate that the ‘buyback yield’ of
the portfolio over the year was approximately 1.9%, which
represents a significant return of capital even though it does
not affect the numbers immediately above.
As the Chair has written in her report, total dividends per
share for the year of 28.8p will represent growth of 5.9%
compared with the previous financial year. We are confident
that the Company should be able to generate mid-single
digit growth in earnings over the medium term, which
should be supportive of similar dividend growth in excess of
inflation for the Company. The main variable is the degree to
which companies return capital to shareholders via buybacks
instead of conventional dividends.
TRANSACTIONS
Notable transactions during the year include purchases
in National Grid, LSEG (London Stock Exchange Group),
Grainger, and Segro – all of which are new additions to your
portfolio.
National Grid is a leading US and UK regulated utility, playing
a critical role in the global energy transition. The company
is exposed to the strong structural growth tailwind of
electrification as a result of global moves to decarbonise,
providing medium-term earnings visibility. We initiated the
position following National Grid strengthening its balance
sheet through a rights issue and a dividend cut, leaving it
better equipped to capitalise on these trends over the
medium term.
Grainger is a leader in the growing professional build to rent
property sector in the UK. The supply-demand dynamic of
this sector is attractive, with consistently strong demand
for high-quality rental properties, set against a supply side
dominated by private rental landlords who are likely to
struggle with new efficiency regulations.
Segro is a leading owner, manager and developer of
warehouses and industrial property. With high-quality assets
strategically located in prime areas, Segro is well-positioned
to benefit from structural trends including the growing
demand for data centres which continue to drive long-term
growth opportunities.
The main sales from the portfolio were Marks and Spencer,
Centrica (utility), and Mondi (paper and packaging). Marks
and Spencer has delivered on a hard-fought turnaround
under the new management team, reinvesting in product,
price, and proposition. We felt the turnaround and future
prospects had become fairly priced, and exited the position.
Centrica, like Marks and Spencer, has been on a self-help
journey, with a significant improvement in capital allocation
and discipline over recent years, alongside an improvement
in operational and financial delivery. Candidly, we exited the
position in Centrica too early as the business has continued
to surprise positively around its cash generation potential.
Mondi we exited owing to cyclical concerns and concerns
that sector consolidation would likely place them at a
strategic disadvantage.
PORTFOLIO MANAGERS’ REPORT / CONTINUED
THE EDINBURGH INVESTMENT TRUST PLC / STRATEGIC REPORT / 11
CURRENT SHAPE OF PORTFOLIO
We think about portfolio construction very carefully and, by building a portfolio of around 40-50 advantaged businesses, we aim
for a set of holdings that are economically and thematically well diversified. The current themes and economic diversification
within the portfolio are shownbelow and will be dealt with in more detail at the shareholder event in October 2025.
Multiple themes
Self-helpMarket Champions
Capital Optimisation
Data & Analytics
Innovation Consumer Bifurcation
Decarbonisation
Source: Liontrust, 31.03.25, ex Cash, example stocks. All use of company logos, images or trademarks in this presentation are for reference purposes only
10%
16%
16%
11%
16%
11%
19%
Economic diversification
Defensives Tech/Data Consumer Healthcare Commodities Financials
Industrials/
Cyclicals
23% 16% 12% 14% 10% 15% 9%
Source: Liontrust, 31.03.25, ex Cash, example stocks. All use of company logos, images or trademarks in this presentation are for reference purposes only
MULTIPLE THEMES
ECONOMIC DIVERSIFICATION
Source: Liontrust, 31.03.25, ex Cash, example stocks. All use of company logos, images or trademarks in this presentation are
for reference purposes only.
12 / STRATEGIC REPORT / THE EDINBURGH INVESTMENT TRUST PLC
PORTFOLIO MANAGERS’ REPORT / CONTINUED
The proportion of the portfolio invested in overseas stocks
is 6.7%, with three names featuring: Verisk and Thermo
Fisher Scientific in the US, and KONE in Finland. These three
holdings each bring unique economic characteristics that we
cannot replicate from the universe of UK stocks. However, the
remaining 42 holdings are all UK listed, reflecting the wide
range of strong businesses in the UK market combined with
attractive valuation both in absolute terms and relative to
global peers.
ENGAGEMENT WITH COMPANIES
Our investment process seeks to take account of the
significant variables that influence a company’s prospects.
Whether these variables be financial, strategic, reputational or
have any other feature, our process tracks the most material
ones. The following three examples illustrate how we engage
with companies on key issues for each investmentcase.
Greggs
This company has made substantial investment in its
infrastructure and distribution assets. While the management
team’s decision to invest ahead of its anticipated growth
is to be applauded, as this should underpin the long-term
competitive advantages of the business, the extent of the
investment was higher than we (and the market) anticipated.
The consequence on the company is the financial impact of
margin erosion. We have discussed this with the company,
highlighting in particular how they have communicated the
investment programme to the market. This subject will remain
an area of focus for us in the year ahead, while for now the
company is a 2.5% weight in the portfolio, and remains one of
the top 15 positions relative to its index weight.
Dunelm
In late 2024 we visited this market leader in the fragmented UK
homewares and furniture market. Dunelm continues to gain
market share by offering high-quality, own-brand products at
compelling prices – a proposition that is difficult for peers to
replicate and creates a meaningful barrier toentry.
Our visit included a Dunelm store, their made-to-measure
manufacturing centre (curtains, blinds and other soft
furnishings), and head office where we met the Digital
Director and Group General Counsel & Company Secretary.
We were given a store tour by a regional manager who
explained the strong return profile from store refits — a
key area of investment for Dunelm. The manufacturing visit
highlighted operational strengths: lead times have been
reduced from 27 to 7–8 days, with potential to deliver in as
little as 3 days. Pleasingly there is ample capacity for further
growth. Our discussions at head office also provided insights
into how Dunelm is leveraging digital and data capabilities
to deepen customer engagement and expand market share.
We engaged with the Digital Director regarding Dunelm’s
advertising strategy and thinking around introducing an
app. We came out of the meeting confident that Dunelm
is thinking sensibly around different ways to drive organic
traffic to its site and boost conversion.
Overall, our conviction in Dunelm’s quality as a company has
grown. Despite some near-term consumer uncertainty, we
remain confident in the company’s medium-term outlook,
underpinning its standing as the top position in the portfolio
relative to the index.
Rotork
This company is a market leader in flow control and
instrumentation products (actuators) and is exposed to
attractive long-term growth drivers such as oil and gas
electrification, and industrial process automation. Rotork’s
CEO, appointed in 2022, brought a renewed focus on driving
organic growth through its ‘Growth +’ strategy, aiming to
deliver mid to high-single digit topline growth, with gentle
margin accretion medium term, through focusing on target
segments with higher growth rates, reinforcing and improving
the customer value proposition, and improving innovation.
A site visit confirmed strong operational efficiency and a
more customer centric culture. Lead times are now best-in-
class and well below industry averages. The facility is well
invested with plenty of capacity to support future growth.
Incremental investments are delivering strong returns.
Our thesis for Rotork revolves around a renewed focus on
organic growth. The organisation has become much more
front-footed and the mentality of the engineers has evolved
to be customer focused. Meeting the Managing Director of
Water & Power, a key growth driver for organic growth, it was
evident that these changes had fed through the division and
had resulted in them winning new projects. For example, in
Singapore they now have a 97% share at a water plant vs
50% a couple of years ago. The visit reinforced our conviction
in Rotork’s ability to execute and deliver sustainable growth.
The holding remains a mid-sized 2% position in the portfolio.
Spirax
Spirax is a steam specialities engineering business with a
strong market position, providing low cost essential solutions
to customers. Around 85% of their sales are exposed to
customer operating budgets rather than capex budgets,
giving the business a degree of resilience relative to Industrial
Production. While Spirax has faced recent challenges due
to both company-specific and macroeconomic factors, we
THE EDINBURGH INVESTMENT TRUST PLC / STRATEGIC REPORT / 13
believe the new management team is high calibre and has
implemented changes that should enable a return to good
organic growth with margin expansion.
The facility we visited has undergone major investment in
recent years with the average age of a machine down from
around 20 years to 10 years and more automation has been
introduced. Several lines have already doubled output while
halving labour input, an achievement they want to achieve
more widely throughout the site. The management team
outlined plans to maximise floor space efficiency and drive
further productivity gains. The General Manager for UK
Supply has a very strong background and seemed to be an
agent for change and would help drive these improvements
across the site. Recently there has been an operational issue
at one of its plants and our visit reassured us that they are on
top of the supply chain issues. These actions helped us better
understand the level of ongoing change in the business, as the
management team continues to drive operational efficiency
and position the business for profitable growth.
More recently we have met with the Chair of the company
to emphasise that not only has operational execution been
poor, but also that financial guidance to the market has been
lacking. We conveyed that these both need to improve. We
also discussed the company’s historic acquisition strategy. In
recent years the company has made a series of acquisitions,
of c. £1b, to create an electric thermal solutions business.
To date the company has not earnt an attractive return on
capital on these investments and we discussed the likely
progression of returns from here. Like Greggs, the company
is a 2.5% weight in the portfolio, and remains one of the top
15 positions relative to its index weight.
OUTLOOK
The re-election of Donald Trump has increased economic
uncertainty. The ‘Liberation’ day tariff announcement
proved more severe than the markets had anticipated,
triggering sharp sell-offs across global equity markets.
Tariffs are expected to increase the cost of doing business
for companies and will weigh on consumer and corporate
confidence. Closer to home, the UK faces its own set of
challenges alongside these announcements. The increase in
employer National Insurance rates following Labour’s budget
will be a direct cost headwind for UK businesses, especially
those with high domestic exposure and labour-intensive
models. We are assessing the extent to which companies are
able to offset these cost headwinds through efficiency gains
and pricing power. Our focus remains on constructing a well-
balanced, and diversified portfolio of advantaged businesses.
Our confidence in the medium-term outlook for the portfolio
comes from the excellent strategic, operational, and financial
progress that the vast majority of the companies in the
portfolio have made (and continue to make) over the last
couple of years.
IMRAN SATTAR
PORTFOLIO MANAGER
EMILY BARNARD
DEPUTY PORTFOLIO MANAGER
20 MAY 2025
14 / STRATEGIC REPORT / THE EDINBURGH INVESTMENT TRUST PLC
Our competitive edge rests on the combination of our
Global Fundamental team’s experience and our flexible
investmentstyle.
ACTIVE MANAGEMENT
Stock-driven. Share prices follow fundamentals over the long
term. Through our proven investment approach, we expect
to outperform over the long term, net of fees.
High conviction portfolio. We expect the portfolio to contain
around 40 to 50 stocks. Holdings sizes reflect the conviction
we have in each company and our assessment of the upside
and downside potential of its share price.
Risk. We think of risk as permanent capital loss. To mitigate
this, our analysis of a company’s valuation is the first line of
defence. Our risk management process combines our depth
of knowledge of the stocks in the portfolio, plus separate
oversight by Liontrust’s Portfolio Risk Committee.
FLEXIBLE INVESTMENT STYLE
Open-minded approach. We do not have dogmatic style
biases, such as ‘growth’ or ‘value’. We are also prepared
to invest in companies that we identify as having scope
for recovery through management change, business
transformation or an improving business environment. We
expect the profile of the portfolio to evolve depending on
our assessment of individual companies and our reading of
the economic and market background.
Disciplined, rigorous, fundamental research. In keeping with
the stock-driven nature of the portfolio, the vast majority
of our effort takes the form of in-depth stock research. The
remainder is spent on macroeconomic analysis.
Materiality assessment is a core part of the investment
process. As part of the investment process, we identify and
prioritise the key risks and opportunities that each holding
(or potential holding) faces over our investment time
horizon. Some of these have financial implications for the
portfolio’s holdings and, as such, we engage each holding on
its key issues or exposures. The outcomes from our in-depth
analysis and engagement help form our conviction level and
investment decisions.
TOTAL RETURN STRATEGY
A focus on both capital growth and income. We take a total
return approach: investor returns should derive over the long
term from both capital appreciation and dividend income.
We generally prefer companies with organic investment
opportunities, but will sometimes hold companies with
acquisitive profiles. Either way, companies with growth
tailwinds are preferred. We view income as an important
component rather than the primary driver of investment
return. This aligns with the Company’s twin objectives.
LONG TERM
Typical holding period of three to five years. This is an
appropriate period to ensure that underlying corporate
fundamentals drive investment returns. It is therefore also a
sensible period over which to measure an active manager.
Gearing should enhance shareholder returns. One of the
advantages of an investment trust is the ability to borrow
to enhance equity returns. We therefore expect gearing to
boost investment returns over time.
CAPACITY MANAGEMENT
Scale diseconomies. In our view, investment performance can
rapidly suffer if assets under management become too large.
We carefully manage capacity to ensure that the interests
of existing clients take precedence over new clients. The
approach ensures we retain a size advantage. It enables us to
reposition the portfolio – and those of all our other clients –
quickly and efficiently when required.
DEEP INVESTMENT RESOURCE WITH GLOBAL
PERSPECTIVE
A close-knit investment team. Average experience of the
investment team is 14 years. The team has been stress-tested
across various market cycles.
Challenge and debate. This is encouraged within a structured
risk control environment, with robust oversight processes.
Team members own Liontrust equity and co-invest in the
team’s investment strategies, including Edinburgh Investment
Trust, which in turn underpins teamwork and collaboration.
THE PORTFOLIO MANAGERS’ CORE
INVESTMENT BELIEFS
THE EDINBURGH INVESTMENT TRUST PLC / STRATEGIC REPORT / 15
STRATEGY AND BUSINESS MODEL
The Edinburgh Investment Trust plc is an investment
company and its investment objective is set out below. The
strategy the Board follows to achieve that objective is to set
investment policy and risk guidelines, including investment
limits, and to monitor how they are applied. These are also
set out below and have been approved by shareholders.
The business model the Company has adopted to achieve
its investment objective has been to contract the services
of the Manager to manage and administer the portfolio in
accordance with the Board’s strategy and under its oversight.
The Portfolio Manager with lead individual responsibility
for the day-to-day management of the portfolio is Imran
Sattar and the Deputy Portfolio Manager is Emily Barnard.
Imran Sattar and Emily Barnard took on these new roles
on 6 February 2024, following the retirement of James de
Uphaugh, after 36 years in the industry.
In addition, the Company has contractual arrangements with
MUFG Corporate Markets to act as registrar, The Bank of
New York Mellon (International) Limited as depositary and
custodian, and NSM Funds (UK) Limited to act as Company
Secretary.
INVESTMENT OBJECTIVE AND POLICY
Investment Objective
The Company invests primarily in UK securities with the
long-term objective of achieving:
1. an increase of the Net Asset Value per share in excess of
the growth in the FTSE All-Share Index; and
2. growth in dividends per share in excess of the rate of UK
inflation.
Investment Policy
The Company will generally invest in companies quoted on
a recognised stock exchange in the UK. The Company may
also invest up to 20% of the market value of the Company’s
investment portfolio, measured at the time of any acquisition,
in securities listed on stock exchanges outside the UK. The
portfolio is selected by the Portfolio Manager on the basis
of its assessment of the fundamental value available in
individual securities. Whilst the Company’s overall exposure
to individual securities is monitored carefully by the Board,
the portfolio is not primarily structured on the basis of
industry weightings. No acquisition may be made which
would result in a holding being greater than 10% of the
market value of the Company’s investment portfolio, nor will
the Company invest more than 15% of the market value of
its investment portfolio in any other UK-listed investment
trusts or investment companies. Further, the Company may
not hold more than 5% of the issued share capital (or voting
shares) of any one company. Investment in convertibles is
subject to normal security limits. Should these or any other
limit be exceeded by subsequent market movement, each
resulting position is specifically reviewed by the Board. The
Company may borrow money to provide gearing to the
equity portfolio of up to 25% of net assets.
Use of derivative instruments is monitored carefully by the
Board and permitted within the following constraints: the
writing of covered calls against securities which in aggregate
amount to no more than 10% of the value of the portfolio, and
the investment in FTSE 100 futures which when exercised
would equate to no more than 15% of the value of the
portfolio. Other derivative instruments may be employed,
subject to prior Board approval, provided that the cost (and
potential liability) of exercise of all outstanding derivative
positions at any time should not exceed 25% of the value of
the portfolio at that time. The Company may hedge exposure
to changes in foreign currency rates in respect of its overseas
investments.
Amendment to the Company’s Investment
Objective and Policy
The Company, after discussion with the Portfolio Managers,
determined that it would be beneficial to amend the existing
investment objective and policy to simplify the wording and
to clarify (in the investment objective) the nature of the
shareholder returns targeted by the Company. The proposed
change to the investment objective and policy wording will
change neither the manner in which the Company’s portfolio
is managed, nor what the Company is seeking to achieve.
It is proposed that the investment objective be simplified by
using wording more easily understood by the investor which
makes it clear that the Company aims to exceed the total
return on the FTSE All-Share Index on a net asset value total
return basis and grow its dividend faster than UK inflation.
This will be set out in one clear statement which may resonate
more effectively with the retail investor base, and which may
be more simply messaged in marketing campaigns and as a
short, memorable phrase going forwards.
To avoid any ambiguity, the stated investment objective will
be expanded upon to make it clear that (i) the Company’s
objectives will be assessed over the long term; and (ii) the
Company’s net asset value total return performance will be
measured against the FTSE All-Share Index total return. This
will ensure that it is clear that the investment objective is to
target an attractive total return relative to the total return of
BUSINESS REVIEW
16 / STRATEGIC REPORT / THE EDINBURGH INVESTMENT TRUST PLC
the Index (which is how the portfolio is currently managed
and, accordingly, the material change is to the wording of the
investment objective and not to its substance).
In addition, the Company proposes to make some
non-substantive changes to the wording of its investment
policy, which will serve to re-order the text and break it into
shorter, more easily digestible sections for the reader.
The Board believes that the proposed amendments are in the
best interests of the shareholders.
The proposed amendments have been approved by the FCA
and also require shareholder approval. The full text of the
proposed amendments may be found in the appendix to the
notice of the AGM on pages 82 and 83.
RESULTS AND DIVIDENDS
At the year end the share price was 740.00p per ordinary
share (2024: 690.00p). The net asset value (debt at fair
value) per ordinary share was 817.16p (2024: 779.97p).
The Directors declared a third interim dividend for the year
ended 31 March 2025 of 7.50 pence per ordinary share (2024:
6.90 pence), an increase of 8.7% compared with each of the
first two interim dividends. This dividend is payable on 23May
2025 to ordinary shareholders on the register on 2May 2025.
The shares were quoted ex-dividend on 1 May 2025.
The Board is recommending a final dividend of 7.50 pence
per share which is the same as the third interim dividend
declared last month, implying a full year payout of 28.8 pence
per share. This represents an increase of 5.9% compared with
the total underlying ordinary dividends paid for the financial
year to 31 March 2024.
Subject to approval at the Company’s AGM, the dividend will
have an ex-dividend date of 5 June 2025 and will be paid on
31 July 2025, to shareholders on the register at 6 June 2025.
PERFORMANCE
The Board reviews the Company’s performance by reference
to a number of KPIs which are shown on page 2. They are
measures of the Company’s absolute and relative performance
and assist in managing performance and compliance and are
reviewed by the Board at each meeting.
The Chair’s Statement on pages 5 to 7 gives a commentary
on the performance of the Company during the year, the
gearing and the dividend.
The Board reviews an analysis of expenditure at each Board
meeting, and the Audit and Management Engagement
Committees formally review the fees payable to the main
service providers, including the Manager, on an annual basis.
The ongoing charges figure is calculated in accordance with
the AIC methodology and is reviewed by the Board annually
in comparison to peers.
The Board also regularly reviews the performance of the
Company in relation to the 20 investment trusts in the
UK Equity Income sector (including the Company). As
at 31 March 2025 the Company was ranked 20th by NAV
performance in this sector over one year, 2nd over three
years and 4th over five years (source: JP Morgan Cazenove).
OUTLOOK, INCLUDING THE FUTURE OF THE
COMPANY
The main trends and factors likely to affect the future
development, performance and position of the Company’s
business can be found in the Portfolio Managers’ Report.
Details of the principal risks affecting the Company can be
found on pages 20 to 23.
FINANCIAL POSITION AND BORROWINGS
The Company’s balance sheet on page 60 shows the assets
and liabilities at the year end. Borrowings at the year end
comprised £120 million of Unsecured Senior Loan Notes
(2024: £120 million).
PERFORMANCE ATTRIBUTION
The following table illustrates the differing contributions to
NAV excess returns, split between underlying stock selection
and other factors such as gearing, costs and share buybacks.
for the
year ended
31 March 2025
%
for the
year ended
31 March 2024
%
Total Return Basis
(1)
NAV (debt at fair value) 8.3 13.4
Benchmark 10.5 8.4
Relative performance -2.2 5.0
Analysis of Relative
Performance
Portfolio total return 7.3 11.8
Benchmark total return
(1)
10.5 8.4
Portfolio outperformance [A] -3.2 3.4
Borrowings:
Net gearing effect
0.8 1.2
Interest
-0.3 -0.3
Market value movement
0.6 0.4
Management fee -0.4 -0.4
Other expenses -0.1 -0.1
Tax 0.0 0.0
Share buybacks 0.4 0.8
Subtotal [B] 1.0 1.6
Relative performance [A+B] -2.2 5.0
(1)
LSEG Data & Analytics.
BUSINESS REVIEW / CONTINUED
THE EDINBURGH INVESTMENT TRUST PLC / STRATEGIC REPORT / 17
Performance attribution – analyses the performance of the
Company relative to its benchmark. The Analysis of Relative
Performance estimates the quantum of relative performance
that is attributable to each of the factors set out in this table.
The table is intended to be indicative rather than precise;
the accuracy of each estimate is determined by a variety of
factors such as the volatility of investment returns over the
year and intra-month, and the timing of income receipts and
expenditure payments.
Relative performance – represents the arithmetic difference
between the NAV and benchmark returns.
Portfolio total return – represents the return of the holdings
in the portfolio including transaction costs, cash and income
received, but excluding expenses incurred by the Company.
Net gearing effect – measures the impact of the unsecured
senior loan notes and cash on the Company’s relative
performance. This will be positive if the portfolio has positive
capital performance and negative if capital performance is
negative.
Interest – interest payable on the unsecured senior loan notes
has a negative impact on performance.
Market value movement – represents the change in market
value of the Company’s borrowings, measured to the end of
the financial year or maturity from the start of the financial
year or issuance, each as appropriate.
Management fee – the fee reduces the Company’s net assets
and decreases returns.
Other expenses and tax – reduce the level of assets and
therefore result in a negative effect on relative performance.
Share buybacks – measures the effect of ordinary shares
bought back at a discount to net asset value on the
Company’s relative performance.
18 / STRATEGIC REPORT / THE EDINBURGH INVESTMENT TRUST PLC
INVESTMENTS IN ORDER OF VALUATION
AT 31 MARCH 2025
UK LISTED ORDINARY SHARES UNLESS OTHERWISE STATED
Company Sector
At Market Value
£’000
% of
Portfolio
Shell Oil, Gas and Coal 92,150 7.5
Unilever Personal Care, Drug and Grocery Stores 76,791 6.2
GSK Pharmaceuticals and Biotechnology 55,563 4.5
Haleon Pharmaceuticals and Biotechnology 55,456 4.5
Compass Consumer Services 49,687 4.0
NatWest Banks 49,167 4.0
Tesco Personal Care, Drug and Grocery Stores 47,345 3.8
AstraZeneca Pharmaceuticals and Biotechnology 46,497 3.8
Dunelm Retailers 45,561 3.7
National Grid Gas, Water and Multi-utilities 44,222 3.6
TOP TEN HOLDINGS 562,439 45.6
Whitbread Travel and Leisure 37,091 3.0
Auto Trader Software and Computer Services 35,583 2.9
Rentokil Industrial Support Services 34,573 2.8
Grainger Real Estate Investment and Services 33,179 2.7
Verisk - US Listed Industrial Support Services 32,729 2.7
London Stock Exchange Group Finance and Credit Services 31,354 2.5
Spirax-Sarco Engineering Industrial Engineering 30,899 2.5
Anglo American Industrial Metals and Mining 30,481 2.5
Greggs Personal Care, Drug and Grocery Stores 30,341 2.5
Segro Real Estate Investment Trusts 28,867 2.3
TOP TWENTY HOLDINGS 887,536 72.0
Admiral Non-Life Insurance 27,141 2.2
Baltic Classifieds Software and Computer Services 25,746 2.1
Rotork Electronic and Electrical Equipment 24,604 2.0
Rightmove Real Estate Investment and Services 24,549 2.0
Thermo Fisher Scientific - US Listed Medical Equipment and Services 22,661 1.8
KONE - B shares - Finnish Listed Industrial Engineering 20,701 1.7
Halma Electronic and Electrical Equipment 20,021 1.6
HSBC Banks 17,401 1.4
Sage Software and Computer Services 16,854 1.4
AJ Bell Investment Banking and Brokerage Services 16,431 1.3
TOP THIRTY HOLDINGS 1,103,645 89.5
BAE Systems Aerospace and Defence 16,376 1.3
Howden Joinery Retailers 15,377 1.3
RELX Media 14,701 1.2
Money Supermarket Software and Computer Services 13,420 1.1
Lloyds Bank Banks 12,482 1.0
Sainsbury's Personal Care, Drug and Grocery Stores 11,960 1.0
Diploma Industrial Support Services 10,993 0.9
3i Investment Banking and Brokerage Services 10,492 1.0
SSE Electricity 5,291 0.4
Applied Nutrition Food Producers 5,152 0.4
TOP FORTY HOLDINGS 1,219,889 99.1
Oxford Instruments Electronic and Electrical Equipment 4,186 0.3
Renishaw Electronic and Electrical Equipment 3,623 0.3
LondonMetric Property Real Estate Investment Trusts 3,190 0.3
Eurovestech (UQ) Investment Banking and Brokerage Services – –
Raven Property (S) - Preference
shares
Real Estate Investment and Services – –
TOTAL HOLDINGS 45
(31 MARCH 2024: 52)
1,230,888 100.0
UQ - Unquoted investment
S - Delisted
THE EDINBURGH INVESTMENT TRUST PLC / STRATEGIC REPORT / 19
PORTFOLIO ANALYSIS
Analysis of Portfolio by Industry
At 31 March 2025 and 2024
2025 2024
Financials Real EstateUtilitiesTechnology Tele-
communications
Health
Care
Consumer
Discretionary
Consumer
Staples
IndustrialsBasic
Materials
Energy
0%
5%
10%
15%
20%
25%
30%
Comparison of Portfolio to FTSE All-Share Index by Industry
At 31 March 2025
Portfolio FTSE All-Share Index
Financials UtilitiesEnergyTechnology Tele-
communications
Health
Care
Real Estate
Consumer
Discretionary
Consumer
Staples
IndustrialsBasic
Materials
0%
5%
10%
15%
20%
25%
30%
20 / STRATEGIC REPORT / THE EDINBURGH INVESTMENT TRUST PLC
PRINCIPAL RISKS AND
UNCERTAINTIES
RISK MANAGEMENT AND MITIGATION
The Manager (‘AIFM’) is responsible for the portfolio
management of the Company and for exercising the risk
management function in respect of the Company. As part
of this risk management function, the AIFM maintains a
risk control summary of identified risks including emerging
risks likely to impact the Company. This is updated regularly,
following discussions with the Manager and highlighted to
the Board.
The Board, through the Audit Committee and with the
assistance of the Manager, regularly reviews a report of
potential risks to the Company in the form of a risk control
summary. The document includes a description of each
identified risk, the mitigating action taken, reporting and
disclosure to the Board and an impact and probability risk
rating. The rating is given both prior to and after the Board’s
mitigation of each risk. The information is then displayed in
matrix form which allows the Board to identify the Company’s
key risks. As the changing risk environment in which the
Company operates has evolved, the total number of risks has
fluctuated, with certain risks having been removed and new
risks added with emerging risks actively discussed as part of
this process and, so far as practicable, mitigated.
Furthermore, the risk control summary underpins the
Company’s preparation for the revised AIC Code, which
requires boards to make a declaration of the effectiveness
of the material controls at the balance sheet date, which
applies to accounting periods beginning on or after 1 January
2026. This particularly supports the new Provision 34 of the
AIC Code which ensures the Board has established and
maintains procedures to manage risk, oversee the internal
control framework and identify any material controls which
have not operated effectively, identifying both actions and
improvements.
The composition of the Board is regularly reviewed to ensure
its members offer sufficient knowledge and experience to
assess, anticipate and mitigate these risks, as far as possible.
The principal risks and uncertainties facing the Company are
an integral consideration when assessing the operations in
place to meet these objectives, including the performance
of the portfolio, share price and dividends. The Board is
ultimately responsible for the risk control systems, but the
day-to-day operation and monitoring are delegated to the
Manager. The Board has carried out a robust assessment
of the principal and emerging risks facing the Company,
including those that would threaten its business model,
future performance, solvency or liquidity. The following sets
out a description of the principal and emerging risks and how
they are being managed or mitigated.
MARKET RISK
All the Company’s investments are traded on recognised
stock exchanges, bar a very small number that have delisted
or suspended since purchase. The principal risk for investors
in the Company is a significant fall and/or a prolonged period
of decline in those markets. The Company’s investments
and the income derived from them are influenced by many
factors such as general economic conditions, interest rates,
inflation, currency movements, a recurrence of a pandemic,
geopolitical events, the war in Ukraine and government
policies (e.g. the recent changes to tariffs by the Trump
administration in the US) as well as by supply and demand
reflecting investor sentiment. Such factors are outside the
control of the Board and Manager and may give rise to
high levels of volatility in the prices of investments held by
the Company. The asset value and price of the Company’s
shares and its earnings and dividends may consequently also
experience volatility and may decline.
Changes in interest rates, inflation and currency could reduce
returns and lead to depreciation of the Company’s net asset
value.
Market risk is included in the risk control summary report
that is prepared by the Manager and reviewed by the Board
at each meeting. Additionally, the Board receives reports
on the performance of the portfolio at each meeting. The
portfolio is positioned by the Portfolio Managers for medium
to long-term returns.
INVESTMENT RISK
The Board sets investment policy and risk guidelines,
together with investment limits, and monitors adherence
to these at each Board meeting. All individual investment
decisions are undertaken by the Portfolio Managers. The
Portfolio Managers’ approach is to construct a portfolio
which should benefit from expected future trends in the UK
and global economies. The Portfolio Manager is a long-term
investor, prepared to take substantial positions in securities
across a range of different types of stock. This reflects the
Portfolio Managers’ high conviction, stock-driven investment
process and total return approach. Strategy, asset allocation
and stock selection decisions by the Portfolio Managers can
lead to underperformance of the portfolio relative to the
benchmark and/or income targets.
The Portfolio Managers’ style may result in a concentrated
portfolio with significant overweight or underweight
positions in individual stocks or sectors compared to the
THE EDINBURGH INVESTMENT TRUST PLC / STRATEGIC REPORT / 21
benchmark and, consequently, the Company’s performance
may deviate significantly, possibly for extended periods,
from that of the benchmark. In a similar way, the Portfolio
Managers manage other portfolios, holding many of the same
stocks as the Company which reflects the Portfolio Managers’
high conviction style of investment management. This could
increase the liquidity and price risk of certain stocks under
certain scenarios and market conditions. However, the Board
and the Portfolio Managers believe that the investment
process and policy outlined above should, over the long
term, meet the Company’s objectives of Net Asset Value per
share growth in excess of the benchmark and real growth
in the dividend per share. Investment selection is delegated
to the Portfolio Managers. The Board does not specify asset
allocations. Information on the Company’s performance
against the benchmark and peer group is provided to the
Board at each Board meeting. The Board uses this to review
the performance of the Company, taking into account
how performance relates to the Company’s objectives.
The Portfolio Managers are responsible for monitoring
the portfolio selected and seek to ensure that individual
stocks meet an acceptable risk-reward profile. There is also
independent oversight of the portfolio and Company’s asset
structure by the Liontrust Investment Riskteam.
As described in the investment policy, derivatives may be
used provided that the market exposure arising is less than
25% of the value of the portfolio.
Investment performance risk is included in the risk control
summary report that is prepared by the Manager and
reviewed by the Board at each meeting. The Board also
receives reports on the performance of the portfolio and on
compliance with the Company’s investment policy guidelines
from the Manager’s risk and compliance department at each
meeting. As part of an annual assessment, the Board reviews
the performance of the Manager and the management
contract at the Management Engagement Committee
meeting.
The Board also reviews the annual depository report and
report from the compliance department of the Manager
and any breaches of the investment policy, limits or
guidelines are reported immediately to the Board and Audit
CommitteeChairs.
Investment risk is increased through the Company’s
borrowing, namely the £120m Unsecured Senior Loan Notes.
This facilitates additional investment exposure than would be
the case for an unleveraged portfolio; if the investments fall in
value, this will increase the adverse impact on performance.
On a routine basis the Board monitors the appropriateness
of gross and net gearing levels, and the amount of headroom
above minimum NAV levels as agreed with the lenders.
INCOME/DIVIDEND RISK
The Company is subject to the risk that income generation
from its investments fails to reach the level of income
required to meet its objectives.
The Board monitors this risk through the review of detailed
income and dividend forecasts and comparison against
budget. These are contained within the Board papers and
the Board considers the level of income at each meeting.
Revenue estimates are presented at each Board meeting
and Board Committee meeting which determine the three
interim dividends and propose the final dividend.
The Board also takes into account the size of the Company’s
accumulated income and capital reserves which can be used
to supplement dividends when income levels alone do not
cover the proposed dividend payments. These reserves are
currently being used to support the dividend and, given the
nature of the portfolio’s underlying income generation, we
expect this to continue for the foreseeable future.
DISCOUNT RISK
The share price is monitored on a daily basis and, at the
request of the Board, the Company is empowered to
repurchase shares within agreed parameters which are
regularly reviewed with the Company’s broker. The discount
at which the shares trade to NAV can be influenced by share
repurchases. During the year, the Company repurchased
7,170,500 shares for holding in treasury (2024: 13,985,000).
Risk management activity includes systematic reviews of the
investment objective and investment strategy and regular
dialogue with shareholders and marketing activities.
Share price and discount risk is included in the risk control
summary report that is prepared by the Manager and
reviewed by the Board at each meeting. In addition, the
Board monitors the Company’s investment performance
against its stated objectives and peer group and reviews the
marketing report at every Board meeting.
22 / STRATEGIC REPORT / THE EDINBURGH INVESTMENT TRUST PLC
PRINCIPAL RISKS AND UNCERTAINTIES / CONTINUED
CORPORATE GOVERNANCE AND INTERNAL
CONTROLS RISK
The Board has delegated to third-party service providers
the management of the investment portfolio, depositary
and custody services (which include the safeguarding of
the assets), registration services, accounting and company
secretarial services.
The principal risks arising from the above mentioned
contracts relate to the performance of the Manager, the
performance of administrative, registration, depositary,
custodial and banking services, and the failure of information
technology systems used by third-party service providers.
These risk areas could lead to the loss or impairment of the
Company’s assets, inadequate returns to shareholders and
loss of investment trust status. Consequently, in respect of
these activities, the Company is dependent on Liontrust’s
control systems and those of its administrator, depositary,
custodian and registrar.
An annual review of the control environments of all service
providers is carried out by the Company Secretary who
provides an assessment of these risks and the operation of
the controls for consideration by the Audit Committee and is
formally reported to and considered by the Board.
Investment trust status is assessed by the Manager,
reviewed at every Board meeting and confirmed by the
Audit Committee and HMRC annually. Taxation matters are
dealt with by independent accountants, with oversight from
theBoard.
RELIANCE ON THE MANAGER AND OTHER THIRD-
PARTY PROVIDERS RISK
The Company is reliant upon the performance of third-party
service providers for its executive function and other service
provisions. The Company’s most significant contract is with
Liontrust Fund Partners LLP who have been appointed as
the Company’s AIFM. The Company has other contractual
arrangements with third parties to act as administrator,
company secretary, registrar, depositary and broker. The
Company’s operational structure means that all cyber risk
(information and physical security) arises at its third-party
service providers, including fraud, sabotage or crime against
the Company. Failure by any service provider to carry out its
obligations to the Company in accordance with the terms of
its appointment could have a materially detrimental impact
on the operation of the Company and could affect the ability
of the Company to pursue successfully its investment policy
and expose the Company to risk of loss or to reputationalrisk.
In particular, the Manager performs services which are
integral to the operation of the Company. The Manager may
be exposed to the risk that litigation, misconduct, operational
failures, negative publicity and press speculation, whether or
not it is valid, will harm its reputation. Any damage to the
reputation of the Manager could result in counterparties and
third parties being unwilling to deal with the Manager and by
extension the Company. This could have an adverse impact
on the ability of the Company to pursue its investment policy.
The Board seeks to manage these risks in a number of ways:
– The Company Secretary reviews the performance and
the service organisation control reports of third-party
service providers and reports to the Board on an annual
basis at the Audit Committee meeting.
– The Board reviews the performance of the Manager at
every Board meeting and otherwise as appropriate. The
Board has the power to replace the Manager and reviews
the management contract formally once a year.
– The day-to-day management of the portfolio is the
responsibility of the named Portfolio Managers.
– The risk that the Portfolio Manager might be incapacitated
or otherwise unavailable is mitigated by the fact that he
works within, and is supported by, the wider Liontrust
team. Moreover, Emily Barnard, as Deputy Portfolio
Manager, works closely with Imran on a daily basis and
would be able to manage the portfolio if Imran Sattar was
unable to do so for any reason.
– The Board has set guidelines within which the Portfolio
Managers are permitted wide discretion. Any proposed
variation outside these guidelines is referred to the Board
and compliance with the guidelines and the guidelines
themselves are reviewed at every Board meeting.
THE EDINBURGH INVESTMENT TRUST PLC / STRATEGIC REPORT / 23
PHYSICAL AND TRANSITIONAL CLIMATE CHANGE
Globally, climate change effects are already emerging in the
form of changing weather patterns. Extreme weather events
could potentially impair the operations of individual investee
companies, potential investee companies, their supply
chains and their customers. Legislative changes are driving
an economic adjustment towards a low-carbon economy.
There are considerable risks to the value, business model and
operations of investee and potential investee companies due
to stranded assets and how investors, financial regulators
and policymakers respond to climate concerns. The Portfolio
Managers take such risks into account, along with the
downside risk to any company – whether in the form of its
business prospects, market valuation or sustainability of
dividends – that is perceived to be making a detrimental
contribution to climate change. The Company invests in
a broad portfolio of businesses with operations spread
geographically, which should limit the impact of location-
specific weather events.
Climate change related risks are regularly monitored by the
Manager and reviewed by the Board as required, together
with any new guidance.
OTHER RISKS
The Company is subject to laws and regulations by virtue of
its status as an investment trust and is required to comply
with certain regulatory requirements that are applicable to
listed closed-ended investment companies. The Company
is subject to the continuing obligations imposed by the UK
Listing Authority on all companies whose shares are listed on
the Official List.
The Manager reviews compliance with investment trust tax
conditions and other financial and regulatory requirements
on a daily basis with any issues being immediately brought
to the attention of the Board.
The Company may be exposed to other business, strategic
and political risks in the future, as well as regulatory risks
(such as an adverse change in the tax treatment of investment
companies), credit, liquidity and concentration risks. The
risk control summary report allows the Board to consider all
these risks, the measures in place to control them and the
possibility of any other risks that could arise.
The Board ensures that satisfactory assurances are received
from the service providers. The Manager’s compliance
officers produce regular reports for review by the Company’s
Audit Committee.
Additionally, the depositary monitors stock, cash, borrowings
and investment restrictions throughout the year. The
depositary reports formally once a year and also has access
to the Company Chair and the Audit Committee Chair if
needed during the year.
Please see Note 16 on page 71 to read more about risk
management and financial instruments.
EMERGING RISKS
The Board has put in place robust procedures to assist with
identifying emerging risks that arise from existing risks or
from new situations. Failure to identify emerging risks may
cause reactive rather proactive actions. The experience and
knowledge of the Board is invaluable in consideration of
emerging risks, as are updates and advice received from the
Board’s key service providers such as the Company’s Manager,
Broker, Company Secretary and Auditors. The Association of
Investment Companies (‘AIC’) also provides regular updates
and draws members’ attention to forthcoming industry and/
or regulatory issues.
There are currently a growing number of risks as a result of
emerging geopolitical factors that may translate into greater
stock market risk, as well as heightened macro-economic
changes in inflation, interest rates, currencies and energy
costs, the ever-evolving global regulatory and trade
environments and a risk of re-emergence of a global
pandemic.
Geopolitical factors include the continuation of conflict in
Ukraine and the Middle East and also US trade policy under
the second Trump administration. Whilst these risks currently
exist, their extent and long-term impact are yet to emerge but
they are regularly assessed by the Manager and the Board.
These emerging risks are kept under review and mitigating
actions are discussed and documented. This ensures that the
Board can react ahead of any risk materialising, therefore
minimising risk exposure.
24 / STRATEGIC REPORT / THE EDINBURGH INVESTMENT TRUST PLC
VIABILITY STATEMENT
The Directors’ view of the Company’s viability has not
changed since last year. The Company, as an investment trust,
is a collective investment vehicle rather than a commercial
business venture and is designed and managed for long-term
investment. The Company’s investment objective clearly sets
this out. ‘Long-term’ for this purpose is considered by the
Directors to be at least five years, a timeframe in which the
accuracy of estimates and assumptions is deemed to be
reasonable. The Company’s viability has thus been assessed
over that period. Five years is considered a reasonable time
frame for a forecast, however, the life of the Company is not
intended to be limited to that or any other period.
There are no current plans to amend the investment strategy,
which has delivered long-term good investment performance
above or in line with benchmark for shareholders and, the
Directors believe, should continue to do so. The investment
strategy and its associated risks are kept under constant
review by the Board.
In assessing the viability of the Company under various
scenarios, the Directors undertook a robust assessment of
the risks to which it is exposed, as set out on pages 20 to 23
together with mitigating factors. The risks of failure to meet
the Company’s investment objective, and contributory
market and investment risks, were considered to be of
particular importance. The Directors also took into account:
the investment capabilities of the Portfolio Managers; the
liquidity of the portfolio, with nearly all investments being
listed and readily realisable; the Company’s borrowings as
considered in further detail in the Going Concern Statement
on pages 42 and 43; the ability of the Company to meet its
liabilities as they fall due; the Company’s annual operating
costs; and that, as a closed-ended investment trust, the
Company is not affected by the liquidity issues of open-ended
companies caused by large or unexpected redemptions.
In taking account of these factors and on reviews conducted
as part of the detailed internal controls and risk management
processes set out above, the Directors have undertaken
a reverse stress test seeking to identify the financial
circumstances that might result in the Company becoming
unviable. This concluded that the viability of the Company
would be challenged if the value of Total Shareholders’ Funds
were to fall permanently by approximately 80% from the
level at the year end, a fall that the Board considers to be
highly unlikely having noted that since the inception of the
Company’s FTSE All-Share Index Total Return benchmark in
December 1985, the largest fall over any calendar year has
been 29.9%, the largest fall over any rolling five year period
was 28.8% and the largest fall since launch was 42.9% (all
based on benchmark calendar month end values).
Based on the above, and assuming there is no adverse
change to the regulatory environment and tax treatment of
UK investment trusts to the extent that would challenge the
viability of the UK investment trust industry as a whole, 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 assessment.
THE EDINBURGH INVESTMENT TRUST PLC / STRATEGIC REPORT / 25
SECTION 172 STATEMENT, COMPANY
SUSTAINABILITY AND STAKEHOLDERS
BOARD RESPONSIBILITIES
The responsibilities of the Board include setting the Company’s
strategic aims, providing the leadership to put them into
effect, supervising the Manager and reporting to shareholders
on their stewardship. The Board is ultimately responsible
for the direction, management, performance and long-term
sustainable success of the Company.
The Board sets the Company’s strategy and objectives, taking
into account the interests of all its stakeholders. However,
the Company has no employees and no customers in the
traditional sense. Consistent with the Company’s nature as an
investment trust, the Board’s principal concern has been, and
continues to be, the interests of the Company’s shareholders
taken as a whole.
COMPANY SUSTAINABILITY AND STAKEHOLDERS
A good understanding of the Company’s stakeholders enables
the Board to consider the potential impact of strategic decisions
on each stakeholder group during the decision-making
process. By considering the Company’s purpose, vision and
values, together with its strategic priorities, the Board aims for
its decisions to be fair and take account of the interests of the
key stakeholder groups. As an externally managed investment
company, the Company does not have any employees. The
Board considers its main stakeholders to be its shareholders,
service providers and investee companies.
SECTION 172 STATEMENT
Section 172 of the Companies Act 2006 requires the Board to
act in the way that it considers would most likely promote the
success of the Company for the benefit of all stakeholders,
taking into consideration the interests of stakeholders in their
decision-making and to share how they have discharged this
duty. During the year under review, the Board believes that
it has acted in good faith and discharged its duties under
Section 172 of the Companies Act 2006. The fulfilment of
this duty not only helps the Company achieve its investment
objective but ensures decisions are made in a responsible
and sustainable way for shareholders.
The following section includes examples of how the
Company’s stakeholders were considered during the key
Board decisions. Key Board decisions include payment of
dividends, liquidity management via share issuance and share
buybacks, marketing, performance evaluation, negotiation
on debt and re-appointment of the Manager and other key
service providers, ESG integration into investment decisions
and Board succession planning.
ENGAGEMENT WITH SHAREHOLDERS
Shareholder relations are given high priority by both the
Board and the Manager, and the Board welcomes feedback
from shareholders throughout the year. The prime medium
by which the Company communicates with shareholders is
through the half-yearly and annual financial reports, which
aim to provide shareholders with a full understanding of
the Company’s activities and results. This information is
supplemented by the daily publication of the Net Asset
Value, monthly factsheets as well as dividend and other
announcements.
Feedback from shareholders forms part of the discussion
at all Board meetings and at the Board’s annual strategy
meeting which involves consideration of how the Company
is meeting shareholder expectations. In October 2024,
Imran Sattar and Emily Barnard spoke at the Company’s
annual retail shareholder event in London. The Company has
also participated in various marketing initiatives, including
podcasts, videos, a publication reviewing the Company’s last
five years, and attendance at a range of events including the
AJ Bell investment trust conference in London. The Company
has also been involved in a range of publications in the year
to date, including the Financial Times, Sunday Times and
Daily Mail, and Money Makers podcast.
Shareholders can also visit the Company’s website
www.edinburgh-investment-trust.co.uk in order to access
copies of the annual and half-yearly financial reports,
pre-investment information, Key Information Documents
(KIDs), proxy voting results, factsheets and stock exchange
announcements. The Company’s website also hosts videos
and other applicable written materials by the Manager to
enhance the information available. Shareholders can send
their questions using a dedicated section of the Company’s
website.
Typically, at each AGM, a presentation is made by the Portfolio
Managers following the formal business of the meeting and
shareholders have the opportunity to attend, vote and most
importantly to communicate directly with the Portfolio
Managers and Board. Presentations to both institutional
shareholders and analysts also follow the publication of the
annual results. The Company held a physical AGM on 17 July
2024, with voting on a show of hands. Shareholders also had
the opportunity to join the meeting virtually via a live weblink
using their smartphone, tablet or computer, with the option
to submit questions to the meeting in real time. In addition to
the AGM and presentations, the Board and Portfolio Managers
hosted a presentation to retail investors in central London
in October 2024. The Chair uses these events to lead the
26 / STRATEGIC REPORT / THE EDINBURGH INVESTMENT TRUST PLC
SECTION 172 STATEMENT, COMPANY SUSTAINABILITY
AND STAKEHOLDERS / CONTINUED
Company’s engagement with its retail shareholders. Please
see page 78 for the notice of the 2025 Annual General Meeting
and page 84 for details of the 2025 shareholder event.
Regular dialogue is maintained between the Board and
Portfolio Managers with a wide range of shareholders
throughout the year to discuss aspects of investment
performance, governance and strategy and to listen to
shareholder views in order to help develop an understanding
of their issues and concerns. All meetings between the
Portfolio Managers and shareholders are reported to the
Board and the directors receive regular updates on the
shareholder register and trading activity.
There is an additional clear channel of communication
between the Board and the Company’s shareholders via
the Company Secretary. The Company Secretary passes to
the Chair all correspondence addressed to the Board of the
Company.
The strategy of the Company is reviewed regularly and
formally by the Board on an annual basis. At the strategy
day on 9 October 2024 the Board discussed industry and
sector trends, growth opportunities, share buybacks, the
Company’s investment objective, marketing and dividends.
Whilst feedback from shareholders is sought regularly,
shareholders’ feedback provided by the Company’s Broker
and Manager is a major consideration at this meeting.
ENGAGEMENT WITH THE MANAGER
The Board maintains a constructive and collaborative working
relationship with the Portfolio Managers, encouraging open
discussion. The Board has regular dialogue with and receives
reports from the Portfolio Manager on the portfolio of
investments, including performance against set objectives
and risk management. The Portfolio Managers and Deputy
Portfolio Manager normally attend each Board meeting to
provide updates and answer questions from the Board. The
Chair also regularly meets with Liontrust executive directors.
The Board has also discussed the AIFM’s responsibility under
the FCA Consumer Duty with the Manager and received
comfort as to how those responsibilities will be met.
The Board agreed a lower management fee scale from
1April2024, further supporting the role of the Company as a
natural home for long-term equity investors.
The Portfolio Manager with individual responsibility for
the day-to-day management of the portfolio is Imran
Sattar and the Deputy Portfolio Manager is Emily Barnard.
Imran Sattar and Emily Barnard took on these new roles
on 6 February 2024, following the retirement of James de
Uphaugh, after 36 years in the industry.
ENGAGEMENT WITH SERVICE PROVIDERS
As an externally managed investment trust, the Company
conducts all its business through its key service providers.
The Board believes that maintaining a collaborative
relationship with each of the Company’s service providers
is essential to the Board’s decision-making and the ongoing
success of the Company. At least annually the Board reviews
the performance and services of its key service providers
including the Manager and receives and considers their
internal control reports on a quarterly basis covering their
operations, policies and control environments.
The Board reviews the quarterly reports of the service
providers and whether the services meet the requirements
of the Company, represent value for money and are therefore
in the best interests of shareholders. The Board treats all
service providers fairly, to maintain a reputation as a trusted,
fair and reliable partner. The Board and/or delegates of the
Board engage with key providers on a periodic basis through
service review meetings or, by invitation, attendance at Board
or committee meetings. Such engagement gives opportunity
to both parties to discuss any challenges being experienced
and potential solutions thereon, and to identify planned
developments at the Company or the service provider. We
aim to pay promptly and if in dispute, to engage openly to
resolve matters in a timely manner.
The Board continues to ensure that service providers are as
prepared as possible for all such eventualities which could
disrupt the performance of their respective functions.
ENGAGEMENT WITH INVESTEE COMPANIES
The Portfolio Managers are long-term investors and typically
develop strong relationships with both investee and potential
investee companies. Both the Board and the Portfolio
Managers believe that engagement with investee companies
is positive, beneficial and welcomed.
Voting is a key activity in the dialogue with investee
companies and these decisions are reported to the Board on
a quarterly basis.
The Board supports the Portfolio Managers’ approach to
ESG in the context of its management of the portfolio, as
discussed below.
THE EDINBURGH INVESTMENT TRUST PLC / STRATEGIC REPORT / 27
ENVIRONMENTAL SOCIAL AND GOVERNANCE
(“ESG”) MATTERS
As an investment company with no employees, property
or activities outside investment, environmental policy has
limited application. Nevertheless, the Board is committed to
taking a responsible approach to ESG matters. The Company’s
compliance with the AIC Corporate Governance Code is
detailed in the Corporate Governance Statement on page 34,
which demonstrates the Company’s own responsibilities on
matters such as governance.
In respect of the Company’s investments, the Portfolio
Managers and the other members of the investment team
integrate ESG risks and opportunities (including climate
change related risks) as part of a material assessment
undertaken for all holdings. Consistent with the Portfolio
Managers’ investment approach, this analysis is undertaken
on a bottom-up, stock basis. The risks and opportunities
that each holding faces over a three-to-five-year period are
then identified and prioritised. Many of these issues can be
sub-categorised as “E”, “S” and “G” issues. The issues that are
identified as the key ones are at the forefront of engagement
discussions on holdings with the investee companies. These
frequently include issues related to global warming, including
those focused on transitional risks, legislation risks, and/or
physical risks. The Manager is a signatory to the Principles
of Responsible Investment (‘PRI’) and the Company’s
assets form part of its commitment to the Net Zero Asset
Managers Initiative. Further information is available at
www.liontrust.co.uk and through the investment company
ESG disclosures at www.theaic.co.uk.
The Board recognises that the most material way in which
the Company can have an impact is through responsible
ownership of its investments. The Manager discusses below
how it engages with the management of investee companies
to encourage that high standards of ESG practice are
adopted.
The Company made no political donations during the year
in review.
Please see the table below for a reference to where information
can be found of how the Company’s key stakeholders were
considered during key Board decisions:
Section 172 statement area Reference
The likely consequences of any
decision in the long-term
See Chair’s Statement, The Portfolio Managers’ Report, Core Investment Beliefs
and Business Review, Going Concern and Viability Statements and Stakeholder
Engagement section below.
The interests of the Company’s
employees
As a closed-ended investment company, the Company has no employees.
Stewardship section refers to how the Company assesses its impact on social issues.
The need to foster the
Company’s business relationships
with suppliers, customers and
others
As a closed-ended investment company, the Company has no customers in the
traditional sense. See Stakeholder Engagement section below Principal Risks and
Uncertainties and Stewardship section on how the Company assesses its impact on
and engages with its key stakeholders.
The impact of the Company’s
operations on the community
and environment
See Principal Risks and Uncertainties, Stewardship section and ESG matters disclosure
below on how the Company assesses its impact on the community and environment
of its investee companies.
The desirability of the Company
maintaining a reputation for high
standards of business conduct
See Stakeholder Engagement section, Anti-Bribery and Corruption and Modern
Slavery disclosures.
The need to act fairly as between
members of the Company
See Stakeholder Engagement section and Corporate Governance Report.
28 / STRATEGIC REPORT / THE EDINBURGH INVESTMENT TRUST PLC
SECTION 172 STATEMENT, COMPANY SUSTAINABILITY
AND STAKEHOLDERS / CONTINUED
STEWARDSHIP CODE AND EXERCISE OF VOTING
POWERS
The Board considers that the Company has a responsibility
as a shareholder to ensure that high ESG standards are
maintained in the companies in which it invests. One of the
principal means of putting shareholder responsibility into
practice is through the exercise of voting rights. The Company
aims to provide investment specific active stewardship and
the Company’s voting rights are exercised on an informed
and independent basis. The Manager has adopted a clear and
considered policy towards its stewardship responsibility on
behalf of the Company. The Manager takes steps to satisfy
itself about the extent to which investee companies protect
shareholder value and comply with local recommendations
and practices, such as the UK Corporate Governance Code.
The Manager’s approach to corporate governance and the UK
Stewardship Code can be found on the Manager’s website at
www.liontrust.co.uk together with a copy of the Manager’s
Stewardship Policy and the Manager’s global proxy voting
policy.
Members of the Managers’ investment team are responsible
for overseeing all aspects of the Stewardship process,
including voting on all resolutions at all Annual General
Meetings and Extraordinary General Meetings in the UK
and overseas. The Portfolio Managers assess corporate
governance, remuneration policies and, if deemed necessary,
will challenge management where it is felt that the best
interests of shareholders are not being met.
The Board reviews the Portfolio Managers’ voting record
at each meeting. The table below demonstrates how the
Portfolio Managers voted during the year in review. The
Portfolio Managers voted at all meetings, except for an
unlisted legacy holding in Raven Property.
Proposal Category
Number of
Proposals Voted
Number voted
with Management
Audit related 99 99
Capitalisation 202 202
Company Articles 2 2
Compensation 88 82
Corporate
Governance
1 1
Director Election 488 488
Director Related 4 4
Environmental 5 3
Miscellaneous 8 8
Routine business 93 93
Social 34 32
Strategic
Transactions
1 1
Takeover related 43 43
TOTAL 1,068 1,058
The Portfolio Managers’ policy is to invest in well-managed
companies. We therefore expect few contentious votes, but
in any given twelve month period there will be a handful.
Toillustrate:
The Portfolio Managers voted in favour of the Remuneration
Policy of Sage Group, the UK-based software company that
provides accounting, HR and payroll technology for small and
mid-sized businesses. This is a global company, 80% of their
revenues are outside the UK, competing against international
players such as Intuit in the US. While proxy advisor ISS
raised concerns about the overall size of the pay package,
we believe Sage must offer a competitive remuneration
structure to attract and retain high-calibre talent. In our view,
this is necessary to support the company’s continued growth
and ensure it remains a leading player in its markets.
The Portfolio Managers voted against the proposed
remuneration policy and proposed new LTIP (long-term
incentive plan) for Ashtead, the North America focused
equipment rental business. We judged the quantum of
the proposals to be incommensurate with the current
performance and outlook for the business. We exited the
position during the year.
In addition, the Manager publishes an annual Responsible
Capitalism report, providing cumulative voting statistics, full
disclosure on voting policy and extracts of engagement for
the year. The Manager publishes a quarterly voting record on
its website www.liontrust.co.uk.
THE EDINBURGH INVESTMENT TRUST PLC / STRATEGIC REPORT / 29
MODERN SLAVERY DISCLOSURE
The Company aims to adopt the highest standards of conduct
and is committed to integrating responsible business practices
throughout its operations. The prevention of modern slavery
is an important part of corporate good governance.
The Company is an investment vehicle and does not provide
goods or services in the normal course of its business or have
customers or employees. Accordingly, the Directors consider
that the Company is not required to make any slavery or
human trafficking statement under the Modern Slavery
Act2015.
ANTI-BRIBERY AND CORRUPTION
It is the Company’s policy to conduct its business in an honest
and ethical manner. The Company takes a zero-tolerance
approach to bribery and corruption and is committed to
acting professionally, fairly and with integrity in all its business
dealings and relationships wherever it operates. The Company’s
policy and the procedures that implement it are designed to
support that commitment and the appropriate training has
been undertaken by the Board and key service providers. The
Company also has policies, procedures and controls in place
to safeguard the assets of the Company and to prevent and
detect fraud and other irregularities.
PREVENTION OF THE FACILITATION OF TAX
EVASION
The Board has adopted a zero-tolerance approach to the
criminal facilitation of tax evasion.
GREENHOUSE GAS EMISSIONS AND STREAMLINED
ENERGY AND CARBON REPORTING (‘SECR’)
The Company has no employees, physical assets, property or
operations of its own, does not provide goods or services and
does not have its own customers. It follows that the Company
has little or no direct environmental impact. In consequence,
the Company has limited greenhouse gas emissions to report
from its operations aside from travel to board meetings, nor
does it have responsibility for any other sources of emissions
under the Companies Act 2006 (Strategic Report and
Directors’ Reports) Regulations 2013. As the Company has no
material operations and therefore has low energy usage, it
has not included an energy and carbon report.
CONCLUSION
The Directors believe that they have fulfilled their duties under
s172 of the Companies Act 2006 in their deliberations on all
matters. The Board takes into account the interests of all the
Company’s key stakeholders, as outlined above, in its decision-
making which reflects the Board’s belief that the long-term
sustainable success of the Company is linked directly to its
key stakeholders. The work of the Board and its Committees is
described in the Governance Report on page 33.
This Strategic Report was approved by the Board on
20 May 2025.
Signed by order of the Board of Directors
NSM FUNDS (UK) LIMITED
COMPANY SECRETARY
20 MAY 2025
30 / STRATEGIC REPORT / THE EDINBURGH INVESTMENT TRUST PLC
GOVERNANCE
THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 31
ELISABETH STHEEMAN
Chair of the Board
Date of appointment:
23 May 2019, became Chair on
21 July 2022
Committees:
M
Management Engagement
N
Nomination Chair
A
Audit
Elisabeth is currently an independent
member of the board of US REIT W.P.
Carey Inc, M&G plc and Deloitte LLP
and an External Member of the Audit
and Risk Committee of The Asian
Infrastructure Investment Bank. She is
also Vice President of the Council of the
German British Chamber of Industry
and Commerce. Previously, she was
an External member of the Financial
Policy Committee and Financial Market
Infrastructure Board and a senior
advisor to the Bank of England’s
Prudential Regulation Authority. She
was also a member of the Supervisory
Board of Aareal Bank AG, Alstria AG
and a member of Council of the London
School of Economics.
AIDAN LISSER
Senior Independent Director
Date of appointment:
27 May 2022, became SID on
19 July 2023
Committees:
M
Management Engagement
N
Nomination
A
Audit
Aidan is the Chair of JPMorgan
Emerging Markets Investment Trust
plc and a non-executive director
of Henderson International Income
Trust plc. He was formerly chief
marketing officer and subsequently
head of strategy for Investec Wealth
& Investment and a board member
of Chapter Zero UK, an organisation
to assist non-executive directors with
the impact of climate change. Before
this he held senior marketing roles
at Allianz Global Investors, Standard
Chartered Bank and Unilever.
THE DIRECTORS
All Directors are non-executive and considered independent. The Directors
of the Company who were in office during the year and up to the date of
signing the financial statements were:
ANNABEL TAGOE-BANNERMAN
Non-Executive Director
Date of appointment:
7 February 2023
Committees:
M
Management Engagement
N
Nomination
A
Audit
Annabel has considerable experience in
senior roles within quoted UK operating
companies within the retail, leisure,
food and beverage sectors. Annabel is
currently Group General Counsel and
Company Secretary of Bakkavor Group
plc, the FTSE 250 listed producer
of freshly prepared food, where she
also chairs the Diversity & Inclusion
Forum. She was previously at Britvic
plc and formerly General Counsel and
a member of the Executive Committee
of Ladbrokes plc. Prior to this Annabel
trained and practised as a solicitor
at SJ Berwin LLP (now King & Wood
Mallesons).
32 / GOVERNANCE / THE EDINBURGH INVESTMENT TRUST PLC
PATRICK EDWARDSON
Non-Executive Director
Date of appointment:
11 February 2021
Committees:
M
Management Engagement Chair
N
Nomination
A
Audit
Patrick joined Baillie Gifford in 1993
and became a partner in 2005. In a
wide-ranging investment career, he
managed bond, equity and multi-asset
portfolios, was manager of the Scottish
American Investment Company plc
between 2004 and 2014 and led
Baillie Gifford’s multi-asset investment
team until his retirement in 2020.
He is currently managing director of
Atheian Ltd, a family investment office,
and of CMH Hope Limited, a property
investment company, a non-executive
director of another investment trust
(North American Income Trust plc) and
also a non-executive director at Tillit,
the retail investment platform.
STEVE BALDWIN
Non-Executive Director
Date of appointment:
10 September 2018
Committees:
M
Management Engagement
N
Nomination
A
Audit Chair
Steve is a Chartered Accountant. Heis
currently Chairman of TruFin plc,
a non-executive director at Plus500
Ltd and a Trustee at Howard de Walden
Estates Limited. He was formerly a
non-executive director of Elegant
Hotels Group plc and Panmure Gordon
& Co plc. He was the Head of European
Equity Capital Markets and Corporate
Broking at Macquarie Capital until
February 2015. Prior to this Steve was
a Director at JPMorgan Cazenove for
ten years and was a Vice President
of Corporate Finance at UBS from
1995-1998.
THE DIRECTORS / CONTINUED
THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 33
THE COMPANY’S CORPORATE GOVERNANCE
FRAMEWORK
THE BOARD AND COMMITTEES
The Board is ultimately responsible to shareholders for the direction, governance, management, performance and long-term
sustainable success of the Company. The responsibilities of the Board include setting the Company’s strategic aims, providing
the leadership to put them into effect, supervising the Manager and reporting to shareholders on their stewardship. In doing
so, the Directors comply with their duties under Section 172 of the Companies Act 2006.
The Board has established certain principal committees to assist it in fulfilling its oversight responsibilities, providing a
dedicated focus on particular areas, as set out below. Terms of reference of the Board Committees are available on the
Company’s website at www.edinburgh-investment-trust.co.uk
The Company’s corporate governance framework is designed to support a closed-end externally managed investment
company, where all of the Company’s day-to-day management and administrative functions are outsourced to third parties.
As a result, the Company has no executive Directors, employees or internal operations.
The Board
Chair Elisabeth Stheeman, Senior Independent Director Aidan Lisser, three additional non-executive directors (NEDs).
Chair
Key responsibilities:
– to provide leadership of the Board, ensuring its effectiveness in all aspects of its role;
– to set Board agenda and ensure that adequate time is available for discussion;
– to promote a culture of openness ensuring that each Board member’s views are considered;
– to ensure that Directors receive accurate, timely and clear information;
– to ensure the Board as a whole has a clear understanding of the views of shareholders;
– to ensure that the Board complies with its obligations under Section 172 Companies Act 2006, by taking into account
the needs of the Company’s wider stakeholders;
– to ensure oversight of the Manager and other external service providers; and
– to encourage constructive challenge and scrutiny of the performance of all outsourced activities.
Senior Independent Director (SID)
Key responsibilities:
– to provide a sounding board for the Chair;
– to serve as an intermediary for the other directors and shareholders; and
– to lead annual appraisal of the Chair’s performance and recruitment process for the position of the Chair.
Audit Committee
Management Engagement
Committee Nomination Committee
Remuneration Committee
Function
All NEDs All NEDs All NEDs The Board as a whole
performs this function
Chair: Steve Baldwin Chair: Patrick Edwardson Chair: Elisabeth Stheeman
Key responsibilities:
– to oversee the control
environment and financial
reporting;
– to make a recommendation
for the appointment of the
auditor; and
– to review the performance
of other service providers,
including the auditor.
Key responsibilities:
– to review regularly the
management contract and
the performance of the
Manager.
Key responsibilities:
– to review regularly
the Board’s structure,
composition and
performance;
– to make recommendations
for any changes or new
appointments; and
- to set the culture and
values of the Company.
Key responsibilities:
– to set the remuneration
policy of the Company.
34 / GOVERNANCE / THE EDINBURGH INVESTMENT TRUST PLC
CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 31 MARCH 2025
This Corporate Governance statement forms part of the
Directors’ Report.
The Board is accountable to shareholders for the governance
of the Company’s affairs and is committed to maintaining
the highest standard of corporate governance for the long-
term sustainable success of the Company, generating value
for shareholders, other stakeholders and contributing to the
wider society through investing in its portfolio companies.
In this statement, the Company reports on its compliance
with the AIC Corporate Governance Code published in
February 2019 (the “AIC Code”), sets out how the Board
and its committees have operated during the past year and
describes how the Board exercises effective stewardship over
the Company’s activities in the interests of shareholders and
other stakeholders of the Company. The AIC Code addresses
all the principles set out in the UK Corporate Governance Code
(the “UK Code”), as well as setting out additional provisions
on issues that are of specific relevance to the Company as
an investment trust. The Board’s focus over the next year will
be on the implementation of the newly introduced 2024 AIC
Corporate Governance Code (the “2024 Code”) as we look
to enhance our readiness, and longer-term for the effective
date of Provision 29 of the 2024 Code.
The Board is confident that it is has properly undertaken its
duties to shareholders and other stakeholders, and taken a
long-term approach to the management of the Company.
STATEMENT OF COMPLIANCE WITH THE AIC CODE
The Board has considered the principles and
recommendations of the AIC Code and considers that
reporting against the principles and recommendations of
the AIC Code (which incorporates the UK Code), will provide
better information to shareholders. The Financial Reporting
Council (the “FRC”) has endorsed the AIC Code. The terms of
the FRC’s endorsement mean that AIC members who report
against the AIC Code meet fully their obligations under the
UK Code and the related disclosure requirements contained
in the UK Listing Rules of the FCA. A copy of the AIC Code
can be obtained via the AIC’s website at www.theaic.co.uk.
A copy of the UK Code can be obtained at www.frc.org.uk.
The Board recognises the importance of a strong corporate
governance culture and has established a framework for
corporate governance which it considers to be appropriate
to the business of the Company. The Board considers that
it has managed its affairs in compliance with the AIC Code
and the relevant provisions of the UK Code throughout the
year ended 31 March 2025, except where it has concluded
that adherence or compliance with any particular principle
or recommendation of either of the Codes would not have
been appropriate to the Company’s circumstances. Similar to
the UK Code, the AIC Code specifies a “comply or explain”
basis and the Board’s report under this section explains any
deviation from its recommendations.
The UK Code includes provisions relating to:
– the role of the chief executive;
– executive directors’ remuneration; and
– the internal audit function.
For reasons set out in the AIC Code, the Board considers
these provisions not relevant to the position of the Company,
being an externally managed investment company with no
executive Directors, employees, or internal operations. It
further considers an internal audit function unnecessary as
the relevant issues are addressed through the Manager’s
own control environment which itself is subject to routine
external independent review. The Company has therefore not
reported further in respect of these provisions.
Provision 37 states that the Board should establish a
remuneration committee of independent non-executive
directors with a minimum membership of three, or in the
case of smaller companies, two. The Board has resolved
that a remuneration committee is not appropriate for a
company of this size and nature. Remuneration is therefore
regarded as part of the Board’s responsibilities to be
addressed regularly. The Board as a whole, comprising of
independent non-executive directors, performs the function
of the remuneration committee with the key responsibility
to set the remuneration policy of the Company. Please see
Directors’ Report on page 33 for the Board’s responsibilities.
Information on how the Company has applied the principles
of the AIC Code is provided in the Governance Section,
including the Directors’ Report as follows:
– the composition and operation of the Board and its
committees are summarised on page 33 and page 35 in
respect of the Audit Committee;
– the Company’s approach to internal control and risk
management is summarised on page 22;
– the contractual arrangements with, and assessment of,
the Manager are summarised on page 43;
– the Company’s capital structure and voting rights are
summarised on page 43;
– the substantial shareholders in the Company are listed on
page 44;
– the rules concerning the appointment and replacement
of directors are contained in the Company’s Articles of
Association and are discussed on page 40. There are
no agreements between the Company and its Directors
concerning compensation for loss of office;
– the annual powers to issue or buy back the Company’s
shares are explained in the notice of AGM on page 78; and
– any amendments to the Company’s Articles of Association
require a resolution to be passed by shareholders.
By order of the Board
NSM FUNDS (UK) LIMITED
COMPANY SECRETARY
20 MAY 2025
THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 35
AUDIT COMMITTEE REPORT
FOR THE YEAR ENDED 31 MARCH 2025
COMMITTEE COMPOSITION AND ROLE
The Audit Committee comprises all the Directors and the
Committee has written terms of reference which clearly
define its objective, authority, composition, roles, duties and
responsibilities, including reporting. The terms of reference
were reviewed during the year, to ensure good practice
and compliance with the AIC Code. They can be inspected
at the registered office of the Company or viewed on the
Company’s website.
AUDIT COMMITTEE RESPONSIBILITIES
The responsibilities of the Audit Committee include:
– consideration of the integrity of the annual and half-
yearly financial reports prepared by the Manager, the
appropriateness of the accounting policies applied and
any financial judgements and key assumptions, together
with ensuring compliance with relevant statutory and
listing requirements;
– at the Board’s request, advising it on whether the
Committee believes the annual financial report taken as a
whole is fair, balanced and understandable and provides
the necessary information for shareholders to assess the
Company’s position and performance, business model
and strategy;
– evaluation of the effectiveness of the internal control
systems and risk management systems, including reports
received on the operational controls of the Company’s
service providers and the Manager’s whistleblowing
arrangements;
– consideration of the scope of work undertaken by the
Manager’s compliance department, monitoring and
reviewing the effectiveness of the Manager’s and the
Company’s procedures for detecting fraud;
– management of the relationship with the external
auditors, including evaluation of their reports and the
scope, effectiveness, independence and objectivity of
their audit, as well as making recommendations to the
Board in respect of their appointment, re-appointment
and removal and for the terms of their audit engagement;
– developing and implementing policy on the engagement
of the external auditor to supply non-audit services; and
– considering annually whether there is a need for the
Company to have its own internal audit function.
AUDIT COMMITTEE ACTIVITIES
The Committee meets formally at least three times a year to
review the internal financial and non-financial controls and
the contents of the half-yearly and annual financial reports,
including accounting policies and financial judgements. In
addition, the Committee reviews the auditor’s independence,
objectivity and effectiveness, the quality of the services
provided to the Company and, together with the Manager,
reviews the Company’s compliance with financial reporting
and regulatory requirements as well as risk management
processes. Representatives of the Manager’s Compliance
Department attend at least two meetings each year.
Representatives of the auditor attend the Committee
meetings at which the draft half-yearly and annual financial
reports are reviewed and are given the opportunity to speak
to Committee members in the absence of representatives of
the Manager.
The external audit programme and timetable are drawn up
and agreed with the auditors in advance of the end of the
financial year and matters for audit focus are discussed and
agreed. The auditors ensure that these matters are given
particular attention during the audit process and reports
on them, and other matters as required, in its report to the
Committee. In addition, the Committee reviews any material
issues raised by the auditors. There have been no such
issues raised during the year. The auditor’s report, together
with reports from the Manager, the Manager’s Compliance
Department and the depositary, form the basis of the
Committee’s consideration and discussions with the various
parties and any recommendations to the Board, including
the Committee’s recommendation to sign the 2025 financial
statements.
36 / GOVERNANCE / THE EDINBURGH INVESTMENT TRUST PLC
ACCOUNTING MATTERS AND SIGNIFICANT AREAS
For the year-end, the following accounting matters were identified for specific consideration by the Committee:
Significant areas How they were addressed
Accuracy of the portfolio valuation
and controls related to the valuation
process.
Actively traded listed investments are valued using stock exchange prices provided by
third-party pricing vendors. Investments that are unlisted or not actively traded are valued
using a variety of techniques to determine their fair value. This is set out in accounting
policies note 1C(v). Any such valuations are carefully considered by the Manager’s pricing
committee and the Committee.
Proof of the existence of portfolio
holdings.
The Manager and the depositary confirmed that the holdings shown in the accounting
records agreed with the custodian records.
Recognition of investment income
and the treatment of special
dividends
Investment income is recognised in accordance with accounting policies note 1F. The
Manager provides detailed revenue estimates for the Board’s review, and income is
assessed to ensure it is complete and accounted for correctly. Careful consideration
is given to special dividends. These are allocated to revenue or capital in accordance
with the facts and circumstances of the payment by the underlying company and the
allocation of material special dividends is also reviewed by the auditors.
The allocation of management fees
and finance costs between revenue
and capital
The allocation is reviewed by the Committee annually taking into account the
long-term split of returns from the portfolio both historic and projected, yield, the
objectives of the Company, and the latest market practice of peers. The Committee
last reviewed the allocation at its meeting in May 2025.
These matters were discussed with the Manager and the
auditors in pre-year-end audit planning and were satisfactorily
addressed through consideration of reports provided by,
and discussed with, the Manager and the auditors at the
conclusion of the audit process. As detailed below, the
Company operates within a robust control environment and
the Committee oversees the effectiveness of the controls of
the Manager, custodian and administrator.
Consequently, and following a thorough review process
of the 2025 annual financial report, the Audit Committee
advised the Board that the report taken as a whole is fair,
balanced and understandable and provides the information
necessary for shareholders to assess the Company’s position
and performance, business model and strategy.
REVIEW OF THE EXTERNAL AUDITORS, INCLUDING
NON-AUDIT SERVICES
The Committee evaluated the performance and effectiveness
of the external auditors and their audit process. This included a
review of the audit planning, execution and reporting and the
quality of the audit work, results and audit team. This review
sought the view of the Manager in their dealings with the
auditors. The Committee also considered the independence
of PricewaterhouseCoopers LLP (PwC) and the objectivity of
the audit process. No significant modifications were required
to the external audit approach. Combining the output of all the
above, and the Audit Committee Chair’s and the Committee’s
direct interaction with PwC, the Committee concluded that
it continued to be satisfied with the performance of PwC
and that the auditors continued to display the necessary
attributes of objectivity and independence.
Prior to any engagement for non-audit services, the Audit
Committee considers whether the skills and experience of the
auditors make them a suitable supplier of such services and
ensures there is no threat to objectivity and independence in
the conduct of the audit as a result. Excluding VAT and any
expenses, the annual audit fee was £53,235 (2024: £50,700)
and the non-audit fee was £nil (2024: £nil), see Note 4 on
page 66. Non-audit services up to £5,000 do not require
approval in advance of the Audit Committee; amounts in
excess of this require the approval of the Audit Committee.
AUDITORS
PwC were appointed as the Company’s Auditors at the AGM
on 25 July 2019 and were re-appointed on 17 July 2024.
After due consideration, the Committee recommends the
re-appointment of PwC and their re-appointment will be put
forward to the Company’s shareholders at the 2025 AGM.
INTERNAL CONTROLS AND RISK MANAGEMENT
The Committee undertakes a robust assessment of the risks
to which the Company is exposed by reference to a risk
control summary, which maps the risks, mitigating controls
in place and relevant information reported to the Directors,
throughout the year. The resultant ratings of the mitigated
risks allow the Directors to concentrate on those risks that
are most significant and also form the basis of the list of
principal risks and uncertainties set out in the Strategic
Report on pages 20 to 23.
The Committee, on behalf of the Board, is responsible for
ensuring that the Company maintains a sound system of
internal control to mitigate risk and safeguard the Company’s
AUDIT COMMITTEE REPORT / CONTINUED
THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 37
assets. The effectiveness of the Company’s system of internal
controls, including financial, operational and compliance
and risk management systems, is reviewed at least annually.
Appropriate action is taken to remedy any significant failings
or weaknesses identified from these reviews. No significant
items were identified in the year. As part of this, the Committee
receives and considers, together with representatives of the
Manager, reports in relation to the operational controls of
the Manager, accounting administrator, custodian, company
secretary and registrar. These reviews identified no issues of
significance during the year.
INTERNAL AUDIT
The Company, being an externally managed investment
company with no employees, does not require its own
specific internal audit function. Instead, it relies on the
control environment of the Manager. An external firm,
Grant Thornton, is engaged by the Manager to provide an
independent review of its control environment. The Manager
has been transparent with the Board in sharing the results of
the review.
INDEPENDENCE
The Chair of the Company was a member of the Audit
Committee during the year in review. The Board and the
Audit Committee believe that this was appropriate as the
Chair has recent and relevant financial experience and
remains independent.
COMMITTEE EVALUATION
The Committee’s activities fell within the scope of the review
of Board effectiveness performed in the year. Details of this
process can be found under ‘Board, Committee and Directors’
Performance Appraisal’ on page 41.
Signed on behalf of the Board of Directors
STEVE BALDWIN
CHAIR OF THE AUDIT COMMITTEE
20 MAY 2025
38 / GOVERNANCE / THE EDINBURGH INVESTMENT TRUST PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 MARCH 2025
BUSINESS AND STATUS
The Company was incorporated and registered in Scotland
on 1 March 1889 as a public limited company, registered
number SC1836. It is an investment company as defined by
section 833 of the Companies Act 2006 and operates as an
investment trust within the meaning of the Corporation Tax
Act 2010 and the Investment Trust (Approved Company)
(Tax) Regulations 2011. HM Revenue & Customs have
approved the Company’s status as an investment trust and,
in the opinion of the Directors, the Company has conducted
its affairs so as to enable it to maintain such approval.
CORPORATE GOVERNANCE
The Corporate Governance Statement set out on page 34 is
included in this Directors’ Report by reference.
THE BOARD
At the year end the Board comprised five independent
non-executive Directors. The Company’s Corporate
Governance Framework is set out on page 33. This shows
the key objectives of the Board and also the membership
and key objectives of the Board’s committees which deal
with specific aspects of the Company’s affairs: the Audit,
Management Engagement and Nomination Committees.
The Board regards all the Directors to be wholly independent
of the Company’s Manager.
Chair
The Chair of the Company is Elisabeth Stheeman. She has
been a member of the Board since 2019 and was appointed
Chair on 21 July 2022.
Senior Independent Director
The Company’s Senior Independent Director is Aidan Lisser
who was appointed to the role on 19 July 2023.
Board Balance and Diversity
The Board’s policy for the appointment of non-executive
directors is based on its belief in the benefits of having a
diverse range of experience, skills, length of service and
backgrounds, including but not limited to gender diversity.
The Board has considered the recommendations of the FTSE
Women Leaders review as well as the Parker review but does
not consider it appropriate to establish targets or quotas in
these regards. The policy is always to appoint the best person
for the job and there will be no discrimination on the grounds
of gender, race, ethnicity, religion, sexual orientation, age or
physical ability. The overriding aim of the policy is to ensure
that the Board is composed of a combination of people with
a range of business, financial or asset management skills
and experience relevant to the direction and control of the
Company for ensuring effective oversight of the Company
and constructive support and challenge to the Manager.
To this end, achieving a diversity of perspectives and
backgrounds on the Board will be a key consideration in
any future Director search process. The Board encourages
any recruitment agencies it engages to find a diverse
range of candidates that meet the criteria agreed for each
appointment and, from the shortlist, aims to ensure that a
diverse range of candidates is brought forward for interview.
The Board gives due regard to the diversity targets in the
FCA UK Listing Rules, and does not discriminate unfairly
on the grounds of gender, ethnicity, age, sexual orientation,
disability or socio-economic background when considering
the appointment of new directors. Candidates’ educational
and professional backgrounds, their cognitive and personal
strengths, are considered against the specification prepared
for each appointment.
The Board comprises five non-executive directors of which,
at present, two are female. Summary biographical details of
the Directors are set out on pages 31 and 32.
IMPLEMENTATION OF THE BOARD’S DIVERSITY
POLICY
The Board reports against the targets set out in the FCA’s UK
Listing Rules. These require that at least 40% of individuals
on the Board are women, at least one individual on the Board
is from a minority ethnic background, and at least one of the
senior Board positions of Chair, SID, CEO and CFO is held
by a woman. At 31 March 2025, and at the date this Annual
Report was signed, the Board comprised five non-executive
Directors. All three of the targets are met because there are
two women on the Board (40%), one Director is ethnically
diverse and at least one of the senior Board positions is held
by a woman. The following information has been provided
by each Director. As the Company has no employees, no
information is included for executive management. The
Board has resolved that the Company’s year-end date be the
most appropriate date for disclosure purposes. There have
been no changes since 31 March 2025.
Number
of board
members
Percentage
of the
board
Number
of senior
positions
on the
board (SID
and Chair)*
Men 3 60% 1
Women 2 40% 1
Not specified/
prefer not to say
– – –
THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 39
Number
of board
members
Percentage
of the
board
Number
of senior
positions
on the
board (SID
and Chair)*
White British
or other White
(including minority
white groups)
4 80% 2
Mixed Multiple
Ethnic Groups
– – –
Asian/Asian British – – –
Black/African/
Caribbean/Black
British
1 20% –
Other ethnic group,
including Arab
– – –
Not specified/
prefer not to say
– – –
* The Company considers the positions of the Chair and Senior
Independent Director (SID) to be senior positions of the Board.
The Listing Rules require an explanation of the Company’s
approach to collecting the data used for the purposes of
making the disclosures. The Company Secretary circulated
the above tables to each director to complete individually
and collated the responses for inclusion in the annual
financial report.
The Company has met the targets on board diversity as
required by the Listing Rules as at 31 March 2025.
BOARD RESPONSIBILITIES
The Board has overall responsibility for the Company’s affairs.
The Directors are equally responsible under the Companies
Act 2006 for promoting the success of the Company and
for the proper conduct of the Company’s affairs taking into
consideration:
– the likely consequences of any decision in the long-term;
– the need to foster business relationships with its Manager,
other service providers and advisors;
– the impact of the Company’s operations on the
community and the environment;
– the desirability of the Company maintaining a reputation
for high standards of business conduct; and
– the need to act fairly between shareholders of the
Company.
This is reported in the Section 172 Statement in the Strategic
Report on page 27. The Board is committed to the prevention
of corruption in the conduct of the Company’s affairs and,
taking account of the nature of the Company’s business and
operations, has put in place procedures for and on behalf of
the Company that the Board considers adequate to prevent
persons associated with it from engaging in bribery. It has
a zero tolerance approach towards the criminal facilitation
of tax evasion. In addition, the Directors are responsible for
ensuring that their policies and operations are in the interest
of all of the Company’s shareholders and that the interests
of creditors and suppliers to the Company are properly
considered.
The Board has established a schedule of matters reserved
for its consideration, which clearly define the Directors’
responsibilities. The main responsibilities include:
– setting long-term strategy;
– setting the Company’s objectives, policies and standards;
– ensuring that the Company’s obligations to shareholders
and others are understood and met;
– selecting an appropriate Manager;
– approving accounting policies and dividend policy;
– determining dividends payable;
– managing the capital structure;
– reviewing investment performance;
– assessing risk;
– approving borrowing;
– and reviewing, and, if agreed, approving recommendations
made by the Board’s committees.
The schedule of matters reserved for the Board will be
available for inspection at the AGM and is otherwise
available at the registered office of the Company and on the
Company’s website.
The Board ensures that shareholders are provided with
sufficient information in order to understand the risk-reward
balance to which they are exposed by holding their shares,
through the portfolio details given in the half-yearly and
annual financial reports, factsheets and daily NAV disclosures.
The Board meets at least five times each year. Additional
meetings are arranged as necessary. Regular contact
is maintained by the Manager with the Board between
formal meetings. The Directors also meet separately for
private discussions, when required. Board meetings follow
a formal agenda, which includes a review of the investment
portfolio with a report from the Portfolio Managers on
the current investment position and outlook, strategic
direction, performance against stock market indices and
the Company’s peer group, asset allocation, gearing policy,
cash management, revenue forecasts for the financial year,
investment policy guidelines, marketing and shareholder
relations, corporate governance, regulatory changes and
industry and other issues.
To enable the Directors of the Board to fulfil their roles, the
Manager and Company Secretary ensure that all Directors
have timely access to all relevant management, financial
40 / GOVERNANCE / THE EDINBURGH INVESTMENT TRUST PLC
and regulatory information. All directors have access to the
advice of the Company Secretary, who is responsible for
advising the Board on all governance matters.
There is an agreed procedure for the Directors in undertaking
their duties to take legal advice at the Company’s expense up to
an initial cost of £10,000, having first consulted with the Chair.
Finally, the Board as a whole undertakes the responsibilities
which would otherwise be assumed by a remuneration
committee, determining the Company’s remuneration policy.
The Board takes into account all factors which are deemed
necessary in order to ensure that members of the Board are
provided with appropriate compensation and are, in a fair and
responsible manner, rewarded for their individual contributions
to the success of the Company. The remuneration of Directors
is reviewed periodically and reported on in more detail in the
Directors’ Remuneration Report.
AUDIT INFORMATION
The Directors confirm that, so far as they are aware, there
is no relevant audit information of which the Company’s
auditor is unaware and each Director has taken steps
that he or she ought to have taken as a director to make
himself/herself aware of any relevant audit information
and to establish that the Company’s auditors are aware of
that information. This confirmation is given and should be
interpreted in accordance with the provisions of section 418
of the Companies Act 2006.
THE COMMITTEES
The Board has three committees: the Audit Committee, the
Management Engagement Committee, and the Nomination
Committee. Each committee has written terms of reference,
which clearly define each committee’s responsibilities
and duties. The terms of reference of each committee are
available for inspection at the AGM, at the registered office of
the Company and also available on the Company’s website.
The Audit Committee
The composition and activities of the Audit Committee are
summarised in the Audit Committee Report on page 35,
which is included in this Directors’ Report by reference.
The Management Engagement Committee
The Management Engagement Committee comprises
all directors and is chaired by Patrick Edwardson. The
Committee meets at least annually to review the investment
management agreement and to review the services provided
by the Manager and other key service providers. Additional
meetings are arranged as necessary.
The Committee carries out a thorough review of the
performance of the Manager including key metrics such as
overall investment performance, investment process, risk
management, individual stock performance, team resources,
notice period, the Manager’s fees level, marketing strategy
and relative fees.
During the year the Committee met twice to review and
consider the performance and continued appointment of the
Manager and other key service providers. The Committee
scrutinised both the Manager’s fee rate and all admin fees
in comparison with similar income-generating UK equity
products, in both the closed and open-ended sectors. A
detailed analysis of the Manager’s fee was performed during
the year and following successful discussions with Liontrust
the Board agreed a new lower fee scale.
This year sees the introduction of the Financial Conduct
Authority’s Consumer Duty regulation, which seeks to improve
the quality of products and services to retail investors. Whilst
the Company is not directly within the scope of the regulation,
the Manager is through its roles as AIFM and distributor. The
Committee has routinely liaised with the Manager during the
year on its preparedness and developments with regards to
consumer outcomes that cover products and services, price
and value, consumer understanding, and consumer support,
and will continue to do so into the future.
The Nomination Committee
All Directors are members of the Nomination Committee
which is chaired by Elisabeth Stheeman. The Committee
meets at least annually to review the composition of the
Board and its committees and evaluate whether they have the
appropriate balance of skills, experience, independence, and
knowledge of the Company and make recommendations to
the Board for the re-election of directors at AGMs. Additional
meetings are arranged as necessary.
The Committee is also responsible for succession planning
and identifying and nominating to the Board suitable
candidates, taking into consideration the balance of skills,
knowledge, experience and independence of the Board and
having regard for the benefits of diversity and the ability of
any new director to devote sufficient time to the Company to
carry out his or her duties effectively. See pages 38 and 39
for Board’s statement on ethnic and gender diversity.
No Director has a contract of employment with the Company.
Directors’ terms and conditions of appointment are set out
in letters of appointment which are available for inspection
at the registered office of the Company and will also be
available at the AGM. A Director can be removed from office
without notice or compensation upon being served with a
written notice signed by all the other Directors.
APPOINTMENT, RE-ELECTION AND TENURE
New Directors are appointed by the Board following
recommendation by the Nomination Committee. The Articles
of Association require that a Director shall be subject to
election at the first AGM after their appointment and re-
election at least every three years thereafter. However, in
accordance with the UK Code of Corporate Governance, the
Board has resolved that all Directors shall stand for annual
re-election at the AGM.
On being appointed to the Board, Directors are fully briefed
as to their responsibilities and are continually updated
throughout their term in office on industry and regulatory
matters. The Company Secretary and the Board have
formulated a programme of induction training for newly
appointed Directors. They have also put arrangements in
place to address ongoing training requirements of Directors
DIRECTORS’ REPORT / CONTINUED
THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 41
which include briefings from the Company Secretary and
the Company’s auditors which ensure that Directors are well
briefed on new legislation and the changing risk environment.
The Board has noted the implication of the provisions in the
UK Corporate Governance Code that non-executive directors
who have served for more than nine years should be presumed
not to be independent. The AIC does not believe that this
presumption is appropriate for investment companies and
therefore does not recommend that long-serving directors
be prevented from forming part of the independent majority
of an investment trust board. It is the Board’s policy that
all Directors, including the Chair, shall normally have tenure
limited to nine years from their first appointment to the
Board, except that the Board may determine otherwise if it is
considered that the continued participation on the Board of
an individual Director, or the Chair, is in the best interests of
the Company and its shareholders. This is also subject to the
Director’s re-election annually by shareholders. The Board
considers that this policy encourages regular refreshment
and is conducive to fostering diversity.
BOARD, COMMITTEE AND DIRECTORS’
PERFORMANCE APPRAISAL
The Directors recognise the importance of the AIC Code’s
recommendation in respect of evaluating the performance
of the Board as a whole, the Committees of the Board and
individual Directors.
For the year ended 31 March 2025 an internal review of
the Board, its Committees and individual Directors was
conducted. The process involved the use of online evaluation
forms to assess the balance of skills, experience, knowledge,
independence and effectiveness of the Directors. In carrying
out these evaluations, each Director is assessed on their
relevant experience, their strengths and weaknesses in relation
to the overall requirements of the Board and their commitment
to the Company in terms of time by regular attendance and
participation at Board meetings. The process is constructed
to assess the contribution of individual Directors to the overall
operation of the Board and its Committees.
As part of the evaluation, key enablers of Board and
Committee performance were reviewed, with a particular
focus on the Company’s strategic priorities, succession
planning, and engagement with the Manager. The review
was positive, and no critical issues were identified. The
recommendations from the report were agreed by the Board.
Key priorities identified for the year ahead include executing
the agreed marketing strategy, discount management, ESG
matters and broadening relationships with the Portfolio
Manager’s wider team.
In addition to a self-assessment, the Chair conducted in
person or telephone meetings with each Director individually
to discuss their performance and development needs.
The Chair evaluated the skills and performance of each
Director and concluded to take appropriate action when
development needs arise and that each Director is making a
positive contribution. The review of the Chair’s performance
was conducted by the Board and led by the SID, who relayed
very positive feedback to the Chair privately and shared a
summary with the Board.
The Board, through the work of the Nomination Committee,
has determined that each Director standing for re-election
continues to offer relevant experience, effectively contributes
to the operation of the Board and has demonstrated
independent views on a range of subjects. The Committee is
satisfied that the structure, size, mix of skills and operation
of the Board continue to be effective and relevant for the
Company.
In 2023 the Board appointed Lintstock Limited, an external
consultant, to undertake a review of the Board, its Committees
and individual Directors, with a further external evaluation to
be conducted for the year ending 31 March 2026.
ATTENDANCE AT BOARD AND COMMITTEE
MEETINGS
The table below sets out the number of scheduled Directors’
meetings held during the year and the number of meetings
attended by each Director. In addition, Directors attended a
number of ad hoc meetings and calls during the year.
The number of scheduled meetings held during the year to
31 March 2025 and the attendance of individual Directors are
shown in the table below:
Board
Audit
Committee
Management
Engagement
Committee
Nomination
Committee
Number of meetings
(total possible/individual attendance)
5 3 2 2
Elisabeth Stheeman 5 3 2 2
Steve Baldwin 5 3 2 2
Patrick Edwardson 5 3 2 2
Aidan Lisser 5 3 2 2
Annabel Tagoe-Bannerman 5 3 2 2
42 / GOVERNANCE / THE EDINBURGH INVESTMENT TRUST PLC
During the year in review, the individual Directors attended
100% of possible meetings of the Board and Committees.
DIRECTORS
Directors’ Interests in Shares
The Directors’ interests in the ordinary share capital of the
Company are disclosed in the Directors’ Remuneration
Report on page 50.
Disclosable Interests
No Director was a party to, or had any interests in, any
contract or arrangement with the Company at any time
during the year or at the year end.
Directors’ Indemnities and Insurance
The Company maintains Directors’ and Officers’ liability
insurance which provides appropriate cover for any legal action
brought against its Directors. In addition, individual deeds of
indemnity have been executed on behalf of the Company
for each of the Directors under the Company’s Articles of
Association. Subject to the provisions of UK legislation, these
deeds provide that the Directors may be indemnified out of
the assets of the Company in respect of liabilities they may
sustain or incur in connection with their appointment.
CONFLICTS OF INTEREST
A Director must avoid a situation where he or she has, or can
have, a direct or indirect interest that conflicts, or has the
potential to conflict with the Company’s interests. The Articles
of Association of the Company give the Directors authority to
authorise potential conflicts of interest and there are safeguards
which apply when Directors decide whether to do so. First, only
Directors who have no interest in the matter being considered
are able to take the relevant decision, and second, in taking the
decision the Directors must act in a way they consider, in good
faith, will be most likely to promote the Company’s success.
The Directors can impose limits or conditions when giving
authorisation if they think this is appropriate.
The Directors have declared any potential conflicts of
interest to the Company. The register of potential conflicts
of interests is kept at the registered office of the Company.
It is reviewed regularly by the Board and Directors know
to advise the Company Secretary as soon as they become
aware of any potential conflicts of interest.
STREAMLINED ENERGY & CARBON REPORTING
‘SECR’
The Company’s disclosure with respect to SECR reporting is
given in the Strategic Report on page 42.
PROPOSED DIVIDENDS
The Directors propose payment of a final dividend to
shareholders, the details of this are given on page 16 of the
Strategic Report.
INTERNAL CONTROLS AND RISK MANAGEMENT
The AIC Code requires the Board to oversee the effectiveness
of the Company’s system of internal controls. The Board
assumes its ultimate responsibility for the Company’s system
of internal controls and for monitoring its effectiveness.
The Company’s system of internal controls is designed to
manage rather than eliminate risk of failure to achieve the
Company’s investment objective and/or adhere to the
Company’s investment policy and/or investment limits.
This system can therefore provide only reasonable and not
absolute assurance against material misstatement or loss.
The Board has undertaken a review of the aspects covered by
the guidance and has identified risk management controls in
the key areas of business objectives, accounting, compliance,
operations and secretarial as being matters of particular
importance upon which it requires reports.
The Board believes that the existing arrangements, set out
below, represent an appropriate framework to meet the
internal control requirements. By these procedures the
Directors have kept under review the effectiveness of the
internal control system throughout the year and up to the
date of this report.
The Company’s internal controls and risk management
systems have been reviewed with the Manager against risk
parameters approved by the Board. The Board reviews a risk
control summary at its quarterly Board meetings and an annual
formal review of the risk procedures and controls in place at
the Manager and other key service providers is performed.
The Audit Committee reviews and makes recommendations
to the Board, at least annually, the effectiveness of the
Company’s system of internal controls, including financial,
operational and compliance and risk management systems.
The Board confirms that necessary actions would be taken to
remedy any significant failings or weaknesses identified from
their review and that no significant failings or weaknesses
occurred throughout the year ended 31 March 2025 and up
to the date of this annual financial report.
The Board reviews financial reports and performance against
forecasts, relevant stock market criteria and the Company’s
peer group. In addition, the Manager and custodian maintain
their own systems of internal controls and risk management
and the Board and Audit Committee receive regular reports
from the Compliance Department of the Manager. Formal
reports are also produced annually on the internal controls
and procedures in place for the operation of secretarial,
administrative, custodial, investment management and
accounting activities.
GOING CONCERN
The financial statements have been prepared on a going
concern basis. The Directors consider this is the appropriate
basis as they have a reasonable expectation that the
Company has adequate resources to continue in operational
existence for the foreseeable future, being taken as at
least twelve months after the signing of the balance sheet,
for the same reasons as set out in the Viability Statement
on page 24. In considering this, the Directors took into
account both ongoing expenses and any obligations under
the Company’s borrowing (Unsecured Senior Loan Notes).
DIRECTORS’ REPORT / CONTINUED
THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 43
In reaching this conclusion, the Directors have considered
the liquidity of the Company’s portfolio of investments as
well as its cash position, income and expense flows. As at
31 March 2025, the Company held £7.2m (2024: £36.3m) in
cash and cash equivalents and £1,230.9m (2024: £1,206.6m)
in quoted investments. The Company’s audited net assets as
at 31 March 2025 were £1,125.9m (2024: £1,135.0m).
In anticipation of potential market volatility, the Manager
has performed stress tests on the Company’s portfolio of
investments under various scenarios. Separately, the Board
remains comfortable with the liquidity of the portfolio. It is
estimated that some 99% by value of the quoted investments
held at the year-end could be realised in thirty working days
under normal market conditions.
The Board also considered the Company’s obligations with
respect to the Company’s borrowing. The Company has issued
£120m of Unsecured Senior Loan Notes with a weighted
average cost of 2.44% of which £20m was drawn in October
2021 and £100m in September 2022. These notes, which are
long-term in nature, do not require repayment until 2037, 2047,
2051 and 2057 as detailed in Note 12. A requirement of this
borrowing is that the Net Assets of the Company must remain
not less than £300m. The Board, which routinely monitors
borrowing restrictions, does not anticipate difficulties in
meeting this. The Company has no other borrowing.
The total ongoing charges (excluding taxation, non-recurring
legal and professional fees and finance costs) for the year
ended 31 March 2025 were £5.9 million (2024: £6.2 million)
or 0.51% of Net Assets (2024: 0.53%).
THE MANAGER
The Alternative Investment Fund Manager is Liontrust
Fund Partners LLP, with responsibility for the day-to-day
investment management activities of the Company delegated
to Liontrust Investment Partners LLP. Liontrust Fund Partners
LLP was appointed the Manager on 1 April 2022, following
completion of the acquisition of Majedie by Liontrust Asset
Management Plc.
Investment Management Agreement (‘IMA’)
The Manager provides investment and administration services
to the Company under an investment management agreement
dated 21 May 2024, which replaced the original agreement
dated 3 March 2020. The agreement is terminable by either
party by giving not less than three months’ notice in writing.
From 1 April 2024, the monthly management fee has been
calculated on 0.03750% per month on the first £500 million,
falling to 0.03333% on the next £500 million and 0.02917% on
the remainder of the market capitalisation of the Company’s
ordinary shares at each month end and paid monthly in arrears
(equivalent to an annualised fee of 0.45% on the first £500m,
0.40% on the next £500m and 0.35% on the remainder).
There is no performance fee. Prior to 1 April 2024, the
monthly management fee was calculated on 0.04000% on
the first £500 million and 0.03875% on the remainder of the
market capitalisation of the Company’s ordinary shares at
each month end and paid monthly in arrears (equivalent to
an annualised fee of 0.480% on the first £500m and 0.465%
on the remainder).
Assessment of the Manager
The Management Engagement Committee has carried out a
review of the Manager and following recommendation from
the Committee, the Board considers that the continuing
appointment of Liontrust Fund Partners LLP as Manager is in
the best interests of the Company and its shareholders.
COMPANY SECRETARY
NSM Funds (UK) Limited were appointed as the Company
Secretary of the Company on 1 March 2024.
The Board has continuous direct access to the advice and
services of the corporate Company Secretary, who are
responsible for ensuring that the Board and Committee
procedures are followed, and that applicable rules and
regulations are complied with. The Company Secretary
provides full company secretarial services to the Company,
ensuring that the Company complies with all legal, regulatory
and corporate governance requirements and officiating at
Board meetings and shareholders’ meetings. The Company
Secretary is also responsible to the Board for ensuring timely
delivery of information and reports and that the statutory
obligations of the Company are met. Finally, the Company
Secretary is responsible for advising the Board through the
Chair on all governance matters.
SHARE CAPITAL
Capital Structure
At the year end, the Company’s allotted and fully paid share
capital consisted of 195,666,734 ordinary shares of 25p
each, of which 51,345,709 shares were held in treasury. To
enable the Board to take action to deal with any significant
overhang or shortage of shares in the market, it seeks
approval from shareholders every year to buy back and sell
shares. No shares were issued in the year. During the year
7,170,500 ordinary shares were repurchased for holding in
treasury at an average price of 747.03p per share (including
costs). Since the year end up until 19 May 2025, being the
latest practicable date before the printing of this report,
125,000 ordinary shares have been bought back for holding
in treasury.
44 / GOVERNANCE / THE EDINBURGH INVESTMENT TRUST PLC
SUBSTANTIAL HOLDINGS IN THE COMPANY
The Company has received notifications, or has otherwise
been made aware, in accordance with the FCA’s Disclosure
Guidance and Transparency Rule 5 of the following interests
(% as at the date of notification).
Shares
% of Voting
rights
Rathbones Investment
Management
11,163,371 7.7
The Company relies on investors complying with these regulations and
certain investors may be exempted. As such, this table should not be relied
on as an exhaustive list of shareholders holding above 5% of the Company’s
voting rights.
In addition to the above disclosure, as at 31 March 2025 the
Company was aware of the following substantial interests in
the voting rights of the Company:
Shares
% of Voting
rights
Charles Stanley & Co. Limited 6,354,106 4.4
City of London Investment
Management
5,229,015 3.6
Evelyn Partners 4,715,396 3.3
RESTRICTIONS
There are no restrictions concerning the transfer of securities
in the Company, no special rights with regard to control
attached to securities, no agreements between holders of
securities regarding their transfer known to the Company,
no restrictions on the distribution of dividends and the
repayment of capital, and no agreements to which the
Company is party that might affect its control following a
successful takeover bid.
Voting
At a general meeting of the Company, every shareholder has
one vote on a show of hands and, on a poll, one vote for each
share held. The notice of general meeting specifies deadlines
for exercising voting rights either by proxy or present in
person in relation to resolutions to be passed at a general
meeting.
Repurchase Powers
The Board’s current powers to repurchase shares and
proposals for their renewal are disclosed on pages 43 and 45.
DISCLOSURES REQUIRED BY UKLA LISTING
RULE 9.8.4
The above rule requires listed companies to report certain
information in a single identifiable section of their annual
financial reports. None of the prescribed information is
applicable to the Company for the year under review.
INDIVIDUAL SAVINGS ACCOUNT (ISA)
The ordinary shares of the Company are qualifying
investments under applicable ISA regulations.
BUSINESS OF THE ANNUAL GENERAL MEETING
(AGM)
The following summarises the business of the forthcoming
AGM of the Company, which is to be held on 22 July 2025
at 11:00 a.m. The notice of the AGM and related notes are
included on pages 78 to 83. All resolutions are ordinary
resolutions unless otherwise identified.
Resolution 1 is for members to receive and consider this
Annual Financial Report (AFR), including the financial
statements and auditor’s report.
Resolution 2 is to approve the Directors’ Remuneration Policy
as set out on page 47.
Resolution 3 is for members to approve the Annual Statement
and Report on Remuneration for the year ended 31 March 2025.
Resolution 4 is to declare a final dividend for the year.
Resolutions 5 to 9 are to re-elect the Directors. Biographies
of the Directors can be found on pages 31 and 32.
All Directors will stand for re-election by shareholders
at the AGM. The Board has determined that each of the
Directors is independent, continues to perform effectively
and demonstrates commitment to their role. Their balance
of knowledge and skills combined with their diversity and
business experience makes a major contribution to the
functions of the Board and its Committees.
Elisabeth Stheeman has extensive executive and non-
executive experience in financial services, real estate and
governance that bring highly relevant and valuable skills to
the Board. Steven Baldwin is a Chartered Accountant and
his experience in a range of industries brings a breadth of
experience to the meetings. Patrick Edwardson has many
years of investment experience as a fund manager and
deep knowledge of the UK equity market and investment
companies. Aidan Lisser has considerable experience as an
investment trust Chair and non-executive director and was
also a member of the Association of Investment Companies’
Marketing Committee. Annabel Tagoe-Bannerman has
considerable experience in senior roles in commercial
operations, law, governance as well as in diversity, equity and
inclusion within quoted UK operating companies within the
retail, leisure, food and beverage sectors.
Resolutions 10 and 11 are to re-appoint
PricewaterhouseCoopers LLP as auditors and to authorise
the Audit Committee to determine their remuneration.
DIRECTORS’ REPORT / CONTINUED
THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 45
Special Business
Resolution 12 Change of Investment Objective and Policy is
an Ordinary Resolution which seeks to amend the Company’s
investment objective and policy in order to simplify the
wording and to clarify (in the investment objective) the
nature of the shareholder returns targeted by the Company.
The full text of the proposed amendments may be found in
the appendix to the notice of the AGM on pages 82 and 83
while further information on the reasons for the proposed
amendments may be found in the Business Review section
on page 15. The proposed amendments have been approved
by the FCA and also require shareholder approval. It is
intended that Resolution 12 will be put to shareholders at the
forthcoming AGM for their approval.
Resolution 13: Authority to Allot Shares is an Ordinary
Resolution seeking renewal of the current authority for
the Directors to allot up to 10% of the issued ordinary
share capital, this being an aggregate nominal amount of
£4,891,668 as at 19 May 2025, (being the last practicable day
prior to the publication of this Notice).
Special Resolution 14: Authority to Allot Shares is a Special
Resolution which seeks renewal of the current authority to
allot equity securities pursuant to a rights issue or to issue
up to 10% of the issued ordinary share capital otherwise than
in connection with a rights issue, dis-applying pre-emption
rights. This will allow shares to be issued to new shareholders,
within the prescribed limits, without having to be offered to
existing shareholders first, thus broadening the shareholder
base of the Company. The Directors will not dilute the
interests of existing shareholders by using the authority to
issue shares at a price which is less than the Net Asset Value
(calculated with debt at fair value) of the existing shares in
issue at that time. These authorities will expire at the next
AGM of the Company or fifteen months after the passing of
the resolutions, whichever is the earlier.
Special Resolution 15: Authority to Buy Back Shares.
This resolution seeks to renew the Directors’ authority to
purchase up to 14.99% of the Company’s issued share capital,
this being 29,330,443 ordinary shares as at 19 May 2025,
(being the last practicable day prior to the publication of this
Notice). The authority will expire at the Company’s next AGM
or 15 months following the passing of this resolution, if earlier.
The principal purpose of share buy-backs is to enhance the
net asset value for remaining shareholders and purchases will
only be made if they do so.
In accordance with the UK Listing Rules, the maximum price
which may be paid for a share must not be more than the
higher of:
(i) 5% above the average of the mid-market values of the
shares for the five business days before the purchase is
made; and
(ii) the higher of the price of the last independent trade in the
shares and the highest then current independent bid for
the shares on the London Stock Exchange. The minimum
price which may be paid will be 25p per share, this being
the nominal value of a share. In making purchases, the
Company will deal only with member firms of the London
Stock Exchange.
The Company will finance the purchase of ordinary shares by
using its existing cash balance or borrowing facilities or by
selling securities in the Company’s portfolio.
The Directors hold repurchased shares in treasury with a
view to possible resale.
Special Resolution 16: Notice Period for General Meetings.
The Shareholder Rights Directive increased the notice period
for general meetings of companies to 21 days unless certain
conditions are met in which case it may be 14 days’ notice.
A shareholders’ resolution is required to ensure that the
Company’s general meetings (other than Annual General
Meetings) may be held on 14 days’ notice. Accordingly,
Special Resolution 16 will propose that the period of notice
for general meetings of the Company (other than AGMs)
shall not be less than 14 days’ notice. It is intended that
this flexibility will be used only where the Board believes it
is in the best interests of shareholders as a whole, and an
explanation will be provided.
The Directors have carefully considered all the resolutions
proposed in the Notice of the AGM and, in their opinion,
consider them all to be in the best interests of shareholders
as a whole. The Directors therefore recommend that
shareholders vote in favour of each resolution as they intend
to do in respect of their own beneficial holdings.
By order of the Board
NSM FUNDS (UK) LIMITED
COMPANY SECRETARY / 20 MAY 2025
46 / GOVERNANCE / THE EDINBURGH INVESTMENT TRUST PLC
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
IN RESPECT OF THE PREPARATION OF THE ANNUAL FINANCIAL REPORT
The Directors are responsible for preparing the annual
financial report and financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law they are
required to prepare the financial statements in accordance
with UK accounting standards, including FRS 102 The
Financial Reporting Standard applicable in the UK and
Republic of Ireland.
Under company law the Directors must not approve the
financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Company and
of its profit or loss for that period.
In preparing these financial statements, the Directors are
required to:
– select suitable accounting policies and then apply them
consistently;
– make judgements and estimates that are reasonable and
prudent;
– state whether applicable UK accounting standards
have been followed, subject to any material departures
disclosed and explained in the financial statements;
– assess the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to
going concern; and
– use the going concern basis of accounting unless they
either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Company
and enable them to ensure that its financial statements
comply with the Companies Act 2006.
They are responsible for such internal controls as they
determine are necessary to enable the preparation of
financial statements that are free from material misstatement,
whether due to fraud or error, and have general responsibility
for taking such steps as are reasonably open to them to
safeguard the assets of the Company and to prevent and
detect fraud and other irregularities.
Under applicable law and regulations, the Directors are
also responsible for preparing a Strategic Report, Directors’
Report, Directors’ Remuneration Report and Corporate
Governance Statement that complies with that law and those
regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website, which is maintained by the
Company’s Manager. Legislation in the UK governing the
preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
RESPONSIBILITY STATEMENT OF THE DIRECTORS
IN RESPECT OF THE ANNUAL FINANCIAL REPORT
We confirm that to the best of our knowledge:
– the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and
fair view of the assets, liabilities, financial position and
profit or loss of the Company; and
– 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.
We consider the annual financial report, taken as a whole,
is fair, balanced and understandable and provides the
information necessary for shareholders to assess the
Company’s position and performance, business model and
strategy.
In the case of each Director in office at the date the Directors’
report is approved:
– so far as the Director is aware, there is no relevant
audit information of which the Company’s Auditors are
unaware; and
– they have taken all the steps that they ought to have
taken as a Director in order to make themselves aware of
any relevant audit information and to establish that the
Company’s Auditors are aware of that information.
Signed on behalf of the Board of Directors
ELISABETH STHEEMAN
CHAIR
20 May 2025
THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 47
DIRECTORS’ REMUNERATION REPORT
FOR THE YEAR ENDED 31 MARCH 2025
This report has been prepared under the requirements of The
Large and Medium-sized Companies and Groups (Accounts
and Reports) (Amendment) Regulations 2013.
The Company’s auditors are required to audit certain of
the disclosures provided in this Report. Where disclosures
have been audited, they are indicated in this Report. The
independent auditor’s opinion is included on pages 52 to 58.
REMUNERATION RESPONSIBILITIES
The Board has resolved that a remuneration committee
is not appropriate for a company of this size and nature.
Remuneration is therefore regarded as part of the Board’s
responsibilities to be addressed regularly. All Directors are
non-executive and they all participate in meetings of the
Board at which Directors’ remuneration is considered.
DIRECTORS’ REMUNERATION POLICY
The Directors’ Remuneration Policy (the ‘Policy’) is put
before shareholders for approval every three years and was
approved by shareholders at the AGM on 21 July 2022 and
became effective on that date. The policy will be put before
shareholders for approval at the AGM on 22 July 2025.
The policy is that the remuneration of Directors should be
fair and reasonable in relation to that of other investment
trusts and to the time commitment and responsibilities
undertaken. It should also be reviewed relative to movements
in the Consumer Price Index and be sufficient to motivate
appointees, as well as ensure that candidates of a high calibre
are recruited to the Board but not be more than necessary
for the purpose; and take into consideration any committee
memberships and chairing duties.
Fees for the Directors are determined by the Board within
the limits stated in the Company’s Articles of Association
(’Articles’). The maximum currently is £250,000 in
aggregate per annum. The remuneration of the Directors
is approved by the Board under The Matters Reserved
for the Board document, which can be found, together
with the Company’s Articles of Association, in section
Insights and Literature on the Company’s website at
www.edinburgh-investment-trust.co.uk.
Directors do not have service contracts. Directors are
appointed under letters of appointment, copies of which
are available for inspection at the registered office of the
Company. Directors are entitled to be reimbursed for any
reasonable expenses properly incurred by them in the
performance of their duties. Directors are not eligible for
bonuses, pension benefits, share options or other incentives
or benefits. There are no agreements between the Company
and its Directors concerning compensation for loss of office.
Notwithstanding the above, the Company’s Articles also
provide that additional discretionary payments can be made
for services which, in the opinion of the Directors, are outside
the scope of the ordinary duties of a Director.
The level of Directors’ remuneration is reviewed annually,
although such review will not automatically result in any
changes. This Directors’ Remuneration Policy will apply to any
new directors, who will be paid the appropriate fee based on
the Directors’ fees level in place at the date of appointment.
The Board will consider, where raised, shareholders’ views on
Directors’ remuneration.
The Board may amend the level of remuneration paid
to Directors within the parameters of the Directors’
Remuneration Policy. This Directors’ Remuneration Policy is
the same as that currently followed by the Board as disclosed
in last year’s Directors’ Remuneration Report.
The Company has no employees and consequently has no
policy on the remuneration of employees.
ANNUAL STATEMENT ON DIRECTORS’
REMUNERATION
For the year ended 31 March 2025, fees paid to the Directors
per annum were:
Role
Current fee
from
1 April
2024
Percentage
increase
during the
year*
%
Chair 47,100 0%
Senior Independent Director 33,700 0%
Audit Committee Chair 37,500 0%
Director 30,500 0%
* Directors last received a fee increase for the year ended 31 March 2023.
The Board carried out a review of Directors’ annual fees
during the year with regard to the latest inflation rates,
measured by the increase in the Consumer Price Index, and
taking into account peer group comparisons by sector and
market capitalisation. Following this review, it was agreed
that annual fees would be increased by 5% (rounded up to
the next £500), effective 1 April 2025. The Board believes
that the level of increase and resulting fees appropriately
reflects prevailing market rates for an investment trust of the
Company’s size, the increasing complexity of regulation and
resulting time spent by the Directors on Company matters,
and will also enable the Company to attract appropriately
experienced additional Directors in the future. Due to the size
and nature of the Company, it was not deemed necessary to
use a remuneration consultant although the Board did review
independent peer group information on Directors’ fees and
took this into account in its deliberations.
48 / GOVERNANCE / THE EDINBURGH INVESTMENT TRUST PLC
REMUNERATION FOR THE YEAR ENDED 31 MARCH 2025
THE COMPANY’S PERFORMANCE
The following graph plots, in annual increments, the net asset value total return and share price total return to ordinary
shareholders compared to the total return of the FTSE All-Share Index over the ten years to 31 March 2025. This index is the
benchmark adopted by the Company for comparison purposes.
Total Returns Over Ten Years
Rebased to 100 at 31 March 2015
Share price Net Asset Value - debt at fair value FTSE All-Share Index
202520242015 2016 2017 2018 2019 2020 2021 2022 2023
50
100
150
200
Source: LSEG Data & Analytics.
SINGLE TOTAL FIGURE OF REMUNERATION FOR THE YEAR (AUDITED)
The single total figure of remuneration for each Director is detailed below, together with the prior year comparative:
Year ended 31 March 2025 Year ended 31 March 2024
Fees
£
Taxable
Benefits
(1)
£
Total
£
Fees
£
Taxable
Benefits
(1)
£
Total
£
Elisabeth Stheeman 47,100 562 47,662 47,100 1,448 48,548
Steve Baldwin 37,500 406 37,906 37,500 240 37,740
Patrick Edwardson 30,500 2,574 33,074 30,500 1,039 31,539
Aidan Lisser 33,700 320 34,020 32,867 740 33,607
Annabel Tagoe-Bannerman 30,500 592 31,092 30,500 255 30,755
Vicky Hastings (retired 19 July 2023) – – – 9,493 – 9,493
Total 179,300 4,454 183,754 187,960 3,722 191,682
(1)
Taxable benefits relate to grossed up costs of travel.
In accordance with The Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report) Regulations 2019,
this 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 relevant financial
year in accordance with the new regulation. These fees exclude taxable benefits which could vary substantially as they reflect
expenses incurred whilst carrying out the Board’s duties.
DIRECTORS’ REMUNERATION REPORT / CONTINUED
THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 49
The single total figure of remuneration for each Director is detailed below, with year on year changes since year ended 31 March
2022.
Non–executive directors
Fees
£
2025
Benefits
£
Fees
£
2024
Benefits
£
Fees
£
2023
Benefits
£
Fees
£
2022
Benefits
£
Elisabeth Stheeman
(Chair from 21 July
2022)
Total 47,100 562 47,100 1,448 40,063 901 27,167 228
% change -% (158)% 18% 60% 47% 295% 9% -%
Steve Baldwin Total 37,500 406 37,500 240 35,000 785 31,720 0
% change -% (41)% 7% (69)% 10% -% 27% -%
Patrick Edwardson Total 30,500 2,574 30,500 1,039 28,500 1,620 27,167 1,226
% change -% 60% 7% (35)% 5% 32% 673% -%
Aidan Lisser (appointed
27 May 2022) Total 33,700 320 32,867 740 24,140 741 – –
% change 2% (131)% 36% 0% –% –% –% –%
Annabel Tagoe-
Bannerman (appointed
7February 2023)
Total 30,500 592 30,500 255 4,421 – – –
% change –% 57% 590% -% -% -% -% -%
Former Directors
Vicky Hastings
(retired 17 July 2023)
Total – 9,493 – 31,500 465 30,667 320
% change –% –% (70)% –% 3% 45% (8)% –%
Glen Suarez
(retired 21July 2022)
Total – – – – 14,307 6,819 44,000 4,887
% change -% –% -% -% (67)% 40% 0% -%
Gordon McQueen
(retired 22 July 2021)
Total – – – – – – 10,239 289
% change -% -% –% –% -% -% (67)% -%
Maxwell Ward
(retired 22 July 2021)
Total – – – – – – 8,222 0
% change -% -% -% –% –% –% (67)% –%
Total 179,300 5,734 187,960 3,722 177,931 11,331 179,182 6,950
Total % change 5% 16% 5% (204)% (1)% 63% (4)% -%
50 / GOVERNANCE / THE EDINBURGH INVESTMENT TRUST PLC
DIRECTORS’ SHAREHOLDINGS AND SHARE INTERESTS (AUDITED)
Save as stated below, no Director had any interests, beneficial or otherwise, in the ordinary shares of the Company during the
year. No changes to these holdings have been notified since the year end. No connected person interests have been notified.
Directors hold shares in the Company at their discretion. Share ownership is encouraged, but no guidelines have been set. The
beneficial interests of the Directors in the ordinary share capital of the Company are set out below:
31 March
2025
31 March
2024
Elisabeth Stheeman 16,883 14,163
Steve Baldwin - -
Patrick Edwardson
1
60,000 60,000
Aidan Lisser 6,180 5,440
Annabel Tagoe-Bannerman 2,047 732
1
Patrick Edwardson’s holding includes 13,000 shares which are being held by a connected person.
RELATIVE IMPORTANCE OF SPEND ON PAY
The following table compares the remuneration paid to the non-executive Directors with aggregate distributions to shareholders
in respect of the year to 31 March 2025 and the prior year:
2025
£’000
2024
£’000
Change
£’000
Aggregate Directors’ Remuneration 182* 168 14
Aggregate Shareholder Distributions 41,810 41,797 13
* This is different from the remuneration table on page 47 by £4,000 (2024: £20,000) due to (under)/over accruals brought forward.
VOTING AT LAST ANNUAL GENERAL MEETING
At the Annual General Meeting of the Company held on 17 July 2024, a resolution approving the Chair’s Annual Statement and
Report on Remuneration was passed. The votes cast (including votes cast at the Chair’s discretion) were as follows.
Number of
Votes
For %
Number of
Votes
Against %
Number of
Votes
Withheld
Annual Statement and Report on Remuneration 40,371,342 99.65% 142,691 0.35% 153,244
APPROVAL
This Directors’ Remuneration Report was approved by the Board of Directors on 20 May 2025.
ELISABETH STHEEMAN
CHAIR
20 May 2025
Signed on behalf of the Board of Directors
DIRECTORS’ REMUNERATION REPORT / CONTINUED
THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 51
FINANCIAL REVIEW
52 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF THE EDINBURGH INVESTMENT TRUST PLC
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Opinion
In our opinion, The Edinburgh Investment Trust plc’s financial statements:
• give a true and fair view of the state of the Company’s affairs as at 31 March 2025 and of its return and cash flows for the
year then ended;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic
of Ireland”, and applicable law); and
• have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Financial Report (the “Annual Report”), which comprise:
the Balance Sheet as at 31 March 2025; 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, which include a description of the significant
accountingpolicies.
Our opinion is consistent with our reporting to the Audit 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
notprovided.
We have provided no non-audit services to the Company in the period under audit.
OUR AUDIT APPROACH
Context
The Edinburgh Investment Trust plc (the “Company”) is a standalone Investment Trust Company and engages Liontrust Fund
Partners LLP (the “Manager”) to manage its assets.
Overview
Audit scope
• We conducted our audit of the financial statements using information from The Bank of New York Mellon (International)
Limited (the “Administrator” and the “Custodian”) and NSM Funds (UK) Limited (the “Company Secretary”) to whom the
Manager has, with the consent of the Directors, 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 both the Manager and the Administrator, and adopted
a fully substantive testing approach using reports obtained from the Administrator.
Key audit matters
• Valuation and existence of investments.
• Accuracy, completeness and occurrence of income.
Materiality
• Overall materiality: £11,256,940 (2024: £11,350,470) based on 1% of Net Assets.
• Performance materiality: £8,442,705 (2024: £8,512,853).
THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 53
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 Audit Committee Report, Accounting
policies (C (v)) and Notes to the Financial Statements
(Note 9).
The investment portfolio as at 31 March 2025 comprised
quoted equity investments (level 1) valued at £1,231m.
We focused on the valuation and existence of listed
investments because investments represent the
principal element of the net asset value of the Company.
We tested the valuation of all of the quoted equity investments
as at 31 March 2025 by agreeing the valuation to independent
third-party sources; and
We tested the existence of all of the quoted equity investments
as at 31 March 2025 by agreeing investment holdings to an
independent custodian confirmation.
No material misstatements were identified from this testing.
Accuracy, completeness and occurrence of income
Refer to the Report of the Audit Committee, Accounting
policies (F) and Notes to the Financial Statements
(Note2).
The Company has reported revenue of £41m (2024:
£42m).
During the year, the Company received special
dividends amounting to £2.5m of which £1.8m was
classified as revenue (2024: £ 2.4m of which £0.162m
was classified as revenue).
We focused on the accuracy, completeness and
occurrence of investment income as incomplete or
inaccurate income could have a material impact on the
Company’s net asset value.
We also focused on the accounting policy for
investment income recognition and the presentation
of investment income in the Income Statement for
compliance with the requirements of The Association
of Investment Companies Statement of Recommended
Practice (the “AIC SORP”), as incorrect application
could indicate a misstatement in income recognition.
We assessed the accounting policy for income recognition for
compliance with accounting standards and the AIC SORP and
performed testing to check that income had been accounted
for in accordance with the stated accounting policy. 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 tested accuracy by selecting a sample of dividend receipts
and agreeing the dividend rates to independent market data.
To test for completeness, we tested, for a sample of investment
holdings in the portfolio, that all dividends declared in the market
had been recorded.
We tested occurrence by testing that a sample of dividends
recorded in the year had been declared in the market.
We also tested the allocation and presentation of dividend
income between the revenue and capital return columns of the
Income Statement in line with the requirements set out in the
AIC SORP by determining reasons behind dividend distributions.
For special dividends, we assessed the appropriateness of the
classification of special dividends as revenue or capital with
reference to publicly available information.
No material misstatements were identified from this testing.
54 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
INDEPENDENT AUDITORS’ REPORT / CONTINUED
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.
The Company’s accounting is delegated to the Administrator who maintains the Company’s accounting records and who has
implemented controls over those accounting records. We obtained our audit evidence from substantive tests. However, as part
of our risk assessment, we understood and assessed the internal controls in place at both the Manager and the Administrator
to the extent relevant to our audit. This assessment of the operating and accounting structure in place at both organisations
involved obtaining and analysing the relevant controls reports issued by the independent service auditor of the Manager and
the Administrator in accordance with generally accepted assurance standards for such work. Following this assessment, we
applied professional judgement to determine the extent of testing required over each balance in the financial statements.
The impact of climate risk on our audit
In conducting our audit, we made enquiries of the Directors and the Portfolio Managers to understand the extent of the
potential impact of climate change risk on the Company’s financial statements. The Directors and Portfolio Managers 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 quoted securities 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 and Portfolio Managers’ 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 £11,256,940 (2024: £11,350,470).
How we determined it 1% of Net Assets.
Rationale for benchmark applied We believe that net assets is the primary measure used by the shareholders in assessing
the performance of the entity, and is a generally accepted auditing benchmark. This
benchmark provides an appropriate and consistent year on year basis for our audit.
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% (2024: 75%) of overall materiality, amounting to £8,442,705
(2024: £8,512,853) 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 Committee that we would report to them misstatements identified during our audit above £562,847
(2024: £567,524) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 55
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
accountingincluded:
• evaluating the Directors’ updated risk assessment and considering whether it addressed relevant threats, including rising
inflation and the wider macroeconomic uncertainty;
• 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;
• assessing the premium/discount the Company’s share price trades as compared to the net asset value per share; and
• assessing the implication of significant reductions in NAV as a result of severe but plausible downside scenario in the
market’s 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.
From our work on the corporate governance statement described below, 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 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 Directors’ Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and
Directors’ Report for the year ended 31 March 2025 is consistent with the financial statements and has been prepared in
accordance with applicable legal requirements.
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 Directors’ Report.
56 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
INDEPENDENT AUDITORS’ REPORT / CONTINUED
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
As explained in the Corporate Governance Statement, the Directors have chosen to demonstrate how the Company has met
its obligations under the UK Corporate Governance Code (‘the Code’) by reporting under the 2019 Association of Investment
Companies’ Code of Corporate Governance (‘the AIC Code’). As such, we refer to the AIC code where we report the matters
required under ISAs (UK) in respect of 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 Code specified by
the Listing Rules 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 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
theaudit:
• 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
andstrategy;
• 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 Committee.
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.
THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 57
RESPONSIBILITIES FOR THE FINANCIAL STATEMENTS AND THE AUDIT
Responsibilities of the Directors for the financial statements
As explained more fully in the Statement of Directors’ Responsibilities, 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 Chapter 4 of Part 24 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 requirements of 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
revenue (investment income and capital gains) or to increase net asset value. Audit procedures performed by the engagement
team included:
• Enquiries with management, including consideration of known or suspected instances of non- compliance with laws and
regulations and fraud;
• Understanding the controls implemented by Liontrust Fund Partners LLP (the “Manager”) and The Bank of New York
Mellon (International) Limited (the “Administrator” and “Custodian”) designed to prevent and detect irregularities;
• Assessment of the Company’s compliance with the requirements of Chapter 4 of Part 24 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 Committee; and
• Designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing.
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.
58 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
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 Committee, we were appointed by the members on 25 July 2019 to audit the
financial statements for the year ended 31 March 2020 and subsequent financial periods. The period of total uninterrupted
engagement is 6 years, covering the years ended 31 March 2020 to 31 March 2025.
Lauren Cooper (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
20 May 2025
INDEPENDENT AUDITORS’ REPORT / CONTINUED
THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 59
INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH
Notes
Revenue
£’000
2025
Capital
£’000
Total
£’000
Revenue
£’000
2024
Capital
£’000
Total
£’000
Gains on investments held at fair
value
9(b) – 53,697 53,697 – 99,095 99,095
Gains/(losses) on foreign
exchange
– 22 22 – (41) (41)
Income 2 40,666 – 40,666 42,095 – 42,095
Investment management fee 3 (1,385) (3,231) (4,616) (1,493) (3,483) (4,976)
Other expenses 4 (1,274) (19) (1,293) (1,179) (14) (1,193)
Net return before finance costs
and taxation
38,007 50,469 88,476 39,423 95,557 134,980
Finance costs 5 (884) (2,066) (2,950) (888) (2,071) (2,959)
Return on ordinary activities
before taxation
37,123 48,403 85,526 38,535 93,486 132,021
Tax on ordinary activities 6 (78) – (78) (316) – (316)
Return on ordinary activities
after taxation for the financial
year
37,045 48,403 85,448 38,219 93,486 131,705
Return per ordinary share:
Basic and diluted 7 25.02p 32.70p 57.72p 23.93p 58.55p 82.48p
The total column of this statement represents the Company’s profit and loss account, prepared in accordance with UK
Accounting Standards. The return after taxation is the total comprehensive income and therefore no additional statement of
comprehensive income is presented. The supplementary revenue and capital columns are presented for information purposes
in accordance with the Statement of Recommended Practice issued by the Association of Investment Companies. All items in
the above statement derive from continuing operations of the Company. No operations were acquired or discontinued in the
year.
The accompanying notes are an integral part of these financial statements.
60 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
Notes
2025
£’000
2024
£’000
Non current assets
Investments held at fair value 9(a) 1,230,888 1,206,563
Current assets
Debtors
10 8,518 19,878
Cash and cash equivalents 7,233 36,314
Total assets
1,246,639 1,262,755
Non current liabilities
Unsecured Senior Loan Notes
12 (120,000) (120,000)
Current liabilities
Other payables
11 (693) (7,708)
Total assets less current liabilities 1,245,946 1,255,047
Total liabilities (120,693) (127,708)
Net assets
1,125,946 1,135,047
Equity
Called up share capital
13 48,917 48,917
Share premium account
14 10,394 10,394
Capital redemption reserve
14 24,676 24,676
Capital reserve
14 999,335 1,004,498
Revenue reserve
14 42,624 46,562
Total equity 1,125,946 1,135,047
Net asset value per ordinary share:
Basic and diluted - debt at par value
15 780.17p 749.25p
Basic and diluted - debt at fair value
15 817.16p 779.97p
The financial statements on pages 59 to 76 were approved and authorised for issue by the Board of Directors on 20 May 2025.
ELISABETH STHEEMAN
CHAIR
Signed on behalf of the Board of Directors
Company Number SC001836
The accompanying notes are an integral part of these financial statements.
BALANCE SHEET
AT 31 MARCH
THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 61
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH
Notes
Share
Capital
£’000
Share
Premium
£’000
Capital
Redemption
Reserve
£’000
Capital
Reserve
1
£’000
Revenue
Reserve
1
£’000
Total
£’000
At 1 April 2023 48,917 10,394 24,676 1,003,989 51,368 1,139,344
Return on ordinary activities – – – 93,486 38,219 131,705
Dividends paid 8 – – – – (43,025) (43,025)
Shares bought back and held
in treasury
2
13 – – – (92,977) – (92,977)
At 31 March 2024 48,917 10,394 24,676 1,004,498 46,562 1,135,047
Return on ordinary activities – – – 48,403 37,045 85,448
Dividends paid 8 – – – – (40,983) (40,983)
Shares bought back into
treasury
2
13 – – – (53,566) – (53,566)
At 31 March 2025 48,917 10,394 24,676 999,335 42,624 1,125,946
1
The revenue reserve and certain amounts of the capital reserve are distributable by way of dividend.
2
Shares bought back and held in treasury includes transaction costs.
The accompanying notes are an integral part of these financial statements.
62 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
Notes
2025
£’000
2024
£’000
Cash flow from operating activities
Net return before finance costs and taxation
88,476 134,980
Tax on overseas income
6 (78) (316)
Adjustments for:
Purchase of investments
(559,942) (329,331)
Sale of investments
593,166 444,660
Gains on investments held at fair value
(53,697) (99,095)
Decrease in debtors
1,594 2,280
Decrease in creditors
(3) (2,211)
Net cash inflow from operating activities
69,516 150,967
Cash flow from financing activities
Interest paid on overdraft
(7) (9)
Interest paid on Unsecured Senior Loan Notes
(2,943) (2,093)
Shares bought back and held in treasury
(54,664) (91,888)
Dividends paid
8 (40,983) (43,025)
Net cash outflow from financing activities (98,597) (137,015)
Net (decrease)/increase in cash and cash equivalents
(29,081) 13,952
Cash and cash equivalents at the start of the year
36,314 22,362
Cash and cash equivalents at the end of the year 7,233 36,314
Reconciliation of cash and cash equivalents to the Balance Sheet is as follows:
Cash held at custodian
1,068 2,768
Goldman Sachs Liquidity Reserve International Fund - Money Market Fund
6,165 33,546
Cash and cash equivalents 7,233 36,314
Cash flow from operating activities includes:
Dividends received
39,922 43,681
Interest received
9 11
At 1 April
2024
£’000
Cash flow
£’000
Non-cash
movement
£’000
At 31 March
2025
£’000
Reconciliation of net debt:
Cash and cash equivalents 36,314 (29,081) – 7,233
Unsecured Senior Loan Notes (120,000) – – (120,000)
Total (83,686) (29,081) – (112,767)
The accompanying notes are an integral part of these financial statements.
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH
THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 63
1. PRINCIPAL ACCOUNTING POLICIES
Accounting policies describe the Company’s approach to recognising and measuring transactions during the year and the
position of the Company at the year end.
The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies
have been consistently applied during the year and the preceding year.
A. Basis of Preparation
Accounting Standards Applied
The financial statements have been prepared in accordance with the Companies Act 2006, applicable United Kingdom
Accounting Standards and applicable law (UK Generally Accepted Accounting Practice (UK GAAP)) including FRS 102 ‘The
Financial Reporting Standard applicable in the UK and Republic of Ireland’ and with the Statement of Recommended Practice
Financial Statements of Investment Trust Companies and Venture Capital Trusts, issued by the Association of Investment
Companies (SORP) in April 2021 (as amended in July 2022).
The financial statements are issued on a going concern basis. Details of the Directors’ assessment of the going concern status
of the Company, which considered the adequacy of the Company’s resources are given on pages 42 and 43.
As an investment fund the Company has the option not to present a cash flow statement. A cash flow statement is not required
when an investment fund meets all the following conditions: substantially all investments are highly liquid and are carried at
market value, and where a Statement of Changes in Equity is provided: all of which are satisfied.
However the Directors’ have elected to present a cash flow statement in the annual financial report to present additional
relevant information to readers of the financial statements.
Significant Accounting Estimates, Assumptions and Judgements
The preparation of the financial statements may require the use of estimates, assumptions and judgements which may affect
the reported amounts of assets and liabilities at the reporting date. While estimates are based on best judgement using
information and financial data available, the actual outcome may differ from these estimates. The Directors have applied their
judgement for the allocation of the investment management fee and finance costs between capital and revenue in the income
statement as set out in Note 1G and the treatment of special dividend income between capital and income, as set out in Note 1J.
The Directors do not believe that these judgements nor any accounting estimates, assumptions or judgements that have been
applied to the financial statements have a significant risk of causing material adjustment to the carrying amount of assets and
liabilities within the next financial year.
B. Foreign Currency and Segmental Reporting
(i) Functional and presentational currency
The financial statements are presented in sterling, which is the Company’s functional and presentational currency and the
currency in which the Company’s share capital and expenses, as well as its assets and liabilities, are denominated.
(ii) Transactions and balances
Transactions in foreign currency, whether of a revenue or capital nature, are translated to sterling at the rates of exchange ruling
on the dates of such transactions. Foreign currency assets and liabilities are translated to sterling at the rates of exchange
ruling at the balance sheet date. Any gains or losses, whether realised or unrealised, are taken to the capital reserve or to the
revenue account, depending on whether the gain or loss is of a capital or revenue nature. All gains and losses are recognised
in the income statement.
(iii) Segmental reporting
The Directors are of the opinion that the Company is engaged in a single segment of business of investing in equity and debt
securities, issued by companies quoted mainly on the UK or other recognised stock exchanges.
C. Financial Instruments
The Company has chosen to apply Section 11 and 12 of FRS102 in full in respect of the financial instruments.
(i) Recognition of financial assets and financial liabilities
The Company recognises financial assets and financial liabilities when the Company becomes a party to the contractual
provisions of the instrument. The Company will offset financial assets and financial liabilities if the Company has a legally
enforceable right to set off the recognised amounts and intends to settle on a net basis.
(ii) Derecognition of financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire or it transfers
the right to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and
rewards of ownership of the financial asset are transferred. Any interest in the transferred financial asset that is created or
retained by the Company is recognised as an asset.
NOTES TO THE FINANCIAL STATEMENTS
64 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
NOTES TO THE FINANCIAL STATEMENTS / CONTINUED
(iii) Derecognition of financial liabilities
The Company derecognises financial liabilities when its obligations are discharged, cancelled or have expired.
(iv) Trade date accounting
Purchases and sales of financial assets are recognised on trade date, being the date on which the Company commits to
purchase or sell the assets.
(v) Classification and measurement of financial assets and financial liabilities
– Financial assets
The Company’s investments are classified as held at fair value through profit or loss.
Financial assets held at fair value through profit or loss are initially recognized as fair value, which is taken to be their
acquisition price, with transaction costs expensed in the income statement. These are subsequently valued at fair value.
Fair value for investments that are actively traded in organised financial markets is determined by reference to stock
exchange quoted bid prices at the balance sheet date. Fair value for investments that are actively traded but where
active stock exchange quoted bid prices are not available is determined by reference to a variety of valuation techniques
including broker quotes and price modelling. Unquoted, unlisted or illiquid investments are valued by the Directors at
fair value using a variety of valuation techniques including earnings multiples, recent transactions and other market
indicators, cash flows and net assets.
– Financial liabilities
Financial liabilities, including borrowings, are initially measured at transaction price, being the fair value. For liabilities
issued at a discount or with significant associated transaction costs, such discount and costs are subsequently measured
at amortised cost using the effective interest method.
D. Cash and Cash Equivalents
Cash and cash equivalents may comprise cash (including short term deposits which are readily convertible to a known amount
of cash and are subject to an insignificant risk of change in value) as well as cash equivalents, including money market funds.
Investments are regarded as cash equivalents if they meet all of the following criteria: short term in duration (typically three
months or less from the date of acquisition), highly liquid investments that are readily convertible to a known amount of cash,
are subject to an insignificant risk of change in value and provide a return no greater than the rate of a three-month high quality
government bond.
E. Hedging
Forward currency contracts entered into for hedging purposes are valued at the appropriate forward exchange rate ruling at
the balance sheet date. Profits or losses on the closure or revaluation of positions are recognised in the income statement and
taken to capital reserves.
F. Income
Interest income arising from fixed income securities and cash is recognised in the income statement using the effective
interest method. Dividend income arises from equity investments held and is recognised on the date investments are marked
‘ex-dividend’. Special dividends are looked at individually to ascertain the reason behind the payment. This will determine
whether they are treated as income or capital in the income statement.
Deposit interest and underwriting commission receivable are taken into account on an accruals basis.
G. Expenses and Finance Costs
Expenses are recognised on an accruals basis and finance costs are recognised using the effective interest method in the
income statement.
The investment management fee and finance costs are allocated 70% to capital and 30% to revenue. This is in accordance
with the Board’s expected long-term split of returns, in the form of capital gains and income respectively, from the portfolio.
Transaction costs are recognised as capital in the income statement. All other expenses are allocated to revenue in the income
statement.
H. Taxation
The liability to corporation tax is based on net revenue for the year, excluding non-taxable dividends. The tax charge is
allocated between the revenue and capital account on the marginal basis whereby revenue expenses are matched first against
taxable income in the revenue account.
THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 65
Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the balance sheet
date where transactions or events that result in an obligation to pay more tax or a right to pay less tax in the future have
occurred. Timing differences are differences between the Company’s taxable profits and its results as stated in the financial
statements. Deferred taxation assets are recognised where, in the opinion of the Directors, it is more likely than not that these
amounts will be realised in future periods.
A deferred tax asset is only recognised in respect of surplus management expenses, losses on loan relationships and eligible
unrelieved foreign tax to the extent that it is probable that the Company will be able to recover them from future taxable
revenue.
I. Dividends payable
Dividends are not recognised in the financial statements unless there is an obligation to pay at the balance sheet date. Proposed
dividends are recognised in the year in which they are paid to shareholders.
J. Critical accounting estimates and judgements
No critical accounting judgements or estimates were made during the year.
K. Accounting for reserves
The share premium comprises the net proceeds received by the Company following the issue of shares, after deduction of the
nominal amount of 25 pence and any applicable issue costs. The capital redemption reserve maintains the equity share capital
of the Company and arose from the nominal value of any shares bought back and cancelled; both are non-distributable.
The capital reserve includes the investment holding gains/(losses), being the difference between cost and market value at the
balance sheet date. It also includes cumulative realised gains/(losses) and costs related to share buybacks. Capital investment
gains and losses are shown in note 9(b) and form part of the capital reserve.
The revenue reserve shows the net revenue retained after payment of any dividends. The revenue reserve and certain amounts
of the capital reserve are distributable by way of dividend.
L. Shares repurchased and held in treasury
The cost of repurchasing ordinary shares (for cancellation or to hold in treasury) including the related stamp duty and
transaction cost is charged to the capital reserve and dealt with in the Statement of Changes in Equity. Share repurchase
transactions are accounted for on a trade date basis. Where shares are cancelled (or are subsequently cancelled having
previously been held in treasury), the nominal value of those shares is transferred out of Called up share capital and into the
Capital redemption reserve. Should shares held in treasury be reissued, the sales proceeds will be treated as a realised capital
profit up to the amount of the purchase price of those shares and will be transferred to capital reserves. The excess of the sales
proceeds over the purchase price will be transferred to Share premium.
2. INCOME
This note shows the income generated from the portfolio (investment assets) of the Company and income received from
any other source.
2025
£’000
2024
£’000
Income from investments:
UK dividends
34,929 35,857
UK special dividends
2,526 2,095
Overseas dividends
1,222 2,789
Overseas special dividends
– 318
Interest from money market funds 1,980 1,025
40,657 42,084
Other income:
Deposit interest 9 11
9 11
Total income 40,666 42,095
Special dividends of £702,000 were recognised as capital during the year (2024: £2,251,000).
66 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
NOTES TO THE FINANCIAL STATEMENTS / CONTINUED
3. INVESTMENT MANAGEMENT FEE
This note shows the fee due to the Manager. This is calculated and paid monthly.
2025 2024
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Investment management fee 1,385 3,231 4,616 1,493 3,483 4,976
Details of the investment management and secretarial agreement is disclosed on page 43 in the Directors’ Report.
At 31 March 2025, investment management fees of £374,000 (2024: £411,000) were accrued.
4. OTHER EXPENSES
The other expenses
(i)
of the Company are presented below, those paid to the Directors and the auditors are separately identified.
2025 2024
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Other expenses 1,274 19 1,293 1,179 14 1,193
Other expenses include the following:
Directors’ remuneration
(ii)
182 – 182 168 – 168
Auditors’ fees
(iii)
:
– for audit of the Company’s annual financial
statements 53 – 53 51 – 51
The maximum Directors’ fees authorised by the Articles of Association are £250,000 per annum.
I. Other expenses include:
– £14,000 (2024: £300) of employer’s National Insurance payable on Directors’ remuneration. As at 31 March 2025, the
amounts outstanding on Directors’ remuneration and employer’s National Insurance was £52,000 (2024: £nil); and
– custodian transaction charges of £19,000 (2024: £14,000). These are charged to capital.
II. There were five directors during the year and the Directors’ Remuneration Report on page 47 provides further information
on Directors’ fees.
III. Auditors’ fees include expenses but exclude VAT.
5. FINANCE COSTS
Finance costs arise on any borrowing facilities the Company has used. Borrowing facilities are the £120m notes (2024: £120m
notes). Please see Note 12 for additional details of the terms.
2025 2024
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Interest payable on borrowings repayable
not by instalment:
– Interest on overdraft facility
2 5 7 3 6 9
– Unsecured Senior Loan Notes repayable
after 5 years
882 2,061 2,943 885 2,065 2,950
884 2,066 2,950 888 2,071 2,959
THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 67
6. TAXATION
As an investment trust the Company pays no tax on capital gains. As the Company invests principally in UK equities, it has little
overseas tax and the overseas tax charge is the result of withholding tax deducted at source. This note also clarifies the basis
for the Company having no deferred tax asset or liability.
(a) Tax charge
2025
£’000
2024
£’000
Overseas taxation 78 316
(b) Reconciliation of tax charge
2025
£’000
2024
£’000
Return before taxation
85,526 132,021
Theoretical tax at the current UK Corporation Tax rate of 25% (2024: 25%) 21,382 33,005
Effects of:
– Non-taxable UK dividends
(8,439) (8,929)
– Non-taxable UK special dividends
(632) (603)
– Non-taxable overseas dividends
(310) (706)
– Non-taxable gains on investments
(13,424) (24,773)
– Non-taxable (gains)/losses on foreign exchange
(6) 10
– Excess of allowable expenses over taxable income
1,424 1,993
– Disallowable expenses
5 3
– Overseas taxation 78 316
Tax charge for the year 78 316
(c) Deferred tax
Owing to the Company’s status as an investment company, and the Directors’ intention that it continues to meet the conditions
required to maintain that approval in the foreseeable future, no deferred tax has been provided on any capital gains and losses
arising on the revaluation or disposal of investments.
(d) Factors that may affect future tax changes
The Company has cumulative excess management expenses of £516,349,000 (2024: £510,654,000) that are available to offset
future taxable revenue.
A deferred tax asset of £129,087,000 (2024: £127,664,000) at 25% (2024: 25%) has not been recognised in respect of these
expenses since the Directors believe that there will be no taxable profits in the future against which the deferred tax assets
can be offset.
7. RETURN PER ORDINARY SHARE
Return per share is the amount of gain generated for the financial year divided by the weighted average number of ordinary
shares in issue.
The basic revenue, capital and total return per ordinary share is based on each of the returns/loss after taxation and on
148,041,467 (2024: 159,690,463) ordinary shares, being the weighted average number of ordinary shares in issue throughout
the year.
68 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
NOTES TO THE FINANCIAL STATEMENTS / CONTINUED
8. DIVIDENDS ON ORDINARY SHARES
Dividends represent the distribution of income to shareholders. The Company pays four dividends a year – three interim and
one final dividend.
2025 2024
pence £’000 pence £’000
Dividends paid and recognised in the year:
– third interim paid in respect of previous year
6.90 10,429 6.70 11,050
– final paid in respect of previous year
6.90 10,390 6.70 11,036
– first interim paid
6.90 10,153 6.70 10,622
– second interim paid 6.90 10,011 6.70 10,317
27.60 40,983 26.80 43,025
2025 2024
pence £’000 pence £’000
Dividends payable in respect of the year:
– first interim
6.90 10,153 6.70 10,622
– second interim
6.90 10,011 6.70 10,317
– third interim
7.50 10,823 6.90 10,429
– proposed final 7.50 10,823 6.90 10,429
28.80 41,810 27.20 41,797
The proposed final dividend is subject to approval by ordinary shareholders at the AGM.
9. INVESTMENTS HELD AT FAIR VALUE
The portfolio comprises investments which are principally listed on a regulated stock exchange or traded on AIM. A very small
proportion of investments are valued by the Directors as they are unlisted.
Gains or losses are either:
– realised, usually arising when investments are sold; or
– unrealised, being the difference from cost on those investments still held at the year end.
(a) Analysis of investments by listing status
2025
£’000
2024
£’000
Investments listed on a recognised investment exchange 1,230,888 1,206,563
THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 69
(b) Analysis of investment gains:
2025
£’000
2024
£’000
Opening book cost
976,923 1,040,163
Opening investment holding gains
229,640 186,486
Opening fair value
1,206,563 1,226,649
Movements in year:
Purchases at cost
554,028 335,245
Sales – proceeds
(583,400) (454,426)
Gains on investments in the year
53,697 99,095
Closing fair value 1,230,888 1,206,563
Closing book cost
1,097,403 976,923
Closing investment holding gains
133,485 229,640
Closing fair value
1,230,888 1,206,563
The Company received £583,400,000 (2024: £454,426,000) from investments sold in the year. The book cost of these
investments when they were purchased was £433,548,000 (2024: £398,434,000) realising a gain of £149,852,000 (2024:
£55,992,000). These investments have been revalued over time and until they were sold any unrealised profits/losses were
included in the fair value of the investments.
The transaction costs included in gains on investments amount to £2,748,000 (2024: £1,642,000) on purchases and £272,000
(2024: £222,000) for sales.
10. DEBTORS
Debtors are amounts which are due to the Company, such as monies due from brokers for investments sold and income which
has been earned (accrued) but not yet received.
2025
£’000
2024
£’000
Amounts due from brokers
– 9,766
Overseas withholding tax recoverable
1,409 2,229
Income tax recoverable
56 28
Prepayments and accrued income 7,053 7,855
8,518 19,878
11. OTHER PAYABLES
Creditors are amounts which must be paid by the Company and are split between those payable within 12 months of the
balance sheet date and those payable after that time. The main creditors have historically been the long-term debt and bank
borrowings. The other creditors include any amounts due to brokers for the purchase of investments, amounts owing on share
buybacks awaiting settlement or amounts owed to suppliers (accruals) such as the Manager and auditors.
2025
£’000
2024
£’000
Amounts due to brokers
– 5,914
Share buybacks awaiting settlement
– 1,098
Accruals and deferred income 693 696
693 7,708
70 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
NOTES TO THE FINANCIAL STATEMENTS / CONTINUED
12. UNSECURED SENIOR LOAN NOTES
These creditors are amounts that must be paid, as shown by note 11, but are due more than one year after the balance sheet
date.
2025
£’000
2024
£’000
Unsecured Senior Loan Notes – 2.26% interest rate, maturity 30 September 2037 35,000 35,000
Unsecured Senior Loan Notes – 2.49% interest rate, maturity 30 September 2047 35,000 35,000
Unsecured Senior Loan Notes – 2.53% interest rate, maturity 30 September 2051 20,000 20,000
Unsecured Senior Loan Notes – 2.53% interest rate, maturity 30 September 2057 30,000 30,000
120,000 120,000
The Unsecured Senior Loan Notes comprise four separate notes. As shown above, each has a fixed interest rate and contracted
maturity date when the par value must be repaid. Interest is payable on a semi-annual basis, with equal amounts payable on
each of 31 March and 30 September each year. These notes require the net tangible assets of the Company to remain not less
than £300m and net borrowings to remain less than 35% of net assets. This requirement was met throughout the year.
13. CALLED UP SHARE CAPITAL
Share capital represents the total number of shares in issue, including treasury shares.
2025
£’000
2024
£’000
Share capital:
Ordinary shares of 25 pence each
36,080 37, 873
Treasury shares of 25 pence each 12,837 11,044
48,917 48,917
2025 2024
Number of ordinary shares in issue:
Brought forward
151,491,525 165,476,525
Shares bought back and held in treasury (7,170,500) (13,985,000)
Carried forward 144,321,025 151,491,525
Number of shares held in treasury:
Brought forward 44,175,209 30,190,209
Shares bought back into treasury 7,170,500 13,985,000
Carried forward 51,345,709 44,175,209
Total ordinary shares 195,666,734 195,666,734
During the year the Company bought back into treasury 7,170,500 (2024: 13,985,000) ordinary shares at an average price of
747.03p (2024: 664.84p) (including costs).
Since the year end to 19 May 2025 (being the last practicable day prior to the publication of this report), 125,000 shares
have been bought back into treasury. Note 1L on page 65 explains the policy on the transaction costs related to the shares
repurchased and held in treasury.
The Directors’ Report on pages 43 and 44 sets out the Company’s share capital structure, restrictions and voting rights.
THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 71
14. RESERVES
This note explains the different reserves attributable to shareholders. The aggregate of the reserves and share capital (see
previous note) make up total shareholders’ funds.
The share premium comprises the net proceeds received by the Company following the issue of shares, after deduction of the
nominal amount of 25 pence and any applicable issue costs. The capital redemption reserve maintains the equity share capital
of the Company and arose from the nominal value of any shares bought back and cancelled; both are non-distributable.
The capital reserve includes the investment holding gains/(losses), being the difference between cost and market value at the
balance sheet date. It also includes cumulative realised gains/(losses) and costs related to share buybacks. Capital investment
gains and losses are shown in note 9(b) and form part of the capital reserve.
The revenue reserve and certain amounts of the capital reserve are distributable by way of dividend.
15. NET ASSET VALUE PER ORDINARY SHARE
The Company’s total net assets (total assets less total liabilities) are often termed shareholders’ funds and are converted into
NAV per ordinary share by dividing by the number of shares in issue (excluding treasury shares).
NAV – debt at par value
The shareholders’ funds in the balance sheet are accounted for in accordance with accounting standards.
2025 2024
NAV
per share
pence
Shareholders’
funds
£’000
NAV
per share
pence
Shareholders’
funds
£’000
Shareholders’ funds
780.17 1,125,946 749.25 1,135,047
NAV – debt at par 780.17 1,125,946 749.25 1,135,047
A reconciliation showing the NAV per share and Shareholders’ funds using debt at fair value is shown in the Alternative
Performance Measures on pages 87 and 88.
16. RISK MANAGEMENT, FINANCIAL ASSETS AND LIABILITIES
Financial instruments comprise the Company’s investment portfolio, derivative instruments (if any) as well as cash, and any
borrowings, debtors and creditors. This note sets out the Company’s financial instruments and the risks related to them.
Financial instruments
The Company’s financial instruments mainly comprise its investment portfolio (as shown on page 18) and Unsecured Senior
Loan Notes as well as its cash, debtors and creditors that arise directly from its operations such as sales and purchases awaiting
settlement and accrued income. For the purpose of this note, ‘cash’ should be taken to comprise cash and cash equivalents
as defined in note 1D. The accounting policies in note 1C include criteria for the recognition and the basis of measurement
applied for financial instruments. Note 1 also includes the basis on which income and expenses arising from financial assets and
liabilities are recognised and measured.
The main financial risks that the Company faces from its financial instruments are market risk, liquidity risk, and credit risk.
These are set out below:
Market risk – arising from fluctuations in the fair value or future cash flows of a financial instrument because of changes in
market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk:
– Currency risk – arising from fluctuations in the fair value or future cash flows of a financial instrument because of changes
in foreign exchange rates;
– Interest rate risk – arising from fluctuations in the fair value or future cash flows of a financial instrument because of
changes in market interest rates; and
– Other price risk – arising from fluctuations in the fair value or future cash flows of a financial instrument for reasons other
than changes in foreign exchange rates or market interest rates.
Liquidity risk – arising from any difficulty in meeting obligations associated with financial liabilities.
Credit risk – arising from financial loss for a company where the other party to a financial instrument fails to discharge an
obligation.
72 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
NOTES TO THE FINANCIAL STATEMENTS / CONTINUED
Risk Management Policies and Procedures
The Directors have delegated to the Manager the responsibility for the day-to-day investment activities and management of
gearing of the Company as more fully described in the Directors’ Report.
The Company invests in equities and other investments for the long-term so as to fulfil its investment policy (incorporating the
Company’s investment objective). In pursuing its investment objective, the Company is exposed to a variety of risks that could
result in either a reduction in the Company’s net assets or a reduction of the profits available for dividends. The associated
risk management policies are summarised below and have remained substantially unchanged for the two years under review.
16.1 Market Risk
The Company’s Manager assesses the Company’s exposure when making each investment decision, and monitors the overall
level of market risk for the whole of the investment portfolio on an ongoing basis. The Board has meetings in each calendar
quarter to assess risk and review investment performance, as disclosed in the Board Responsibilities on page 39. Any borrowing
to gear the investment portfolio is used to enhance returns but also increases the Company’s exposure to market risk and
volatility. The Company has the ability to gear using its £120 million Unsecured Senior Loan Notes.
16.1.1 Currency risk
The majority of the Company’s assets and liabilities are denominated in sterling. There is some exposure to US dollar, Swiss
franc and the Euro.
16.1.2 Inflation risk
The Company has no assets or liabilities that have direct inflation link properties.
Management of the currency risk
The Manager monitors the Company’s direct exposure to foreign currencies on a daily basis and reports to the Board on
a regular basis. Forward currency contracts can be used to reduce the Company’s exposure to foreign currencies arising
naturally from the Manager’s choice of securities. All contracts are limited to currencies and amounts commensurate with the
assets denominated in currencies. No Forward currency contracts were used during the year (2024: none).
Income denominated in foreign currencies is converted to sterling on receipt. The Company does not use financial instruments
to mitigate the currency exposure in the period between the time that income is included in the financial statements and its
receipt.
The Company may invest up to 20% of the portfolio in securities listed on non-UK stock exchanges. At the year end holdings
of non-UK securities total £76.1 million (2024: £74.3 million) representing 6.2% (2024: 6.2%) of the portfolio.
Currency exposure
The fair values of the Company’s monetary items that had a material currency exposure at 31 March are shown below. Where
the Company’s equity investments (which are not monetary items) are priced in a foreign currency, they have been included
separately in the analysis so as to show the overall level of exposure.
2025 2024
Currency exposure
USD
£’000
DKK
£’000
CHF
£’000
EUR
£’000
USD
£’000
DKK
£’000
CHF
£’000
EUR
£’000
Foreign currency exposure on
net monetary items 869 38 988 384 2,730 38 2,183 584
Investments at fair value
through profit or loss that are
equities 55,389 – – 20,701 40,666 – 21,373 12,254
Total net foreign currency
exposure
56,258 38 988 21,085 43,396 38 23,556 12,838
The above may not be representative of the exposure to risk during the year, because the levels of foreign currency exposure
may change significantly throughout the year.
Currency sensitivity
In respect of the Company’s material direct foreign currency exposure to investments denominated in currencies, if sterling
had weakened by 2.1% (2024: 1.7%) against the US dollar, 1.2% (2024: 1.4%) for the Swiss franc, 1.2% (2024: 1.0%) for the Euro,
and for the Danish Krone, 1.2% (2024: 1.0%) during the year, the capital return and net assets of the Company would have
increased for all currency exposures by £1.4 million (2024: £1.2 million). Conversely, if sterling had strengthened to the same
THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 73
extent for the currencies mentioned above, the capital return and net assets of the Company would have decreased by the
same amount. The exchange rate variances noted above have been based on market volatility in the year, using the standard
deviation of sterling’s fluctuation to the applicable currency. This sensitivity takes no account of any impact on the market
values of the Company’s investments arising from the foreign currency mix of their respective revenues, expenses, assets and
liabilities.
16.1.3 Interest rate risk
Interest rate movements will affect the level of income receivable on cash deposits and money market funds, and the interest
payable on variable rate borrowings. When the Company has cash balances, they are held on variable rate bank accounts
yielding rates of interest dependent on the base rate determined by the custodian, The Bank of New York Mellon (International)
Limited.
The Company has Unsecured Senior Loan Notes of £120 million (2024: £120 million). The Unsecured Senior Loan Notes have
a fixed interest rate which only exposes the Company to changes in market value in the event that the debt is repaid before
maturity. Specifics of the Unsecured Senior Loan Notes are shown in Note 12. The details of their fair value and the affect on net
asset value within the Net Asset Value (NAV) – Debt at Fair Value reconciliation within the Alternative Performance Measures
on page 88.
The Company held no fixed income securities during the year (2024: no fixed income securities). As at 31 March 2025 no
government bonds (2024: none) were recognised as a Cash and Cash Equivalent on the Balance Sheet.
Interest rate exposure
At 31 March the exposure of financial assets and financial liabilities to interest rate risk is shown by reference to:
– floating interest rates (giving cash flow interest rate risk) – when the interest rate is due to be re-set; and
– fixed interest rates (giving fair value interest rate risk) – when the financial instrument is due for repayment.
2025 2024
Within
one year
£’000
Between
one
and five
years
£’000
After
five
years
£’000
Total
£’000
Within
one year
£’000
Between
one
and five
years
£’000
After
five
years
£’000
Total
£’000
Exposure to floating interest
rates:
Cash and cash equivalents
7,233 – – 7,233 36,314 – – 36,314
Unsecured Senior Loan Notes –
debt at par value
– (120,000) (120,000) – – (120,000) (120,000)
Total exposure to interest
rates
7,233 – (120,000) (112,767) 36,314 – (120,000) (83,686)
16.1.4 Other price risk
Other price risks (i.e. changes in market prices other than those arising from interest rate risk or currency risk) may affect the
value of the equity investments, but it is the business of the Manager to manage the portfolio to achieve the best return that
he can.
Management of the other price risk
The Directors manage the market price risks inherent in the investment portfolio by meeting regularly to monitor on a formal
basis the Manager’s compliance with the Company’s stated objectives and policies, and to review investment performance.
The Company’s portfolio is the result of the Manager’s investment process and need not be highly correlated with the
Company’s benchmark or the market in which the Company invests. The value of the portfolio will not move in line with the
market but will move as a result of the performance of the company shares within the portfolio.
If the value of the portfolio fell by 10% at the balance sheet date, the profit after tax for the year and the net assets of the
Company would decrease by £123.1 million (2024: £120.7 million). Conversely, if the value of the portfolio rose by 10%, the profit
after tax and the net assets of the Company would increase by the same amounts.
74 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
NOTES TO THE FINANCIAL STATEMENTS / CONTINUED
16.2 Liquidity risk
Liquidity risk is minimised as the majority of the Company’s investments constitute a diversified portfolio of readily realisable
securities which can be sold to meet funding commitments as necessary.
Liquidity risk exposure
The contractual maturities of the financial liabilities at the year end, based on the earliest date on which payment can be
required, are as follows:
2025
Three
months
or less
£’000
More than
three
months
but less
than
one year
£’000
More than
one
year
£’000
Total
£’000
Unsecured Senior Loan Notes – debt at par value
– – 120,000 120,000
Interest on Unsecured Senior Loan Notes
– 2,928 64,645 67,573
Accruals and deferred income
693 – – 693
693 2,928 184,645 188,266
2024
Three
months
or less
£’000
More than
three
months
but less
than
one year
£’000
More than
one
year
£’000
Total
£’000
Unsecured Senior Loan Notes – debt at par value
– – 120,000 120,000
Interest on Unsecured Senior Loan Notes
– 2,928 67,573 70,501
Amounts due to brokers
5,914 – – 5,914
Share buybacks awaiting settlement
1,098 – – 1,098
Accruals and deferred income
696 – – 696
7,708 2,928 187,573 198,209
16.3 Credit risk
Credit risk encompasses the failure by counterparties to deliver securities which the Company has paid for, or to pay for
securities which the Company has delivered, and cash balances. Counterparty risk is minimised by using only approved
counterparties. The Company’s ability to operate in the short-term may be adversely affected if the Company’s custodian
suffers insolvency or other financial difficulties. However, with the support of the depositary’s restitution obligation the risk of
outright credit loss on the investment portfolio is remote. The Board reviews the custodian’s annual controls report and the
Manager’s management of the relationship with the custodian. Cash balances are limited to a maximum of 1% of net assets with
any one deposit taker, with only approved deposit takers being used, and a maximum deposit of 6% of net assets in aggregate
in liquidity funds with credit ratings of AAAm (or equivalent). These limits are at the discretion of the Board and are reviewed
on a regular basis. The investment policy also allows for UK Government Treasuries to be held. Such holdings are recorded as
cash equivalents if they meet the criteria set out in Note 1D on page 64.
16.4 Custody risk
All investment assets are held in custody by The Bank of New York Mellon (International) Limited in accounts segregated from
the bank’s own assets.
THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 75
17. CLASSIFICATION UNDER FAIR VALUE HIERARCHY
The values of the financial assets and financial liabilities are carried either at their fair value (investments), or at a reasonable
approximation of fair value (amounts due from brokers, dividends receivable, accrued income, amounts due to brokers,
accruals and cash).
Fair Value Hierarchy Disclosures
All except two of the Company’s portfolio of investments are in the Level 1 category as defined in FRS 102 as amended for fair
value hierarchy disclosures (March 16). The three levels set out in this follow.
Level 1 – the unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the
measurement date.
Level 2 – Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the
asset or liability, either directly or indirectly.
Level 3 – Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.
Categorisation within the hierarchy is determined on the basis of the lowest level input that is significant to the fair value
measurement of each relevant asset/liability.
The valuation techniques used by the Company are explained in the accounting policies note.
2025
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Financial assets designated at fair value through profit or loss:
Quoted investments:
Equities and preference shares
1,230,888 – – 1,230,888
Total for financial assets 1,230,888 – – 1,230,888
2024
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Financial assets designated at fair value through profit or loss:
Quoted Investments:
Equities
1,206,563 – – 1,206,563
Total for financial assets 1,206,563 – – 1,206,563
The book cost and fair value of Unsecured Senior Loan Notes, are as follows:
2025 2024
Book
Value
£’000
Fair
Value
£’000
Book
Value
£’000
Fair
Value
£’000
Unsecured Senior Loan Notes
120,000 66,611 120,000 73,461
120,000 66,611 120,000 73,461
Incorporating the fair value of the Unsecured Senior Loan Notes, results in the increase of the net asset value per ordinary share
to 817.16p (2024: 779.97p).
76 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
NOTES TO THE FINANCIAL STATEMENTS / CONTINUED
18. CAPITAL MANAGEMENT
The Company’s total capital employed at 31 March 2025 was £1,245,946,000 (2024: £1,255,047,000) comprising borrowings
of £120,000,000 (2024: £120,000,000) and equity share capital and other reserves of £1,125,946,000 (2024: £1,135,047,000).
The Company’s total capital employed is managed to achieve the Company’s objective and investment policy as set out on
page 15, including that borrowings may be used to provide gearing of the equity portfolio up to the maximum authorised by
shareholders, currently 25% of net assets. Net gearing was 5.0% (2024: 3.1%) at the balance sheet date. The Company’s policies
and processes for managing capital were unchanged throughout the year and the preceding year.
The main risks to the Company’s investments are shown in the Strategic Report under the ‘Principal Risks and Uncertainties’
section on pages 20 to 23. These also explain that the Company is able to use borrowings to gear and that gearing will amplify
the effect on equity of changes in the value of the portfolio.
The Board can also manage the capital structure directly since it has taken the powers, which it is seeking to renew, to issue
and buyback shares and it also determines dividend payments.
The Company is subject to externally imposed capital requirements with respect to the obligation and ability to pay dividends
by section 1158 Corporation Tax Act 2010 and by the Companies Act 2006, respectively. The Board regularly monitors, and has
complied with, the externally imposed capital requirements. This is unchanged from the prior year. As detailed in note 11 and
note 12, current borrowings comprise the Unsecured Senior Loan Notes.
19. CONTINGENCIES, GUARANTEES AND FINANCIAL COMMITMENTS
There were no contingencies, guarantees or other financial commitments of the Company as at 31 March 2025 (2024: nil).
20. RELATED PARTY TRANSACTIONS AND TRANSACTIONS WITH MANAGER
A related party is a company or individual who has direct or indirect control or who has significant influence over the Company.
Under accounting standards, the Manager is not a related party.
Under UK GAAP, the Company has identified the Directors as related parties. The Directors’ remuneration and interests have
been disclosed in pages 47 to 50 with additional disclosure in note 4. No other related parties have been identified.
Details of the Manager’s services and fees are disclosed in the Directors’ Report on page 43, and in note 3.
21. POST BALANCE SHEET EVENTS
There are no significant events after the end of the reporting period requiring disclosure.
THE EDINBURGH INVESTMENT TRUST PLC / FINANCIAL REVIEW / 77
OTHER INFORMATION
FOR SHAREHOLDERS
78 / OTHER INFORMATION FOR SHAREHOLDERS / THE EDINBURGH INVESTMENT TRUST PLC
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR
IMMEDIATE ATTENTION.
If you are in any doubt as to what action to take, you should
consult your stockbroker, solicitor, accountant or other
appropriate independent professional advisor authorised
under the Financial Services and Markets Act 2000. If
you have sold or otherwise transferred all your shares in
The Edinburgh Investment Trust plc, please forward this
document and the accompanying Form of Proxy to the
person through whom the sale or transfer was effected, for
transmission to the purchaser or transferee.
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the one hundred and thirty fifth
Annual General Meeting of The Edinburgh Investment Trust
plc will be held at The Balmoral Hotel, Edinburgh, EH2 2EQ,
at 11:00 a.m. on 22 July 2025.
The 2025 AGM will be held in person and voting will be
by way of a poll. In addition, shareholders may follow the
proceedings virtually using a smartphone, tablet or computer.
Shareholders will be able to view and listen to a webcast of the
2025 AGM and submit questions to the Directors in writing.
Those following proceedings virtually will not be able to vote
on-line and are encouraged to vote ahead of the meeting.
To join the 2025 AGM virtually, please visit www.edinburgh-
investment-trust.co.uk from your device. The recording of
the 2025 AGM will be available on the Company’s website as
soon as practicable after the conclusion of the AGM.
Virtual access to the Annual General Meeting will be available
from 10:30 a.m. on 22 July 2025 although you will not be
able to submit questions until the Annual General Meeting is
declared open. If you wish to appoint a proxy and for them
to attend the Annual General Meeting on your behalf, please
contact MUFG Corporate Markets on telephone number
+44 (0) 371 277 1020*.
*Lines are open from 9.00 a.m. to 5.30 p.m. Monday to Friday,
calls are charged at the standard geographic rate and will
vary by provider. Calls outside the UK will be charged at the
applicable international rate.
AGM VOTING
Shareholders are encouraged to vote by proxy and to appoint
the “Chair of the Meeting” as their proxy. Details of how to
vote, either electronically, by proxy form or through CREST or
Proxymity, can be found in the Notes to the Notice of AGM on
pages 80 and 81.
The results of the AGM will be announced to the London Stock
Exchange and placed on the Company’s website, as soon as
practicable after the conclusion of the AGM.
ORDINARY BUSINESS
To consider and, if thought fit, to pass the following resolutions
all of which will be proposed as Ordinary Resolutions.
1. To receive and consider the Annual Financial Report for
the year ended 31 March 2025;
2. To approve the Remuneration Policy for the year ended
31 March 2025;
3. To approve the Annual Statement and Report on
Remuneration for the year ended 31 March 2025;
4. To declare a final dividend on the ordinary shares;
5. To re-elect Steven Baldwin as a Director of the Company;
6. To re-elect Elisabeth Stheeman as a Director of the
Company;
7. To re-elect Patrick Edwardson as a Director of the
Company;
8. To re-elect Aidan Lisser as a Director of the Company;
9. To re-elect Annabel Tagoe-Bannerman as a Director of
the Company;
10. To re-appoint PricewaterhouseCoopers LLP as auditors
of the Company; and
11. To authorise the Audit Committee to determine the
remuneration of the auditors.
SPECIAL BUSINESS
To consider and, if thought fit, to pass the following resolutions
of which resolutions 12 and 13 will be proposed as Ordinary
Resolutions and resolutions 14 to 16 as SpecialResolutions:
12. To approve and adopt the proposed investment objective
and policy set out in the appendix to this notice on
pages 82 and 83, a copy of which has been produced
to the meeting and signed by the Chairman for the
purposes of identification, as the investment policy of
the Company to the exclusion of the existing investment
policy of theCompany.
13. That:
in substitution for any existing authority under section 551
of the Companies Act 2006 (the ‘Act’) but without prejudice
to the exercise of any such authority prior to the date of this
resolution the Directors of the Company be generally and
unconditionally authorised in accordance with section 551 of
the Act as amended from time to time prior to the date of
the passing of this resolution, to exercise all powers of the
Company to allot shares and grant rights to subscribe for, or
convert any securities into, shares up to an aggregate nominal
amount within the meaning of sections 551(3) and (6) of the
Act of £4,891,668 this being 10% of the Company’s issued
ordinary share capital as at 19 May 2025, such authority to
expire at the conclusion of the next Annual General Meeting
of the Company or the date fifteen months after the passing
NOTICE OF ANNUAL GENERAL MEETING
THE EDINBURGH INVESTMENT TRUST PLC / OTHER INFORMATION FOR SHAREHOLDERS / 79
of this resolution, whichever is the earlier unless the authority
is renewed or revoked at any other general meeting prior to
such time, but so that this authority shall allow the Company
to make offers or agreements before the expiry of this
authority which would or might require shares to be allotted,
or rights to be granted, after such expiry as if the authority
conferred by this resolution had not expired.
14. That:
subject to the passing of resolution number 13 set out in the
notice of this meeting (the ‘Section 551 Resolution’) and in
substitution for any existing authority under sections 570
and 573 of the Companies Act 2006 (the ‘Act’) but without
prejudice to the exercise of any such authority prior to the
date of this resolution, the Directors be and are hereby
empowered, in accordance with sections 570 and 573 of the
Act as amended from time to time prior to the date of the
passing of this resolution to allot equity securities (within
the meaning of section 560(1), (2) and (3) of the Act) for
cash, either pursuant to the authority given by the Section
551 Resolution or (if such allotment constitutes the sale of
relevant shares which, immediately before the sale, were held
by the Company as treasury shares) otherwise, as if section
561 of the Act did not apply to any such allotment, provided
that this power shall be limited:
(a) to the allotment of equity securities in connection
with a rights issue in favour of all holders of a class of
equity securities where the equity securities attributable
respectively to the interests of all holders of securities of
such class are either proportionate (as nearly as may be)
to the respective numbers of relevant equity securities
held by them or are otherwise allotted in accordance with
the rights attaching to such equity securities (subject in
either case to such exclusions or other arrangements
as the Directors may deem necessary or expedient in
relation to fractional entitlements or legal, regulatory or
practical problems under the laws of, or the requirements
of, any regulatory body or any stock exchange in any
territory or otherwise); and
(b) to the allotment (otherwise than pursuant to a rights
issue) of equity securities up to an aggregate nominal
amount of £4,891,668 this being 10% of the Company’s
issued ordinary share capital as at 19 May 2025.
and this power shall expire at the conclusion of the next
Annual General Meeting of the Company or the date fifteen
months after the passing of this resolution, whichever is
the earlier, unless the authority is renewed or revoked at
any other general meeting prior to such time, but so that
this power shall allow the Company to make offers or
agreements before the expiry of this power which would
or might require equity securities to be allotted after such
expiry as if the power conferred by this resolution had not
expired; and so that words and expressions defined in or
for the purposes of Part17 of the Act shall bear the same
meanings in thisresolution.
15. That:
the Company be generally and subject as hereinafter appears
unconditionally authorised in accordance with section 701
of the Companies Act 2006 (the ‘Act’) to make market
purchases (within the meaning of section 693(4) of the Act)
of the issued ordinary shares of 25p each in the capital of the
Company (‘Shares’).
Provided always that:
(a) the maximum number of Shares hereby authorised
to be purchased shall be 29,330,443 ordinary shares
(being 14.99% of the issued ordinary share capital of the
Company as at 19 May 2025);
(b) the minimum price which may be paid for a Share shall be
25p;
(c) the maximum price which may be paid for a Share must
not be more than the higher of: (i) 5 per cent. above
the average of the mid-market values of the Shares for
the five business days before the purchase is made; and
(ii)the higher of the price of the last independent trade in
the Shares and the highest then current independent bid
for the Shares on the London Stock Exchange;
(d) any purchase of Shares will be made in the market for
cash at prices below the prevailing net asset value per
Share (as determined by the Directors);
(e) the authority hereby conferred shall expire at the
conclusion of the next Annual General Meeting of the
Company or the date fifteen months after the passing
of this resolution, whichever is the earlier, unless the
authority is renewed or revoked at any other general
meeting prior to such time;
(f) the Company may make a contract to purchase Shares
under the authority hereby conferred prior to the expiry
of such authority which will or may be executed wholly
or partly after the expiration of such authority and may
make a purchase of Shares pursuant to any such contract;
and
(g) any shares so purchased shall be cancelled, or, if the
Directors so determine and subject to the provisions of
section 724 to 731 of the Companies Act 2006 and any
applicable regulations of the United Kingdom Listing
Authority, be held (or otherwise dealt with in accordance
with section 727 or 729 of the Companies Act 2006) as
treasury shares.
16. That:
the period of notice required for general meetings of the
Company (other than AGMs) shall be not less than 14 days.
The resolutions are explained further in the Directors’ Report
on pages 44 and 45.
80 / OTHER INFORMATION FOR SHAREHOLDERS / THE EDINBURGH INVESTMENT TRUST PLC
NOTICE OF ANNUAL GENERAL MEETING / CONTINUED
Notes
1. The 2025 AGM will be held in person and voting will be
by way of a poll, however, shareholders may follow the
proceedings virtually using a smartphone, tablet or computer.
Shareholders should continue to monitor the Company’s
website at www.edinburgh-investment-trust.co.uk and our
announcements for any updates in relation to the meeting.
2. A member entitled to attend and vote at the AGM is
entitled to appoint one or more proxies to attend, speak
and vote in his stead. A proxy need not be a member
of the Company. In order to be valid an appointment of
proxy must be returned by one of the following methods:
– via MUFG Corporate Markets website
https://uk.investorcentre.mpms.mufg.com/Login/Login;
or
– in hard copy form by post, by courier or by hand to
the Company’s Registrars, MUFG Corporate Markets,
PXS 1, Central Square, 29, Wellington Street, Leeds,
LS1 4DL; or
– in the case of CREST members, by utilising the CREST
electronic proxy appointment service in accordance
with the procedures set out below and in each case,
to be received by the Company not less than 48 hours
before the time of the meeting. Any amended proxy
appointment must be received by this time.
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 11:00 a.m. on 18 July 2025 in
order to be considered valid or, if the meeting is adjourned,
by the time which is 48 hours before the time of the
adjourned meeting. Before you can appoint a proxy via
this process, you will need to have agreed to Proxymity’s
associated terms and conditions. It is important that you
read these carefully as you will be bound by them and they
will govern the electronic appointment of your proxy. An
electronic proxy appointment via the Proxymity platform
may be revoked completely by sending an authenticated
message via the platform instructing the removal of your
proxy vote.
3. CREST members who wish to appoint a proxy by
utilising the CREST electronic proxy appointment service
may do so by utilising the procedures described in the
CREST Manual. 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
made by means of CREST to be valid, the appropriate
CREST message (a ‘CREST Proxy Instruction’) must be
properly authenticated in accordance with Euroclear
UK & International Limited’s specifications and must
contain the information required for such instructions, as
described in the CREST Manual. The message, regardless
of whether it relates to the appointment of a proxy or to
an amendment to the instruction given to a previously
appointed proxy must, in order to be valid, be transmitted
so as to be received by the issuer’s agent (ID RA10) by the
latest time(s) for receipt of proxy appointments specified
in this document. For this purpose, the time of receipt
will be taken to be the time (as determined by the time
stamp applied to the message by the CREST Applications
Host) from which the issuer’s agent is able to retrieve the
message by enquiry to CREST in the manner prescribed
by CREST. After this time any changes of instructions to
proxies through CREST should be communicated to the
appointee through other means.
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. CREST members and, where applicable, their
CREST sponsors or voting service provider(s) should
note that Euroclear UK & International 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 his CREST sponsor or voting service
provider(s) take(s), such action as shall be necessary to
ensure that a message is transmitted by means of the
CREST system by any particular time. In this connection,
CREST members and, where applicable, their CREST
sponsors or voting service providers are referred, in
particular, to those sections of the CREST Manual
concerning practical limitations of the CREST system
and timings. The CREST Manual can be reviewed at
www.euroclear.com.
4. A form of proxy is enclosed.
To be effective, the form of proxy, duly completed
and executed, together with any power of attorney or
other authority under which it is signed (or a notarially
certified copy thereof) must be lodged at the office of
the Company’s Registrars, MUFG Corporate Markets, PXS
1, Central Square, 29, Wellington Street, Leeds, LS1 4DL
by no later than 11:00 a.m. on 18 July 2025.
5. A person entered on the Register of Members at close
of business on 18 July 2025 (a ‘member’) is entitled to
vote at the Meeting pursuant to Regulation 41 of the
Uncertificated Securities Regulations 2001. Any changes
to the Register of Members after such time and date shall
be disregarded in determining the rights of any person
to vote at the Meeting. If the Meeting is adjourned,
THE EDINBURGH INVESTMENT TRUST PLC / OTHER INFORMATION FOR SHAREHOLDERS / 81
entitlement to vote at the adjourned meeting, and the
number of votes which may be cast thereat, will be
determined by reference to the Company’s register of
members 48 hours before the time fixed for the adjourned
meeting.
6. The Terms of Reference of the Audit, Management
Engagement and Nomination Committees and the
Letters of Appointment for Directors will be available
for inspection at the website of the Company at www.
edinburgh-investment-trust.co.uk.
7. A copy of the Company’s Articles of Association is
available for inspection at the website of the Company at
www.edinburgh-investment-trust.co.uk.
8. Any person to whom this Notice is sent who is a person
nominated under section 146 of the Companies Act 2006
to enjoy information rights (a ‘Nominated Person’) may
have a right, under an agreement between him/her and
the shareholder by whom he/she was nominated, to be
appointed (or to have someone else appointed) as a
proxy for the meeting. If a Nominated Person has no such
proxy appointment right or does not wish to exercise it,
he/she may have a right, under such an agreement, to
give instructions to the shareholder as to the exercise of
voting rights.
The statement of the above rights of the shareholders in
relation to the appointment of proxies does not apply to
Nominated Persons. Those rights can only be exercised
by shareholders of the Company.
9. Any corporation which is a member can appoint one or
more corporate representatives who may exercise on its
behalf all of its powers as a member provided that they
do not do so in relation to the same shares.
10. You may not use any electronic address (within the
meaning of section 333(4) of the Companies Act 2006)
provided in this Notice (or in any related documents
including the proxy form) to communicate with the
Company for any purposes other than those expressly
stated.
11. As at 19 May 2025 (being the last practicable day prior
to the publication of this Notice) the Company’s issued
share capital consists of 195,666,734 ordinary shares of
25p each carrying one vote each. 51,470,709 ordinary
shares held in treasury, therefore, the total voting rights
in the Company as at that date are 144,196,025.
12. A copy of this notice (which is at the back of the annual
financial report), and other information required by
section 311A of the Companies Act 2006, can be found at
www.edinburgh-investment-trust.co.uk.
13. Shareholders should note that it is possible that, pursuant
to requests made by members of the Company under
section 527 of the Companies Act 2006, the Company
may be required to publish on a website a statement
setting out any matter relating to: (i) the audit of the
Company’s financial statements (including the auditor’s
report and the conduct of the audit) that are to be laid
before the AGM for the financial year beginning on
1 April 2024; or (ii) any circumstance connected with
auditors of the Company appointed for the financial year
beginning on 1 April 2024 ceasing to hold office since the
previous meeting at which the annual financial report was
laid in accordance with section 437 of the Companies Act
2006 (in each case) that the members propose to raise at
the relevant AGM.
The Company may not require the members requesting
any such website publication to pay its expenses in
complying with sections 527 or 528 of the Companies
Act 2006. Where the Company is required to place
a statement on a website under section 527 of the
Companies Act 2006, it must forward the statement to
the Company’s auditors not later than the time when
it makes the statement available on the website. The
business which may be dealt with at the AGM includes
any statement that the Company has been required
under section 527 of the Companies Act 2006 to publish
on a website.
82 / OTHER INFORMATION FOR SHAREHOLDERS / THE EDINBURGH INVESTMENT TRUST PLC
NOTICE OF ANNUAL GENERAL MEETING / CONTINUED
APPENDIX TO NOTICE OF ANNUAL GENERAL
MEETING
Current Investment Objective and Policy
Please see below the full text of the current investment
objective and policy.
INVESTMENT OBJECTIVE AND POLICY
Investment Objective
The Company invests primarily in UK securities with the
long-term objective of achieving:
1. an increase of the Net Asset Value per share in excess of
the growth in the FTSE All-Share Index; and
2. growth in dividends per share in excess of the rate of
UKinflation.
Investment Policy
The Company will generally invest in companies quoted on
a recognised stock exchange in the UK. The Company may
also invest up to 20% of the market value of the Company’s
investment portfolio, measured at the time of any acquisition,
in securities listed on stock exchanges outside the UK. The
portfolio is selected by the Portfolio Manager on the basis
of its assessment of the fundamental value available in
individual securities. Whilst the Company’s overall exposure
to individual securities is monitored carefully by the Board,
the portfolio is not primarily structured on the basis of
industry weightings. No acquisition may be made which
would result in a holding being greater than 10% of the
market value of the Company’s investment portfolio, nor will
the Company invest more than 15% of the market value of
its investment portfolio in any other UK-listed investment
trusts or investment companies. Further, the Company may
not hold more than 5% of the issued share capital (or voting
shares) of any one company. Investment in convertibles is
subject to normal security limits. Should these or any other
limit be exceeded by subsequent market movement, each
resulting position is specifically reviewed by the Board. The
Company may borrow money to provide gearing to the
equity portfolio of up to 25% of net assets.
Use of derivative instruments is monitored carefully by the
Board and permitted within the following constraints: the
writing of covered calls against securities which in aggregate
amount to no more than 10% of the value of the portfolio, and
the investment in FTSE 100 futures which when exercised
would equate to no more than 15% of the value of the portfolio.
Other derivative instruments may be employed, subject to
prior Board approval, provided that the cost (and potential
liability) of exercise of all outstanding derivative positions at
any time should not exceed 25% of the value of the portfolio
at that time. The Company may hedge exposure to changes in
foreign currency rates in respect of its overseas investments.
Revised Investment Objective and Policy to be
approved by Shareholders at the Annual General
Meeting on 22 July 2025
Please see below the full text of the proposed investment
objective and policy.
INVESTMENT OBJECTIVE AND POLICY
Investment Objective
The Company aims to exceed the total return on the FTSE
All-Share Index and grow its dividend faster than UK inflation.
This objective will be assessed over the long term and
performance against the FTSE All-Share Index will be
measured on a NAV total return basis.
Investment Policy
The Company invests primarily in the shares of companies
quoted on a recognised stock exchange in the UK. Securities
of companies quoted on a recognised stock exchange
outside of the UK may also be held but will not exceed 20%
of the market value of the investment portfolio, measured at
the time of any acquisition.
The portfolio is selected by the Portfolio Manager, and
monitored carefully by the Board, on the basis of the Portfolio
Manager’s assessment of the fundamental value available in
individual securities, whilst giving due regard to sector and
industry weightings and to broader economic and market
conditions. Companies are chosen by the Portfolio Manager
on the basis of their individual business strengths, growth
and income characteristics and valuation, and not according
to specific rules of asset allocation.
Borrowings may be used to provide gearing to the equity
portfolio of up to 25% of net assets.
Investment decisions are restricted by the following:
– No acquisition may be made which would result in a
holding being greater than 10% of the market value of the
investment portfolio;
– The Company will not invest more than 15% of its total
assets in the shares of other UK-listed investment trusts
or investment companies;
– The Company will not hold more than 5% of the issued
share capital (or voting shares) of any one company.
THE EDINBURGH INVESTMENT TRUST PLC / OTHER INFORMATION FOR SHAREHOLDERS / 83
In addition, the Company may:
– invest in convertibles (securities which are typically
expected to convert into shares on a recognised stock
exchange) subject to no acquisition or conversion
resulting in a holding breaching the limits in this
investment policy;
– use derivative instruments, monitored carefully by the
Board and subject to constraints, including the writing
of covered calls against securities (which in aggregate
amount to no more than 10% of the value of the investment
portfolio) and the investment in FTSE 100 futures (subject
to the value of such positions, if exercised, not exceeding
15% of the value of the investment portfolio). Other
derivative instruments may be employed, subject to prior
Board approval, provided that the cost (and potential
liability) of exercise of all outstanding derivative positions
should not exceed 25% of the value of the investment
portfolio at any time;
– hedge exposure to changes in foreign currency rates in
respect of its overseas investments.
84 / OTHER INFORMATION FOR SHAREHOLDERS / THE EDINBURGH INVESTMENT TRUST PLC
HOW TO INVEST IN THE EDINBURGH INVESTMENT
TRUST PLC (THE COMPANY)
The Company’s shares are quoted on the London Stock
Exchange. There are a variety of ways by which investors
can buy the shares. Shares may be purchased through
discretionary wealth managers, banks, independent
financial advisors and via a large number of execution-only
trading platforms. The Manager’s website contains a list
of some of the larger dealing platforms as well as a link to
unbiased.co.uk, for those seeking financial advice, and to the
AIC’s website at www.theaic.co.uk for detailed information
on investment companies.
SHARE PRICE
The price of your ordinary shares can be found in the Financial
Times, Daily Telegraph, The Scotsman and The Times.
In addition, share price information can be found at the London
Stock Exchange website using the EDIN ticker code, on the
website of most share dealing platforms and on the Company’s
own website www.edinburgh-investment-trust.co.uk.
NAV PUBLICATION
The NAV of the Company’s ordinary shares is calculated by
the Manager on a daily basis and is notified to the Stock
Exchange on the next business day. It is published daily in
the newspapers detailed above.
COMPANY’S WEBSITE
Information relating to the Company including investment
objective, supporting philosophy and investment
performance along with news, opinions, disclosures, results
and key information documents can be found on the
Company’s website www.edinburgh-investment-trust.co.uk.
The contents of websites referred to in this document,
or accessible from links within those websites, are not
incorporated in to, nor do they form part of this annual
financial report.
FINANCIAL CALENDAR
In addition, the Company publishes information according to
the following calendar:
ANNOUNCEMENTS
Annual financial report May
Half-yearly financial report November
LONDON RETAIL SHAREHOLDER EVENT
The Company invites shareholders to a retail presentation
by the Portfolio Managers, Imran Sattar and Emily Barnard,
and to meet with the Directors. The event will be held on
8October 2025 at 11am.
Please note this is a non-voting meeting.
DIVIDEND PAYABLE TIMETABLE
1st interim November
2nd interim February
3rd interim May
Final July
ANNUAL GENERAL MEETING
July
YEAR END
31 March
LOCATION OF AGM
The one hundred and thirty fifth Annual General Meeting of
the Company will be held at The Balmoral Hotel, Edinburgh,
EH2 2EQ on 22 July 2025 at 11:00 am.
UK GENERAL DATA PROTECTION REGULATION
(UKGDPR)
UK GDPR is a positive step towards individuals knowing
how their personal data is used and also having more
control over how it is used. The Company has a privacy
notice which sets out what personal data is collected, and
how and why it is used. The latest privacy notice can be
found at www.edinburgh-investment-trust.co.uk under the
‘Other Documents’ section, or a copy can be obtained from
the Company Secretary whose correspondence address is
shown on the next page.
SHAREHOLDER INFORMATION
THE EDINBURGH INVESTMENT TRUST PLC / OTHER INFORMATION FOR SHAREHOLDERS / 85
ADVISORS AND PRINCIPAL
SERVICE PROVIDERS
REGISTERED OFFICE
First Floor
9 Haymarket Square
Edinburgh EH3 8RY
COMPANY NUMBER
Registered in Scotland.
Number: SC1836
ALTERNATIVE INVESTMENT FUND MANAGER
(MANAGER)
Liontrust Fund Partners LLP
2 Savoy Court
London WC2R 0EZ
020 7412 1700
COMPANY SECRETARY
NSM Funds (UK) Limited
4th Floor 46-48 James Street
London W1U 1EZ
0203 697 5772
THE ASSOCIATION OF INVESTMENT COMPANIES
The Company is a member of the Association of Investment
Companies. Contact details are as follows:
020 7282 5555
Email: enquiries@theaic.co.uk / Website: www.theaic.co.uk
LEGAL ADVISOR
Dentons UK and Middle East LLP
First Floor
9 Haymarket Square
Edinburgh
EH3 8RY
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
7 More London Riverside
London SE1 2RT
DEPOSITARY AND CUSTODIAN
The Bank of New York Mellon (International) Limited
160 Queen Victoria Street
London EC4V 4LA
BANKER
The Bank of New York Mellon
160 Queen Victoria Street
London EC4V 4LA
CORPORATE BROKER
Investec Bank plc
30 Gresham Street
London EC2V 7QP
REGISTRAR
MUFG Corporate Markets
Central Square
29 Wellington Street
Leeds
LS1 4DL
If you hold your shares direct and not through a Savings
Scheme or ISA and have queries relating to your shareholding,
you should contact the Registrars on:
0371 664 0300
Calls are charged at the standard geographic rate and will
vary by provider.
From outside the UK: +44 (0) 371 664 0300. Calls from
outside the United Kingdom will be charged at the applicable
international rate. Lines are open from 9:00 am to 5:30 pm,
Monday to Friday (excluding UK Public Holidays).
Shareholders can also access their holding details via MUFG
Corporate Markets’ website:
https://uk.investorcentre.mpms.mufg.com/Login/Login
MUFG Corporate Markets provide an on-line and telephone
share dealing service to existing shareholders who are not
seeking advice on buying or selling. This service is available
at https://dealing.cm.mpms.mufg.com or
0371 664 0445.
Calls are charged at the standard geographic rate and will
vary by provider.
From outside the UK: +44 (0) 371 664 0445. Calls from outside
the UK will be charged at the applicable international rate.
Lines are open from 8:00 am to 4:30 pm, Monday to Friday
(excluding UK Public Holidays).
86 / OTHER INFORMATION FOR SHAREHOLDERS / THE EDINBURGH INVESTMENT TRUST PLC
An APM is a measure of performance or financial position that is not defined in applicable accounting standards and cannot
be directly derived from the financial statements. The calculations shown in the corresponding tables are for the financial years
ended 31 March 2025 and 31 March 2024. The APMs listed here are widely used in reporting within the investment company
sector and consequently aid comparability, providing useful additional information.
BENCHMARK (OR BENCHMARK INDEX)
A standard against which performance can be measured, usually an index that averages the performance of companies in a
stock market or a segment of the market. The benchmark most often referred to in this annual financial report is the FTSE
All-Share Index.
BENCHMARK RETURN
Total return on the benchmark is on a mid-market value basis, assuming all dividends received were reinvested, without
transaction costs, into the shares of the underlying companies at the time the shares were quoted ex-dividend.
DISCOUNT OR PREMIUM (APM)
Discount is a measure of the amount by which the mid-market price of an investment company share is lower than the
underlying net asset value of that share. Conversely, Premium is a measure of the amount by which the mid-market price
of an investment company share is higher than the underlying net asset value of that share. In this annual financial report
the discount is expressed as a percentage of the NAV per share with debt at fair value (see reconciliation of NAV per share
with debt at fair value within the Net Asset Value (NAV) Debt at Fair Value reconciliation within the Alternative Performance
Measures on page 88) and is calculated according to the formula set out below. If the shares are trading at a premium the result
of the below calculation will be positive and if they are trading at a discount it will be negative.
Page 2025 2024
Share price 2 a 740.00p 690.00p
Net asset value per share – debt at market value (note 15) 71 b 817.16p 779.97p
Discount c = (a-b)/b (9.4)% (11.5)%
DIVIDEND YIELD
The annual dividend payable expressed as a percentage of the year end share price.
Page 2025 2024
Dividends per share payable in respect of the year (note 8)
68 a 28.80p 27.20p
Share price 2 b 740.00p 690.00p
Dividend yield c = a/b 3.9% 3.9%
GEARING
The gearing percentage reflects the amount of borrowings that a company has invested. This figure indicates the extra amount
by which net assets, or shareholders’ funds, would move if the value of a company’s investments were to rise or fall. A positive
percentage indicates the extent to which net assets are geared; a nil gearing percentage, or ‘nil’, shows a company is ungeared.
A negative percentage indicates that a company is not fully invested and is holding net cash as described below.
There are several methods of calculating gearing and the following has been used in this report:
GLOSSARY OF TERMS AND ALTERNATIVE
PERFORMANCE MEASURES
THE EDINBURGH INVESTMENT TRUST PLC / OTHER INFORMATION FOR SHAREHOLDERS / 87
GROSS GEARING (APM)
This reflects the amount of gross borrowings in use by a company and takes no account of any cash balances. It is based on
gross borrowings as a percentage of net assets.
Page
2025
£’000
2024
£’000
Unsecured Senior Loan Notes – debt at fair value
75 a 66,611 73,461
Gross borrowings 66,611 73,461
Net asset value – debt at fair value APM 88 b 1,179,335 1,181,586
Gross gearing c = a/b 5.6% 6.2%
NET GEARING OR NET CASH (APM)
Net gearing reflects the amount of net borrowings invested, i.e. borrowings less cash and cash equivalents (incl. investments in
money market funds). It is based on net borrowings as a percentage of net assets. Net cash reflects the net exposure to cash
and cash equivalents, as a percentage of net assets, after any offset against total borrowings.
Page
2025
£’000
2024
£’000
Unsecured Senior Loan Notes – debt at fair value
75 66,611 73,461
Less: cash and cash equivalents 60 (7,233) (36,314)
Net borrowings a 59,378 37,147
Net asset value – debt at fair value APM 88 b 1,179,335 1,181,586
Net gearing c = a/b 5.0% 3.1%
LEVERAGE
Leverage, for the purposes of the UK AIFM Directive is not synonymous with gearing as defined above. In addition to
borrowings, it encompasses anything that increases the Company’s exposure, including foreign currency and exposure gained
through derivatives. Leverage expresses the Company’s exposure as a ratio of the Company’s net asset value.
Accordingly, if a Company’s exposure was equal to its net assets it would have leverage of 100%. Two methods of calculating
such exposure are set out in the AIFMD, gross and commitment. Under the gross method, exposure represents the aggregate
of all the Company’s exposures other than cash balances held in base currency and without any offsetting. The commitment
method takes into account hedging and other netting arrangements designed to limit risk, offsetting them against the
underlying exposure.
NET ASSET VALUE (NAV)
Also described as shareholders’ funds, the NAV is the aggregate value of all assets less all liabilities. Liabilities for this purpose
include debt, deducted at either par value or fair value as described in more detail below. The NAV per share is calculated by
dividing the net asset value by the number of ordinary shares in issue (excluding shares held in treasury).
NET ASSET VALUE (NAV) – DEBT AT PAR
The NAV with debt at par recognises the value of the debt liability as the nominal amount that will be repaid at maturity. For
the £120m Unsecured Senior Loan Notes, this recognises a liability of £120m. This is the basis used in the preparation of the
Balance Sheet on page 60.
88 / OTHER INFORMATION FOR SHAREHOLDERS / THE EDINBURGH INVESTMENT TRUST PLC
GLOSSARY OF TERMS AND ALTERNATIVE PERFORMANCE MEASURES / CONTINUED
NET ASSET VALUE (NAV) – DEBT AT FAIR VALUE
The fair value of each tranche of the £120m Unsecured Senior Loan Notes is ascertained by the administrator by aggregating
the discounted value of future cashflows, being the contractual interest payments and the repayment of capital at maturity as
each falls due. The discount factor used for each tranche is based on the market yield of UK Treasuries with similar maturity
dates adjusted to incorporate a credit spread.
The net asset value per share adjusted to include the Unsecured Senior Loan Notes at fair value rather than at par is as follows:
NAV
per share
pence
2025
Shareholders’
funds
£’000
NAV
per share
pence
2024
Shareholders’
funds
£’000
NAV - debt at par
780.17 1,125,946 749.25 1,135,047
Unsecured Senior Loan Notes 83.15 120,000 79.21 120,000
- debt at fair value (46.16) (66,611) (48.49) (73,461)
NAV - debt at fair value 817.16 1,179,335 779.97 1,181,586
ONGOING CHARGES RATIO (APM)
The ongoing administrative costs of operating the Company are encapsulated in the ongoing charges ratio, which is calculated
in accordance with guidance issued by the AIC. The calculation incorporates charges allocated to capital in the financial
statements as well as those allocated to revenue, but excludes non-recurring costs, transaction costs of investments, finance
costs, taxation, and the costs of buying back or issuing shares. The ongoing charges ratio is the aggregate of these costs
expressed as a percentage of the average daily net asset value reported in the year.
Page
2025
£’000
2024
£’000
Investment management fee
59 4,616 4,976
Other expenses 59 1,293 1,193
Total recurring expenses a 5,909 6,169
Average daily net assets b 1,169,201 1,163,962
Ongoing charges ratio c = a/b 0.51% 0.53%
RETURN
The return generated in a period from the investments.
CAPITAL RETURN
Reflects the return on NAV, excluding any dividends reinvested.
TOTAL RETURN
Total return is the theoretical return to shareholders that measures the combined effect of any dividends paid together with
the rise or fall in the share price or NAV. In this annual financial report these return figures have been sourced from LSEG Data
& Analytics who calculate returns on an industry comparative basis.
TREASURY SHARES
Shares previously issued by a Company that have been bought back from shareholders to be held by the Company for
potential sale or cancellation at a later date. Such shares are not capable of voting and carry no rights to dividends.
NET ASSET VALUE TOTAL RETURN (APM)
Total return on net asset value per share, with debt at fair value, assuming dividends paid by the Company were reinvested into
the shares of the Company at the NAV per share at the time the shares were quoted ex-dividend.
THE EDINBURGH INVESTMENT TRUST PLC / OTHER INFORMATION FOR SHAREHOLDERS / 89
SHARE PRICE TOTAL RETURN (APM)
Total return to shareholders, on a mid-market price basis, assuming all dividends received were re-invested, without transaction
costs, into the shares of the Company at the time the shares were quoted ex-dividend.
2025 Page
Net Asset
Value
Share
Price
As at 31 March 2025
60 817.16p 740.00p
As at 31 March 2024 60 779.97p 690.00p
Change in year a 4.8% 7.2%
Impact of dividend reinvestments
(1)
b 3.5% 4.1%
Total return for the year c = a+b 8.3% 11.3%
2024 Page
Net Asset
Value
Share
Price
As at 31 March 2024
60 779.97p 690.00p
As at 31 March 2023 60 713.75p 660.00p
Change in year a 9.3% 4.5%
Impact of dividend reinvestments
(1)
b 4.1% 4.4%
Total return for the year c = a+b 13.4% 8.9%
(1) Total dividends paid during the year of 27.60p (2024: 26.80p) reinvested at the NAV or share price on the ex-dividend date. Share price increases
subsequent to the reinvestment date consequently further increase the returns, or vice versa if the NAV or share price falls.
COMPANY NAME
The Edinburgh Investment Trust plc is registered at Companies House as The Edinburgh Investment Trust Public Limited
Company.
90 / OTHER INFORMATION FOR SHAREHOLDERS / THE EDINBURGH INVESTMENT TRUST PLC
ALTERNATIVE INVESTMENT FUND
MANAGERS DIRECTIVE DISCLOSURE
ALTERNATIVE INVESTMENT FUND MANAGER AND
UK AIFM DIRECTIVE
UK AIFM DIRECTIVE (the UK AIFMD, the Directive)
The UK’s implementation of Directive 2011/61/EU of the
European Parliament and of the Council of 8 June 2011
on Alternative Investment Fund Managers, together with
Commission Delegated Regulation (EU) No. 231/2013 which
forms part of UK law by virtue of the European Union
(Withdrawal) Act 2018, and any transposing legislation
incorporating the same into UK law (including, but not
limited to, the UK Alternative Investment Fund Managers
Regulations 2013 (SI 2013/1773), as amended by The
Alternative Investment Fund Managers (Amendment etc.)
(EU Exit) Regulations 2019), all as may be amended or
supplemented from time to time.
ALTERNATIVE INVESTMENT FUND MANAGER
(AIFM, the Manager, the Portfolio Manager)
The Company falls within the definition of an Alternative
Investment Fund (AIF) under the Directive and, as such, is
required to have (or be) an authorised AIFM. The Company
has appointed Liontrust Fund Partners LLP (Liontrust) as
AIFM. Liontrust is authorised and regulated by the FCA as a
full-scope AIFM.
The responsibility for the day-to-day investment management
activities of the Company has been delegated by AIFM to
Liontrust Investment Partners LLP.
Amongst other things, regulations implementing the
UK AIFMD require certain information to be provided to
prospective investors. This information can be found in the
Company’s page of the Manager’s website (www.liontrust.
co.uk) in a downloadable document titled ‘AIFMD Investor
Information’. There has been no material change to this
document in the year.
Any information requiring immediate disclosure pursuant to
the Directive will be disclosed through a primary information
provider. In addition, the Directive requires information
in relation to the Company’s leverage (both ‘gross’ and
‘commitment’ – see the Glossary of Terms and Alternative
Performance Measures on pages 86 to 89) and the
remuneration of the Company’s AIFM to be made available
to investors.
Accordingly:
– the leverage calculated for the Company at its year end
was 109% for gross and 109% for commitment (2024:
105% gross and 109% commitment). The limits the AIFM
has set for the Company remain unchanged at 250% and
200% respectively;
– the AIFM summary remuneration policy is available from
the corporate policies page of the Manager’s website
(www.liontrust.co.uk) and from the Company’s company
secretary, on request (see contact details on page 85);
and – the AIFM remuneration paid for the year to 31March
2025 is described below.
AIFM REMUNERATION
REMUNERATION POLICY
As AIFM, Liontrust Fund Partners LLP is required to
maintain a remuneration policy (the “Remuneration Policy”
or the “Policy”) that meets the requirements of the AIFM
Remuneration Code. The Policy governs the remuneration
of the AIFM’s key senior personnel, risk takers and control
functions (the “Code Staff”). The table below provides an
overview of the total remuneration paid to the staff of the
Management Company for the year ended 31 March 2025:
l Aggregate total remuneration paid by the Manager to its
staff (employees and members).
l Aggregate total remuneration paid by the Manager to all
relevant code staff.
THE EDINBURGH INVESTMENT TRUST PLC / OTHER INFORMATION FOR SHAREHOLDERS / 91
Headcount
Total
Remuneration
(£’000)
Manager UK Staff
1
of which
94 11,664
Fixed Remuneration 94 9,339
Variable Remuneration 94 2,325
AIFM Remuneration Code Staff of which
Senior Management
2
2 82
Other control functions:
Other code staff/risk takers 4 1,275
1
The Manager’s UK Staff costs have been incurred by another Group entity and allocated to the AIFM. The most appropriate measure of staff costs are
those staff who are members of Liontrust Fund Partners LLP or Group staff who are employed by Liontrust Asset Management Plc but have theirs costs
apportioned to the LLP. The information has been disclosed on an annualised basis.
2
AIFM Aggregate Remuneration Code Staff applies only in respect of services to the AIFM funds rather than their total remuneration in the year. For senior
management and control function staff, remuneration is apportioned on the basis of assets under management for AIFM funds versus the total Group
assets under management.
Remuneration is made up of fixed pay (i.e. salary and
benefits such as pension contributions) and variable pay
(annual performance based or linked directly to investment
management revenues). Annual incentives are designed
to reward performance in line with the business strategy,
objectives, values and long term interests of the AIFM
and Liontrust Asset Management PLC (LAM) Group. The
annual incentive earned by an individual is dependent on
the achievement of financial and non-financial objectives,
including adherence to effective risk management practices.
The AIFM provides long-term incentives which are designed
to link reward with long-term success and recognise the
responsibility participants have in driving future success and
delivering value. Long-term incentive awards are conditional
on the satisfaction of corporate performance measures. The
structure of remuneration packages is such that the fixed
element is sufficiently large to enable a flexible incentive
policy to be operated.
Staff are eligible for an annual incentive based on their
individual performance, and depending on their role, the
performance of their business unit and/or the group. These
incentives are managed within a strict risk framework, and
the Directors of LAM retain ultimate discretion to reduce
annual incentive outcomes where appropriate.
The AIFM actively manages risks associated with delivering
and measuring performance. All our activities are carefully
managed within our risk appetite, and individual incentive
outcomes are reviewed and may be reduced in light of any
associated risk management issues.
The Liontrust Group operates a Remuneration Committee
(the “Committee”). The Committee reports to the Board. The
Committee reviews risk and compliance issues in relation
to the vesting of deferred awards for all employees and
members. Compliance is monitored throughout the vesting
period by the Committee.
These remuneration policies apply also to other entities in
the Liontrust Group to which investment management of
the Company has been delegated, and those delegates are
subject to contractual arrangements to ensure that policies
which are regarded as equivalent are applied.
The Board adopts, and reviews annually, the general
principles of the applicable remuneration policies, and
the implementation of the remuneration policies is, at
least annually, subject to central and independent internal
review by the Committee for compliance with policies and
procedures.
SCOPE OF THE POLICY
The AIFM is subject to the requirements of the AIFM
Remuneration Code (SYSC 19B) (the “Code”). The
requirements of the Code are applicable to the remuneration
arrangements of individuals who fall within the definition of
Code staff under the Code and this policy sets out the basis
on which the rules contained within the Code will be applied
to Code Staff. The Committee itself sets the remuneration
and has oversight if remuneration arrangements for all
other Code Staff together with such other senior employees
as the Committee may determine from time to time. The
Committee also reviews the remuneration arrangements of
other employees and the operation of the incentive plans to
ensure that remuneration arrangements have regard to pay
and employment conditions. However, decisions on individual
remuneration arrangements are made by management in the
area, with oversight by the Human Resources Director. No
hedging or other mitigation arrangements may be entered
into by employees as that would undermine risk alignment
effects.
CBP029867
The paper stock used in this report is manufactured at
a mill that is FSC accredited. The manufacture of the
paper in this report has been Carbon Balanced. The print
factory is FSC accredited and has the Environmental
ISO 14001 accreditation.
Vegetable based inks were used in the printing process.
THE EDINBURGH INVESTMENT TRUST PLC ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 MARCH 2025
MANAGED BY
Edinburgh Investment Trust plc
First Floor
9 Haymarket Square
Edinburgh
EH3 8RY
Telephone +44 (0)20 7412 1700
Email LionTA@liontrust.co.uk
edinburgh-investment-trust.co.uk