Annual Report & Financial Statements
For the year ended 31 December 2023
01.
Objective
The investment objective of Temple Bar
Investment Trust Plc* is to provide growth in
income and capital to achieve a long-term total
return greater than the benchmark FTSE All-Share
Index, through investment primarily in UK-listed
securities. The Company’s policy is to invest in a
broad spread of securities with the majority of
the portfolio typically selected from the
constituents of the FTSE 350 Index.
02.
Purpose
The purpose of the Company is to deliver long-term
returns for shareholders from a diversified portfolio
of investments.
* “Temple Bar”, the “Trust” or the “Company”
2
Temple Bar Investment Trust Plc
Annual Report & Financial Statements for the year ended 31 December 2023
Contents
Strategic Report
5 Summary of Results
7 Chairman’s Statement
11
Investment Approach
14 Portfolio Manager’s Report
19 Engagement Case Studies
24 Portfolio of Investments
26 Portfolio Distribution
28 Overview of Strategy
Governance Report
44 Board of Directors
46 Report of Directors
50 Corporate Governance Statement
55 Report on Directors’ Remuneration
57
60 Report of the Management Engagement Committee
61 Report of the Nomination Committee
62 Statement of Directors’ Responsibilities
65
Report of the Audit and Risk Committee
Independent Auditor’s Report
Financial Report
73 Statement of Comprehensive Income
74 Statement of Changes in Equity
75 Statement of Financial Position
76 Statement of Cash Flows
77 Notes to the Financial Statements
Shareholder Information
93 Notice of Annual General Meeting
97 Useful Information for Shareholders
98 Corporate Information
99 Glossary of Terms
Temple Bar Investment Trust Plc
Annual Report & Financial Statements for the year ended 31 December 2023
3
3
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Strategic Report
4
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Summary of Results
NAV total return with debt at fair value1,2,3
Share price total return1,3
FTSE All-Share Index (the “Benchmark”) 4
Change in Retail Price Index over year 5
NAV per share with debt at book value
NAV per share with debt at fair value1,2
Share price
Discount of share price to NAV per share with debt at fair value1
Dividends per share
Dividend Yield1
Net gearing with debt at book value1
Ongoing charges1
2023
12.3%
12.5%
7.9%
5.2%
248.0p
252.2p
238.0p
5.6%
9.60p
4.0%
9.8%
0.56%
20224
0.9%
3.6%
0.3%
13.4%
228.5p
233.5p
220.5p
5.6%
9.35p
4.2%
8.4%
0.54%
% change
8.5%
8.0%
7.9%
2.7%
1 Alternative Performance Measure – See glossary of terms beginning on page 99 and for definition and more information.
2 Debt fair value is calculated based on unobservable input, see note 20 beginning on page 87 .
3 Source: Morningstar.
4 Source: Redwheel.
5 Source: ons.gov.uk.
Total Return Performance Year to 31 December 2023
115
Temple Bar Share Price (12.5%)
Temple Bar NAV with debt at fair value (12.3%)
FTSE All-Share (7.9%)
110
105
100
95
Dec 22
Jan 23
Feb 23
Mar 23
Apr 23
May 23
Jun 23
Jul 23
Aug 23
Sep 23
Oct 23
Nov 23
Dec 23
Source: Morningstar for Company returns, Redwheel for FTSE All-Share returns.
Rebased to 100 as at 31 December 2022.
Total Return Performance from 30 October 2020 to 31 December 2023
200
150
100
Temple Bar Share Price (92.5%)
Temple Bar NAV with debt at fair value (86.7%)
FTSE All-Share (50.0%)
Oct 20 Dec 20
Feb 21 Apr 21 Jun 21 Aug 21 Oct 21 Dec 21 Feb 22
Apr 22 Jun 22 Aug 22 Oct 22 Dec 22
Feb 23
Apr 23 Jun 23 Aug 23 Oct 23 Dec 23
Source: Morningstar for Company returns, Redwheel for FTSE All-Share returns.
Rebased to 100 as at 30 October 2020, date of appointment of Redwheel, the trading name of RWC Asset Management LLP.
5
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
6
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Chairman’s Statement
Review
In the year under review, I am pleased to report that the
Trust’s Net Asset Value total return with debt at fair value
was +12.3%, outperforming the total return on the FTSE
All-Share Index of +7.9%. The share price total return
was slightly better at +12.5% .
Since Redwheel took over the management of the Trust at
the end of October 2020, the Net Asset Value total return to
the end of 2023 has been 86.7% compared with 50.0% for
the Benchmark, a significant outperformance. Although
annual metrics are of course important, the Board
continues to focus primarily on the Trust’s longer-term
performance.
Capital
Challenging stock market conditions have continued to
have a negative impact on share price discounts across
the investment company sector, with the average level of
discount standing at c. 12. 3%* for equity investment
trusts, compared to the Trust’s discount of 10.1% as a t
2 April 2024. The Board has continued with its active
share buyback policy, purchasing 27,209,505 shares to be
held in treasury for a total consideration of £63.5m during
the year. These buybacks not only have the effect of stabilising
the supply/ demand balance but are also accretive to the
Trust’s Net Asset Value, adding 1.4p per share to our
year-end Net Asset Value.
On 31 December 2023, there were 290,612,881 shares in issue
(excluding the 43,750,944 shares held in treasury). Since this
date to 2 April 2024, a further 3, 771,869 shares have been
bought back for treasury, at a cost of £8. 9m.
Portfolio
Portfolio turnover^ increased in 2023, although remained
comparatively low at 16.9% (2022: 7.2%) with our Portfolio
Manager being generally satisfied with the positioning of
the portfolio.
Further details of the Portfolio Manager’s investment
approach, portfolio construction and significant
contributors to and detractors from return in the year can be
found in the Portfolio Manager’s Report beginning on page 14 .
Dividend
Total dividends for the year amounted to 9.60p per
share (2022: 9.35p per share), an increase of 2.7% and
representing a current yield of 4.0 %. This increase
has been supported by a marginal contribution
from the Trust’s distributable revenue reserves
this year.
The Board closely monitors the Trust’s net revenue
position and, based on the latest forecasts, expects
future annual dividends to increase from this level
over time.
Gearing
At the year-end, the Trust’s net gearing was 9.8%
(2022: 8.4%).
Environmental, Social
& Governance (“ESG”)
Issues
ESG matters continue to be an important priority for the
Board and our objective is to have full, transparent disclosure
on the topic. The Board continues to advocate the concept of
active stewardship, requesting that our Portfolio Manager
monitors, evaluates and actively engages with investee
companies with the aim of preserving or adding value to
the portfolio. The Portfolio Manager reports back to the Board
regularly on ESG related matters. Further details can be found
in the Portfolio Manager’s Report beginning on page 14
and also on page 18.
* Source: Cavendish Securities
^ See glossary on page 100 for definition.
7
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
Chairman’s statement continued
The Board
Lesley Sherratt, the Company’s Senior Independent
Director and the Chair of the Audit and Risk Committee,
having served on the Board since 2015, will retire at the
conclusion of the Company’s Annual General Meeting on
Tuesday, 7 May 2024. Lesley’s leadership, and her financial
and investment industry experience have been invaluable
to the Board. Carolyn Sims, a Chartered Accountant, will
take over from Lesley as the Chair of the Audit and Risk
Committee and Charles Cade will take over as the Senior
Independent Director .
Annual General Meeting
(“AGM”)
Like last year, the AGM this year will be held at 25 Southampton
Buildings, London WC2A 1AL. It will be held on
Tuesday,7 May 2024 at 11.00am. Shareholders are
welcome to attend in person where you will be able to
hear a presentation from the portfolio management
team Nick Purves and Ian Lance and also to meet the Board
of Directors.
I encourage all shareholders to exercise their right to vote at
the AGM and to register your votes in advance of the meeting.
Registering your vote in advance will not restrict you from
attending and voting at the meeting in person should you
wish to do so.
Shareholders are invited to register their vote in
advance by 11.00am on Thursday, 2 May 2024 at the
latest (please see page 95 for further information).
8
Outlook
Against a backdrop of continued concerns regarding the
level of inflation in the UK and uncertainty for the global
economy and also rising geopolitical tensions, the valuation
of UK equities looks compelling compared to their
equivalents overseas.
Your Board shares the view of our Portfolio Manager that
the Trust’s portfolio continues to be priced to offer
shareholders further excess investment returns in the future.
The UK equity market continues to be valued at a significant
discount to its international peers as many market
participants in the UK have been allocating away from UK
equities. This has resulted in large portions of the UK equity
market being valued at a significant discount to intrinsic
value. Unless this changes, it seems likely that we will
continue to see overseas corporate buyers step in to take
advantage of these depressed valuations, with ownership
falling into foreign hands and the number of quoted UK
businesses continuing to decline. Whilst this process is likely
to be very rewarding for the Company’s shareholders, with
takeover premiums often between 50% and 100% of the
previously prevailing share price, your Board believes that a
healthy equity market is beneficial to the functioning of the
economy.
Richard Wyatt
Chairman
3 April 2024
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 9
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 “Our investment approach has
always been to seek out
fundamentally sound
businesses which by virtue of
their market positions can grow
their profits over the long term.”
10
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Investment Approach
A classic approach to value investing
The portfolio management team of Nick Purves and Ian
Lance are long-term intrinsic value investors who believe
that short-term sentiment amongst many market
participants causes them to overreact to news which has
little or no impact on the long-run value of a business.
This overreaction causes share prices to diverge from the
intrinsic value of the underlying business and provides an
opportunity for long-term investors to purchase shares at
less than their true value. In the long term the share price
tends to move closer to the intrinsic value of the business
and this creates excess returns for investors who purchased
shares at low valuations. The team form a view of a
company’s long-run profit potential and make balance
sheet adjustments to assess intrinsic value. They use their
experience and knowledge of companies and sectors to
identify those companies that are more likely to recover
and improve in the future.
Identifying quality and avoiding value
traps
Some value strategies simply apply mechanistic measures
to identify undervalued stocks but this can lead to investing
in businesses that are in structural decline; they may be
cheap but their potential to recover is limited. Instead, the
p ortfolio management team’s ‘intrinsic value’ approach
aims to identify undervalued, yet good, quality
companies with strong cash flows and robust balance
sheets. The portfolio management team put a strong
emphasis on financial strength because it gives them
the confidence that a company can survive through a
prolonged period of lower profitability caused by
company-specific issues, or an unexpected downturn in
the economy.
11
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 As Temple Bar’s Portfolio
Manager, Redwheel aims
to avoid lower-quality
stocks or so called ‘value
traps’ by monitoring
companies against three
different types of risk:
12
• Valuation – extrapolating favourable trends and paying
more than the intrinsic value of the business (e.g. avoiding a
situation where something is positively impacting a
company’s share price in the short term but that isn’t
sustainable longer term);
• Earnings – the risk that the earnings of the Company
decline for cyclical or secular reasons (e.g. the industry or
sector that the business operates in is itself in cyclical or
long-term decline);
• Environmental, Social & Governance – unethical or
neglectful behaviour by a company in one of these areas
can harm those who invest as well as the environment
or society in which a company is located. We believe
that applying ESG best practices, such as
consideration of environmental and product safety,
workplace diversity and strong corporate governance
can contribute to long-term investment returns while
mitigating risks.
In the diagram overleaf Redwheel has set out some of
the key factors it considers when seeking to uncover the
most compelling value opportunities:
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 10 Pillars of value investing
Ian Lance and Nick Purves believe value
investing is making a comeback. With
more than six decades of combined
experience in UK equities, here’s how
they do it.
Enhance, don’t drift
Discipline is key to value
investing –stick to your
philosophy, you’re here
for the long run. Always
look to improve and
adapt as things change.
Consider probabilities
and payoffs
No matter the research,
there are always surprises,
positive and negative.
Think best and worst case
scenarios. If we think a
share price could go to
zero in one scenario, but
has 400% upside in
another, there is probably a
case for investing.
Simple but not easy
Buying shares for less than
their worth then selling
when the value has been
realised is easy to
understand. But most
don’t invest this way due
to a lack of ‘sticking with it’.
Value investing is tricky
– we are hard-wired to
conform – but can be
rewarding.
Cycles, cycles, cycles
Profits and share prices are
impacted by cycles such
as credit, commodity and
business. An investor’s
overreaction can throw
up opportunities. An
advantage lies in knowing
which cycles impact an
investment and where
we are in that cycle.
Be contrarian but not
mindless contrarian
Investors love to buy what
everyone else hates. But
having respect for what
the market is saying is
key. Eagerly buying shares
being sold in companies
with too much debt, or
declining profits, can
prove costly and
mindlessly contrarian.
Don’t buy rubbish
Recently the market has
become fixated with
quality and growth.
Quality and growth are
intrinsic to a business’
value. We’ve had success
when high quality
businesses have been
questioned by the
market, resulting in low
value entry.
Bargains are rare, make
the most of them
It’s unlikely that you’re
going to buy a business
trading at half its intrinsic
value. However, a
company or an industry
will suffer a drawdown at
some stage, which may
present an opportunity
to buy at a good value.
Adopt an absolute
return mindset
Value investing is a risk
averse strategy born out
of a reaction to the Great
Depression. By buying a
dollar of value for 50 cents,
you build in a ‘margin of
safety’ in case the economy
and/or the stock market
suffer. Value investors see
risk as the risk of
permanent capital
impairment, so, invest
with this at top of mind.
Be patient, be long term
A struggling, out-of-
favour business is unlikely
to turn around the day
after you invest. It’s more
likely that things continue
to get worse, so we try to
be patient, allowing for
profitability to improve
and for the market to
recognise it. Our typical
holding period is at least
five years.
There is no single
correct method
Value investing relies on
estimating the intrinsic
worth of a business. Our
experience tells us to be
flexible, by adjusting
earnings for cyclicality,
and to recognise the
positive (hidden value),
and the negative (e.g.
pension fund deficit), on
a balance sheet.
13
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Portfolio Manager’s
Report
14
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 The Portfolio
Manager’s Team
Nick Purves
Ian Lance
How do you describe your approach to investing?
We are value investors. This means that we invest the Trust’s assets in companies
whose stock market value is at a significant discount to the fair or intrinsic value of
the business. Investing in under valued companies provides two benefits. First, it
provides investors with a margin of safety if events don’t unfold in a way that investors
would have hoped and second, they can expect to receive an excess investment return
as and when this under valuation is corrected by the stock market.
How does this work in practice?
A company’s shares will trade at a discount to its intrinsic value for one of two reasons:
neglect or controversy. Where the cause is neglect, the stock market is not concerned
that there is a particular problem with the business; it is just that the company is
seen to offer relatively dull prospects in a world where many investors crave
excitement. Where there is a controversy surrounding the company, investors are
worried that a downturn in the economy or some secular change in the
company’s industry will negatively impact profitability. This uncertainty is unsettling
for many investors and can cause them to sell the shares. In a desire to avoid what are
sometimes seen as troubled businesses, investors often forget that the purchase of a
share exposes them to a very long-term stream of corporate cash flows, the true value
of which only changes by a relatively small amount even in the event of a severe
recession. The result is that share prices will often overreact to short-term news flow.
Temple Bar seeks to take advantage of this excess volatility by investing in
companies whose shares are significantly undervalued based on a conservative
view of a business’s long-term profit potential .
What evidence is there supporting this style of investment?
Numerous academic studies1 have shown that systematically investing in lowly valued
companies has seen investors enjoy an excess long-term investment return above
the wider stock market, even though it is often these companies that are seen to
operate in the most challenged industries. The reason for this outperformance
comes down to psychological factors where investors systematically overpay for
those companies whose prospects are seen to be the most attractive, whilst being
too quick to overlook or dismiss companies where the outlook is more difficult. By
investing the Trust’s assets in lowly valued companies, we aim to take advantage of
these behavioural inconsistencies to the benefit of the Temple Bar ’s shareholders.
So, what is that you look for in companies?
We seek to identify fundamentally sound but lowly valued companies whose shares
are priced to offer higher investment returns in the future. A fundamentally sound
business is one that can grow its profits over time (although not necessarily in each
year), has strong finances and a capable and sensible management team who allocate
capital in the best interests of their shareholders.
How would you describe the investment backdrop in the last year?
Most stock markets delivered attractive returns in 2023, despite having to contend with
further interest rate rises, the ongoing war in Ukraine and instability in the US banking
sector. In the US, the UK and Continental Europe, Central Banks have been raising rates
to bring inflation back to the target level of around 2%. In the summer, there were
concerns that Central Banks were losing this battle which led to fears that interest rates
might have to take another step up, thereby increasing the risk of a hard landing in
the economy. However, in the fourth quarter, the narrative changed considerably
thanks to several downside surprises in inflation readings, which led to hopes that
inflation would soon be back to around target levels. For stock markets, this led to
optimism that an economic soft landing was coming into view, whereby inflation
would be back at target levels without a recession taking place.
1 One study from Professors Dimson, Marsh and Staunton used dividend
yield as a measure of valuation and demonstrated that the highest
yielding part of the US stock market between 1927 and 2022 generated
a total return of 11.2% per annum versus 9.4% per annum for the lowest
yielding part, meaning that $1 at the start of the period became $25,277
in the former but only $5,513 in the latter. The data for the UK market
starts from 1900 with £1 invested producing £199,040 in high yielding
stocks versus £9,717 for low yielding stocks. Source: © Elroy Dimson,
Paul Marsh and Mike Staunton; US data is from Professor Kenneth
French, Tuck School of Business, Dartmouth. UK data is from Elroy
Dimson, Paul Marsh, and Mike Staunton, London Share Price Database.
The following link can be used to obtain further information online:
https://assets.london.edu/hxo16fanegqh/2IqOF6Hm6WFzJrm96rPwFY/
a00257bcf04cd917a821b3e40084de89/global-investments-yearbook.pdf
Past performance is not a guide to future returns. The information shown
above is for illustrative purposes.
15
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
Portfolio Manager’s
Report continued
Turning to the financial year, how has the portfolio performed and what were the major winners
and losers?
Despite the depressed starting valuation, the UK equity market was a laggard in 2023, delivering a total return
of around 8% , however, the Trust’s portfolio performed well in the year, outpacing the rise in the FTSE
All-Share. Temple Bar benefitted from significant rises in the share prices of Marks & Spencer, Centrica and
International Distribution Services (the old Royal Mail Group). Each of these three companies added over a
per cent to the Trust’s return, with Marks & Spencer more than doubling during the year. The Trust ’s portfolio
was negatively impacted by a more than 30% fall in the share price of Anglo American.
In 2023, Marks & Spencer continued to perform well from an operational perspective, taking market share
in both clothing and food and continuing to make good progress towards its longer-term profitability targets.
Although it can’t be quantified, there is little doubt that the company is benefiting from the demise of several
competitors during the COVID pandemic, and the company is able to invest capital at high returns in rightsizing
and re-orientating its store estate. If achieved, the company’s profitability targets would simply bring the retailer’s
profitability in line with its peers and would result in significant growth in shareholder earnings, thereby
suggesting that the shares continue to be undervalued.
Centrica announced the results of a strategic review in the summer. The company has a unique place in the
energy value chain and can add value as a producer of power, through the provision of energy infrastructure,
system optimisation through its Marketing and Trading business and energy retail through British Gas. Having
simplified and de-risked the business, management intend to invest in the energy transition and thereby
create further value for shareholders. Nevertheless, the company’s profits will continue to be sensitive to the
level of energy prices. Even assuming a ‘normalisation’ of commodity prices from today’s elevated levels to
pre COVID levels, the company continues to be valued at around nine times it annual profits. The company
also has significant portion of its market capitalisation as net cash on its balance sheet, and this needs to be
factored into any consideration of value.
International Distribution Services performed well in 2023 as a new agreement with its unions bedded in well.
A successful execution of the agreement will enable the company to release significant unrealised potential in
the company’s UK business and thereby drive group profitability higher. Making just modest assumptions about
the potential profitability in the company’s UK business, suggests that the company is valued at less than six
times its earnings potential. For some time, we have believed that more than 100% of the company’s market
capitalisation can be justified by its overseas (parcels only) business alone, suggesting that the stock market is
placing a negative valuation on the more challenged UK business. This is even though more than half of the
company’s UK revenues are derived from parcels (rather than letters) and it has around a 50% market share in
the UK parcels market.
On the negative tack, Anglo American downgraded its production guidance for 2024 and 2025 and as a result
2024 earnings estimates were cut by 20% to 25%. These profit downgrades are unwelcome although the
accompanying share price fall has left the shares looking very undervalued. To address balance sheet issues,
the company went through a radical restructuring in 2015, halving the number of assets in its portfolio and
consequently, the assets that remain are generally of good quality. Anglo American has significant investments
in publicly quoted assets and stripping these out, the company’s Copper, Diamond, Metallurgical Coal and
Nickel assets are valued at just five times earnings before interest and tax. We would therefore not be surprised
to see some corporate activity if the operating performance of the company does not improve. This could take
the form of asset disposals to demonstrate value or a bid for all or parts of the group.
16
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 How has the Trust ’s portfolio changed over the year?
In 2023, the Trust purchased shares in Stellantis, a company formed by
the merger of Fiat Chrysler and Peugeot in 2021. The rationale for the
merger was to combine the European strength of the Peugeot business
with the North American strength of Fiat Chrysler. Combining the entities
has allowed for significant cost saving s and created a stronger and
more diversified business. At the time of purchase, the company was
valued at around three times its annual profits and the shares offered a
dividend yield of around 8%. In the last two years, the auto industry
has enjoyed high profitability as strong demand post COVID, coupled
with muted supply drove price increases in most markets. Whilst
profitability is likely to decline in future years as industry conditions
normalise, in our view, the company would nevertheless continue to be
very attractively valued. The company has significant net cash on its
balance sheet, equating to around one third of its market capitalisation.
Stellantis has performed well since its purchase and in 2023 added over
1% to the Trust’s return.
We also established a position in GlaxoSmithKline (“GSK”), a
high-quality global franchise which has traditionally struggled with
execution and whose shares have therefore significantly underperformed
its peers over almost all-time frames. The company’s vaccines business
is the global leader, with the widest product and technology portfolio, and
is well insulated from threats, with more than 90% of revenues
coming from vaccines with more than 90% efficacy. In combination
with GSK’s pharmaceutical business, the company should be capable
of delivering good levels of growth. The management targets annual
sales and operating profit growth of more than 5% and 10% respectively
over the five years to 2026.
A new position in the Dutch Insurer, NN Group, was also established
which derives most of its profits from the Dutch pension market. The
company targets moderate growth in profits in the coming years and its
balance sheet is strong. At the time of purchase, the company was valued
at a multiple of six-times profits and offered a dividend yield of around
9% and is expected to return another 3% of its market capitalisation in
share buybacks in respect of 2023.
The UK stock market continues to be compared negatively with
other major equity markets. Do you think this is justified and are
you able to find appealing investment opportunities in the UK?
The UK stock market remains very out of favour with investors who continue
to sell UK assets to channel money overseas. Here investment prospects
are seen to be more exciting even though a large portion of the profits of
companies listed in the UK are derived from outside the UK. The result of
this negative sentiment towards the UK however is that UK listed stocks
are valued at a significant discount to their overseas listed peers for no
other reason than they happen to be listed in the UK. Today, your portfolio
in aggregate is valued at a multiple of around eight times last year’s
estimated earnings. In contrast, in the US, the S&P 500 is valued on a
multiple of over twenty times, more than 2.5x the valuation of the
Trust’s portfolio. In respect of the UK, you should take comfort from the
fact that markets don’t de-rate forever and that this headwind will
ultimately abate and maybe even become a tailwind. If the Trust’s
portfolio simply re-rated back to a still conservative ten times earnings on
an earnings base that was unchanged, the Trust would deliver a
return of around 25% to its shareholders from this re-rating alone. Whilst
many will no doubt continue to take a dim view of UK economic prospects;
it is important to remember that the Trust buys companies and not
economies. The companies in which the Trust is invested are sound,
conservatively run businesses with strong finances and capable
management teams.
How is the portfolio currently positioned and what is your
outlook for the year ahead?
Whilst it is somewhat frustrating that UK listed shares continue to attract
such miserly valuations, the attraction for the long-term investor is
significant as stock market history has shown that the best predictor
of long-term future investment return is starting valuation. Time and
time again, those that have invested in highly valued assets have been
rewarded with suboptimal returns, even though the underlying asset has
continued to perform well from an operational perspective. Conversely,
Nick Purves and Ian
Lance joined Redwheel in
August 2010 and together
manage c.£3.9 billion of
client assets.
those that have invested in lowly valued, but fundamentally sound
businesses, which did not happen to fit with the prevailing investment
narrative at the time of purchase, have enjoyed outsized gains. We are
often asked when UK equities will re-rate and whilst we can’t answer this
question, we would point out that one doesn’t need the Trust’s
portfolio to re-rate to enjoy an attractive investment return. A lowly valued
company that converts a significant portion of its profits into cash can pay
a generous dividend and undertake value enhancing share buybacks
whilst holding debt at a constant level. As we enter 2024, the Trust’s
portfolio continues to be priced to offer its shareholders further excess
investment return in the future.
Could you provide your views on the post-period takeover bids
that were received on holdings within the portfolio?”
So far in 2024, there have been two bids for companies held in the
Trust’s portfolio; first Currys and then Direct Line Group. Whilst
takeover bids can come at any time, this is perhaps not a surprise as
many of the companies in the portfolio carry a stock market
valuation which is significantly below a reasonable view of their true
value. The UK continues to be an attractive place to invest and given
the rock bottom valuations that exist in some parts of the UK market,
it is understandable that private equity and corporate buyers would
want to take advantage of that.
We have mixed feelings about these takeover approaches. Takeover
bids highlight the undervaluation that exists in the target companies
and can result in a rapid crystallisation of the upside that we
believed existed at the time of a stock’s purchase. However, we must
also remember that private equity bidders especially are intent on
paying a price which continues to under value the company and
from which they themselves can make an attractive investment
return. They will therefore rarely be prepared to pay what we think
the target company is worth. Currys is a case in point. Our view of the
company’s fair value was significantly higher than the 67p offered by
hedge fund , Elliott who have since said that they are not prepared to
bid any more.
In 2022, the private equity group, Apollo Capital, made three
takeover offers for Pearson, the educational publisher, and last year,
First Abu Dhabi Bank approached Standard Chartered. It is
reasonable to expect that there will be more bids for companies in
the Trust’s portfolio and shareholders should expect to benefit
further from that.
Ian Lance and Nick Purves
Redwheel
3 April 2024
17
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Our Approach to ESG
ESG is incorporated in to the investment process rather than
being implemented by a centralised team.
ESG is integrated in to our stock research as one of the four
risks we assess before investing in a company (along with
valuation risk, business risk and balance sheet risk).
“We see our role as stewards of our investors’ capital
as wholly consistent with investing responsibly and
encouraging our investee companies to act
sustainably. Sustainability and our long-term
investment horizon go hand-in-hand. Furthermore,
as value investors, we believe we can have an
outsized impact on sustainability issues, as these are
often of greater importance to older economy
companies that typically fall into our value universe,
particularly on environmental issues.”
Redwheel UK Value & Income Team Stewardship Policy, 2021
Deep understanding
of individual
stocks
SASB Materiality
Map¹
Assessment of
material risks for
a company or
sector
Governance
ESG Risk Rating
provided by
Sustainalytics
Non-financial
material risks
at portfolio
level
Independent
research
1The Sustainability Accounting Standards Board
Incorporated into
broader
fundamental
research
Environmental
• The potential for climate issues to cause a material financial impact on the value
of individual companies has increased dramatically in the past decade
• We believe that the answer to environmental problems is not as simple as
divesting from challenged sectors
• By actively engaging with companies, by supporting them in the transition
to a sustainable business model, we believe the outcome can be better for the
Company and the environment
Social
• We believe companies should be mindful of the interests of all stakeholders
• Companies treating their employees, customers, or suppliers badly store
up future problems for the business in terms of human capital, brand value
and reputation
Governance
• Governance has always been at the heart of our process as we believe it sets
the basis for the culture of a firm, supporting long-term value creation and
positive environmental and social outcomes
• Governance means shareholder rights, governance structures and aligning
management with shareholders through remuneration policies.
18
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Engagement
Case Studies
19
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Anglo American
ESG Risk:
Environmental and
Governance
Background:
Anglo American is a multi-national mining company and
is a major producer of platinum, diamonds, copper, nickel,
iron-ore and steelmaking coal. Due to the nature of their
business, Anglo American has been identified as one of the
world’s largest GHG emitters by the Climate Action 100+
investor coalition. Anglo American are targeting net zero in
Scope 1 and Scope 2 emissions by 2040, and a 50% reduction
in Scope 3 emissions by 2040 (against a 2020 baseline).
In addition, health and safety is an important issue for
companies in the extractives sector due to a high level of risk
in operations. Anglo American’s total injury frequency rate
has tracked up since 2020, and sadly there have been three
fatalities so far in 2023.
Our engagement:
• The aim of this engagement was to present our assessment of Anglo
American’s transition plan and why these issues matter in the context of
current investment industry trends. The secondary aim was to better
understand what had caused the fatalities and what is being done
to address any gaps in process.
• The team had two face to face interactions with Anglo American as
part of the engagement. The first was with Anglo American’s investor
relations team and their Head of International Policy and UK
Government Relations, this was followed by a meeting with Anglo
American’s CEO post their H1 2023 results.
20
Outcome:
In the first interaction we highlighted strengths and weaknesses of Anglo
American’s transition plan and provided recommendations. Anglo
American appreciated our in-depth research and the opportunity to have
a structured and constructive discussion on the issues the company faces.
We later had an opportunity to discuss the ongoing engagement on
emissions and the CEO confirmed that we would receive a detailed
response to our concerns.
Regarding safety, Anglo American highlighted the continued work to
implement their targeted safety strategy including investing in systems and
technology, standards, and training their employees. With regards to
the fatalities suffered this year, they have launched a thorough investigation
to determine the causes of the accident and the learnings from this.
We also met with the CEO of Anglo American, who gave us details of the
tragedy that cost two lives in the Los Bronchos mine in August.
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Barrick Gold
ESG Risk:
Social
Background:
Barrick Gold is a Canadian based mining company.
In early 2019 it completed its merger with Randgold
Resources to create the world’s largest gold miner
at the time. The company has a troubled history
and we have engaged with them frequently over
recent years on a number of issues primarily
relating to human rights. When it merged with
Randgold in early 2019, several of Barrick’s mines
were not operating due to controversy. Randgold
had a much better operational reputation and their
management team, led by CEO Mark Bristow and
CFO Graham Shuttleworth, took control of the
merged company.
Our engagement:
• This past year Redwheel hired Jessica Wan to be the
Social Lead within Greenwheel, their in-house
sustainability research unit, bringing with her immense
human rights knowledge. Jessica has greatly enhanced
Redwheel’s approach and introduced a new human
rights framework.
• Using that framework, we conducted a thorough review
of Barrick Gold’s human rights policy. Our assessment
was that Barrick Gold have implemented a
comprehensive human rights policy, made good
progress in cleaning-up legacy issues and align with
international best practices. We did identify areas where
the company could improve upon, to give more comfort
about the implementation of best practice and redress
of legacy issues.
• To get comfort that Barrick Gold have properly
addressed these issues, we engaged again in 2023 with
the company’s CEO and then with the company’s
sustainability team who gave an in-depth review of how
they handled the legacy issues and what steps are being
taken to prevent a recurrence in the future.
Outcome:
These dialogues are ongoing, and we hope that with these
engagements Barrick can advance on the areas we outlined above.
We believe it is worth supporting good mining companies, that they
can generate attractive returns for investors and in demonstrating
their role in supporting economic and social development, as well
as the transition, and acting in line with Global Norms, they improve
their image and brand and by doing so they reduce sustainability
risks for the portfolio.
21
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 BP
ESG Risk:
Environmental
Background:
BP announced a climate transition strategy adjustment in
February, which elicited many negative news headlines as
the move was broadly interpreted as reducing BP’s climate
commitments. However, as with the original commitment
in 2020 to reduce hydrocarbon production by 40% by 2030
perhaps receiving too much praise, we felt the latest
announcement was perhaps judged too harshly.
Our engagement:
• Rather than accept the headlines, we wished to understand more deeply
the impact of the changes and the motivation for those changes, as
there are several ‘narratives’ as to why BP altered the strategy.
• Critical narratives might point out that BP was never a true transition
believer, the plan announced in 2020 being a nice way to present asset
disposals when oil prices were low, and now with high oil prices
they decide to keep the assets. A less critical narrative might claim
that the management felt pressure from shareholders to slow the
speed of the transition, that the earnings bridge between the legacy
hydrocarbon business and the low carbon growth businesses was
too risky, the decline rate on legacy assets too steep and the growth
rate on low carbon too uncertain.
• In understanding BP’s change in strategy, we engaged numerous times
with the company (including CEO, CFO, Head of Gas and Renewables,
Head of Sustainability and Company Secretary), we spoke with peers in
the financial industry to gauge other views and our internal
Greenwheel team guided us in our assessment against net zero
pathways.
Outcome:
What we know is divestment itself does not decarbonise the real world, it
may decarbonise a company or indeed a portfolio, but it does not follow
that it reduces real world emissions or mitigates global warming. BP and
other majors have been selling assets to private companies who sweat
the assets harder and often have worse environmental records, and they
certainly are less transparent. Therefore, divesting is not climate positive.
The second leg to understand is how the cashflows are spent from the
legacy assets and we can see that BP is deploying more capital to low
carbon businesses as a result of retaining more upstream assets. On
balance, BP’s latest move may be climate positive. However, if the move
signals to other oil majors that retreating from climate ambition is
acceptable, then this would clearly be a negative outcome.
22
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 23
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Sector
Energy
Place of primary
listing
Valuation
£’000
% of
portfolio
UK
57,818
Portfolio of Investments
As at 31 December 2023
Company
Royal Dutch Shell
Shell explores for, produces, and refines
petroleum. The company produces fuels,
chemicals, and lubricants. Shell owns and
operates gasoline filling stations worldwide.
BP
BP is an oil and petrochemicals company. The
company explores for and produces oil and
natural gas, refines, markets, and supplies
petroleum products, generates solar energy,
and manufactures and markets chemicals.
TotalEnergies
TotalEnergies operates as an energy company.
The company produces, transports, and
supplies crude oil, natural gas, and low carbon
electricity, as well as refines petrochemical
products. TotalEnergies owns and manages
gasoline filling stations worldwide.
Marks & Spencer Group
Marks & Spencer Group operates a chain of
retail stores. The company sells consumer goods
and food products, as well as men’s, women’s,
and children’s clothing and sportswear
NatWest Group
NatWest Group operates as a banking and.
financial services company. The Bank provides
personal and business banking, consumer loans,
asset and invoice financing , commercial and
residential mortgages, credit cards, and financial
planning services, as well as life, personal, and
income protection insurance.
Aviva
Aviva operates as an international insurance
company that provides all classes of general
and life assurance. The Company also offers
a variety of financial services, including long-term
savings and fund management
ITV
ITV provides broadcasting services. The company
produces and distributes content on multiple
platforms. ITV serves customers in the
United Kingdom.
Stellantis
Stellantis manufactures and markets
automobiles and commercial vehicles.
The Company also produces metallurgical
products and production systems for the
automobile industry, as well as owning
publishing and insurance companies. Stellantis
serves customers worldwide.
Barclays
Barclays is a global financial services provider
engaged in retail banking, credit cards, wholesale
banking, investment banking, wealth
management, and investment management
services
Anglo American
Anglo American is a global mining company.
The company’s mining portfolio includes bulk
commodities including iron ore, manganese,
and metallurgical coal, base metals including
copper and nickel, and precious metals and
minerals including platinum and diamonds.
1
2
3
4
5
6
7
8
9
10
24
Energy
UK
50,819
Energy
France
43,078
Consumer Staples
UK
42,012
Financials
UK
40,581
Financials
UK
35,019
Communications
UK
34,338
Consumer
Discretionary
Netherlands
32,110
Financials
UK
31,721
Materials
UK
30,013
7.3
6.5
5.5
5.3
5.1
4.4
4.3
4.1
4.0
3.8
Top Ten Investments
397,509
50.3
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Company
NN Group
Standard Chartered
WPP
GSK
Kingfisher
International Distributions
HP
Centrica
Pearson
Citigroup
Currys
Honda Motor
BT Group
Forterra
Vodafone Group
Capita
Newmont
CK Hutchison Group
Barrick Gold
Continental
Short-dated UK T-Bills
Sector
Financials
Financials
Communications
Healthcare
Consumer
Discretionary
Industrials
Information
Technology
Utilities
Consumer
Discretionary
Financials
Top 20 Investments
Consumer
Discretionary
Consumer
Discretionary
Communications
Materials
Communications
Industrials
Materials
Industrials
Materials
Consumer
Discretionary
Netherlands
UK
UK
UK
UK
UK
United States
UK
UK
United States
UK
Japan
UK
UK
UK
UK
United States
Hong Kong
Canada
Germany
Total Equity Investments
Fixed Interest
UK
Total Valuation of Portfolio
Place of primary
listing
Valuation
£’000
% of
portfolio
29,939
29,199
28,513
26,536
26,145
24,933
24,010
23,471
22,762
20,453
653,470
16,434
14,609
14,249
14,142
13,098
11,014
10,590
10,394
9,892
8,983
776,875
13,713
790,588
3.8
3.7
3.6
3.4
3.3
3.1
3.0
3.0
2.9
2.6
82.7
2.1
1.8
1.8
1.8
1.7
1.4
1.3
1.3
1.3
1.1
98.3
1.7%
100%
25
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
Temple Bar
%
FTSE All-Share
%
23.6
19.3
15.3
11.4
8.2
5.8
5.3
3.4
3.0
3.0
–
98.3
1.7
100.0
18.6
11.7
8.8
2.9
9.0
13.8
15.7
11.1
1.7
4.0
2.7
100.0
–
100.0
Portfolio Distribution
As at 31 December 2023
Discount to NAV
1
2
3
4
5
6
7
8
9
10
11
Industry
Financials
Energy
Consumer Discretionary
Communications
Materials
Industrials
Consumer Staples
Healthcare
Information Technology
Utilities
Real Estate
Total Equities
Fixed Interest
Total Portfolio
Source: Redwheel
*FTSE All-Share ex investment Trusts
26
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
27
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Overview of Strategy
The Strategic Report is designed to help shareholders assess
how the Directors have performed their duty to promote
the success of the Company during the year under review.
Business of the Company
Temple Bar Investment Trust Plc was incorporated in England
and Wales in 1926 with the registered number 00214601.
The Company carries on business as an investment company
under Section 833 of the Companies Act 2006 and has been
approved by HM Revenue & Customs as an investment trust in
accordance with Section 1158 of the Corporation Tax Act 2010.
Section 172 Statement
The Directors’ overarching duty is to act in good faith and
in a way that is the most likely to promote the success of
the Company as set out in Section 172 of the Companies Act
2006 (“Section 172”). In doing so, Directors must take into
consideration the interests of the various stakeholders of the
Company, having regard, amongst other matters, to the
following six items:
The likely consequences of any decision in the long term
All Board discussions include consideration of the longer-term consequences of any key
decisions and their implications for the relevant stakeholders. In managing the Company
during the year under review, the Board acted in the way which it considered, in good
faith, would be most likely to promote the Company’s long-term sustainable success and
to achieve its wider objectives for the benefit of our shareholders as a whole, having had
regard to our wider stakeholders and the other matters set out in Section 172.
The interests of the Company’s employees
This provision is not relevant as the Company does not have any employees.
The need to foster the Company’s business relationships
with suppliers, customers and others
The impact of the Company’s operations on the community
and the environment
The Board’s approach is described under “Stakeholders” on the following page.
The Board takes a close interest in responsible investment issues and sets the overall
strategy. Management of the portfolio is delegated to the Portfolio Manager, which is
responsible for the practical implementation of policy. A description of the Company’s
approach to stewardship and the role of the Portfolio Manager is set out on page 39.
The desirability of the Company maintaining a reputation
for high standards of business conduct
The Board’s approach is described under “Culture” on page 30.
The need to act fairly between shareholders of the Company
The Board’s approach is described under “Stakeholders” on the following page.
In considering the primary purpose of the Company, the Board made several key decisions during the year. The Board:
• continued to instruct the use of share buy backs as a means of stabilising
the share price discount to NAV in response to sector weakness (for
further details see pages 7 and 46);
•
worked with the Portfolio Manager and Frostrow Capital to maintain
a high level of shareholder engagement via webinars and newsletters;
and
•
increased dividend payments at a sustainable level based on income
received from investments (for further details see page 3 1).
The Directors have reviewed and discussed each aspect of Section
172 and consider that the information set out on pages 29 and 30 is
particularly relevant in the context of the Company’s business as an
externally managed investment company which does not have any
employees or suppliers.
28
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Stakeholders
The Board continuously seeks to understand the needs and priorities
of the Company’s stakeholders, and these are taken into account during
all of its discussions and as part of its decision making. As the
Company is an externally managed investment company and does not
have any employees or customers, it therefore has very little direct
impact on the community or the environment. Its key stakeholders
comprise its shareholder base and its lender. The Company also has
important contractual relationships with its key service providers but
does not consider these to be stakeholders. The Company recognises
the indirect impact it may have on the community and the
environment through its investee companies. Further details on this are
set out on pages 39 to 42. The sections below outline why these key
stakeholders are considered of importance to the Company and the
actions taken to ensure that their interests are considered.
Shareholders
The primary purpose of the Company is to deliver long-term returns
for shareholders from a diversified portfolio of investments.
Continued shareholder support and engagement are critical to the
existence of the Company and the delivery of its long-term strategy.
The Board recognises the importance of engaging with shareholders on a
regular basis to maintain a high level of transparency and accountability
and to inform the Company’s decision making and future strategy.
The Board primarily engages with shareholders through direct engagement
by the Chairman and through the Portfolio Manager and Frostrow
Capital who maintain an ongoing dialogue with shareholders through
regular shareholder communications, both written and verbal. The
Portfolio Manager has continued to publish quarterly newsletters written
by the p ortfolio m anagement team , which explore their ideas and
philosophies around investing and explain the positioning of the
portfolio. Online statistics on engagement show that these newsletters
remain very popular with shareholders. Additional dialogue with
shareholders is achieved through the annual and half-yearly reports,
both of which contain reports from the Portfolio Manager, the daily
NAV announcements and the monthly fact sheet which is available
on the Company’s website. Portfolio data is also provided to external
providers such as Morningstar, which feeds several websites on a
monthly basis.
One of the Board’s long-term strategic aspirations has been that the
Company’s shares should trade consistently at a price close to the NAV
per share. During the year under review investment companies as a sector
again saw discounts widen significantly, in the face of economic headwinds
and political instability (the average discount was 13.5%* as at
31 December 2023). The Company continued to use share buy backs
throughout the year to protect its discount, generally maintaining it at
a level less than 6%. Both the Board and the Portfolio Manager has
continued to focus heavily on the promotion of the Company, in order
to maintain buying interest in the Company’s shares and to support a
natural narrowing of the discount.
An important role of the Board is to ensure that the Company’s ongoing
charges are competitive both in terms of its peer group and other
comparable investment products. While having an optimal service
provider structure brings inevitable cost, excessive expense can eat away
at investment returns over time. For that reason, despite the exercise
described later in the document the Board remains focused on limiting
cost increases to shareholders as far as possible, despite the current
inflationary environment.
All shareholders are encouraged to attend and vote at AGMs, at which
the Board and the p ortfolio m anagement team are available to
discuss issues affecting the Company and to answer any questions.
Further details regarding the AGM are set out in the Notice of AGM on
pages 93 to 96.
* Source: Cavendish Securities.
29
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Overview of Strategy continued
Lenders
Alongside shareholders’ equity, the Company is partly funded by debt.
All the Company’s debt is subject to contractual terms and restrictions.
We have an established procedure to report regularly to our lender on
compliance with debt terms. It is our policy that all interest payments and
repayments of principal will continue to be made in full and on time.
Service Providers
To function as an investment trust with a premium listing on the London
Stock Exchange, the Company relies on a number of suppliers and advisers
for support in complying with all relevant legal and regulatory obligations.
The Company’s day-to-day operational functions are delegated to a
number of third-party service providers, each engaged under separate
contracts. The Company’s principal service providers are the Portfolio
Manager, Alternative Investment Fund Manager, Administrator and
Company Secretary, Custodian and Depositary, Broker, Solicitor and
the Registrar.
Over the past three years the Board believes it has continued to develop
a close and constructive working relationship with the Portfolio Manager,
which it believes is crucial to promoting the long-term success of the
Company. Representatives of the Portfolio Manager attend Board meetings
and provide reports and verbal updates on matters relating to investments,
performance and marketing.
The Board, primarily through the Audit and Risk and Management
Engagement Committees, keeps the ongoing performance of the Portfolio
Manager and the Company’s other principal third-party service providers
under continual review.
Culture
The purpose of the Company is to deliver long-term returns for shareholders
from a diversified portfolio of investments. These investments will primarily
be UK listed. The Company has no employees, but the culture of the Board
is to promote strong governance and a long-term investment outlook with
an emphasis on investing in businesses that can deliver enduring value to
shareholders. Therefore, the Board asks the Company’s Portfolio Manager
to invest in stocks that fulfil the traditional metrics of the value style but also
possess a business model that is resilient and viable in the long term.
Investment Objective and Policy
The Company’s investment objective is to provide growth in income and
capital to achieve a long-term total return greater than the benchmark
FTSE All-Share Index, through investment primarily in UK-listed securities.
The Company’s policy is to invest in a broad spread of securities with
typically the majority of the portfolio selected from the constituents of the
FTSE 350 Index.
Investment Guidelines
The UK equity element of the portfolio will be mostly invested in the
FTSE All-Share Index; however, exceptional positions may be
sanctioned by the Board and up to 30% of the portfolio may be held
in listed international equities, subject to a maximum 10% exposure
to emerging markets. The Company may continue to hold securities
that cease to be quoted or listed if the Portfolio Manager considers
this to be appropriate. There is an absolute limit of 10% of the portfolio in
any individual stock with a maximum exposure to a specific sector of 35%,
in each case irrespective of their weightings in the Benchmark .
It is the Company’s policy to invest no more than 15% of its gross assets in
other listed investment companies (including listed investment trusts).
The Company maintains a diversified portfolio of investments, typically
comprising 30-50 holdings, but without restricting the Company from
holding a more or less concentrated portfolio from time-to-time as
circumstances require.
The Company’s long-term investment strategy emphasises stocks of
companies that are out of favour and whose share prices do not match the
Portfolio Manager’s assessment of their longer-term value.
From time-to-time fixed interest holdings or non-equity interests may
be held for yield enhancement and other purposes. Derivative
instruments may be used in certain circumstances, and with the prior
approval of the Board, for hedging purposes or to take advantage of
specific investment opportunities.
Liquidity and borrowings are managed with the aim of increasing returns
to shareholders. The Company’s gross gearing range may fluctuate
between 0% and 30%, based on the current balance sheet structure, with
an absolute limit of 50%.
As a general rule, it is the Board’s intention that the portfolio should be
reasonably fully invested. An investment level of 90% of shareholder
funds is regarded as a guideline minimum investment level dependent
on market conditions.
Risk is managed through diversification of holdings, investment limits
set by the Board and appropriate financial and other controls relating
to the administration of assets.
30
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
Key Performance Indicators
The key performance indicators (“KPIs”) used to determine the progress
and performance of the Company over time, and which are comparable
to those reported by other investment trusts, are:
• NAV total return relative to the FTSE All-Share Index;
• Discount/premium to NAV;
• Dividends per share; and
• Ongoing charges.
While some elements of performance against KPIs are beyond the Board’s
and Portfolio Manager’s control, they provide measures of the Company’s
absolute and relative performance and are, therefore, monitored by the
Board on a regular basis.
NAV Total Return
In reviewing the performance of the assets in the Company’s portfolio
the Board monitors the NAV in relation to the FTSE All-Share Index. This
is the most important KPI by which performance is judged. During the
year the NAV total return with debt at fair value of the Company was
12.3% compared with a total return of 7.9% by the FTSE All-Share Index.
As noted in both the Chairman’s Statement and Portfolio Manager’s Report,
the Company outperformed the FTSE All-Share Index on both a NAV and
share price basis.
Discount to NAV
The Board monitors the premium/discount at which the Company’s
shares trade in relation to their NAV. During the year the shares traded at
an average discount to NAV of 6.0%. This compares with an average
discount of 5.1% in the previous year. As set out in the Chairman’s
Statement on page 7, during the year the Board closely monitored the
discount and utilised share buy backs when it was considered appropriate
to do so. The Board and Portfolio Manager closely monitor both
movements in the Company’s share price and significant dealings in the
shares. In order to avoid substantial overhangs or shortages of shares in
the market the Board asks shareholders to approve resolutions which
allow for both the buy back of shares and their issuance, which can assist
in the management of the discount or premium.
Dividends per Share
It remains the Directors’ intention to distribute, over time, by way of
dividends, substantially all of the Company’s net revenue income after
expenses and taxation. The Portfolio Manager aims to maximise total
returns from the portfolio. The Company has paid dividends totalling
9.60 pence per ordinary share for the year ended 31 December 2023
(2022: 9.35 pence). The Board hopes to continue sustainable dividend
growth over the coming years. This is explained in more detail in the
Chairman’s Statement on page 7.
Ongoing Charges
Ongoing charges is an expression of the Company’s management fees
and other operating expenses as a percentage of average daily net assets
over the year. The ongoing charges for the year ended 31 December 2023
were 0.56% (2022: 0.54%). The Board reviews the Company’s ongoing
charges on a regular basis. The Company’s ongoing charges ratio has
remained relatively consistent and compares favourably with peers in the
UK Equity Income sector of investment trust companies.
31
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Overview of Strategy continued
Ten-Year KPI Summary
Discount to NAV
Total Returns
NAV with debt at
fair value3
2014
2015
2016
2017
2018
2019
2020^
2021
2022
2023
-2.6%
-1.2%
20.6%
10.2%
-11.3%
27.9%
-28.0%
24.6%
0.9%
12.3%
Share Price3
-1.4%
-7.9%
20.7%
11.0%
-9.7%
34.3%
-31.5%
20.0%
3.6%
12.5%
FTSE All-Share
Index3
1.2%
1.0%
16.8%
13.1%
-9.5%
19.2%
-9.8%
18.3%
0.3%
7.9%
NAV per share* (p)
239.1
226.0
236.2
280.0
239.9
294.6
202.0
241.7
228.5
248.0
NAV per share with
debt at fair value* (p)
234.9
222.9
259.6
277.4
238.1
292.5
199.2
240.4
233.5
252.2
Share Price* (p)
238.2
210.4
244.6
262.8
229.2
295.2
191.0
221.6
220.5
238.0
Premium/
(Discount) 2
Dividends per
share* (p)
1.4%
(5.6%)
(5.8%)
(5.3%)
(3.7%)
0.9%
(4.1%)
(7.8%)
(5.6%)
(5.6%)
7.78
7.93
8.09
8.49
9.34
10.28
7.70
7.90
9.35
9.60
Dividend Yield 1
3.3%
3.8%
3.3%
3.2%
4.1%
3.5%
4.0%
3.6%
4.2%
4.0%
Ongoing Charges
0.48%
0.49%
0.51%
0.49%
0.47%
0.49%
0.50%
0.48%
0.54%
0.56%
* Comparative periods have been restated for the sub-division of each ordinary share into 5 new ordinary shares, approved at the AGM held on
10 May 2022 and completed on 13 May 2022.
^ Redwheel was appointed as Portfolio Manager on 30 October 2020.
1 Calculated as dividends per share divided by the year-end share price.
2 Premium / (Discount) of share price to NAV per share with debt at fair value
3 Source: Morningstar for Company returns, Redwheel for FTSE All-Share returns.
32
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
33
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Overview of Strategy continued
Principal and Emerging Risks
The Board has overall responsibility for reviewing the effectiveness of the system
of risk management and internal control which is operated by the Portfolio
Manager and the Company’s other service providers. The Company’s ongoing
risk management process is designed to identify, evaluate and mitigate the
significant risks that the Company faces. A ‘heat map’ system is used, allowing a
visual assessment of the different risks identified and adjustment of the inputs
based on changing internal and external factors.
The Board undertakes a semi-annual risk review with the assistance of the Audit
and Risk Committee, to assess the adequacy and effectiveness of the Portfolio
Manager and other service providers’ risk management and internal control
processes.
The Board has carried out a robust assessment of its principal and emerging risks
during the period under review, including those that would threaten its business
model, future performance, solvency or liquidity.
The principal and emerging risks and uncertainties faced by the Company are set
out overleaf. The risks arising from the Company’s financial instruments are set
out in note 20 to the financial statements (beginning on page 87).
34
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Risk
Market Risk
By the nature of its activities and Investment Objective, the Company’s
portfolio is exposed to fluctuations in market prices (from both individual
security prices and foreign exchange rates). As such investors should be
aware that by investing in the Company they are exposing themselves
to market risks.
The Company also uses gearing, via the private placement loans issued, the
effect of which is to amplify the gains or losses the Company experiences.
Mitigation and Management
To manage these risks the Board and the AIFM have appointed Redwheel
to manage the portfolio within the remit of the investment objective and
policy, and imposed various limits and guidelines, set out on page 30.
These limits ensure that the portfolio is diversified, reducing the risks
associated with individual stocks. The compliance with those limits and
guidelines is monitored daily by Frostrow and Redwheel and reported
to the Board weekly.
In addition, Redwheel reports at each Board meeting on the performance
of the Company’s portfolio, including the rationale for investment
decisions, the make-up of the portfolio and the investment strategy.
As part of its review of the viability of the Company, the Board also considers
the sensitivity of the Company to changes in market prices and foreign
exchange rates (see note 20 beginning on page 87), how the portfolio would
perform during a market crisis, and the ability of the Company to liquidate
its portfolio if the need arose. Further details are included in the Going
Concern and Viability Statements on page 38.
Geopolitical and Macro Risks
As recent years have demonstrated, global events, including unforeseen
events, can have a dramatic effect on both financial markets and everyday
life. The Company is at risk from both the financial impacts of such events,
as well as possible disruption to the day-to-day activities of its service
providers and portfolio companies. Ongoing geopolitical tensions
around the world while not currently directly affecting the Company may
have an impact on its investments.
While global events are outside the control of the Company the Board
reviews regularly, and discusses with the Portfolio Manager, the wider
economic and political environment, along with the portfolio exposure
and the execution of the investment policy against the long-term
objectives of the Company. The Portfolio Manager performs risk analysis,
including country and industry specific monitoring, on an ongoing basis.
Climate Risks
While the Company itself faces limited direct risk from climate change, the
board is cognisant of the potential impact on portfolio companies and
their operations. Significant changes in climate, or indeed Government
measures taken to combat climate change, could present a material risk
to the value of the portfolio.
The Board regularly reviews global environmental, geopolitical and
economic developments with the Portfolio Manager, along with the
implications of these risks and events on portfolio construction and the
Company’s operations. ESG considerations are incorporated into the
investment process of Redwheel, as part of the drive to invest in companies
with long-term viability. The Portfolio Manager also uses its voting powers
to engage with and influence investee companies towards taking
positive steps against climate change and other environmental impacts.
35
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Overview of Strategy continued
Risk
Mitigation and Management
Shareholder Relations and Share Price Performance Risk
The Company is exposed to the risk, particularly if the investment
strategy and approach are unsuccessful, that the Company may
underperform resulting in the Company becoming unattractive to
investors, a widening of the share price discount to NAV per share and
the Company may become vulnerable to activist shareholders.
Loss of Investment Team or Portfolio Manager
A sudden departure of the members of the portfolio management team
could result in a short-term deterioration in investment performance.
Income Risk – Dividend
Risk that the portfolio does not generate the necessary level of income,
over time, from which to maintain progressive dividend payments to
shareholders.
36
In managing this risk the Board:
• reviews the Company’s investment strategy and objective in relation
to market and economic conditions, and the operation of the
Company’s peers;
• discusses at each Board meeting the Company’s future development
and strategy;
• reviews the shareholder register at each Board meeting; and,
• actively seeks to promote the Company to current and potential
investors.
In addition the Company’s share price and premium or discount to NAV
are monitored by the Portfolio Manager and the Board on a regular basis.
The Directors attach considerable importance to the level of premium
or discount to NAV at which the shares trade, both in absolute terms
and relative to the rating at which the UK Equity Income sector of
investment trusts is trading, and will take action where levels are deemed
to be excessive. The Directors are prepared to be proactive in
premium/ discount management to minimise potential disadvantages
to shareholders, which continued to be demonstrated during 2023.
The investments of the Company are managed by a team of two
m anagers, Ian Lance and Nick Purves. The Portfolio Manager takes
steps to reduce the likelihood of such an event by aligning the
interests of the investment team with the wider organisation, as well
as providing a high degree of autonomy with no overarching chief
investment officer or investment committee. Furthermore, the AIFM,
in consultation with the Board, may terminate the Portfolio
Management Agreement should Ian Lance and Nick Purves cease to
be able to perform their duties or cease to be associated with the
Portfolio Manager and not be replaced by people with relevant
experience.
The Board monitors this risk through the review of detailed income
reports and forecasts which are considered at each meeting, with input
from the Portfolio Manager. As at 31 December 2023 the Company had
distributable revenue reserves of £12.7 million. Furthermore, income
risk is mitigated by the Company’s ability to distribute realised capital
gains if required to meet any revenue shortfall. With the level of income
paid and forecast by investee companies continuing to increase across
the year, the Company has been able to raise its dividend.
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Risk
Cyber Security
Mitigation and Management
The Company has limited direct exposure to cyber risk. However, the
Company’s operations or reputation could be affected if any of its
service providers suffered a major cyber security breach. A State-
backed cyber attack could also result in widespread disruption across
the financial services industry.
The Audit and Risk Committee receives control reports and confirmation
from its service providers regarding the measures that they take in this
regard. The cyber security policies of all providers have also been
reviewed by the Board. For more widespread disruption such as a
state-backed cyberattack limited mitigation is possible, however all
service providers remain vigilant given the increased likelihood of such
an event in the current climate.
Service Provider Risk
The Company is reliant on the systems of its service providers and as such
disruption to, or a failure of, those systems (including, for example, as a
result of cyber-crime or a ‘black swan’ event) could lead to a failure to
comply with law and regulations leading to reputational damage and/or a
financial loss.
To manage these risks the Board, via its Management Engagement
Committee and Audit and Risk Committee:
• receives reports from Frostrow at each Board meeting, which includes,
inter alia, details of compliance with applicable laws and regulations;
• reviews internal control reports, key policies, including measures
taken to combat cyber security issues, and also the disaster
recovery procedures of its service providers;
• maintains a risk matrix with details of risks the Company is exposed
to and the controls/mitigation in relation to those risks;
• receives updates on pending changes to the regulatory and legal
environment and progress towards the Company’s compliance with
these; and
• has considered the increased risk of cyber attacks and received
reports and assurance at meetings with its service providers that
appropriate information security controls are in place.
The AIFM, in addition, to its ongoing monitoring of the investment
portfolio and transactions, carries out a formal due diligence exercise on
the Portfolio Manager annually, ensuring that the appropriate controls,
processes and resourcing are in place to manage the portfolio within the
stated investment policies and guidelines. Responsibility for this process
moved from Link Group to Frostrow during the year, with Frostrow
performing initial due diligence process prior to their appointment.
Emerging Risks
The Board has in place a robust process to identify, assess and monitor the principal risks and uncertainties and also to identify and evaluate newly
emerging risks. The Board, through the Audit and Risk Committee, regularly reviews all risks to the Company, including emerging risks, which are
identified by a variety of means, including advice from the Company’s professional advisors, the Association of Investment Companies (the “AIC”), and
Directors’ knowledge of markets, changes and events. No new or emerging risks were identified during the year.
37
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Overview of Strategy continued
Going Concern
The Directors have reviewed the going concern basis of accounting for the
Company. The Company’s assets consist substantially of equity shares
in listed companies and in most circumstances are realisable within a short
timescale. The use of the going concern basis of accounting is appropriate
because there are no material uncertainties related to events or conditions
that may cast significant doubt about the ability of the Company to
continue as a going concern. The Directors therefore have a reasonable
expectation that the Company has adequate resources to continue in
operational existence for 12 months from the date of the approval of these
financial statements. Accordingly, the Directors continue to adopt the
going concern basis in preparing the accounts. See note 1 beginning on
page 77 for further detail.
Viability Statement
The Board makes an assessment of the longer-term prospects of the
Company beyond the timeframe envisaged under the going concern
basis of accounting, having regard to the Company’s current position and
the principal and emerging risks and uncertainties it faces. The AIFM and
Portfolio Manager have assisted the Board in making this assessment
via financial modelling and income forecasting, which demonstrates
the financial viability of the Company. Stress-testing scenarios, such
as an extreme drop in equity markets, have also been carried out and
the projected financial position remains strong and all payment
obligations achievable .
The stress-testing scenarios used to assess future viability incorporate
a number of inputs. The financial structure of the Company is stable, with
known payment obligations that can be modelled for future years with
a low likelihood of any changes. Revenue expectations are modelled by
the Portfolio Manager for future years with decreasing levels of certainty
over time, based on the financial position and performance of investee
companies. This is combined with an expectation of the rate of dividend
payments to be made by the Company over the coming years to give an
overall financial projection in normal market conditions.
To stress-test this projection, scenarios are then modelled for a 20%
and 50% fall in both investee company valuations and the level of
dividend payments made. In both cases, because the Company has both
the ability to control its own dividend payments and a liquid portfolio of
investments, the impact to reserves could be managed and the Company
would remain viable during such periods.
The Company is a long-term investment vehicle and the Directors,
therefore, believe that it is appropriate to assess its viability over a
long-term horizon. For the purposes of assessing the Company’s
prospects in accordance with the AIC Code of Corporate Governance
(the “AIC Code”), the Board considers that assessing the Company’s
prospects over a period of five years is appropriate given the nature of
the Company and the inherent uncertainties over a longer time period.
The Directors believe that a five-year period appropriately reflects the
long-term strategy of the Company and over which, in the absence of any
adverse change to the regulatory environment and the favourable tax
treatment afforded to UK investment trusts, they do not expect there to
be any significant change to the current principal and emerging risks
and to the adequacy of the mitigating controls in place.
In assessing the viability of the Company, the Directors have conducted a
thorough assessment of each of the Company’s principal and emerging
risks and uncertainties set out on pages 35 to 37. Particular scrutiny was
given to the impact of a significant fall in equity markets on the value of the
Company’s investment portfolio.
The Directors have also considered the Company’s leverage and liquidity
in the context of its long-dated fixed-rate borrowings (see notes 8 and 15
for further details on the borrowings), its income and expenditure
projections and the fact that the Company’s investments comprise mainly
readily realisable quoted securities which can be sold to meet funding
requirements if necessary. As a result, the Directors do not believe that
there will be any impact on the Company’s long-term viability.
All of the key operations required by the Company are outsourced to
third-party providers and alternative providers could be secured at relatively
short notice if necessary. The change from Link Group to Frostrow has
demonstrated this and leaves the Company strongly positioned.
Having taken into account the Company’s current position and the
potential impact of its principal and emerging risks and uncertainties, the
Directors have a reasonable expectation that the Company will be able to
continue in operation and meet its liabilities as they fall due for a period of
five years from the date of this Annual Report.
Modern Slavery Act
Due to the nature of the Company’s operational model and the fact that it
generates no turnover, the Board is satisfied that the Company is not subject
to the UK’s Modern Slavery Act 2015. The Company does not therefore
make a modern slavery and human trafficking statement. The Board
however appreciates the significance of Modern Slavery as an issue but
considers the Company’s supply chains, dealing predominantly with
professional advisers and service providers in the financial services industry,
to represent a low risk of exposure to modern slavery.
In relation to the Company’s investments, the Board has noted that
the Portfolio Manager signed a letter in 2023, and will again in 2024, which
is sent to FTSE 350 companies considered at that time not to be in
compliance with the requirements of the Modern Slavery Act 2015. This
initiative, coordinated by Rathbones, was awarded the Stewardship
Initiative of the Year award in 2022 by the UN Principles for Responsible
Investment. Infractions tend to be of a technical nature, such as not
having a Modern Slavery Statement available on websites, or not
evidencing that such Statements have approval from the board of the
relevant organisation. In 2023, the Portfolio Manager engaged with
investee companies to highlight where corrections were required to
achieve compliance and worked with Rathbones to monitor responses.
Within investments, Redwheel principally assesses the risk of modern
slavery exposure through reference to the Corporate Human Rights
Benchmark (which scores companies on governance and policies;
remedies and grievance mechanisms; and embedding respect and
human rights due diligence) and through company compliance with the
UN Global Compact, the UN Guiding Principles on Business and Human
Rights, and the Organisation for Economic Co-operation and
Development Guidelines for Multinational Enterprises.
The Portfolio Manager also uses Sustainalytics data to monitor breaches
in global norms and controversies including employee incidents. The
Materiality Map developed originally by the Sustainability Accounting
Standards Board helps improve understanding of the sectors in which
companies are most at risk of exposure to labour and modern slavery
issues.
38
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Environment
As an investment trust which outsources all of its operations, there are
no greenhouse gas emissions to report from the operations of the
Company other than those of the service providers and limited home
working by the Board. The Company does not have responsibility for
any other emissions producing sources reportable under the Companies
Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 or
the Companies (Directors’ Report) and Limited Liability Partnerships
(Energy and Carbon Report) Regulations 2018. Consequently, the
Company consumed very little direct energy during the year and
therefore is exempt from the disclosures required under the Streamlined
Energy and Carbon Reporting criteria.
Environmental and climate considerations – both in a systemic sense and
idiosyncratically – have become increasingly important for many in the
investment industry and beyond over the past decade. Physical and
transitional climate risks remain very much at the top of the list of factors
considered to potentially have a material financial impact over the
longer term. Attention is now also increasing in relation to the use and
management by companies of natural resources, such as water, as well
as biodiversity impacts arising in particular from pollution and waste
management practices. The Portfolio Manager believes active engagement
with portfolio companies is required to address these kinds of challenges.
Divesting simply does not address the problem. Instead, by supporting
companies as they transition over time to more sustainable business
models, the Portfolio Manager believes that environmental impacts can
be both reduced and mitigated.
Detail on the carbon characteristics of the Company is shown in the
following sections.
Gender Diversity
At the year-end, there were two male and three female Directors on the
Board. The Company has no employees and therefore there is nothing
further to report in respect of gender representation within the Company.
The Company’s policy on diversity is detailed in the Corporate Governance
Statement on page 53 .
Bribery Act
The Company has a zero-tolerance policy towards bribery and is
committed to carrying out business fairly, honestly and openly. The
Portfolio Manager also adopts a zero-tolerance approach and has policies
and procedures in place to prevent bribery.
Criminal Finances Act 2017
The Company has a commitment to zero tolerance towards the criminal
facilitation of tax evasion.
Stewardship/Engagement
The Board requires the Portfolio Manager to adopt an active stewardship
role, including the effective exercising of shareholders’ ownership rights.
It believes that this is central to the achievement of its aim to preserve
and grow the long-term real purchasing power of the assets
entrusted to it by shareholders.
The Portfolio Manager thus monitors, evaluates and if necessary, actively
engages or withdraws from investments with the aim of preserving or
adding value to the portfolio. It became a signatory to the UN Principles
for Responsible Investment in 2020, had been a signatory to the UK
Stewardship Code 2012 and in 2023 was again endorsed as a signatory
to the UK Stewardship Code 2020.
Both the Board and the Portfolio Manager firmly believe that
environmental, social and governance issues can have a material
financial impact on the value of a company along with its social licence to
operate, and therefore on the value of its investors’ capital. It is thus
important for a long-term responsible investor to integrate these issues
into the investment process.
The Portfolio Manager believes that its stewardship role is wholly
consistent with supporting companies to grow in a sustainable way, for
executive teams and board members to run their companies for the long
term and for the benefit of all stakeholders. Moreover, it believes that
companies not run in a sustainable manner, from lack of prudence on
financial strength and recklessness in the pursuit of growth at the expense
of the environment and relations with business stakeholders, have
significant potential to put shareholders’ capital at risk. Conversely,
companies run in a prudent manner for all stakeholders are believed
to be more likely to be successful, resilient, and financially rewarding
for shareholders.
Further detail on the Portfolio Manager’s approach to stewardship is
detailed within its Stewardship Policy1.
1 www.redwheel.com/uk/en/individual/resources
39
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Overview of Strategy continued
Carbon Emissions
Total Scope 1 & 2 Emissions
(t CO2eq)
Portfolio Weighted Average Carbon Intensity
(WACI) (t CO2eq/GBPm Revenue)
0
30,000
60,000
90,000
120,000
150,000
0
30
60
90
120
150
Temple Bar
Investment Trust
FTSE All-Share
2023
2022
2023
2022
Temple Bar
Investment Trust
FTSE All-Share
2023
2023
2022*
2022
Source: FTSE All- Share and Temple Bar Investment Trust data as at 29 December 2023. To ensure consistency and comparability of the emissions
of underlying companies, the emissions data used represents emissions generated across financial year 2022. Data provided by
Sustainalytics, as at 29 December 2023.
* Comparative figures have been amended from those reported in the 2022 Annual Report which had incorrectly understated the weighted average carbon intensity of both the FTSE
All-Share and the Company.
Approach
When monitoring and reporting the carbon credentials of the Company,
we use the metrics and methodologies recommended by the Taskforce
on Climate-Related Financial Disclosures (TCFD). Analysis focuses on the
emissions of companies that are considered to be either “Scope 1” or
“Scope 2”. Scope 1 emissions are the emissions directly attributable to a
company’s operations, whereas Scope 2 emissions are the emissions
indirectly attributable to a company’s operations (e.g. relating to the power
it consumes). Both are expressed in terms of tonnes of carbon dioxide
equivalent (t CO2eq), the universal unit of measurement used to indicate
the global warming potential of greenhouse gases, definition and
methodology by Greenhouse Gas Protocol.
The integration into the analysis of corporate “Scope 3” emissions remains
an aspiration as there are issues relating to data quality and the
double-counting of emissions within methodologies which continue to
hamper expansion of the analysis.
Total Scope 1 & 2 Emissions
The chart above provides representations of the absolute greenhouse
gas emissions (GHG) attributable both to Temple Bar, and also to a
notional investment of equal value in the FTSE All- Share.
An equity ownership approach is used to allocate both Scope 1 and
Scope 2 emissions to investments. Under this approach, if an investor
holds shares equal in value to 5 percent of a company’s total market
capitalisation, then the investor is considered to own 5 percent of the
Company; accordingly, it is considered to be liable for 5 percent of the
Company’s GHG (or carbon) emissions.
As compared to the FTSE All- Share, Temple Bar exhibits a higher
value for its Scope 1 and Scope 2 emissions (+37%).
These metrics are presented on an absolute basis; as the value of the
Company increases, we would expect the overall emissions attributable
to Temple Bar to increase. The respective values for Temple Bar and the
FTSE All- Share, normalised by the value of the Company, which in
essence is the carbon footprint metric, are 157.2 and 116.5 tCO2eq/
GBPm, respectively. Temple Bar’s carbon footprint is 35% higher as
it has a higher exposure to sectors responsible for a considerable
amount of emissions, such as Energy and Consumer Discretionary .
Weighted Average Carbon Intensity (WACI):
This chart shows the asset-weighted emissions intensity both of
Temple Bar, and also of an investment of equal value in the FTSE
All-Share.
Emissions intensity as a metric reflects the value of a company’s Scope 1
and Scope 2 carbon emissions (t CO2eq), normalised by revenues derived
(here, using GBP millions), over a particular period in line with the carbon
reporting one, which is financial year 2022 and 2021 respectively.
The weighted average carbon intensity of the Company is 3% lower than
the FTSE All- Share, indicating on average a lower allocation to
carbon intensive companies.
Observations
As compared to the FTSE All- Share (ex Investment Trusts), Temple
Bar has a higher allocation to the Energy sector (+7 .6%), Consumer
Discretionary sector (+6.5%)At the same time, the Company’s
allocation to the Materials and Utilities sectors is roughly the same as the
FTSE All-Share. These are sectors responsible for a significant amount of
carbon emissions and the previous figures and charts above
demonstrate this.
That said, it is important to note that whilst Temple Bar has 100%
reported emissions coverage, this is not the case for the FTSE All- Share.
Here, only 60.1% of companies disclose emissions data directly. For
some of the remaining 38.5% of companies it is possible to make an
estimate; for others it is not. Where there is no available emissions
data or third party estimates the companies have been excluded from
the FTSE All- Share’s analysis, this portion of companies represent
around 2.6% of the FTSE All- Share weight in terms of total invested.
40
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Social
The Portfolio Manager continues to believe that the financial impact
from social issues can be substantial.
Companies treating their employees, customers or suppliers
inappropriately, store up future problems for the business in terms of
human capital (lower productivity, disruption to production, staff turnover),
brand value (dissatisfied customers, litigation) and reputation
(supply-chain issues, health and safety). Local communities are also
important to consider, particularly in extractive industries.
Cyber security is a notable risk for many companies, particularly for those
holding customer information, sensitive sectors such as banks or utilities
or where intellectual property is the basis of the value of a company.
The Portfolio Manager researches and monitors social risks, reviewing
issues for focus based on the Company’s composition. Exposure to
conflict regions is monitored for a risk of human rights abuses.
Where there is potential exposure the Portfolio Manager will monitor
news flow and speak with the investee companies to evaluate the
risk. It may also speak to a company’s wider stakeholders in order to
seek a more holistic assessment of specific situations. For instance,
during the course of the year, a representative of the Portfolio Manager
attended an event hosted by the Trades Union Congress to hear more
about the experience of companies engaging with their workforces
via unions.
Governance
The consideration of companies’ approaches to governance has been at
the heart of the Portfolio Manager’s process since inception. Governance
describes the controls and oversight processes in place to manage
operational risks (including environmental and social risks); it also sets the
basis for the culture of a firm. The Portfolio Manager seeks investee
companies whose management runs the business as owners, and thinks
long term about customers, employees, suppliers, and community.
Such an approach is believed ultimately to benefit shareholders.
The Portfolio Manager believes in the importance of investee companies
possessing a strong board, with non-executive directors possessing the
requisite skills, experience and independence to counter the impact
of a powerful or dominant chief executive officer. Diversity can support
this aim and helps to counter ‘group think’ and incorporate better the
views of wider stakeholders. Remuneration is an area of controversy,
with management pay ratcheting higher, often without consequence
for failure or poor performance. Compensation packages must be tied to
long-term drivers of sustainable value, rather than a function of financial
engineering. The timeframe for executive evaluations should be extended
and there should also be a downside risk by requiring management to
put significant ‘skin in the game’.
If companies behave responsibly and act sustainably there are benefits
for society in terms of economic prosperity, political stability, and trust
in free markets. This in turn drives further benefits for the companies
themselves. The Portfolio Manager therefore believes it makes sense to
integrate into the investment process the consideration of a company’s
performance in addressing sustainability issues, even if the advantages
of doing so take time to emerge.
Remuneration
The Portfolio Manager believes that governance within UK companies
is generally of a very high standard. This reflects the UK Corporate
Governance Code and the long history of efforts to raise standards.
Whilst there are many individual aspects of corporate governance that
the Portfolio Manager considers, remuneration – the design and
implementation in practice of pay structures to reward and incentivise
behaviours that help the Company execute against its strategy – remains
one of the most important.
The Portfolio Manager’s view is that the basis of a good corporate
remuneration policy is a well-constituted remuneration committee.
This requires both the independence of the committee members
and relevant experience in the field of remuneration. A committee
must guard against the ratcheting upward of compensation awards,
balancing this with attracting and retaining talent.
The Portfolio Manager encourages companies to set remuneration
metrics that align with the overall strategy, reflecting appropriate
financial incentives, in combination with non-financial metrics relating
to environment and social issues. Environmental metrics should be
calibrated to help address specific operational challenges, while on social
issues relations with employees, customers, suppliers and the community
should be reflected as appropriate.
Remuneration is a complex area and challenging to find the right balance
between the various objectives and agendas. Shareholders will invariably
give conflicting feedback to remuneration committees. Where the Portfolio
Manager can have significant influence, they will engage with companies
in the construction of the remuneration policy. Where they feel their
shareholding in a given company is too low to ensure a constructive basis
for engagement, they will share their own remuneration expectations
document which sets out for companies what the Portfolio Manager
expects to see.
The Portfolio Manager in conjunction with the Board will continue to
develop the overall approach and push for higher standards, ensuring
that they collectively protect shareholder interests and promote
long-termism, set in the context of sustainability for all stakeholders.
Engagement Policy
Engagement is central to the Portfolio Manager’s process. Communicating
with investee companies on areas of concern is a key aspect of the
Portfolio Manager’s approach. Having a long-term investment
horizon and concentrated portfolio allows the Portfolio Manager to
build meaningful relationships.
The engagement process is led and carried out by the Portfolio Manager,
consistent with the Redwheel Stewardship Policy. The specifics of each
process will be determined by the size of the exposure within the portfolio
and the materiality of the identified risk, amongst other factors. The Portfolio
Manager will draw from its own experience in assessing materiality risks
as well as both the Company’s own materiality assessment and
independent assessments on a sector basis, such as the Materiality Map
developed originally by the Sustainability Accounting Standards Board.
The method of engagement will depend on the engagement objectives.
For example, where the Portfolio Manager holds a position in an investee
company and is materially at odds with the Company’s strategic direction
or specific actions, it will usually set out its concerns in a letter to the
Company and follow up with a meeting. In some instances, the Portfolio
Manager will go further and set out a detailed analysis of the business or
sector, with proposed alterations to strategy, and discuss this analysis
with management.
The Portfolio Manager will engage with the chair of an investee company,
particularly at times of management change or in relation to long-term
questions on strategic direction. It may also engage with the investee
company’s senior independent director should it have concerns about
the chair or about board effectiveness. Other engagements may take
place in response to a request from the investee company themselves,
such as engagements with the chair of the remuneration committee
to discuss incentive structures and policies. Engaging in collaboration
with other shareholders, and casting votes against management at a
company’s AGM provide further means to escalate concerns when
direct bilateral engagement fails. As regards remuneration, the Portfolio
41
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Overview of Strategy continued
Manager aligns its approach to reflect the guidance provided by the
Pensions and Lifetime Savings Association, the UK Corporate Governance
Code and The Investment Association, as updated from time to time.
The evaluation of the outcome of the Portfolio Manager’s engagements
will depend on the type of engagement and the extent to which the original
objective can be considered to have been achieved.
Where the Portfolio Manager looks for specific actions, it will assess
the outcome on whether management or the board engaged and
subsequently chose to act on the suggestions made. On other issues,
the evaluation of the engagement may be more qualitative and not as
transparent. The Portfolio Manager tries to be very open about the nature
of its engagements and the outcomes of them.
Case studies of the Portfolio Manager’s engagement with investee
companies during the year are provided on pages 20 to 22 and are just
some of numerous calls, meetings and written correspondence that the
Portfolio Manager had with companies to discuss a variety of sustainability
and ESG-related issues.
Externalities and Non-Environmental Issues
In addition to adopting a stewardship approach to investment and
integrating sustainability and ESG considerations into its investment
approach, the Board asks the Portfolio Manager to consider systemic
externalities when assessing a company’s suitability for inclusion in the
portfolio. Systemic externalities are costs, usually considered as costs
to society or the environment,which are not captured by market pricing.
In particular, there are some areas where companies operating legally
and ethically may, through their joint actions (whether or not
coordinated),inadvertently contribute to the delivery of unintended
consequences for people and planet, particularly in relation to
climate change, global financial fragility and antimicrobial resistance.
These are areas where the Board believes that engagement with investee
companies, in conjunction with other asset owners, is of particular
importance in order to raise awareness amongst companies of the need
for market-based response. The Portfolio Manager reports regularly to
the Board with regard to its engagement with portfolio companies in
relation to such issues.
Future Developments
The future development of the Company is dependent on the
success of its investment strategy in the light of economic and equity
market developments. The outlook is discussed in the Chairman’s
Statement on page 8 and the Portfolio Manager’s Report on pages 14
to 17.
Strategic Report
On behalf of the Board
Richard Wyatt
Chairman
3 April 2024
42
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 43
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Governance Report
Board of Directors
Richard Wyatt
Lesley Sherratt
Chairman of the Board and Member of the
Audit and Risk, Management Engagement
and Nomination Committees
Richard Wyatt was appointed a Director in 2017.
He is a former Group Managing Director at
Schroders and a Partner at Lazard. He was
chairman of the media agency Engine Group
and served on the Regulatory Decisions
Committee of the FSA. He is currently a global
partner of Rothschild & Co.
Senior Independent Director, Chair of the
Audit and Risk Committee and member of
the Management Engagement and
Nomination Committees
Lesley Sherratt, PhD was appointed a Director in
2015. She has 25 years’ experience as an
investment manager, specialising in the analysis
of financial services companies but also running
the global equity team at Flemings. She was
formerly Investment Director of the Save &
Prosper and Fleming Flagship ranges of funds,
and CEO and CIO of Ark Asset Management Ltd,
a hedge fund she founded. She is currently a
trustee of the Henry Moore Foundation, a
Visiting Lecturer at King’s College, London and
writes on ethics in finance.
44
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Shefaly Yogendra
Charles Cade
Carolyn Sims
Member of the Audit and Risk Committee
and Chair of the Management Engagement
and Nomination Committees
Member of the Audit and Risk Committee,
Management Engagement Committee and
Nomination Committee
Member of the Audit and Risk Committee,
Management Engagement Committee and
Nomination Committee
Shefaly Yogendra, PhD was appointed a Director
in 2019. She became an independent
Non-Executive Director of Witan Investment Trust
Plc in February 2023 and was recently the COO of
Ditto AI, a symbolic AI startup. She built her career
in the technology industry, followed by strategic
advisory work on emerging technologies, and
specialises in governance, growth, risk, and
decision making. She is a non-executive director
of Harmony Energy Income Trust PLC and JP
Morgan US Smaller Companies Investment Trust
PLC. She was listed among the “100 Women To
Watch” in the Female FTSE Board Report 2016.
Charles Cade was appointed a Director in
2022. He has almost 30 years’ experience in
the investment companies sector, and was
ranked among the leading analysts
throughout his career at Numis Securities,
Winterflood Securities, HSBC and Merrill
Lynch. He joined the City following an MBA,
having previously worked for a consultancy
firm and as an economist in the UK
government. He is currently a non-executive
director of Vietnam Enterprise Investments
Ltd, a member of the Investment Committee
of the Rank Foundation charity, and an
independent consultant to interactive
investor, the retail platform.
Carolyn Sims was appointed a Director in
January 2023. She is the CFO and COO of British
International Investment plc (BII), the UK’s
Development Finance Institution. Before joining
BII in 2020, Carolyn was CFO of the Wealth
Management Division of Schroders plc and a
member of its Group Management Committee.
Prior to that, Carolyn was the CFO of Cazenove
Capital Management Limited until its sale to
Schroders in 2013. Carolyn started her career
with Touche Ross & Co. where she qualified as
a Chartered Accountant. She then joined Lazard
where her roles included COO for Global Capital
Markets and UK Finance Director.
45
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Report of Directors
The Directors present the Annual Report & Financial Statements of the
Company for the year ended 31 December 2023.
Directors
The Directors of the Company who held office at 31 December 2023 and
up to the date of the signing of the Annual Report are detailed on
pages 44 and 45. As at 31 December 2023, the Board of Directors of
the Company comprised two male and three female Directors.
Lesley Sherratt will retire as a Director of the Company following the AGM.
All other Directors, will retire and stand for re-election at the Company’s
AGM on 7 May 2024. The rules concerning the appointment and
replacement of Directors are set out in the Company’s Articles of
Association. There are no agreements between the Company and its
Directors concerning any compensation for their loss of office.
Ordinary Dividends
The interim dividends paid by the Company are set out in note 10 to
the financial statements.
Subsequent to the year-end, the Board approved a fourth interim
dividend for the year ended 31 December 2023 of 2.5 pence per
ordinary share, which was paid on 2 April 2024.
Upon a winding-up, after meeting the liabilities of the Company, the
surplus assets would be distributed to the shareholders pro rata to their
holding of ordinary shares. There are no restrictions on the transfer of
securities in the Company or on the voting rights of each ordinary share.
There are no special rights attached to any of the shares and no
agreements between holders of shares regarding their transfer known
to the Company and no agreements which the Company is party to that
might affect its control following a takeover bid.
An amendment to the Company’s Articles of Association and the giving
of authority to issue or buy back the Company’s shares requires an
appropriate resolution to be passed by shareholders. Proposals for the
renewal of the Board’s current authorities to issue and buy back shares
are set out in the Notice of AGM on pages 93 to 96.
Substantial Shareholders
As at 31 December 2023, the Company had received notification of the
following disclosable interests in the voting rights of the Company. This
information was correct at the date of notification. It should be noted
that these holdings may have changed since notified to the Company
and may not therefore be wholly accurate statements of actual holdings
as at 31 December 2023. However, notification of any change is not
required until the next applicable threshold is crossed:
Share Capital
At the AGM held on 9 May 2023, the Company was granted authority
to allot ordinary shares in the Company up to an aggregate nominal
amount of £1,531,636, being 10% of the total issued share capital at
that date, amounting to 30,632,714 ordinary shares. No shares were
issued during the year.
The Company was also granted authority to purchase up to 14.99% of
the Company’s ordinary share capital in issue at that date, amounting to
45,918,439 ordinary shares.
The Company bought back 27,209,505 shares of 5p each at a total cost
of £63.5m during the year. This represented 9.4 % of the total voting
rights at 31 December 2023. The shares bought back are held in
treasury.
Number of
ordinary
shares*
16,385,945
15,861,091
Evelyn Partners
Rathbone Investment
Management Limited
City of London Investment
Management Company Limited
14,991,840
Percentage
of voting
rights
5.64
5.46
5.16
At 31 December 2023, the Company had 334,363,825 ordinary shares
in issue, 43,750,944 of which were held in treasury. The total voting rights
of the Company at 31 December 2023 were 290,612,881.
In addition to the substantial shareholders identified in the table above
who have notified the Company of their respective shareholdings, the
Company is aware that a significant portion of the share register is
represented by retail investors via private investor platforms.
Subsequent to the year-end and up to 2 April 2024 , the Company
bought back 3, 771,869 ordinary shares for treasury, at a total cost of
£8. 9m . At 2 April 2024 , the Company has 334,363,825 ordinary shares
in issue, 47, 522,813 of which are held in treasury. The total voting
rights at the date of this Annual Report are 28 6,841,012 .
Following the date of this report, the Company was notified that City
of London Investment Management Company Limited’s holding had
decreased to 14,454,355 ordinary shares representing 5.03% of the
voting rights. T he Company has not been informed of any other
changes to the notifiable interests between 31 December 2023 and
the date of this Annual Report.
Authorities given to the Directors at the 2022 AGM to allot shares, disapply
statutory pre-emption rights and buy back shares will expire at the
forthcoming AGM.
At general meetings of the Company, shareholders are entitled to one
vote on a show of hands and on a poll, for every share held. The ordinary
shares carry the right to receive dividends and have one voting right per
ordinary share. To the extent that they exist, the revenue, profits and
capital of the Company (including accumulated revenue and realised
capital reserves) are available for distribution by way of dividends to
holders of ordinary shares.
46
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
Post Balance Sheet Events
Post balance sheet events are disclosed in note 21 on page 91 to the
financial statements.
Future Developments
Details on the outlook of the Company are set out in the Chairman’s
Statement on page 8 and the Portfolio Manager’s Report on pages 14
to 17.
Annual General Meeting (“AGM”)
The Notice of the AGM of the Company to be held on 7 May 2024 is on
pages 93 to 96. In addition to the ordinary business the following items
of business will also be proposed.
Dividend Policy
Resolution 9 set out in the Notice of AGM is for shareholders to approve
the Company’s dividend policy which is to authorise Directors of the
Company to declare and pay all dividends of the Company as interim
dividends, and for the last dividend referable to a financial year to not be
categorised as a final dividend. This is subject to shareholder approval.
Management Arrangements
Under the terms of the Portfolio Management Agreement, Redwheel
is paid a management fee equal to 0.325% (0.35% to 30 June 2023)
per annum of the Company’s total assets. The Portfolio Management
Agreement may be terminated on six months’ notice. The Portfolio
Management Agreement is also capable of termination in certain
circumstances including in the event that both Nick Purves and Ian Lance
cease to be responsible for the management of the Company’s assets or
otherwise become incapacitated.
Under the terms of the AIFM agreement that took effect from 1 July 2023,
Frostrow Capital LLP (‘Frostrow’) are paid 0.125% of market
capitalisation up to £250m and 0.1% of market capitalisation above
£250m.
Continued Appointment of the AIFM and Portfolio Manager
The Board keeps the performance of the Portfolio Manager under
continual review, and the Management Engagement Committee
conducts an annual appraisal of the Portfolio Manager’s performance,
and makes a recommendation to the Board about the continuing
appointment of the Portfolio Manager. It is the opinion of the Board
that the continuing appointment of the Portfolio Manager, on the
existing terms, is in the best interests of shareholders as a whole. The
reasons for this view are that the Portfolio Manager has executed the
investment strategy according to the Board’s expectations and has
produced positive returns relative to the broader market.
As set out in last years annual report, the Company appointed Frostrow
as its AIFM with effect from 1 July 2023. The Company’s Portfolio Manager,
RWC Asset Management LLP (‘Redwheel’), will continue in its role. Frostrow
also took on a number of marketing and distribution tasks currently
undertaken by Redwheel. It is the Directors’ opinion that the continuing
appointment of Frostrow as AIFM is also in the best interests of the
Company and its shareholders as a whole.
Requirements of the Listing Rules
Listing Rule 9.8.4 requires the Company to include certain information in a
single identifiable section of the Annual Report or a cross reference table
indicating where the information is set out. The Directors confirm that there
are no disclosures to be made in this regard.
Streamlined Energy and Carbon Reporting
The Company’s approach to ESG is set out on page 18.
Stakeholder Engagement
While the Company has no employees, or customers, the Directors give
regular consideration to the need to foster the Company’s business
relationships with its stakeholders. The effect of this consideration upon
the principal decisions taken by the Company during the financial year
is set out in further detail in the Strategic Report on page 29.
Financial Risk Management
Information about the Company’s financial risk management objectives
and policies is set out in note 20 to the financial statements.
Disclosure of Information to the Auditor
The Directors who held office at the date of the approval of the Annual
Report 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 all reasonable steps that he/ 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 Auditor is aware of that information.
47
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Report of Directors continued
Authority to Allot Shares
Resolution 10 set out in the Notice of AGM is an ordinary resolution and
will, if passed, authorise the Directors to allot up to 28, 684,101 ordinary
shares with a nominal value of £1,43 4, 055 or 10% of the Company’s
ordinary shares in issue at the date at which this resolution is passed.
This will replace the current authority granted to the Directors at the
last AGM. This authority will expire at the AGM to be held in 2025 when
a resolution to renew the authority will be proposed.
The Directors intend to use this authority whenever they believe it would be
in the best interests of shareholders to do so. Any such issues would only be
made at prices greater than the prevailing NAV per share at the time of issue,
including current year income, as adjusted for the market value of the
Company’s debt and would therefore increase the assets underlying each
share. The issue proceeds would be available for investment in line with
the Company’s investment policy.
Authority to Disapply Pre-Emption Rights
When shares are to be allotted for cash, the Companies Act 2006 requires
such new shares to be offered first to existing shareholders in proportion
to their existing holdings of ordinary shares.
However, in certain circumstances, it is beneficial to allot shares for
cash otherwise than by pro rata to existing shareholders and the ordinary
shareholders can, by special resolution, waive their pre-emption rights.
Resolution 11 set out in the Notice of AGM is a special resolution and
will, if passed, authorise the Directors to allot up to 28, 684,101 ordinary
shares with a nominal value of £1,43 4, 055 or 10% of the Company’s
ordinary shares in issue at the date at which this resolution is passed,
for cash on a non-pre-emptive basis. This will replace the current
authority granted to the Directors at the last AGM. This authority will
expire at the AGM to be held in 2025 when a resolution to renew the
authority will be proposed.
The Directors intend to use this authority whenever they believe it would
be in the best interests of shareholders to do so. Any such issues would
only be made at prices greater than the prevailing NAV per share at the
time of issue, including current year income, as adjusted for the market
value of the Company’s debt and would therefore increase the assets
underlying each share. The issue proceeds would be available for
investment in line with the Company’s investment policy.
No issues of shares will be made which would alter the control of the
Company without the prior approval of shareholders in general meeting.
Authority to Purchase the Company’s Own Shares
The Directors consider it desirable to give the Company the opportunity
to buy back shares in circumstances where the shares may be bought
for a price which is below the NAV per share of the Company. The
purchase of ordinary shares is intended to reduce the discount at which
ordinary shares trade in the market through the Company becoming a
source of demand for such shares, as well as being accretive to the NAV
per share. During the year, the Company continued to buy back shares
for this purpose with the shares being held in treasury.
Resolution 12 set out in the Notice of AGM is a special resolution and will, if
passed, authorise the Directors to buy back up to 14.99% of the Company’s
shares in issue at the date at which the resolution is passed. This will
replace the current authority granted to the Directors at the last AGM.
This authority will expire at the AGM to be held in 2025 when a
48
resolution to renew the authority will be proposed. 27,209,505 shares
have been bought back under this authority during the year and
3, 771,869 shares have been bought back under this authority post
year-end to 2 April 2024. The maximum price (exclusive of expenses)
which may be paid by the Company in relation to any such purchase is
the higher of:
i) 5% above the average of the mid-market value of shares for the
five business days before the day of purchase; or
ii
the higher of the price of the last independent trade and the
highest current independent bid on the London Stock Exchange.
The minimum price which may be paid for an ordinary share is the
nominal value of 5 pence each.
The decision as to whether to buy back any ordinary shares will be at
the discretion of the Board. Ordinary shares bought back in accordance
with the authority granted to the Board will either be held in treasury
or cancelled. Shares held in treasury may be reissued from treasury but
will only be reissued at a price that is in excess of the Company’s then
prevailing NAV per share. This authority will expire at the AGM to be held
in 2025 when a resolution to renew the authority will be proposed.
Notice Period for General Meetings
Under the Companies Act 2006, the notice period of general meetings
(other than an AGM) is 21 clear days’ notice unless the Company: (i) has
gained shareholder approval for the holding of general meetings on a
shorter notice period (subject to a minimum of 14 clear days’ notice) by
passing a special resolution at the most recent AGM; and (ii) offers the
facility for all shareholders to vote by electronic means.
The Company would like the ability to call general meetings (other than
an AGM) on less than 21 clear days’ notice. The shorter notice period
proposed by Resolution 13, a special resolution, would not be used as
a matter of routine, but only where the flexibility is merited taking into
account the business of the meeting and is thought to be in the interests
of shareholders as a whole. The approval will be effective until the end
of the AGM to be held in 2025, when it is intended that a similar
resolution will be proposed.
Recommendation
The Board considers the resolutions to be proposed at the AGM to be
in the best interests of the Company and its shareholders as a whole.
Accordingly, the Directors unanimously recommend that shareholders
should vote in favour of the resolutions to be proposed at the AGM, as
they intend to do so in respect of their own beneficial holdings.
On behalf of the Board
Richard Wyatt
Chairman
3 April 2024
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 49
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Corporate Governance
Statement
The Corporate Governance Statement and reports from the Committees
form part of the Report of Directors.
As at 31 December 2023, the Board consisted of five non-executive
Directors.
Corporate governance is the process by which the board of directors of
a company protects shareholders’ interests and by which it seeks to
enhance shareholder value. Shareholders hold the directors responsible
for the stewardship of a company’s affairs, delegating authority and
responsibility to the directors to manage the company on their behalf
and holding them accountable for its performance.
Compliance with the AIC Code of Corporate Governance
(the “AIC Code”)
The Board considers the practice of good governance to be an integral
part of the way it manages the Company and is committed to
maintaining high standards of financial reporting, transparency and
business integrity.
As Temple Bar is a UK-listed company, the Board’s principal governance
reporting obligation is in relation to the UK Code of Corporate Governance
(the “UK Code”) issued by the Financial Reporting Council (the “FRC”).
However, it is recognised that investment companies have special
circumstances which have an impact on their governance arrangements.
An investment company typically has no employees and as such the
day-to-day functions of the Company are outsourced to third parties. The
AIC has therefore drawn up its own set of guidelines known as the AIC Code,
last updated in February 2019, which recognises the nature of investment
companies by focusing on matters such as board independence and the
review of management and other third- party contracts. The FRC has
endorsed the AIC Code and confirmed that companies which report
against the AIC Code will meet their obligations in relation to the UK Code
and Listing Rule 9.8.6. The Board has chosen to report against the AIC
Code as it believes that its principles and recommendations will provide
better information to shareholders than reporting against only the
UK Code.
A copy of the AIC Code can be found at www.theaic.co.uk.
A copy of the UK Code can be obtained at www.frc.org.uk. The UK Code
includes provisions relating to:
• the role of the chief executive;
• executive directors’ remuneration; and
• the need for an internal audit function.
The Board considers that these provisions are not relevant to the position
of Temple Bar, being an externally managed investment company.
In particular, 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
such as an internal audit function. The Company has therefore not
reported further in respect of these provisions.
The Board of Directors
Under the leadership of the Chairman, the Board is ultimately responsible
for framing and executing the Company’s strategy and for closely
monitoring risks. The Directors are responsible for the determination
of the Company’s investment policy and investment strategy and have
overall responsibility for the Company’s activities, including the review
of investment activity and performance and the control and supervision
of the Portfolio Manager.
The Board seeks to ensure that it has an appropriate balance of skills
and experience, and considers that, collectively, it has substantial recent
and relevant experience of investment trusts and financial and public
company management.
The terms and conditions of the appointment of the Directors are
formalised in letters of appointment, copies of which are available for
inspection from the Company’s registered office. None of the Directors
has a service contract with the Company nor has there been any other
contractual arrangement between the Company and any Director at
any time during the year. Directors are not entitled to compensation for
loss of office.
The Directors have access to independent professional advice at the
Company’s expense if required. This is in addition to the access that every
Director has to the advice and services of the Company Secretary, who
is responsible for advising the Board on all governance matters and for
ensuring that Board procedures are followed and that applicable rules
and regulations are complied with.
Chairman and Senior Independent Director (“SID”)
The Chairman, Richard Wyatt, is independent and the Board considers
that he has sufficient time to commit to the Company’s affairs. The
Chairman’s other commitments are detailed in his biography on page 44.
There is a clear division of responsibility between the Chairman, the
Directors, the Portfolio Manager and the Company’s other third-party
service providers. The Chairman is responsible for leading the Board,
ensuring its effectiveness in all aspects of its role and is responsible for
ensuring that all Directors receive accurate, timely and clear information.
Lesley Sherratt is the Company’s SID. She acts as a sounding Board for the
Chairman, takes the lead in the annual evaluation of the Chairman by the
independent Directors, provides a channel for any shareholder concerns
regarding the Chairman and is available to meet with major shareholders
as appropriate. In periods of stress, the SID works with the Chairman, the
other Directors, and/or shareholders to resolve any issues. Following
Lesley’s retirement from the Board at the conclusion of this year’s A G M , it
has been agreed that Charles Cade will succeed her as the Company’s SID.
The documents setting out the roles of the Chairman and SID are
available on the Company’s website.
Board Operation
The Directors have adopted a formal schedule of matters specifically
reserved for their approval. These include the following:
• approval of the Company’s investment policy, long-term
objectives and strategy;
• approval of annual and half-yearly reports and financial
statements and accounting policies, prospectuses, circulars and
other shareholder communications;
• raising new capital;
• approval of dividends;
• board appointments and removals;
• appointment and removal of the AIFM, Administrator and
Company Secretary and Portfolio Manager ; and
• approval of the Company’s annual expenditure budget.
50
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 At each Board meeting the Directors follow a formal agenda, which
includes a review of investment performance, analysis of the peer
group, marketing and financial information, together with briefing
notes and papers in relation to changes in the Company’s economic
and financial environment, statutory and regulatory changes and
corporate governance best practice.
The Board meets regularly throughout the year and representatives of
the AIFM and Portfolio Manager are in attendance, when appropriate, at
each meeting. Prior to each Board and Committee meeting, Directors
are provided with a comprehensive set of papers giving detailed
information on the Company and all Directors have timely access to all
relevant management, financial and regulatory information.
Committees
The Board has established three committees to assist its operations: the
Audit and Risk Committee, the Management Engagement Committee
and the Nomination Committee. Given the size and nature of the Board
it is felt appropriate that all Directors are members of each Committee.
The need for a separate Remuneration Committee will be kept under
review but, at present, given the size of the Board, the functions which
a Remuneration Committee would be responsible for are overseen by
the full Board.
The terms of reference of the Committees are available on the
Company’s website.
Audit and Risk Committee
The Audit and Risk Committee is chaired by Lesley Sherratt. The Committee
meets formally at least twice a year. The Board is satisfied that members of
the Committee have relevant and recent financial experience to fulfil their
role effectively and also have sufficient experience of the investment trust
sector. In particular, Lesley has 25 years’ experience as an investment
manager across all asset classes but specialising in the analysis of financial
services companies and investment trusts.
Following Lesley’s retirement from the Board at the conclusion of this
year’s AGM , it has been agreed that Carolyn Sims will succeed her as Chair
of the Audit and Risk Committee. See page 45 for Carolyn’s biographical
details.
The Committee has direct access to the Company’s Auditor and provides
a forum through which the Auditor reports to the Board. Representatives
of the Auditor are invited to attend the Committee meeting at which
the annual accounts are considered and any other meetings that the
Committee deems necessary.
Given the size and nature of the Board it is felt appropriate that all Directors
are members of each Committee. The Directors therefore believe it is
appropriate for Richard Wyatt, the Chairman of the Board, to be a member
of the Committee given his financial experience and experience of the
Company overall. The Committee is also of the view that his membership
would not compromise his independence as Chairman of the Board.
51
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Corporate Governance
Statement continued
Management Engagement Committee
The Management Engagement Committee comprises all Directors and
is chaired by Shefaly Yogendra. The Committee met once during the year
to review the ongoing performance and the continuing appointment of
all service providers of the Company, including the Portfolio Manager. The
Committee also considers any variation to the terms of all service providers’
agreements and reports its findings to the Board.
Nomination Committee
A Nomination Committee comprising all Directors oversees a formal review
procedure governing the appointment of new Directors and evaluates the
overall composition of the Board, taking into account the existing balance
of skills, experience and knowledge. The Committee is also responsible
for assessing, on an annual basis, the individual performance of each
Director and for making recommendations as to whether they should
remain in office. This Committee is chaired by Shefaly Yogendra. The
Committee met once during the year, to discuss Board composition and
succession, the re-election of each Director.
Meeting Attendance
The table below sets out the Directors’ attendance at Board and Committee meetings held during the year ended 31 December 2023.
Board
Audit and Risk
Committee
Management
Engagement
Committee
Nomination
Committee
Meetings
Held
Meetings Meetings
Held
Attended
Meetings
Attended
Meetings
Held
Meetings
Attended
Meetings
Held
Meetings
Attended
Total Returns
Arthur Copple*
Lesley Sherratt
Richard Wyatt
Shefaly Yogendra
Charles Cade
Carolyn Sims
3
5
5
5
5
5
3
5
5
5
5
5
2
3
3
3
3
3
2
3
3
3
3
3
1
1
1
1
1
1
0
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
* Retired from the Board on 9 May 2023.
52
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
Independence of the Directors
The Board has reviewed the independence status of each individual
Director and the Board as a whole. All Directors are considered to be
independent of the Portfolio Manager and free from any business or
other relationship that could materially interfere with the exercise of
their independent judgement.
Induction and Training
New Directors appointed to the Board are provided with an induction
programme which is tailored to the particular circumstances of the
appointee. The Company Secretary will offer induction training to new
Directors about the Company, its key service providers, the Directors’ duties
and obligations and other matters as may be relevant from time to time.
Regular briefings are provided during the year on industry and regulatory
matters and the Directors receive other relevant training as required.
Director Appointment, Re-Election and Tenure
The rules concerning the appointment and replacement of Directors
are contained in the Company’s Articles of Association and the
Companies Act 2006.
Diversity
In terms of gender, ethnicity, experience and knowledge the Board
demonstrates great diversity. The Board believes that this diversity is
immensely helpful in developing and implementing its strategic goals.
The Board’s policy on diversity, including gender and ethnicity, is to take
this into consideration during the recruitment and appointment
process. The Board is committed to appointing and retaining the most
appropriate, well qualified candidates, and therefore no specific targets
have been set against which to report.
The following two tables provide the breakdown in gender identity and
ethnic representation on the Board in accordance with Listing Rule 9.8.6R
(10). As the Company is an investment trust it does not have any executive
directors, executive or senior management, or employees so only
information regarding the Directors is disclosed.
Reporting table on sex/gender representation as at
31 December 2023
Number of
Board members
Percentage of
the Board
Under the Company’s Articles of Association, Directors are subject to
election by shareholders at the first AGM after their appointment.
Thereafter, at each AGM any Director who has not stood for re- election at
either of the two preceding AGMs shall retire. Beyond these requirements
and in accordance with the AIC Code, the Board has agreed a policy
whereby all Directors will seek annual re- election at the Company’s AGM.
Male
Female
Prefer not to say
2
3
–
40%
60%
–
Directors are not appointed for specified terms, but the Board would
not normally expect Directors to serve for more than nine years. However,
in exceptional circumstances, mindful of the prevailing balance of skills
and experience on the Board, it may be considered appropriate for one
or more Directors to extend their tenure by a further three-year period.
Due to the recent Board refreshment exercise, the average length of service
for those Directors seeking re-election at the AGM is relatively low.
The Board has carefully considered the position of each of the Directors
and, following the annual Board evaluation, all of the Directors continue
to be effective and to display an undiminished enthusiasm and
commitment to the role. The Board therefore believes that it is in the best
interests of shareholders that each of the following Directors is re-elected
at the forthcoming AGM. The specific reasons for the re-election of each
Director are set out below:
•
Richard Wyatt: Richard typically adopts a ‘big picture’ approach to
Board discussion and decision making. He is well reasoned,
knowledgeable and possesses a good understanding of the impact
of current events. In certain contexts, Richard’s ability to approach
issues from a unique perspective provides important balance to
Board discussion.
• Shefaly Yogendra: Shefaly has extensive experience of governance and
risk, an increasingly important attribute in the Board’s risk management
and decision-making process. This particular skillset contributes
significantly to Board balance and discussion.
• Charles Cade: Charles joined the Board on 24 March 2022, and has
brought with him a wealth of experience and expertise in the investment
trust sector. His extensive career in the investment sector and his relevant,
expertise and experience has already proved invaluable to the Board.
• Carolyn Sims: Carolyn joined the Board on 1 January 2023. She brings
a wealth of knowledge to the Board, drawing from her experience in her
executive role as Chief Financial Officer and Chief Operating Officer of
British International Investment plc, the UK’s Development Finance
Institution. Prior to joining British International Investment in 2020, she
was CFO of the Wealth Management Division of Schroders plc and a
member of its Group Management Committee. Prior to that, she was
the CFO of Cazenove Capital Management Limited until its sale to
Schroders in 2013. Carolyn started her career with Touche Ross & Co.
where she qualified as a Chartered Accountant. She then joined Lazard
where her roles included Chief Operating Officer for Global Capital
Markets and UK Finance Director.
Reporting table on ethnicity representation as at
31 December 2023*
Number of
Board members
Percentage of
the Board
White British or other
White (including
minority- white groups)
Mixed/Multiple
Ethnic Groups
Asian/Asian British
Black/African/
Caribbean/Black British
Other ethnic group,
including Arab
Not specified/
prefer not to say
4
–
1
–
–
–
* There were five Directors serving on the Board as at 31 December 2023.
80%
–
20%
–
–
–
53
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
The internal control systems are designed to ensure that proper accounting
records are maintained, that the financial information on which business
decisions are made and which are issued for publication is reliable and that
the assets of the Company are safeguarded.
The risk management process and systems of internal control are
designed to manage rather than eliminate the risk of failure to achieve
the Company’s objectives. It should be recognised that such systems
can only provide reasonable, not absolute, assurance against material
misstatement or loss.
Internal Control Assessment Process
Robust risk assessments and reviews of internal controls are undertaken
regularly in the context of the Company’s overall investment objective.
A risk register has been produced against which identified and emerging
risks and the controls in place to mitigate those risks can be monitored.
The risks are assessed on the basis of the likelihood of them happening,
the impact on the business if they were to occur and the effectiveness
of the controls in place to mitigate them. This risk matrix is reviewed on a
regular basis by the Audit and Risk Committee.
The Directors have carried out a review of the effectiveness of the
Company’s risk management and internal control systems as they have
operated over the year and up to the date of approval of the Annual Report.
There were no matters arising from this review that required further
investigation and no significant failings or weaknesses were identified.
The majority of the day-to-day management functions of the Company are
sub-contracted, and the Directors therefore obtain regular assurances and
information from key third-party suppliers regarding the internal systems
and controls operating in their organisations. In addition, each of the third
parties is requested to provide a copy of its report on internal controls each
year, where available, which is reviewed by the Audit and Risk Committee.
On behalf of the Board
Richard Wyatt
Chairman
3 April 2024
Corporate Governance
Statement continued
Board Evaluation
The Directors are aware that they need to continually monitor and improve
performance, and recognise that this can be achieved through regular
Board evaluation, which provides a valuable feedback mechanism for
improving Board effectiveness.
An extensive independent evaluation was undertaken by Stogdale
St James in respect of the year ended 31 December 2023.
The evaluation was conducted through a questionnaire covering a range
of areas including strategy, processes and effectiveness, size and
composition, and corporate governance together with individual
interviews. The process was designed to assess the strengths, areas
of improvement and independence of the Board, together with the
performance of its Committees, the Chairman and individual Directors.
The results of the Board and Chairman evaluations were reviewed
and discussed by the Nomination Committee. Following the evaluation
process, the Board considers that all the Directors contribute effectively
and have the skills and experience relevant to the leadership and
direction of the Company.
Conflicts of Interest
Directors have a statutory duty to avoid situations in which they have or may
have interests that conflict with those of the Company, unless that conflict is
first authorised by the Board. This includes potential conflicts that may arise
when a Director takes up a position with another company. The Company’s
Articles of Association allow the Board to authorise such potential conflicts
and there is a procedure in place to deal with any actual or potential conflict
of interest. The Board deals with each appointment on its individual merit
and takes into consideration all relevant circumstances.
A register of conflicts is maintained by the Company Secretary and is
reviewed by the Directors at Board meetings to ensure that any authorised
conflicts remain appropriate. The Directors are required to confirm at
these meetings whether there has been any change to their position.
Shareholder Communications
Shareholder relations are given high priority by both the Board and
the Portfolio Manager. The principal medium by which the Company
communicates with shareholders is through annual and half-yearly
reports. The information contained therein is supplemented by daily
NAV announcements, a monthly factsheet available on the Company’s
website and a quarterly newsletter. Further information on engagement
with shareholders can be found under the Section 172 Statement on
page 28.
Internal Control Review
The Directors are responsible for the systems of internal control relating
to the Company and the reliability of the financial reporting process,
and for reviewing its effectiveness. The Directors have reviewed and
considered the guidance supplied by the FRC on risk management,
internal control and related finance and business reporting and an ongoing
process has been established for identifying, evaluating and managing
the principal and emerging risks faced by the Company. This process,
together with key procedures established with a view to providing
effective financial control, was in place during the year under review and
at the date of this Annual Report.
54
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Report on Directors’
Remuneration
The Board presents the Report on Directors’ Remuneration for the year
ended 31 December 2023.
There is no compensation for loss of office.
Shareholder views in respect of Directors’ remuneration are
communicated at the AGM and are taken into account when formulating
the Directors’ remuneration policy.
Voting at AGM
The Report on Directors’ Remuneration for the year ended 31 December
2022 was approved by shareholders at the AGM held on 9 May 2023. 99.5%
of poll votes in respect of the approval of the Report on Directors’
Remuneration were in favour, 0.5% were against and 174,878 votes
were withheld. The Directors’ Remuneration Policy was approved by
shareholders at the AGM held on 9 May 2023. 99.5% of proxy votes in
respect of approval of the Remuneration Policy were in favour, 0.5% were
against and 163,251 votes were withheld.
Performance Graph
The Company tries to meet its stated investment objective by investing
primarily in UK equities across different sectors, while maintaining a
balance of larger and smaller/medium-sized companies. The FTSE
All-Share Index is a very broad UK-based index, which makes it an
appropriate benchmark for the Company’s strategy and UK value mandates
in general, due to its coverage of small cap companies as well as the
larger-cap listings found in the main FTSE Indices.
The Directors consider that the most appropriate measure of the
Company’s performance is its share price total return compared with
the total return on the FTSE All-Share Index. A graph illustrating this relative
performance over a ten-year period is shown below.
Temple Bar Total Return Ten Years to 31 December 2023
FTSE All-Share (total return
sterling adjusted) (68.2%)
Share Price
Total Return (41.5%)
180
160
140
120
100
80
Source: Morningstar for Company returns, Redwheel for FTSE All-Share returns.
Rebased to 100 as at 31 December 2013.
Statement from the Chairman
As set out in the Corporate Governance Statement on page 51 , the
Company does not have a Remuneration Committee and the Directors’
remuneration is determined by the Board as a whole. No Director is involved
in deciding their own individual remuneration. The Board reviews Directors’
fees on an annual basis to ensure that they remain appropriate and are in
line with the level of remuneration for other investment trusts of a similar
size. During the year ended 31 December 2023, the annual fees were set at
a rate of £45,750 for the Chairman, £35,750 for the Chair of the Audit and
Risk Committee and £29,500 for a Director.
The Board met in November 2023 and discussed the proposed Director
fees for the year ended 31 December 2024. The Board agreed to keep
the fees for the Chairman and Chair of the Audit and Risk Committee
unchanged and increase the fees for other directors by £500. With effect
from 1 January 2024, annual fees were therefore increased to £30,000
for the other Directors. No remuneration consultants were engaged by
the Company during the financial year under review.
Remuneration Policy
The Directors’ Remuneration Policy was last approved at the Company’s
AGM in 2023. The policy is required to be put to a shareholders’ vote at
least once every three years and, in any year, if there is to be a change in the
Directors’ remuneration policy. Accordingly, an ordinary resolution will be
put to shareholders at the AGM to be held in 2026 to receive and approve
the Directors’ remuneration policy and will take effect once approved by
shareholders. The Remuneration Policy will then remain in place for a
further three years or until such time as the Board may choose to make a
change to the Policy (whereby they would put any changed Remuneration
Policy to shareholders for approval), whichever is earliest. This ordinary
resolution will be in addition to the ordinary resolution which will be put to
shareholders to receive and approve the Directors’ Remuneration Report.
The proposed Directors’ remuneration policy is set out below in full and is
unchanged from that previously approved by shareholders. There will be
no change in the way that the Remuneration Policy will be implemented
compared to how it was implemented in the financial year under review
and since its last approval by shareholders in 2023.
Purpose and link to strategy
Fees payable to Directors should be sufficient to attract and retain
individuals of high calibre with suitable knowledge and experience. Those
chairing the Board and key committees should be paid higher fees than
other Directors in recognition of their more demanding roles. Fees
should reflect the time spent by Directors on the Company’s affairs and
the responsibilities borne by the Directors.
Maximum and minimum levels
Remuneration consists of a fixed fee each year, set in accordance with
the stated policies, and any increase granted must be in line with the
stated policies.
The Board reviews the quantum of Directors’ fees each year to ensure
this is in line with the level of remuneration for other investment trusts of
a similar size.
When making recommendations for any changes in fees, the Board
considers wider factors such as the average rate of inflation over the period
since the previous review, and the level and any change in complexity of
the Directors’ responsibilities (including additional time commitments as
a result of increased regulatory or corporate governance requirements).
55
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Report on Directors’
Remuneration continued
Remuneration for the Year Ended 31 December 2023 (audited)
The aggregate limit of Directors’ fees of £250,000 per annum is set out in
the Company’s Articles of Association. Approval of shareholders would
be required to increase this limit.
It is the Company’s policy that no Director shall be entitled to any
performance-related remuneration, benefits in kind, long-term incentive
schemes, share options, pensions or other retirement benefits or
compensation for loss of office. None of the Directors have a service
contract with the Company, nor are they required to serve a notice period.
The remuneration paid to the Directors during the year is set out in the
table below:
Expenditure by the Company on Remuneration and Distributions
to Shareholders
The table below compares the remuneration paid to Directors with
distributions made to shareholders by way of a dividend, ongoing charges
of the Company, and shares bought back during the year under review
and the prior financial year.
Relative importance of Spend on Pay
2023
£’000
181
28,932
4,095
63,535
2022
£’000
155
28,877
4,153
25,891
Total amount of fixed fees
Arthur Copple1
Lesley Sherratt2
Richard Wyatt3
Shefaly Yogendra
Charles Cade4
Carolyn Sims5
Total
2023
£
16,188
35,750
40,289
29,500
29,500
29,500
Directors’ Remuneration
2022
£
Total Dividends
Ongoing charges1
Cost of share buybacks
during year
1 See Glossary on page 100.
43,500
34,000
28,000
28,000
21,538
–
Directors’ Shareholdings (audited)
There is no requirement under the Company’s Articles of Association for
Directors to hold shares in the Company.
180,727
155,038
The beneficial interests of the Directors’ and any connected persons in
the shares of the Company are set out below:
1 Retired from the Board on 9 May 2023.
2 Chair of the Audit and Risk Committee.
3 Appointed Chairman of the Board from 9 May 2023.
4 Appointed as a Director on 24 March 2022.
5 Appointed as a Director on 1 January 2023.
There were no taxable benefits received by any Directors during the year.
Annual percentage change in Directors’ Remuneration
The following table sets out the annual percentage change in Directors’
fees over the last three years and for the forthcoming year.
% change
Arthur Copple*^
Lesley Sherratt
Richard Wyatt
Shefaly Yogendra
Charles Cade
Carolyn Sims†
2023
Number of
shares*
2022
Number of
shares
N/a
325,000
50,000
4,500
50,000
–
361,545
325,000
50,000
4,500
50,000
N/a
2023 to
2024
2022 to
2023
2021 to
2022
2020 to
2021
* Figures re-stated in light of the share split as approved by shareholders in May 2022.
^ Retired from the Board on 9 May 2023
† Joined the Board on 1 January 2023
Chairman
Chair of the
Audit and Risk
Committee
Director
–
–
+1.7
+5.2
+12.3
+5.1
+5.4
+10.6
+8.7
–
–
–
There were no changes in the interests shown above between
31 December 2023 and the date of this Annual Report.
Approval
The Report on Directors’ Remuneration was approved by the Board and
signed on its behalf by:
Richard Wyatt
Chairman
3 April 2024
56
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
Report of the Audit and
Risk Committee
I am pleased to present the Report of the Audit and Risk Committee
(the “Committee”) for the year ended 31 December 2023.
Role and Responsibilities of the Committee
The Committee’s main responsibilities during the year were:
•
•
•
•
•
•
•
To review the Company’s Half-Year and Annual Report. In particular, to
consider and advise the Board on whether the Annual Report, taken
as a whole, is fair, balanced and understandable.
To review the risk management and internal control processes of the
Company and its key service providers.
To develop and implement a policy for the engagement of the external
Auditor and agreeing the scope of its work and its remuneration. Also,
to be responsible for the selection process of the external Auditor
(including the leadership of an audit tender process) and to have primary
responsibility for the Company’s relationship with the external Auditor.
To review the effectiveness of the external audit and the process.
To review the independence and objectivity of the external Auditor.
To consider any non-audit work to be carried out by the Auditor.
The Committee reviews the need for non-audit services to be provided
by the Auditor and authorises such on a case by case basis, having
consideration to the cost effectiveness of the services and the
independence and objectivity of the Auditor.
To consider the need for an internal audit function. Since the Company
delegates its day-to-day operations to third parties and has no
employees, the Committee has determined there is no requirement
for such a function.
•
To assess the going concern and viability of the Company, including
the assumptions used.
•
To report its findings to the Board.
A comprehensive description of the Committee’s role, its duties and
responsibilities, can be found in its terms of reference which are available for
review on the Company’s website at www.templebarinvestments.co.uk.
Composition and Meetings
The Committee met twice during the year under review and once following
the year-end. In addition, the Committee meets the Auditor at least
annually, without any other party present, for a private discussion.
Details of the composition of the Committee are set out in the Corporate
Governance Statement on page 51. The members of the Committee
consider that they have the requisite skills and experience to fulfil the
responsibilities of the Committee. As a financial sector analyst running
substantial funds in the financial and investment trust sectors for twenty
years, and having previously chaired the audit committee of (now
dissolved) US Smaller Companies Investment Trust for ten years, I have
recent and relevant financial experience with which to fulfil my role as
Chair of the Committee, and the Committee as a whole has competence
relevant to the investment trust sector.
Matters Considered During the Year
During the year, and to the date of this Annual Report, the Committee has:
• reviewed the internal controls and risk management systems of the
Company and its third-party service providers;
• agreed the audit plan and fees with the Auditor in respect of the audit,
including the principal areas of focus;
• received and discussed with the Auditor its report on the results of
the audit; and
• reviewed the performance and effectiveness of the Auditor and
considered its re-appointment and fees.
57
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Report of the Audit and Risk
Committee continued
Significant Issues Considered by the Committee
The Committee considered the following key issues in relation to the
Company’s financial statements during the year:
Significant issue
Annual Report and
Financial Statements
How the issue was addressed
The production of the Company’s Annual Report (including the audit by the Company’s external
Auditor) is a thorough process involving input from a number of different areas.
In order to be able to confirm that the Annual Report is fair, balanced and understandable, the Board
has requested that the Committee advise on whether it considers these criteria have been satisfied.
As part of this process the Committee has considered the following:
• the procedures followed in the production of the Annual Report, including the processes
•
in place to assure the accuracy of the factual content;
the extensive levels of review that were undertaken in the production process, by the
Company’s AIFM and the Committee; and
• the internal control environment as operated by the Portfolio Manager, AIFM and other
service providers.
As a result of the work undertaken by the Committee, it has confirmed to the Board that the Annual
Report and the Financial Statements for the year ended 31 December 2023, taken as a whole, is fair,
balanced and understandable and provides the information necessary for shareholders to assess
the Company’s financial position, performance, business model and strategy.
The Committee addressed the overall accuracy of the annual report by considering the draft
Annual Report, a letter from Frostrow in support of the letter of representation made by the Board
to the Auditor and the Auditor’s Report to the Committee.
The Board reviews detailed portfolio valuations at each meeting. It relies on the AIFM and the
Portfolio Manager to use correct listed prices and seeks comfort in the testing of this process
through their internal control statements. This was discussed with the AIFM and Portfolio Manager
and Auditor at the conclusion of the audit.
The Company uses the services of an independent Depositary (BNYM) to hold the assets of
the Company. The Depositary checks the consistency of its records with those of the AIFM and
Portfolio Manager on a monthly basis. The Depositary provides a six-monthly report to the Board
in relation to its monitoring and oversight of activities.
Income received is accounted for in accordance with the Company’s accounting policies as set
out in note 1 to the financial statements.
The Board receives income forecasts, including special dividends, together with explanations
from the Portfolio Manager for any significant movements from previous forecasts.
The Committee regularly considers the controls in place to ensure that the regulations for
maintaining investment trust status are observed at all times and receives supporting
documentation from the AIFM.
The Committee considered the Company’s financial requirements for the next twelve months
and concluded that it has sufficient resources to meet its commitments. Consequently, the financial
statements have been prepared on a going concern basis. The Committee also considered the
longer-term viability statement within the Annual Report for the year ended 31 December 2023,
covering a five-year period, and the underlying factors and assumptions which contributed to
the Committee deciding that this was an appropriate length of time to consider the Company’s
long-term viability. The Company’s viability statement can be found on page 38.
Valuation and
ownership of the
investment portfolio
Incomplete or
inaccurate revenue
recognition
Maintenance of
investment trust status
Going concern and
long-term viability of
the Company
58
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Appointment of the Auditor
Following consideration of the performance of the Auditor, the services
provided during the year and a review of its independence and objectivity,
the Committee has recommended to the Board the re-appointment
of BDO LLP as Auditor to the Company. Resolutions for BDO LLP’s
reappointment and to authorise the Committee to determine its
remuneration will be proposed at the forthcoming AGM.
As a public company listed on the London Stock Exchange, the Company
is subject to mandatory auditor rotation requirements. Based on these
requirements, a tender process will be conducted no later than 2029. The
Committee will, however, continue to consider annually the need to go
to tender for audit quality, remuneration or independence reasons.
The Competition and Markets Authority (“CMA”) Order
The Company has complied with the provisions of the CMA Order
throughout the year ended 31 December 2023.
Performance Evaluation
The Committee’s performance over the past year was reviewed as part
of the annual Board evaluation. The internal evaluation considered the
composition of the Committee and the efficacy of Committee meetings,
as well as assessing the Committee’s role in monitoring and overseeing
the Company’s financial reporting and accounting, risk management and
internal controls, compliance with corporate governance regulations and
the assessment of the external audit.
I am pleased to confirm that the evaluation result was positive and
no matters of concern or requirements for change were highlighted.
Lesley Sherratt
Chair of the Audit and Risk Committee
3 April 2024
Internal Controls
The Committee carefully considers the internal control systems by
continually monitoring the services and controls of its third party service
providers.
The Committee reviewed and updated the risk matrix during the year in
consideration of the Company’s principal and emerging risks. In addition,
the Committee reviews the Company’s risk heat map on a regular basis.
This enables the Committee to assess all current and emerging risks faced
by the Company and to discuss in detail how these can be mitigated
and agree any action to be taken. The risks are considered individually
and collectively so as to ensure the potential combined impact of all
risks can be considered and appropriate action taken. The Committee
received reports on internal controls and compliance from the Portfolio
Manager and the Company’s other service providers and no significant
matters of concern were identified. Details of the principal and emerging
risks faced by the Company can be found on pages 35 to 37.
Half-Year Report & Financial Statements
The Committee reviewed the Half Year Report and financial statements,
which are not audited or reviewed by the Auditor, to ensure that the
accounting policies were consistent with those used in the annual financial
statements and that they portrayed a fair, balanced and understandable
picture of the period in question.
Internal Audit
The Company does not have an internal audit function.
The Committee monitors and considers the need for an internal audit
function on (at least) an annual basis. The Committee continues to
believe that the Company does not require an internal audit function
as it delegates its day-to-day operations to third parties from whom it
receives and reviews internal control reports.
External Auditor
This is the fourth audit for BDO LLP following its appointment at the AGM
held in March 2020. Audit fees for the year ended 31 December 2023 are
set out in note 7 to the financial statements.
There were no non-audit services provided by the Auditor during the year.
Effectiveness of the External Audit
The Committee monitors and reviews the effectiveness of the external
audit carried out by the Auditor, including a detailed review of the audit
plan and the audit results report, and makes recommendations to the
Board on the re-appointment and the terms of engagement of the Auditor.
The Chair of the Committee met with the Company’s Audit Partner prior
to the finalisation of the audit of the Annual Report & Financial Statements
for the year ended 31 December 2023, without the Portfolio Manager
or the AIFM being present, to discuss how the external audit was carried
out, the findings from such audit and whether any issues had arisen from
the Auditor’s interaction with the Company’s various service providers.
No concerns were raised in respect of the year ended 31 December 2023.
Independence and Objectivity of the Auditor
The Committee has considered the independence and objectivity of the
Auditor and is satisfied that the Auditor has fulfilled its obligations to the
Company and its shareholders. The Committee remains satisfied that
BDO as a firm, its audit engagement team, audit partner, all other partners,
directors and managers comply with all relevant ethical requirements
as required and are independent of the Company. The Auditor’s
independence and objectivity are safeguarded by several control
measures which include the rotation of the audit partner every five years
and by the fact that no non-audit services were provided by BDO during
the year. The Committee reviews the continuing appointment of the
Auditor on an annual basis and gives regular consideration to the Auditor’s
fees and independence, along with matters raised during each audit.
59
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Report of the Management
Engagement Committee
I am pleased to present the Report of the Management Engagement Committee
for the year ended 31 December 2023.
The Role of the Committee
The Committee’s primary responsibilities are to:
• monitor and evaluate the performance of both the Portfolio Manager and the AIFM
and their compliance with the terms of their respective agreements;
• review the terms of the Portfolio Management and AIFM Agreements annually to
ensure that the terms conform with market and industry practice and remain in
the best interests of shareholders;
• recommend to the Board any variation to the terms of the Investment
Management and AIFM Agreements which it considers necessary or desirable;
• review and make the appropriate recommendations to the Board as to whether
the continuing appointment of the Portfolio Manager and the AIFM are in the best
interests of the Company and shareholders;
• review the level and method of remuneration of the Portfolio Manager;
• monitor the appropriateness and compliance of other service providers’ terms
of their respective agreements;
• review, consider and recommend to the Board any amendments to the terms
of the appointment and remuneration of other service providers; and
• consider any points of conflict of interest which may arise between the service
providers.
Matters Considered During the Year
The Committee met once during the year ended 31 December 2023. At the meeting,
the Committee:
• reviewed the performance of the AIFM and the Portfolio Manager;
• considered the continuing appointment of the AIFM and Portfolio Manager; and
• considered the services provided by the Company’s other third-party service
providers.
The Committee agreed when it met towards the end of the financial year that it had
been satisfied with the performance of all of the Company’s service providers to date.
Shefaly Yogendra
Chair of the Management Engagement Committee
3 April 2024
60
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Report of the Nomination
Committee
I am pleased to present the Nomination Committee report for the year ended
31 December 2023.
The Role of the Committee
The Committee’s primary responsibilities are to:
• regularly review the structure, size and composition (including the skills, knowledge,
diversity, ethnicity and experience) of the Board;
• give full consideration to succession planning for Directors, taking into account
the challenges and opportunities facing the Company and the skills and expertise
needed on the Board in the future;
• using objective criteria, identify and nominate for the approval of the Board,
candidates to fill Board vacancies as and when they arise;
• review the results of the Board performance evaluation process that relate to the
composition and the succession planning of the Board;
• make recommendations on the tenure of the Chairman of the Board; and
• review annually the time required from Directors and any other business interest
that may result in a conflict.
Matters Considered During the Year
The Committee met once during the year ended 31 December 2023. At this meeting,
the Committee:
• discussed Board composition and succession planning, where it was noted that
Arthur Copple would be retiring from the Board at the conclusion of the Company’s
AGM , that was held on Tuesday, 9 May 2023, and that Richard Wyatt would
succeed him as Chairman of the Company;
• reviewed and agreed the Board diversity disclosure to be contained in the Company’s
Annual Report and Accounts; and
• considered the election or re-election of each of the current Directors (with the
exception of Arthur Copple) at the forthcoming AGM.
The Committee carefully considered the position of each of the Directors and, following
the annual performance evaluation concluded that all of the Directors continued to be
effective and to display an undiminished enthusiasm and commitment to the role.
The Committee therefore recommended to the Board that the election or re-election
of those Directors seeking to remain on the Board was in the best interests of
shareholders and that accordingly resolutions regarding the same should be put to
shareholders at the forthcoming AGM. Further detail can be found on pages 93 to 96.
Shefaly Yogendra
Chair of the Nomination Committee
3 April 2024
61
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Statement of Directors’
Responsibilities
Directors’ responsibilities
The Directors are responsible for preparing the Annual Report & Financial
Statements in accordance with UK-adopted international accounting
standards and applicable law and regulations.
Company law requires the Directors to prepare financial statements for
each financial year. Under that law the Directors are required to prepare
the company financial statements in accordance with UK-adopted
international accounting standards. Under company law the Directors
must not approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the company and of
the profit or loss for the company for that period.
Directors’ responsibilities pursuant to DTR4
The Directors confirm to the best of their knowledge:
• the financial statements have been prepared in accordance with the
applicable set of accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit of the Company; and
• the Annual Report includes a fair review of the development and
performance of the business and the financial position of the
Company, together with a description of the principal risks and
uncertainties that it faces.
On behalf of the Board
In preparing these financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable
Richard Wyatt
Chairman
3 April 2024
and prudent;
• state whether they have been prepared in accordance with UK-adopted
international accounting standards, subject to any material departures
disclosed and explained in the financial statements;
• prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in business;
and
• prepare a Directors’ report, a strategic report and Directors’ remuneration
report which comply with the requirements of the Companies Act 2006.
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 the financial statements comply with the
Companies Act 2006.
They are also responsible for safeguarding the assets of the company and
hence for taking reasonable steps for the prevention and detection of fraud
and other irregularities. The Directors are responsible for, and confirm that
to the best of their knowledge, the Annual Report and Financial Statements,
taken as a whole, are fair, balanced, and understandable and provide the
information necessary for shareholders to assess the company’s position
and performance, business model and strategy.
Website publication
The Directors are responsible for ensuring the Annual Report & Financial
Statements are made available on a website. Financial statements are
published on the Company’s website in accordance with legislation in
the UK governing the preparation and dissemination of financial
statements, which may vary from legislation in other jurisdictions. The
maintenance and integrity of the Company’s website is the
responsibility of the Directors. The Directors’ responsibility also extends
to the ongoing integrity of the financial statements contained therein.
62
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 63
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 64
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Independent Auditor’s Report
to the Members of Temple Bar
Investment Trust Plc
• Assessing the projected management fees for the going concern
period to check that it was in line with the current assets under
management levels and the projected market growth forecasts
for the following year;
• Sensitising the forecasts based on an economic downturn and
calculating financial ratios to check the financial health of the Company,
including performing calculations assessing the net asset position of
the Company to understand the reliance on loans;
• Assessing the liquidity of the Company’s investments as a source
to settle liabilities; and
• Reviewing the loan agreements to identify the covenants and assessing
the likelihood of them being breached based on the Directors’ forecasts
and our sensitivity analyses.
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 relation to the Company’s reporting on how it has applied the UK
Corporate Governance Code, we have nothing material to add or draw
attention to in relation to the Directors’ statement in the financial
statements about whether the Directors considered it appropriate to
adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect
to going concern are described in the relevant sections of this report.
Overview
Key audit matters
Valuation and ownership
of quoted investments
Revenue recognition –
Dividend income
2023
2022
✓
✓
✓
✓
Materiality
Company financial statements as a whole
£7,200,000 (2022: £7,260,000) based on 1% (2022: 1%) of Net Assets
Opinion on the financial statements
In our opinion the financial statements:
• give a true and fair view of the state of the Company’s affairs as at
31 December 2023 and of its profit for the year then ended;
•
•
have been properly prepared in accordance with UK adopted
international accounting standards; and
have been prepared in accordance with the requirements of the
Companies Act 2006.
We have audited the financial statements of Temple Bar Investment
Trust Plc (the ‘Company’) for the year ended 31 December 2023 which
comprise the Statement of Comprehensive Income, Statement of Changes
in Equity, Statement of Financial Position, Statement of Cashflows and
notes to the financial statements, including a summary of significant
accounting policies. The financial reporting framework that has been
applied in their preparation is applicable law and UK adopted
international accounting standards.
Basis for opinion
We conducted our audit in accordance with International Standards on
Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under
those standards are further described in the Auditor’s responsibilities
for the audit of the financial statements section of our report. We believe
that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion. Our audit opinion is consistent with
the additional report to the Audit and Risk Committee.
Independence
Following the recommendation of the Audit and Risk Committee, we were
appointed by the Board of Directors and subsequently by the shareholders
on 30 March 2020 to audit the financial statements for the year ended 31
December 2020 and subsequent financial periods. The period of total
uninterrupted engagement including retenders and reappointments is four
years, covering the years ended 31 December 2020 to 31 December 2023.
We remain independent of the Company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the
UK, including the FRC’s Ethical Standard as applied to listed public interest
entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. The non-audit services prohibited
by that standard were not provided to the Company.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the Directors’
assessment of the Company’s ability to continue to adopt the going
concern basis of accounting included:
• Evaluating the appropriateness of the Directors’ method of assessing the
going concern in light of market volatility and the present uncertainties in
economic recovery by reviewing the information used by the Directors
in completing their assessment;
• Assessing the appropriateness of the Directors’ assumptions and
judgements made by comparing the prior year forecasted costs to the
actual costs incurred to assess the reliability of the Directors forecasting
ability as well as comparing the projected costs to the current year
actuals to assess whether they are reasonable;
65
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
Independent Auditor’s Report to the Members of
Temple Bar Investment Trust Plc continued
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding of the Company and its environment, including the Company’s system of internal control,
and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal
controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which
had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Key audit matter
How the scope of our audit addressed the key audit matter
Valuation and ownership of quoted Investments
Notes 1 and 12
The investment portfolio at the year-end comprised of quoted
equity and debt investments.
There is a risk that the prices used for the listed investments held by the
Company are not reflective of fair value and the risk that errors made in
the recording of investment holdings result in the incorrect reflection of
investments owned by the Company.
Therefore we considered the valuation and ownership of quoted equity and
debt investments to be the most significant audit area as the quoted equity
and debt investments also represent the most significant balance in the
financial statements and underpin the principal activity of the entity.
For these reasons and the materiality of the balance in relation to the
financial statements as a whole, we considered this to be a key audit matter.
We responded to this matter by testing the valuation and ownership of the
whole portfolio of quoted equity and debt investments. We performed
the following procedures:
• Confirmed the year-end bid price was used by agreeing to externally
quoted prices;
• Assessed if there were contra indicators, such as liquidity considerations,
to suggest bid price is not the most appropriate indication of fair value
by considering the realisation period for individual holdings;
• Recalculated the valuation by multiplying the number of shares held
per the statement obtained from the custodian by the valuation per
share; and
• Obtained direct confirmation of the nominal value and number of
shares held per debt and equity investment, respectively, from the
custodian regarding all investments held at the balance sheet date.
Key observations:
Based on our procedures performed we did not identify any matters
to suggest the valuation or ownership of the quoted equity and debt
investments was not appropriate.
Revenue recognition-Dividend Income
Notes 1 and 4
Income arises predominately from dividends and can be volatile, but
is a key factor in demonstrating the performance of the portfolio.
We assessed the treatment of dividend income from corporate actions and
special dividends, if any, and challenged if these had been appropriately
accounted for as income or capital by reviewing the underlying reason
for issue of the dividend and whether it could be driven by a capital event.
As such there may be an incentive to recognise dividend income as revenue
where it is more appropriately of a capital nature.
Additionally, judgement is required by management in determining the
allocation of dividend income to revenue or capital for certain corporate
actions or special dividends.
For this reason we considered revenue recognition of dividend income
to be a key audit matter.
We analysed the whole population of dividend receipts to identify items
for further discussion that could indicate a capital distribution, for example
where a dividend represents a particularly high yield. In these instances
we performed a combination of inquiry with management and our own
independent research, including inspection of financial statements and
public announcements by investee companies, to ascertain whether the
underlying event was indeed of a capital nature.
In addition, we formed our own expectation of dividend income for 100% of
the portfolio based on investment holdings and dividend announcements
obtained from independent sources and compared this to dividend
income recognised by the Company.
Key observations:
Based on our procedures performed we found the judgements made by
management in determining the allocation of income to revenue or
capital to be appropriate.
66
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Our application of materiality
We apply the concept of materiality both in planning and performing
our audit, and in evaluating the effect of misstatements. We consider
materiality to be the magnitude by which misstatements, including
omissions, could influence the economic decisions of reasonable users
that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any
misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed.
Importantly, misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature of identified
misstatements, and the particular circumstances of their occurrence,
when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the
financial statements as a whole and performance materiality as follows:
Company
financial
statements
2023
Company
financial
statements
2022
Materiality
£7,200,000
£7,260,000
Basis for determining
materiality
Rationale for the
benchmark applied
1% of Net Assets
1% of Net Assets
As an investment trust, the net
asset value is the key measure
of performance for users of the
financial statements.
Performance materiality
75% of materiality 75% of materiality
Rationale for the
percentage applied
or performance
materiality
The level of performance materiality
applied was set after having
considered a number of factors
including the expected total value of
known and likely misstatements and
the level of transactions in the year.
67
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
Independent Auditor’s Report to the Members of
Temple Bar Investment Trust Plc continued
Specific materiality
We also determined that for Revenue return before tax, a misstatement
of less than materiality for the financial statements as a whole, specific
materiality, could influence the economic decisions of users as it is a
measure of the Company’s performance of income generated from its
investments after expenses. As a result, we determined materiality for
these items to be £1,450,000 (2022: £1,570,000), based on 5% of Revenue
return before tax (2022: 5% of Revenue return before tax). We further applied
a performance materiality level of 75% of specific materiality to ensure that
the risk of errors exceeding specific materiality was appropriately mitigated.
Corporate governance statement
The Listing Rules require us to review the Directors’ statement in relation
to going concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Company’s compliance with the
provisions of the UK Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded
that each of the following elements of the Corporate Governance
Statement is materially consistent with the financial statements or our
knowledge obtained during the audit.
Reporting threshold
We agreed with the Audit and Risk Committee that we would report to
them all individual audit differences in excess of £70,000 (2022:£80,000).
We also agreed to report differences below this threshold that, in our view,
warranted reporting on qualitative grounds.
Other information
The directors are responsible for the other information. The other
information comprises the information included in the Annual Report and
Financial Statements other than the financial statements and our auditor’s
report thereon. Our opinion on the financial statements does not cover
the other information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
Going concern and longer-term viability
• The Directors’ statement with regards to the appropriateness of
adopting the going concern basis of accounting and any material
uncertainties identified; and
• The Directors’ explanation as to their assessment of the Company’s
prospects, the period this assessment covers and why the period is
appropriate.
Other Code provisions
• Directors’ statement on fair, balanced and understandable;
• Board’s confirmation that it has carried out a robust assessment of the
emerging and principal risks;
• The section of the annual report that describes the review of
effectiveness of risk management and internal control systems; and
• The section describing the work of the Audit and Risk Committee.
68
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 to influence the economic decisions of users taken on the basis of these
financial statements.
Extent to which the audit was capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws
and regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below:
Non-compliance with laws and regulations
Based on:
• Our understanding of the Company and the industry in which it
operates;
• Discussion with management and those charged with governance;
and
• Obtaining and understanding of the Company’s policies and procedures
regarding compliance with laws and regulations.
We considered the significant laws and regulations to be Companies
Act 2006, the FCA listing and DTR rules, the principles of the AIC Code
of Corporate Governance, industry practice represented by the AIC SORP,
the applicable accounting framework, and the Company’s qualification
as an Investment Trust under UK tax legislation as any non-compliance
of this would lead to the Company losing various deductions and
exemptions from corporation tax.
Our procedures in respect of the above included:
• Agreement of the financial statement disclosures to underlying
supporting documentation;
• Enquiries of management and those charged with governance
relating to the existence of any non-compliance with laws and
regulations;
• Reviewing minutes of meeting of those charged with governance
throughout the period for instances of non-compliance with laws
and regulations; and
• Reviewing the calculation in relation to Investment Trust compliance
to check that the Company was meeting its requirements to retain
their Investment Trust Status.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed
during the course of the audit, we are required by the Companies Act 2006
and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report and Directors’ report
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic report and the Directors’ report
for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
• the Strategic report and the Directors’ report have been prepared
in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its
environment obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the Directors’ report.
Directors’ remuneration
In our opinion, the part of the Directors’ remuneration report to be audited
has been properly prepared in accordance with the Companies Act 2006.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not
visited by us; or
• the financial statements and the part of the Directors’ remuneration
report to be audited are not in agreement with the accounting records
and returns; or
• certain disclosures of Directors’ remuneration specified by law are
not made; or
• we have not received all the information and explanations we require
for our audit.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ Responsibilities, the
Directors are responsible for the preparation of the financial statements
and for being satisfied that they give a true and fair view, and for such
internal control as the Directors determine is necessary to enable the
preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for
assessing the Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the Directors either intend
to liquidate the Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected
69
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Independent Auditor’s Report to the Members of
Temple Bar Investment Trust Plc continued
Fraud
We assessed the susceptibility of the financial statement to material
misstatement including fraud.
Our risk assessment procedures included:
• Enquiry with management and those charged with governance
including the Audit and Risk Committee, regarding any known or
suspected instances of fraud;
• Obtaining an understanding of the Company’s policies and
procedures relating to:
– Detecting and responding to the risks of fraud; and
Use of our report
This report is made solely to the Company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our
audit work has been undertaken so that we might state to the Company’s
members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other than the Company
and the Company’s members as a body, for our audit work, for this report,
or for the opinions we have formed.
Peter Smith (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
– Internal controls established to mitigate risks related to fraud.
3 April 2024
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
• Review of minutes of meeting of those charged with governance for
any known or suspected instances of fraud; and
• Discussion amongst the engagement team as to how and where
fraud might occur in the financial statements.
Based on our risk assessment, we considered the areas most susceptible
to management override of controls and the recognition of dividend
income between revenue and capital.
Our procedures in respect of the above included:
• The procedures set out in the relevant sections of the Key Audit
Matters section above; and
• Testing the appropriateness of a samples of journal entries in the
general ledger and adjustments made in the preparation of the financial
statements to supporting documentation and reviewing accounting
estimates for possible bias.
We also communicated relevant identified laws and regulations and
potential fraud risks to all engagement team members who were all
deemed to have appropriate competence and capabilities and remained
alert to any indications of fraud or non-compliance with laws and
regulations throughout the audit.
Our audit procedures were designed to respond to risks of material
misstatement in the financial statements, recognising that the risk of not
detecting a material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve deliberate
concealment by, for example, forgery, misrepresentations or through
collusion. There are inherent limitations in the audit procedures performed
and the further removed non-compliance with laws and regulations is
from the events and transactions reflected in the financial statements, the
less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial
Reporting Council’s website at: www.frc.org.uk/ auditorsresponsibilities.
This description forms part of our auditor’s report.
70
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 71
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Financial Report
72
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Statement of
Comprehensive Income
Total Income
Profit/(losses) on investments
Currency exchange loss
Total income/(loss)
Expenses
Portfolio management fees
Other expenses
Profit/(loss) before finance costs and tax
Finance costs
Profit/(loss) before tax
Tax
Profit/(loss) for the year
Earnings per share
Notes
4
12
6
7
8
9
2023
2022
Revenue
£000
Capital
£000
Total Revenue
£000
£000
Capital
£000
Total
£000
32,422
–
32,422
34,791
–
34,791
–
–
62,826
62,826
(143)
(143)
–
–
(42,572)
(42,572)
(13)
(13)
32,422
62,683
95,105
34,791
(42,585)
(7,794)
(1,103)
(1,654)
(2,757)
(1,175)
(1,762)
(2,937)
(1,068)
(721)
(1,789)
(1,057)
(487)
(1,544)
30,251
60,308
90,559
32,559
(44,834)
(12,275)
(1,123)
(1,685)
(2,808)
(1,123)
(1,685)
(2,808)
29,128
58,623
87,751
31,436
(46,519)
(15,083)
(926)
–
(926)
(886)
–
(886)
28,202
58,623
86,825
30,550
(46,519)
(15,969)
11
9.3p
19.4p
28.7p
9.4p
(14.3p)
(4.9p)
The total column of this statement represents the Statement of Comprehensive Income prepared in accordance with IFRS. The supplementary revenue
return and capital return columns are both prepared under guidance issued by the AIC. All items in the above statement derive from continuing operations.
No operations were acquired or discontinued during the year.
The Company does not have any income or expense that is not included in profit for the year. Accordingly, the profit for the year is also the Total
Comprehensive Income for the year, as defined in IAS1 (revised).
The notes on pages 77 to 91 form an integral part of the financial statements.
73
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
Statement of
Changes in Equity
Notes
Called-up Share premium
account
£’000
share capital
£’000
Capital
reserves
£’000
Revenue
reserve
£’000
Total
equity
£’000
Balance at 1 January 2022
16,719
96,040
672,616
11,708
797,083
(Loss)/profit for the year
Contributions by and distributions to owners
Cost of shares bought back for treasury
Dividends paid to equity shareholders
10
–
–
–
–
(46,519)
30,550
(15,969)
–
–
(25,891)
–
(25,891)
–
(28,877)
(28,877)
Balance at 31 December 2022
16,719
96,040
600,206
13,381
726,346
Profit for the year
Contributions by and distributions to owners
Cost of shares bought back for treasury
Dividends paid to equity shareholders
10
–
–
–
–
–
–
58,623
28,202
86,825
(63,535)
–
(63,535)
–
(28,932)
(28,932)
Balance at 31 December 2023
16,719
96,040
595,294
12,651
720,704
As at 31 December 2023, the Company had distributable revenue reserves of £12,651,000 (2022: £13,381,000) and distributable capital reserves
of £595,294,000 (2022: £600,206,000) for the payment of future dividends. Only the revenue reserve and capital reserves are distributable.
The notes on pages 77 to 91 form an integral part of the financial statements.
74
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
Statement of
Financial Position
31 December 2023
31 December 2022
Notes
£’000
£’000
£’000
£’000
Non-current assets
Investments
Current assets
Investments
Cash and cash equivalents
Receivables
Total assets
Current liabilities
Payables
Total assets less current liabilities
Non-current liabilities
Interest bearing borrowings
Net assets
Equity attributable to equity holders
Ordinary share capital
Share premium
Capital reserves
Revenue reserve
Total equity attributable to equity holders
NAV per share
NAV per share with debt at fair value1
12
12
13
14
15
16
18
18
776,875
782,463
13,713
4,275
2,979
5,170
13,240
2,257
20,967
797,842
(2,394)
795,448
(74,744)
720,704
720,704
248.0p
252.2p
16,719
96,040
600,206
13,381
20,667
803,130
(2,077)
801,053
(74,707)
726,346
726,346
228.5p
233.5p
16,719
96,040
595,294
12,651
1 Alternative Performance Measure – See glossary of terms beginning on page 99 for definition and more information.
The notes on pages 77 to 91 form an integral part of the financial statements.
The financial statements of Temple Bar Investment Trust Plc (registered number: 00214601) on pages 73 to 91 were approved by the Board of Directors
and authorised for issue on 3 April 2024. They were signed on its behalf by:
Richard Wyatt
Chairman
75
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
Statement of
Cash Flows
Cash flows from operating activities
Profit/(loss) before tax
Adjustments for:
(Gains)/losses on investments
Finance costs
Dividend income
Interest income
Dividends received
Interest received
Decrease/(increase) in other receivables
Increase in other payables
31 December 2023
31 December 2022
Notes
£’000
£’000
£’000
£’000
87,751
(15,083)
4
4
(62,826)
2,808
(32,278)
(144)
32,037
(97)
38
584
42,572
2,808
(34,504)
(287)
37,680
584
(361)
70
(886)
Net overseas withholding tax paid
9
(1,229)
Net cash flows from operating activities
(61,107)
26,644
47,676
32,593
Purchases of investments
Sales of investments
(137,215)
197,110
(127,456)
154,148
Net cash flows from investing activities
59,895
26,692
Cash flows from financing activities
Equity dividends paid
10
Interest paid on borrowings
Shares bought back for treasury
(28,932)
(2,773)
(63,799)
(28,877)
(2,772)
(26,022)
Net cash flows used in financing activities
(95,504)
(57,671)
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the start of the year
Cash and cash equivalents at the end of the year
(8,965)
13,240
4,275
1,614
11,626
13,240
The notes on pages 77 to 91 form an integral part of the financial statements.
76
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
Notes to the Financial
Statements
General information
Temple Bar Investment Trust Plc was incorporated in England and Wales
in 1926 with the registered number 00214601.
The Company carries on the business as an investment trust company
within the meaning of Sections 1158/1159 of the Corporation Tax Act 2010.
Presentation of Statement of Comprehensive Income
In order to better reflect the activities of an investment trust company and
in accordance with guidance issued by the AIC, supplementary information
which analyses the Statement of Comprehensive Income between items
of a revenue and capital nature has been presented alongside the
Statement of Comprehensive Income.
1. Principal Accounting Policies
Basis of accounting
The financial statements have been prepared on a going concern basis,
under the historical cost convention, modified by the valuation of
investments at fair value, prepared in accordance with UK adopted
international accounting standards.
The annual financial statements have also been prepared in accordance
with the AIC SORP for investment trusts issued by the AIC in July 2022,
except to any extent where it is not consistent with the requirements
of IFRS. The principal accounting policies adopted by the Company are
set out below.
All values are rounded to the nearest thousand pounds unless
otherwise indicated.
Going concern
The Directors are required to make an assessment of the Company’s ability
to continue as a going concern and that the Company has adequate
resources to continue in operational existence for 12 months from the
date when these financial statements are approved.
In making this assessment, the Directors have considered a wide variety of
emerging and current risks to the Company, as well as mitigation
strategies that are in place. The Board has also reviewed stress-testing
and scenario analyses prepared by the AIFM to assist it in assessing the
impact of changes in market value and income with associated cash
flows. In making this assessment, the AIFM has considered plausible
downside scenarios.
These tests are carried out as an arithmetic exercise, which can apply
equally to any set of circumstances in which asset value and income are
significantly impaired. It was concluded that in a plausible downside
scenario, the Company could continue to meet its liabilities. Whilst the
economic future is uncertain, the opinion of the Directors is that no
foreseeable downside scenario would be to a level which would threaten
the Company’s ability to continue to meet its liabilities as they fall due.
Based on the information available to the Directors at the time of this report,
including the results of the stress tests and scenario analyses, and having
taken account of the liquidity of the investment portfolio, the Company’s
cash flow and borrowing position (see notes 8 and 15 for further details on
borrowings), the Directors are satisfied that the Company has adequate
financial resources to continue in operation for 12 months from the date
of signing of these financial statements and that, accordingly, it is
appropriate to adopt the going concern basis.
Income
Dividend income from investments is recognised when the Company’s
right to receive payment has been established, normally the ex-dividend
date.
Where the Company has elected to receive its dividends in the form of
additional shares rather than cash, the amount of cash dividend foregone
is recognised as income. Any excess in the value of shares received over
the amount of cash dividend foregone is recognised as a capital gain
in the Statement of Comprehensive Income.
Interest income is recognised in line with coupon terms on a time-
apportioned basis. Special dividends are credited to capital or revenue
according to their circumstances.
Foreign currency
The financial statements are prepared in pounds sterling because that
is the currency of the primary economic environment in which the
Company operates.
The primary objective of the Company is to generate returns in pounds
sterling, its capital-raising currency. The liquidity of the Company is
managed on a day-to-day basis in sterling as the Company’s performance
is evaluated in that currency. Therefore, the Directors consider pounds
sterling as the currency that most faithfully represents the economic
effects of the underlying transactions, events and conditions.
Transactions involving foreign currencies are converted at the exchange
rate ruling at the date of the transaction. Foreign currency monetary
assets and liabilities as well as instruments carried at fair value are
translated into pounds sterling at the exchange rate ruling on the year-end
date. Foreign exchange differences arising on translation are recognised
in the Statement of Comprehensive Income.
Expenses
All expenses are accounted for on the accruals basis. In respect of the
analysis between revenue and capital items presented within the
Statement of Comprehensive Income, all expenses have been presented
as revenue items except as follows:
• transaction costs which are incurred on the purchases or sales of
investments designated as fair value through profit or loss are
expensed to capital in the Statement of Comprehensive Income; and
• expenses are split and presented partly as capital items where a
connection with the maintenance or enhancement of the value of
the investments held can be demonstrated and, accordingly, the
investment management fee and finance costs have been allocated
40% to revenue and 60% to capital, in order to reflect the Directors’
long-term view of the nature of the expected investment returns of
the Company; this remains consistent with the prior year.
77
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Investments
Equity investments are held at fair value through profit or loss as they fail
the contractual cash flows test under IFRS 9. Debt instruments that pass
the contractual cash flow test are held under a business model to
manage them on a fair value basis for investment income and fair value
gains and are therefore classified as fair value through profit or loss.
Upon initial recognition, investments are measured at fair value through
profit or loss. Gains or losses on investments measured at fair value
through profit or loss are included in net profit or loss as a capital item and
transaction costs on acquisition or disposal of investments are expensed.
For investments that are actively traded in organised financial markets,
fair value is determined by reference to stock exchange quoted market bid
prices at the close of business on the year-end date.
All purchases and sales of investments are recognised on the trade date,
i.e. the date that the Company commits to purchase or sell an asset.
Notes to the Financial Statements
continued
1. Principal Accounting Policies continued
Taxation
The tax expense represents the sum of the current tax expense. The tax
currently payable is based on the taxable profit for the year. The taxable
profit differs from profit before tax as reported in the Statement of
Comprehensive Income because it excludes items of income or expense
that are taxable or deductible in other years and it further excludes items
that are never taxable or deductible. The Company’s liability for current
tax is calculated using a blended rate as applicable throughout the year.
In line with the recommendations of the SORP, the allocation method
used to calculate tax relief on expenses presented against capital returns
in the supplementary information in the Statement of Comprehensive
Income is the ‘marginal basis’. Under this basis, if taxable income is
capable of being entirely offset by expenses in the revenue column of the
income statement, then no tax relief is transferred to the capital column.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of
taxable profit and is accounted for using the balance sheet liability
method. Deferred tax liabilities are recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised.
Deferred tax is calculated at the enacted tax rate that is expected to apply
in the period when the liability is settled or the asset is realised. Deferred
tax is charged or credited in the revenue return of the Statement of
Comprehensive Income, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also dealt with in equity.
• Investment trusts which have approval under Section 1158 of the
Corporation Tax Act 2010 are not liable for taxation on capital gains.
•
Irrecoverable withholding tax is recognised on any overseas dividends
on an accruals basis using the applicable rate for the country of origin.
Financial instruments
The Company classifies its financial assets as subsequently measured at
amortised cost or measured at fair value through profit or loss on the basis
of its business model for managing the financial assets and the contractual
cash flow characteristics of the financial asset. Financial assets are
measured at fair value through profit or loss if their contractual terms do
not give rise to cash flows on specified dates that are solely payments of
principal and interest and at amortised cost if they do. Financial assets
and financial liabilities are recognised in the Statement of Financial Position
when the Company becomes party to the contractual provisions of the
instrument. The Company will offset financial assets and financial liabilities
if it has a legally enforceable right to offset the recognised amounts and
interest and intends to settle on a net basis. A financial asset is derecognised
when the right to receive cash flows from the asset expires or the rights to
receive cash flows from the asset have been transferred and a financial
liability is derecognised when the obligation under the liability is discharged,
cancelled or expired.
78
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 1. Principal Accounting Policies continued
Financial liabilities and equity instruments
Financial liabilities and equity instruments are classified according to
the substance of the contractual arrangements entered into. An equity
instrument is any contract that evidences a residual interest in the assets
of the Company after deducting all of its liabilities.
2. Significant Accounting Judgements, Estimates and
Assumptions
There are no significant judgements, estimates or assumptions involved
in the presentation of the Company’s accounts, other than the judgement
on the functional and presentational currency of the Company as set
out in the preceding note.
Interest bearing borrowings
Interest bearing borrowings, being the debenture stock and loans issued
by the Company, are initially recognised at a carrying value equivalent
to the proceeds received net of issue costs associated with the
borrowings. After initial recognition, interest bearing borrowings are
subsequently measured at amortised cost using the effective interest
rate method.
When calculating the NAV with debt at fair value the fair value of the private
placement loans is determined using discounted cash flow techniques
which utilise inputs including interest rates obtained from comparable
loans in the market.
Equity dividends payable
Equity dividends payable are recognised when the shareholders’ right to
receive payment is established. For interim dividends this is when they are
paid and for final dividends this is when they are approved by shareholders.
Cash and cash equivalents
Cash and cash equivalents (which are presented as a single class of
asset on the Statement of Financial Position) comprise cash at bank and
in hand, and deposits with an original maturity of three months or less.
The carrying value of these assets approximates their fair value.
3. Adoption of New and Revised Standards New standards,
interpretations and amendments adopted from 1 January 2023
There are no new standards impacting the Company that have had a
significant effect on the annual financial statements for the year ended
31 December 2023.
Disclosure of Accounting Policies (Amendments to IAS 1 Presentation
of Financial Statements and IFRS Practice Statement 2 Making
Materiality Judgements)
In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice
Statement 2. The amendments aim to make accounting policy disclosures
more informative by replacing the requirement to disclose ‘significant
accounting policies’ with ‘material accounting policy information’. The
amendments also provide guidance under what circumstance, the
accounting policy information is likely to be considered material and
therefore requiring disclosure.
These amendments have no effect on the measurement or presentation
of any items in the financial statements of the Company nor do they affect
the disclosure of accounting policies of the Company.
Standards issued but not yet effective
There are no standards or amendments not yet effective which are
relevant or have a material impact on the Company.
Reserves
The share capital represents the nominal value of the Company’s
ordinary shares.
The share premium account represents the excess over nominal
value of the fair value of consideration received for the Company’s
ordinary shares, net of expenses of the share issue. This reserve
cannot be distributed.
The capital reserve represents realised and unrealised capital and
exchange gains and losses on the disposal and revaluation of investments
and of foreign currency items. Realised gains can be distributed,
unrealised gains cannot be distributed.
The revenue reserve represents retained profits from the income derived
from holding investment assets less the costs and interest on cash balances
associated with running the Company. This reserve can be distributed.
79
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Notes to the
Financial Statements continued
4. Income
Investment Income
UK dividends
Overseas dividends
Interest from fixed-interest securities
Other income
Deposit interest
Total income
2023
2022
Revenue
£’000
Capital
£’000
Total Revenue
£’000
£’000
Capital
£’000
Total
£’000
23,085
9,193
84
32,362
60
32,422
–
–
–
–
–
–
23,085
26,541
9,193
7,963
84
256
32,362
34,760
60
31
32,422
34,791
–
–
–
–
–
–
26,541
7,963
256
34,760
31
34,791
During the year ended 31 December 2023, the Company received special dividends totalling £nil (2022: £3,183,079). All the special dividends in 2022
were recognised as revenue and included within investment income.
5. Segmental Reporting
The Directors are of the opinion that the Company is engaged in a single segment of business being investment business.
6. Portfolio Management Fee
2023
2022
Revenue
£’000
Capital
£’000
Total Revenue
£’000
£’000
Capital
£’000
Total
£’000
Portfolio management fee
1,103
1,654
2,757
1,175
1,762
2,937
1,103
1,654
2,757
1,175
1,762
2,937
Under the terms of the Portfolio Management Agreement, Redwheel is entitled to a management fee, details of which are set out in the Directors’
Report on page 47. As at 31 December 2023, an amount of £1,306,000 (2022: £741,000) was payable to Redwheel in relation to the management fees.
80
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
7. Other Expenses
2023
2022
Revenue
£’000
Capital
£’000
Total Revenue
£’000
£’000
Capital
£’000
Total
£’000
Transaction costs1
–
430
430
–
310
310
Directors’ fees
(see Report on Directors’ Remuneration beginning on page 55 )
AIFM fee
Company Secretary fee
Registrar’s fee
Marketing costs
Auditor’s remuneration – annual audit2
Depositary fee
Other expenses
181
194
69
60
59
51
92
362
–
291
–
–
–
–
–
–
181
485
69
60
59
51
92
362
155
83
104
113
108
47
95
352
–
124
–
–
–
–
–
53
155
207
104
113
108
47
95
405
1,068
721
1,789
1,057
487
1,544
All expenses are inclusive of VAT where applicable.
1 Transaction costs represent costs incurred on both the purchase and sale of investments. Transaction costs on purchases amounted to £360,000 (2022: £283,100) and on sales amounted
to £70,000 (2022: £27,000).
2 During the year audit fees of £42,600 (2022: £39,500) (excluding VAT) were due to the Auditor.
8. Finance Costs
4.05% Private Placement Loan 20281
2.99% Private Placement Loan 20471
Total finance costs
2023
2022
Revenue
£’000
Capital
£’000
Total Revenue
£’000
£’000
Capital
£’000
Total
£’000
823
300
1,234
2,057
451
751
823
300
1,234
2,057
451
751
1,123
1,685
2,808
1,123
1,685
2,808
The amortisation of the loan issue costs is calculated using the effective interest method.
1 The 4.05% and 2.99% Private Placement Loans contain the following principal financial or other covenants, with which failure to comply could necessitate the early repayment of the loan.
These were all complied with during the current and previous year:
• net tangible assets of at least £275 million;
• aggregate principal amount of financial indebtedness not to exceed 50% of net tangible assets;
• prior approval by the note holder of any change of Portfolio Manager; and
• prior approval by the note holder of any change in the Company’s investment objective and policy.
81
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
Notes to the
Financial Statements continued
9. Taxation
The Company has no corporation tax liability for the year ended 31 December 2023 (2022: nil).
Analysis of charge for the year:
Overseas withholding tax suffered
2023
2022
Revenue
£’000
Capital
£’000
Total Revenue
£’000
£’000
Capital
£’000
Total
£’000
926
926
–
–
926
926
886
886
–
–
886
886
The charge for the year can be reconciled to the profit per the Statement of Comprehensive Income as follows:
2023
2022
Revenue
£’000
Capital
£’000
Total Revenue
£’000
£’000
Capital
£’000
Total
£’000
Profit/(loss) before taxation
29,128
58,623
87,751
31,436
(46,519)
(15,083)
Tax at UK corporation tax rate of 23.5% (2022: 19.0%)
6,845
13,776
20,621
5,973
(8,839)
(2,866)
Tax effects of:
Non–taxable(gains)/losses on investments¹
Disallowed expenses
Non–taxable UK dividends
Overseas withholding tax suffered
Non–taxable overseas dividends
Excess management expenses
Total tax charge for the year
–
(14,730)
(14,730)
–
101
101
–
–
8,091
8,091
69
69
(5,425)
926
(2,161)
741
926
–
–
–
(5,425)
(5,043)
926
886
(2,161)
(1,513)
–
–
–
(5,043)
886
(1,513)
853
1,594
–
926
583
886
679
1,26 2
–
886
1 Investment trusts are not subject to corporation tax on these items.
No provision for deferred taxation has been made in the current year. The Company has not provided for deferred tax on capital profits arising on
the revaluation of investments, as it is exempt from tax on these items because of its status as an investment trust company.
The Company has not recognised a deferred tax asset on the excess management expenses of £130,092,000 (2022: £124,374,000). It is not anticipated
that these excess expenses will be utilised in the foreseeable future.
82
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
10. Dividends
Amounts recognised as distributions to equity holders in the year
Fourth interim dividend for year ended 31 December 2022 of 2. 5p
(2022: fourth interim dividend for year ended 31 December 2021 of 2.05p*) per share
Interim dividends for year ended 31 December 2023. Two payments of 2.3p and one payment of 2.5p
(2022: one payment of 2.05p, one payment of 2.3p and one payment of 2.5p ) per share
Fourth interim dividend for the year ended 31 December 2023 of 2.5p
(fourth interim dividend 2022: 2.5p) per share
2023
£’000
7,790
21,142
28,932
7,214
2022
£’000
6,759
22,118
28,877
7,791
The fourth interim dividend is not included as a liability in these financial statements.
Therefore, also set out below is the total dividend payable in respect of these financial years, which is the basis on which the requirements of
Section 1158 of the Corporation Tax Act 2010 are considered.
Interim dividends (three)
Fourth interim dividend for year ended 31 December 2023 of 2.5p (2022: 2.5p) per share
* Restated to reflect the subsequent 5 for 1 share split.
11. Earnings per Share
2023
£’000
21,142
7,214
28,356
2022
£’000
22,118
7,791
29,909
2023
2022
Revenue
Capital
Total Revenue
Capital
Total
Basic and diluted
Profit/(loss) for the year (£000’s)
28,202
58,623
86,825
30,550
(46,519)
(15,969)
Weighted average number of ordinary shares
302,388,667
325,567,365
Earnings per ordinary share (pence)
9.3
19.4
28.7
9.4
(14.3)
(4.9)
83
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
Notes to the
Financial Statements continued
12. Investments
(a) Investment portfolio summary
2023
2022
Quoted
Debt
equities securities
£’000
£’000
Total
£’000
Quoted
Debt
equities securities
£’000
£’000
Total
£’000
Opening cost at the beginning of the year
734,594
5,172
739,766
736,629
7,948
744,577
Opening unrealised appreciation/ (depreciation)
at the beginning of the year
47,869
(2)
47,867
112,521
(4)
112,517
Opening fair value at the beginning of the year
782,463
5,170
787,633
849,150
7,944
857,094
Movements in the year:
Purchases at cost
Sales proceeds
123,559
13,680
137,239
59,648
67,611
127,259
(191,910)
(5,200)
(197,110)
(83,787)
(70,361)
(154,148)
Realised gain/(loss) on sale of investments
67,070
–
67,070
22,104
(26)
22,078
Change in unrealised (depreciation)/ appreciation
(4,307)
63
(4,244)
(64,652)
2
(64,650)
Closing fair value at the end of the year
776,875
13,713 790,588 782,463
5,170 787,633
Closing cost at the end of the year
733,313
13,652
746,965
734,594
5,172
739,766
Closing unrealised appreciation/ (depreciation)
at the end of the year
43,562
61
43,623
47,869
(2)
47,86 7
Closing fair value at the end of the year
776,875
13,713 790,588 782,463
5,170 787,633
The Company received £197,110,000 (2022: £154,148,000) from investments sold in the year. The book cost of these investments when they were
purchased was £130,040 ,000 (2022: £132,070,000). These investments have been revalued over time and until they were sold any gains/losses were
included in the fair value of the investments.
(b) Fair value of financial instruments
IFRS 13 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making
the measurements. The fair value hierarchy has the following classifications:
• Level 1 – valued using quoted prices in active markets for identical investments.
• Level 2 – valued using other significant observable inputs (including quoted prices for similar investments, interest rates, prepayments, credit
risk, etc). There are no level 2 financial assets (2022: £nil).
• Level 3 – valued using significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments).
There are no level 3 financial assets (2022: £nil).
All of the Company’s investments are in quoted securities actively traded on recognised stock exchanges, with their fair value being determined
by reference to their quoted bid prices at the reporting date and have therefore been determined as Level 1.
There were no transfers between levels in the year (2022: no transfers) and as such no reconciliation between levels has been presented.
84
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
13. Receivables
Accrued income
Other receivables
Accrued income includes dividends and fixed-interest income.
14. Current Liabilities
Accruals
Due to broker
Accruals include the interest payable on borrowings amount to £802,000 (£2022: £805,000).
15. Borrowings
Interest bearing borrowings
Amounts payable after more than one year:
4.05% Private Placement Loan 2028
2.99% Private Placement Loan 2047
Total
Opening balance as per the Statement of Financial Position
Borrowings repaid
Interest movement
Finance costs for the year as per the Statement of Comprehensive Income
Closing balance as per the Statement of Financial Position
2023
£’000
1,937
1,042
2,979
2023
£’000
2,363
31
2,394
2023
£’000
49,849
24,895
74,744
2022
£’000
1,481
776
2,257
2022
£’000
1,782
295
2,077
2022
£’000
49,817
24,890
74,707
2023
2022
£’000
74,707
–
(2,771)
2,808
74,744
£’000
74,671
–
(2,772)
2,808
74,707
The 4.05% Private Placement Loan is secured by a floating charge over the assets of the Company. The loan is repayable at par, £50,000,000, on
3 September 2028.
The 2.99% Private Placement Loan is secured by a floating charge over the assets of the Company. The loan is repayable at par, £25,000,000, on
24 October 2047.
See note 20 beginning on page 87, for the disclosure and fair value categorisation of the financial liabilities.
85
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
Notes to the
Financial Statements continued
16. Ordinary Share Capital
As at 1 January
Purchase of shares into treasury pre-share split
Issue of shares following 5 for 1 share split
Purchase of shares into treasury post-share split
As at year-end:
In circulation
In Treasury
Listed
Nominal Value of 5p ordinary shares (£’000)
2023
Number
317,822,386
–
–
(27,209,505)
290,612,881
43,750,944
334,363,825
16,719
2022
Number
65,951,785
(260,125)
262,766,640
(10,635,914)
317,822,386
16,541,439
334,363,825
16,719
During the year, the Company bought back ordinary shares at a cost of £63,535,000 (Year ended 31 December 2022: £25,891,000).
At the AGM of the Company held in May 2022, shareholders approved a resolution for a five for one share split such that each shareholder would
receive five shares with a nominal value of 5 pence each for every one share held. 267,491,060 additional shares (262,766,640 to shareholders and
4,724,420 in relation to shares held in treasury) were issued following this approval.
17. Contingent Liabilities And Capital Commitments
As at 31 December 2023, there were no contingent liabilities or capital commitments for the Company (2022: £nil).
18. Net asset value (“NAV”) per share
The NAV per share is based on the net assets attributable to the equity shareholders of £720,704,000 (31 December 2022: £726,346,000) and
290,612,881 (31 December 2022: 317,822,836) shares being the number of shares in issue at the year-end.
The NAV per share with debt at fair value is based on the net assets attributable to the equity shareholders, adjusted for the difference between the
debt at book value and fair value as shown in note 20 beginning on page 87, and the number of shares in issue at the year-end. Adjusting for debt
at fair value resulted in an increase in net assets of £12,290,000 or 4.2p per share (31 December 2022: increase of £15,938,000 or 5.0p per share).
86
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 19. Related Party Transactions and Transactions with the
Portfolio Manager
IAS 24 ‘Related party disclosures’ requires the disclosure of material
transactions between the Company and any related parties. Accordingly,
the disclosures required are set out below:
Directors – The remuneration of the Directors is set out in the Report on
Directors’ Remuneration on pages 55 to 56. There were no contracts existing
during or at the end of the year in which a Director of the Company is or was
interested and which are or were significant in relation to the Company’s
business. There were no other material transactions during the year
with the Directors of the Company. See page 56 for details of Directors’
shareholdings.
At 31 December 2023, there was £nil (2022: £nil) payable to the
Directors for fees and expenses.
AIFM and Portfolio Manager – On 1 July 2023, Frostrow Capital LLP
was appointed the AIFM of the Company and has delegated portfolio
management to Redwheel, who are deemed to be Key Management
Personnel for the purposes of disclosing related party information under
IAS24. Details of the services provided by the Portfolio Manager are given
on page 47 and their fees for the year, along with outstanding balances
to them, are set out in note 6.
20. Risk Management and Financial Instruments
The Company’s investing activities undertaken in pursuit of its investment
objective, as set out on page 30 , involve certain inherent risks. The main
financial risks arising from the Company’s financial instruments are
market price risk, interest rate risk, liquidity risk, credit risk and currency
risk. The Board reviews and agrees policies for managing each of these
risks as summarised below. The Board has also established a series of
investment parameters, which are reviewed annually, designed to limit
the risk inherent in managing a portfolio of investments. These policies
have remained substantially unchanged during the current and
preceding periods. The Board meets on four scheduled occasions in
each year and at each meeting it receives sufficient financial and
statistical information to enable it to monitor adequately the investment
performance and status of the business.
Market price risk
Market price risk arises mainly from uncertainty about future prices of
financial instruments used in the Company’s business. It represents
the potential loss the Company might suffer through holding market
positions in the face of price movements. The Company’s borrowings
have the effect of increasing the market risk faced by shareholders.
Interest rate risk
Interest rate risk is the risk of movements in the value of financial
instruments or interest income cash flows that arise as a result of
fluctuations in interest rates. The Company finances its operations
through retained profits including capital profits, and additional financing
is obtained through the two Private Placement Loans, on both of which
interest is paid at a fixed rate and therefore subject to fair value interest
rate risk.
Cash flow interest rate risk
The majority of the Company’s financial assets are equity shares and
other investments which neither pay interest nor have a maturity date.
The Company’s fixed-interest holdings have a market value of
£13,713,000, representing 1.9% of net assets (2022: £5,170,000; 0.7%).
The weighted average running yield as at 31 December 2023 was 5.0%
(2022: 4.0%) and the weighted average remaining life was 1.6 years
(2022: 0.7 years). The Company’s cash balance of £4,275,000 (2022:
£13,240,000) earns interest, calculated on a tiered basis, depending on
the balance held, by reference to the base rate. Cashflow interest rate
risk is not considered a significant risk to the Company.
Fair value interest rate risk
The 4.05% Private Placement Loan and the 2.99% Private Placement
Loan, which are repayable in 2028 and 2047 respectively, pay interest at
fixed rates. The weighted average period until maturity of the loans is 11
years (2022: 12 years) and the weighted average interest rate payable
is 3.7% (2022: 3.7%) per annum. The fair value of the loans will vary with
changes in interest rates. As interest rates increase the fair value of the
loan liability is expected to decrease, while when interest rates decrease
the fair value of the loan liability is expected to increase.
Liquidity risk
The Company’s assets comprise mainly readily realisable securities,
which can be sold to meet funding commitments if necessary. Short-
term flexibility is achieved through the use of cash balances and
short-term bank deposits.
Credit risk
Credit risk is the risk that one party to a financial instrument will fail
to discharge an obligation and cause the other party to incur a
financial loss. This is mitigated by the Portfolio Manager reviewing
the credit ratings of broker counterparties. The Company’s
Custodian is responsible for the collection of income on behalf of
the Company. Cash is held either with reputable banks with high
quality external credit ratings or in liquidity/cash funds providing a
spread of exposures to various underlying banks in order to diversify
risk. The carrying amounts of financial assets represent their
maximum exposure to credit risk. The full portfolio can be found on
pages 24 and 25. The debt security held at the year-end has a credit
rating of AA.
Currency risk
The income and capital value of the Company’s investments and liabilities
can be affected by exchange rate movements as some of the Company’s
assets and income are denominated in currencies other than Pounds
Sterling, which is the Company’s reporting currency. The Company does not
currently hedge its currency exposure. The key areas where foreign currency
risk could have an impact on the Company are:
• movements in rates that would affect the value of investments; and
• movements in rates that would affect the income received.
87
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Notes to the
Financial Statements continued
The Company had the following currency exposures, all of which are included in the Statement of Financial Position based on the exchange rates
ruling at the respective year ends. Exposures vary throughout the year as a consequence of changes in the composition of the net assets of the
Company arising out of the investment and risk-management processes.
Euro
US Dollar
Canadian Dollar
Hong Kong Dollar
Japanese Yen
Pounds Sterling
Euro
US Dollar
Canadian Dollar
Hong Kong Dollar
Japanese Yen
Pounds Sterling
Investments
£’000
Cash
£’000
Receivables
£’000
Payables
£’000
Borrowings
£’000
2023
114,111
55,052
9,892
10,394
14,609
586,530
790,588
–
–
–
–
–
4,275
4,275
–
–
–
–
–
–
–
–
–
–
(2,394)
(74,744)
(2,394)
(74,744)
–
189
–
–
–
2,790
2,979
2022
Investments
£’000
Cash
£’000
Receivables
£’000
Payables
£’000
Borrowings
£’000
50,086
55,995
9,919
12,350
11,434
647,849
787,633
–
–
–
–
–
13,240
13,240
–
151
–
–
–
2,106
2,257
–
–
–
–
–
–
–
–
–
–
(2,077)
(74,707)
(2,077)
(74,707)
Foreign currency sensitivity
2023
2022
Projected movement
Effect on net assets for the year
£’000
+10%
(18,568)
£’000
-10%
22,694
£’000
+10%
(12,858)
Total
£’000
114,111
55,241
9,892
10,394
14,609
516,457
720,704
Total
£’000
50,086
56,146
9,919
12,350
11,434
586,411
726,346
£’000
-10%
15,380
88
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
20. Risk Management and Financial Instruments continued
Other price risk exposure
If the investment valuation fell by 20% at 31 December 2023, the impact on the profit or loss and net assets would have been negative £158.1 million
(2022: 20% negative £157.5 million). If the investment portfolio valuation rose by 20% at 31 December 2023, the impact on the profit or loss and
net assets would have been positive £158.1 million (2022: 20% positive £157.5 million). The calculations are based on the portfolio valuation as
at the respective year-end dates.
The Company held the following categories of financial instruments, all of which are included in the Statement of Financial Position at fair value
or amortised cost which is an approximation of fair value, with the exception of interest-bearing borrowings which are shown at amortised cost
at 31 December .
Assets at fair value through profit or loss
Cash
Receivables and Payables
Investment income receivable
Other receivables
Payables
Interest- bearing borrowings:
4.05% Private Placement Loan
2.99% Private Placement Loan
2023
2022
Amortised
cost
£’000
Fair value
£’000
790,588
790,588
4,275
4,275
Amortised
cost
£’000
787,633
13,240
1,937
1,042
1,937
1,042
1,481
776
(2,394)
(2,394)
(2,077)
(49,849)
(24,895)
(47,291)
(15,163)
(49,817)
(24,890)
720,704
732,994
726,346
Fair value
£’000
787,633
13,240
1,481
776
(2,077)
(44,872)
(13,987)
742,194
The 4.05% Private Placement Loan 2028 and the 2.99% Private Placement Loan 2047 do not have prices quoted on an active market, however their
fair values have been calculated using observable inputs. As such they have been classified as Level 2 instruments (2022: Level 2).
89
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
Notes to the
Financial Statements continued
Liquidity risk exposure
This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.
Contractual maturities of the financial liabilities at the year-end, including future interest payments not yet accrued for, based on the earliest
date on which payment can be required, are as follows:
Three
months
or less
£’000
1,012
–
1,452
Three
months
or less
£’000
1,012
–
1,133
Not more
than one
year
£’000
1,760
–
140
Not more
than one
year
£’000
1,760
–
139
2023
Two years
£’000
Three years
£’000
2,772
2,772
–
–
–
–
More than
three years
£’000
19,748
75,000
–
2022
Two years
£’000
Three years
£’000
2,772
2,772
–
–
–
–
More than
three years
£’000
22,520
75,000
–
Total
£’000
28,064
75,000
1,592
Total
£’000
30,836
75,000
1,272
Loan Interest due
Loan principle
Accruals
Loan Interest due
Loan principle
Accruals
90
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
Capital management policies and procedures
The Company’s capital management objectives are to ensure that it will be able to
continue as a going concern, and to provide long-term growth in revenue and capital,
principally by investment in UK securities. There have been no changes in the
Company’s objectives, policies and processes for managing capital from the prior year.
The Company’s capital is its equity share capital and reserves that are shown in the
Statement of Financial Position and fixed-term loans (see note 15) at a gross total
of £795,488,000 (2022: £801,053,000).
The Company is subject to several externally imposed capital requirements:
• as a public Company, the Company has a minimum share capital of £50,000;
•
in order to be able to pay dividends out of profits available for distribution by way
of dividends, the Company has to be able to meet one of the two capital restriction
tests imposed on investment companies by company law; and
• the Note Purchase Agreements governing the terms of the Private Placement
Loans also contain certain financial covenants as set out in note 8. These are
measured in accordance with the policies used in the Annual Report &
Financial Statements.
The Company has complied with all of the above requirements during the current
and prior year.
21. Post Balance Sheet Events
Subsequent to the year-end and up to 2 April 2024, the Company bought back
3, 771,869 ordinary shares for treasury, at a total cost of £8,910 ,000 , representing
1.3% of the issued share capital as at 31 December 2023.
On 15 February 2024 , the Board approved a fourth interim dividend for the year
ended 31 December 2023, of 2.5 pence per ordinary share payable on 2 April 2024.
91
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Shareholder
Information
92
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Notice of Annual
General Meeting
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR
IMMEDIATE ATTENTION.
If you are in any doubt as to the action you take you should
consult your stockbroker, bank manager, solicitor, accountant
or other independent financial adviser authorised under the
Financial Services and Markets Act 2000 immediately.
If you have sold or otherwise transferred all of your ordinary
shares in Temple Bar Investment Trust Plc, please forward
this document and the accompanying form of proxy as
soon as possible to the purchaser or transferee or to the
stockbroker, bank or other agent through whom the sale or
transfer was or is being effected for delivery to the purchaser
or transferee.
NOTICE IS HEREBY GIVEN that the 98th Annual General Meeting (“AGM”) of Temple Bar Investment Trust Plc will be held at 25 Southampton
Buildings, London WC2A 1AL on Tuesday, 7 May 2024 at 11.00 am for the purpose of considering and, if thought fit, passing the resolutions below.
1. To approve the Company’s Annual Report & Financial Statements for the year ended 31 December 2023 (together with the reports of the
Directors and Auditor therein).
2. To approve the Report on Directors’ Remuneration for the year ended 31 December 2023.
3. To re-elect Mrs Carolyn Sims as a Director of the Company.
4. To re-elect Mr Charles Cade as a Director of the Company.
5. To re-elect Mr Richard Wyatt as a Director of the Company.
6. To re-elect Dr Shefaly Yogendra as a Director of the Company.
7. To re-appoint BDO LLP as the Auditor to the Company, to hold office from the conclusion of this meeting until the conclusion of the next
meeting at which financial statements are laid before the Company.
8. To authorise the Audit and Risk Committee to determine the remuneration of the Auditor.
9. To approve the Company’s dividend policy, authorising the Directors of the Company to declare and pay all dividends of the Company as interim
dividends, and for the last dividend referable to a financial year not to be categorised as a final dividend that is subject to shareholder approval.
10. That, in substitution of all existing authorities, the Directors be and are hereby generally and unconditionally authorised in accordance with
Section 551 of the Companies Act 2006 (the “Companies Act”) to allot shares in the Company or grant rights to subscribe for or to convert any
security into shares in the Company (‘Rights’) up to an aggregate maximum nominal amount of £1,43 4,055, being 10% of the issued share
capital of the Company as at 2 April 2024 and representing 28, 684,101 ordinary shares in the capital of the Company (or if changed, the number
representing 10% of the issued share capital of the Company at the date at which this resolution is passed), such authority to expire at the
conclusion of the AGM of the Company to be held in 2025 (unless previously renewed, varied, revoked or extended by the Company in general
meeting), save that the Company may, before such expiry, make offers or agreements which would or might require ordinary shares to be
allotted after such expiry, and the Directors may allot ordinary shares in pursuance of such offers or agreements as if the authority
conferred by this resolution had not expired.
93
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Notice of Annual
General Meeting continued
SPECIAL RESOLUTIONS
11. That, subject to the passing of resolution 10 set out above, the Directors be and they are hereby generally
empowered pursuant to Sections 570 and 573 of the Companies Act to allot equity securities (as defined in
Section 560 of the Companies Act) for cash, including for the avoidance of doubt, the sale of shares held by the
Company as treasury shares, in accordance with the authority conferred on the Directors by resolution 10, as if
Section 561 of the Companies Act did not apply to the allotment or sale, up to an aggregate nominal amount of
£ 1,43 4,055 (being 10% of the issued ordinary share capital of the Company at 2 April 2024), (or, if changed, the number
representing 10% of the issued share capital of the Company at the date at which this resolution is passed), such power
to expire at the conclusion of the AGM of the Company to be held in 2025 (unless previously renewed, varied, revoked or
extended by the Company in general meeting) save that the Company may, at any time prior to the expiry of such
power, make an offer or enter into an agreement which would or might require ordinary shares to be allotted or
sold from treasury after the expiry of such power and the Directors may allot or sell ordinary shares from treasury in
pursuance of such an offer or agreement as if such power had not expired.
12. That, the Company generally be and is hereby authorised for the purpose of Section 701 of the Companies Act to
make market purchases (as defined in Section 693 of the Companies Act) of its ordinary shares in issue, either for
retention as treasury shares for future reissue, resale, transfer or cancellation provided that:
i) the maximum number of ordinary shares hereby authorised to be purchased is 14.99% of the issued share capital
of the Company as at the date of the passing of this resolution;
ii) the minimum price (exclusive of expenses payable by the Company) which may be paid for such ordinary shares
is the nominal value per share;
iii) the maximum price (exclusive of expenses payable by the Company) which may be paid for such ordinary shares
shall be the higher of:
i) an amount equal to 105% of the middle market quotations for an ordinary share as derived from the London
Stock Exchange Daily Official List for the five business days immediately preceding the date on which the
ordinary shares are purchased; and
ii)
the higher of the price of the last independent trade and the highest current independent bid on the trading
venue where the purchase is carried out.
This authority shall expire at the conclusion of the AGM of the Company to be held in 2025 (unless previously revoked,
varied, renewed or extended by the Company in general meeting) save that the Company may, before such expiry, enter
into a contract to purchase shares which will or may be executed wholly or partly after the expiry of such authority.
13. That, a general meeting, other than an annual general meeting, may be called on not less than 14 clear days’ notice.
Registered Office:
25 Southampton
Buildings
London
WC2A 1AL
By order of the Board
Frostrow Capital LLP
3 April 2024
94
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 NOTES
1. Entitlement to attend and vote
Members who hold ordinary shares in the Company in uncertificated form must have been entered on the Company’s
register of members by 6.30pm on Thursday, 2 May 2024 in order to be able to attend and vote at the meeting, or if the
meeting is adjourned, 6.30pm on the day two business days before the time fixed for the adjourned meeting. Such
members may only vote at the meeting in respect of ordinary shares held at the time.
2. Proxies
A member entitled to attend and vote at the above meeting is entitled to appoint a proxy to attend the meeting to speak and
vote on a show of hands and, on a poll, to vote instead of them. A proxy need not be a member of the Company. A member
wishing to appoint more than one proxy must appoint each proxy in respect of a specified number of shares within their
holding. For this purpose, a member may photocopy the enclosed form of proxy before completion and must indicate the
number of shares in respect of which each proxy is appointed.
Instruments of proxy should be sent to Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA so
as to arrive no later than 11.00 am on Thursday, 2 May 2024. Completion and return of the form of proxy will not preclude
shareholders from attending and voting at the meeting should they wish to do so.
It is possible for you to submit your proxy votes online by going to Equiniti’s Shareview website, www.shareview.co.uk, and
logging in to your Shareview Portfolio. Once you have logged in, simply click ‘View’ on the ‘My Investments’ page and then
click on the link to vote and follow the on-screen instructions. If you have not yet registered for a Shareview Portfolio, go to
www.shareview.co.uk and enter the requested information. It is important that you register for a Shareview Portfolio with
enough time to complete the registration and authentication processes.
CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may
do so for the meeting and any adjournment(s) there of by using the procedures described in the CREST Manual. CREST personal
members or other CREST sponsored members and those CREST members who have appointed a 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 using the CREST service to be valid, the appropriate CREST message (a “CREST proxy
instruction”) must be properly authenticated in accordance with Euroclear’s specifications and must contain the information
required for such instructions, as described in the CREST Manual (available via www.euroclear.com). The CREST message must
be transmitted so as to be received by the issuer’s agent (ID RA19) by not later than 48 hours (excluding non-working days) before
the time appointed for the holding of the meeting or the adjourned meeting. For this purpose, the time of receipt will be taken to
be the time (as determined by the timestamp applied to the CREST message by the CREST Applications Host) from which the
issuer’s agent is able to retrieve the CREST message by enquiry to CREST in the manner prescribed by CREST.
After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee
through other means. CREST members and, where applicable, their CREST sponsors or voting service provider(s), should note
that Euroclear 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(s) is/are a CREST personal member or sponsored member or has appointed a
voting service provider(s), to procure that the CREST sponsor or voting service provider takes) such action as shall be necessary
to ensure that a CREST 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 provider(s) is/are referred, in particular, to those sections
of the CREST Manual concerning practical limitations of the CREST system and timings. The Company may treat as invalid
a CREST proxy instruction in the circumstances set out in Regulation 35(5) (a) of the Uncertificated Securities Regulations 2001.
3. Proxymity
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 am on Thursday, 2 May 2024 in order to be considered
valid. Before you can appoint a proxy via this process you will need to have agreed to Proxymity’s associated terms
and conditions. It is important that you read these carefully as you will be bound by them and they will govern the
electronic appointment of your proxy.
4. Corporate representatives
A member of the Company which is a corporation may authorise a person or persons to act as its representative(s) at the
AGM. In accordance with the provisions of the Companies Act, each such representative may exercise (on behalf of the
corporation) the same powers as the corporation could exercise if it were an individual member of the Company, provided that
they do not do so in relation to the same shares. It is no longer necessary to nominate a designated corporate representative.
95
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 9. Members’ rights under Sections 338 and 338A of the
Companies Act
Shareholders meeting the threshold under Sections 338 and 338A of
the Companies Act can instruct the Company: (i) to give shareholders
(entitled to receive notice of the AGM) notice of a resolution which may
properly be proposed and is intended to be proposed at the AGM; and/or
(ii) to include in the business to be dealt with at the AGM any matter
(other than a proposed resolution) which may be properly included in
the business. A resolution may properly be proposed or a matter may
properly be included in the business unless: (a) (in the case of a
resolution only) it would, if passed, be ineffective; (b) it is defamatory
of any person; or (c) it is frivolous or vexatious. Such a request may
be in hard copy form or in electronic form, must identify the resolution
of which notice is to be given or the matter to be included in the
business, must be authorised by the person or persons making it, must
be received by the Company not later than 26 March 2024 , being the
date six weeks before the meeting, and (in the case of a matter to be
included in the business only) must be accompanied by a statement
setting out the grounds for the request.
10. Total number of shares and voting rights
As at 2 April 2024, the latest practicable date prior to publication of this
Notice, the Company had 334,363,825 ordinary shares in issue, with a
total of 28 6,841,012 voting rights. 47, 522,813 shares were held in
treasury.
11. Website
In accordance with Section 311A of the Companies Act, the contents
of this Notice, details of the total number of shares in respect of which
members are entitled to exercise voting rights at the AGM and, if
applicable, any members’ statements, members’ resolutions or
members’ matters of business received by the Company after the date
of this Notice will be available on the Company’s
website at: www.templebarinvestments.co.uk.
12. Documents available for inspection
Copies of letters of appointment between the Company and the
Non-Executive Directors may be inspected during usual business hours
on any weekday (public holidays excepted) at the registered office of
the Company from the date of this Notice until the date of the AGM and
at the place of the Meeting from 10.45 am until the Meeting’s conclusion.
Any shareholders wishing to inspect the documents are requested to
contact the Company Secretary by email at cosec@frostrow .com in
advance of any visit to ensure that appropriate arrangements can be
made and access can be arranged.
Notice of Annual
General Meeting continued
5. Nominated persons
In accordance with Section 325 of the Companies Act, the right to appoint
proxies does not apply to persons nominated to receive information rights
under Section 146 of the Companies Act. Persons nominated to receive
information rights under Section 146 of the Companies Act who have
been sent a copy of this Notice are hereby informed, in accordance with
Section 149 (2) of the Companies Act, that they may have a right under
an agreement with the registered member by whom they were nominated
to be appointed, or to have someone else appointed, as a proxy for this
meeting. If they have no such right, or do not wish to exercise it, they may
have a right under such an agreement to give instructions to the member
as to the exercise of voting rights. Nominated persons should contact
the registered member by whom they were nominated in respect of
these arrangements.
6. Joint holders
In the case of joint holders, the signature of only one of the joint holders
is required on the proxy form and, where more than one joint holder has
signed the proxy form or where more than one joint holder purports to
appoint a proxy, only the signature of, or the appointment submitted by
the most senior holder will be accepted to the exclusion of the other joint
holders. Seniority is determined by the order in which the names of the
joint holders appear in the Company’s Register of Members in respect of
the joint holding (the first named being the most senior).
7. Members’ requests under Section 527 of the Companies Act
Under Section 527 of the Companies Act, members meeting the threshold
requirements set out in that section have the right to require the Company
to publish on a website a statement setting out any matter relating to (i)
the audit of the Company’s accounts (including the Auditor’s report and the
conduct of the audit) that are to be laid before the AGM for the financial
year ended 31 December 2023; or (ii) any circumstance connected with
an Auditor of the Company appointed for the financial year ended 31
December 2023 ceasing to hold office since the previous meeting at which
annual accounts and reports were laid. The Company may not require the
shareholders requesting any such website publication to pay its expenses
in complying with Sections 527 or 528 (requirements as to website
availability) of the Companies Act. Where the Company is required to
place a statement on a website under Section 527 of the Companies Act,
it must forward the statement to the Company’s Auditor not later than the
time when it makes the statement available on the website. The business
which may be dealt with at the AGM for the relevant financial year includes
any statement that the Company has been required under Section 527
of the Companies Act to publish on a website.
8. Members’ rights to ask questions
Any member attending the meeting has the right to ask questions. The
Company must cause to be answered any such question relating to the
business being dealt with at the meeting but no such answer need be
given if (a) to do so would interfere unduly with the preparation for the
meeting or involve the disclosure of confidential information, (b) the
answer has already been given on a website in the form of an answer
to a question, or (c) it is undesirable in the interests of the Company or
the good order of the meeting that the question be answered.
96
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Useful Information
for Shareholders
Annual General Meeting
7 May 2024
Dividend Dates
2 April 2024
Payment of fourth interim dividend year ended 31 December 2023
30 June 2024
Payment of first interim dividend year ending 31 December 2024
Where to Buy Temple Bar Shares
1. Via a third-party provider
Third party providers include:
AJ Bell
Barclays Stockbrokers
Bestinvest
29 September 2024
Payment of second interim dividend year ending 31 December 2024
Charles Stanley Direct
FundsNetwork
Interactive Investor
James Brearley
James Hay
Selftrade
TD Direct
29 December 2024
Payment of third interim dividend year ending 31 December 2024
Hargreaves Lansdown
Trustnet Direct
Payment of Dividends
Cash dividends will be sent by cheque to the first-named shareholder
on the Register at his or her registered address together with a tax voucher.
At shareholders’ request, dividends may instead be paid direct into the
shareholder’s bank account through the Bankers’ Automated Clearing
System (‘BACS’). This may be arranged by contacting the Company’s
Registrar on 0371 384 2432.
Price and Performance Information
The Company’s ordinary shares are traded on the London Stock Exchange.
The market price of the ordinary shares is shown daily in the Financial
Times, other leading newspapers and on the Company’s website.
Share Register Enquiries
The Company’s Registrar, Equiniti, maintains the share register. In the
event of queries regarding your holding, please contact the Registrar on
0371 384 2432 . Lines are open from 8.30am to 5.30pm Monday to
Friday. Changes of name or address must be notified in writing to the
Registrar.
Tax Information Exchange
Local laws may require Temple Bar to disclose investor holding and
income data to UK and other tax authorities. This will only happen where
required by law.
Please note this list is not exhaustive and the availability of Temple Bar
may vary depending on the provider. These websites are third-party
sites and Temple Bar does not endorse or recommend any. Please
consult each site’s privacy and cookie policies as well as their platform
charges structure.
The Board encourages all shareholders to exercise their rights and notes
that many specialist platforms provide shareholders with the ability to
continue to receive Company documentation, to vote their shares and
to attend general meetings, at no cost. Please refer to your investment
platform for more details, or visit the AIC’s website at www.theaic.co.uk/
aic/shareholder-votingconsumer- platforms for information on which
platforms support these services and how to utilise them.
2. Through a professional adviser
Professional advisers are usually able to access the products of all the
companies in the market and can help you find an investment that
suits your individual circumstances. An adviser will let you know the fee
for their service before you go ahead. You can find an adviser at
www.unbiased.co.uk
You may also buy investment trusts through stockbrokers, wealth
managers and banks.
AIC
The Company is a member of the AIC, which produces monthly
publications of detailed information on the majority of investment trusts.
To familiarise yourself with the FCA adviser charging and commission
rules, visit www.fca.org.uk.
Temple Bar Website
The Company’s website can be found at www.templebarinvestments.
co.uk and includes useful background information on the Company,
together with helpful downloads of published documentation such as
previous annual and half-yearly reports.
97
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Depositary, Bankers and Custodian
The Bank of New York Mellon (International) Limited
One Canada Square
London E14 5AL
Stockbroker
Cavendish Securities plc
6.7.8 Tokenhouse Yard
London EC2R 7AS
Solicitor
Gowling WLG (UK) LLP
4 More London Riverside
London SE1 2AU
Independent Auditor
BDO LLP
55 Baker Street
London W1U 7EU
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Shareholder Helpline: 0371 384 2432*
Broker Helpline: 0371 384 2779*
Website: www.equiniti.com
* Lines are open 8.30 a.m. to 5.30 p.m., Monday to Friday (excluding
public holidays in England and Wales).
Notifications of changes of address and enquiries regarding
share certificates or dividend cheques should be made
in writing to the Registrars quoting your shareholder
reference number. Registered shareholders can obtain
further details of their holdings on the internet by visiting
www.shareview.co.uk
Corporate Information
Directors
Richard Wyatt – Chairman
Charles Cade
Lesley Sherratt – Senior Independent Director and Chair of the
Audit and Risk Committee
Carolyn Sims
Shefaly Yogendra – Chair of the Management Engagement and
Nomination Committees
Registered Office
25 Southampton Buildings
London WC2A 1AL
Website
www.templebarinvestments.co.uk
Portfolio Manager
RWC Asset Management LLP
Verde 4th Floor
10 Bressenden Place
London SW1E 5DH
Telephone: 0207 227 6000
Website: www.redwheel.com
AIFM, Administrator and Company Secretary
Frostrow Capital LLP
25 Southampton Buildings
London WC2A 1AL
Telephone: 0203 008 4910
Email: info@frostrow.com
Website: www.frostrow.com
Authorised and regulated by the Financial Conduct Authority.
If you have an enquiry about the Company, please contact
Frostrow Capital using the above email address.
Temple Bar Identifiers
ISIN (ordinary shares) – GB00BMV92D64
SEDOL (ordinary shares) – BMV92D6
Legal Entity Identifier – 213800O8EAP4SG5JD323
Bloomberg: TMPL: LN
Registered number
Registered in England Number 00214601
98
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023 Glossary of Terms
Discount or Premium of share price to NAV per share*
A description of the difference between the share price and the net asset
value per share. The size of the discount or premium is calculated by
subtracting the share price from the net asset value per share and is usually
expressed as a percentage (%) of the net asset value per share. If the share
price is higher than the net asset value per share the result is a premium.
If the share price is lower than the net asset value per share, the shares
are trading at a discount.
Fixed Interest
Fixed-interest securities, also known as bonds, are loans usually taken out
by a government or company which normally pay a fixed rate of interest
over a given time period, at the end of which the loan is repaid.
FTSE All-Share Index
A comparative index that tracks the market price of the UK’s leading
companies listed on the London Stock Exchange. Covering around 600
companies, including investment trusts, the name FTSE is taken from the
Financial Times and the London Stock Exchange, who are its joint owners.
FTSE 350 Index
A comparative index that tracks the market price of the UK’s 350 largest
companies, by market value, listed on the London Stock Exchange.
Gilts
A bond that is issued by the British government which is generally
considered low risk.
Gross Gearing
Total assets divided by shareholders funds expressed as a percentage.
Liquidity
The ease with which an asset can be purchased or sold at a reasonable
price for cash.
Market Capitalisation
The total value of a company’s equity, calculated by the number of shares
multiplied by their market price.
NAV (‘Net Asset Value’) per Share
The value of total assets less liabilities, with debenture and loan stocks
at book value. Book value is the amount borrowed less the current loan
arrangement fee debtor still to be expensed. The NAV per share is calculated
by dividing this amount by the number of ordinary shares outstanding.
NAV per Share with debt at fair value*
The value of total assets less liabilities, with the loans at fair value. The NAV
per share with debt at fair value is calculated by dividing this amount by
the number of ordinary shares outstanding.
Net asset value (NAV) per share total return with debt at fair value*
The theoretical total return on shareholders’ funds per share, reflecting
the change in NAV with debt at fair value assuming that dividends paid
to shareholders were reinvested at NAV with debt at fair value at the time
the shares were quoted ex-dividend. A way of measuring performance
which is not affected by movements in discounts/premiums.
Year to
31 December
2023
(p)
Year to
31 December
2022
(p)
233.5
29.1
(9.60)
(0.8)
240.4
(3.9)
(9.35)
6.4
252.2
233.5
12.1%
1.0%
0.2%
(0.1%)
12.3%
0.9%
Opening NAV with debt
at fair value
Increase /(decrease) in NAV
Less dividends paid
Adjustment for movement
in fair value of debt
Closing NAV with debt at
fair value
% increase in NAV with
debt at fair value
Impact of reinvesting
dividends
NAV total return with
debt at fair value
Net Gearing
Total assets (less cash and cash equivalents) divided by shareholders’
funds expressed as a percentage.
Ongoing Charge Ratio*
Ongoing charges is calculated on an annualised basis. This figure excludes
any portfolio transaction costs and may vary from period to period. The
calculation below is in line with AIC guidelines.
Investment management fee
Other expenses (excluding
transaction costs)
Less: one off legal and
professional fees
Total
Average cum income net
asset value throughout
the period
(a)
(b)
Ongoing charges (c=a/b)
(c)
* Alternative Performance Measure.
Year to
31 December
2023
(p)
Year to
31 December
2022
(p)
2,757
1,359
(21)
4,095
2,937
1,234
(18)
4,153
731,023
0.56%
762,206
0.54%
99
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
Glossary of Terms continued
Portfolio Turnover
The portfolio turnover rate measures the Company’s trading activity. It is
calculated by taking the lower of investment purchases and sales and
dividing by the average gross asset value (net assets with debt added
back) of the Company. It is expressed as a % and the lower the % the
lower the turnover. For example a turnover rate of 25% would suggest
that the fund holds stocks for four years on average, while a 50% turnover
rate would suggest a two year holding period.
Transactions in gilts are excluded from the investment purchases and
sales for the purposes of calculating the turnover rate.
Share Price Total Return*
Return to the investor on mid-market prices assuming that all dividends
paid were reinvested at the share price at the time the shares were quoted
ex-dividend.
Year to
31 December
2023
(p)
Year to
31 December
2022
(p)
220.5
27.1
(9.60)
238.0
12.3%
0.2%
12.5%
221.6
8.3
(9.35)
220.5
3.7%
(0.1%)
3.6%
Opening share price
Increase in share price
Less: dividends paid
Closing share price
% increase in share price
Impact of reinvesting dividends
Share price total return
Value Investing
An investment strategy that aims to identify under valued yet good quality
companies with strong cash flows and robust balance sheets, putting
an emphasis on financial strength.
Dividend Yield*
A measure of the income return earned on an investment. In the case of
a share the yield expresses the annual dividend payment as the percentage
of the market price of the share. In the case of a bond the running yield (or
flat or current yield) is the annual interest payable as a percentage of the
current market price. The redemption yield (or yield to maturity) allows for
any gain or loss of capital which will be realised at the maturity date.
* Alternative Performance Measure.
100
Temple Bar Investment Trust Plc Annual Report & Financial Statements for the year ended 31 December 2023
Temple Bar Investment Trust Plc
Registered Office
25 Southampton Buildings
London
WC2A 1AL
www.templebarinvestments.co.uk
A member of the Association of Investment Companies
Portfolio Manager
RWC Asset Management LLP
Verde 4th Floor
10 Bressenden Place
London SW1E 5DH
www.redwheel.com