Going concern

The condensed interim financial statements have been prepared on a basis other than going concern as the Board of Directors, after consulting with Company shareholders, announced that the Company will redeem no less than 95% of each shareholder's holding in the Company by no later than 30 June 2023, with such redemption to be satisfied by a distribution of the Investment Partnership's underlying assets (including an in specie distribution of shares) at a value equivalent to the Board's estimate of the then prevailing net asset value. Once the redemption has been completed the Board will commence a process to wind-up the Company with any residual net assets to be returned to shareholders through that process.

The Company has sufficient funds to meet its liabilities as they fall due for the next 12 months from the date of approval of these financial statements. The Directors believe there are no material differences than had the financial statements been prepared on a going concern basis as the fair value of assets and liabilities held equate to their net realisable value.

Based on these sources of information and their own judgement, the Directors believe it is appropriate to prepare the condensed interim financial statements of the Company on a basis other than going concern.

New and amended standards and interpretations applied

The following accounting standards and updates were applicable in the reporting period but did not have a material impact on the Company:

-     Amendments to IFRS 1 and IFRS 9 Annual Improvements to IFRS 2018-2020

-     Amendments to IFRS 3: Business Combinations

-     Amendments to IAS 16: Property, Plant and Equipment

-     Amendments to IAS 37: Provisions, Contingent Liabilities and Contingent Assets

New and amended standards and interpretations not applied

The following new and amended standards and interpretations in issue are applicable to the Company but are not yet effective and therefore, have not been adopted by the Company:

-     IFRS 17: Insurance Contracts (effective 1 January 2023)

-     Amendments to IAS 17: Insurance Contracts (effective 1 January 2023)

-     Amendments to IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors (effective 1 January 2023)

-     Amendments to IAS 12: Income Taxes (effective 1 January 2023)

-     Amendments to IAS 1: Presentation of Financial Statements (effective 1 January 2023)

The Company has considered the IFRS's in issue but not yet effective and do not consider any to have a material impact on the Company.

Segment reporting

The Directors are of the opinion that the Company is currently engaged in a single segment of business, being the investment through Trian Investors 1 Midco Limited ("Midco") into Trian Investors 1, L.P. (Incorporated) (the "Investment Partnership").

3.   Critical accounting judgements and key sources of estimation uncertainty

The preparation of the financial statements requires the Directors to make estimates and assumptions that affect the amounts reported for assets and liabilities as at the Statement of Financial Position date and the amounts reported for revenue and expenses during the period. The nature of the estimation means that actual outcomes could differ from those estimates.  Estimates and underlying assumptions are reviewed on an ongoing basis.  Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. 

The Directors also need to make judgements (other than those involving estimates) that have a significant impact on the application of accounting standards.  The following critical judgements apply to the Company's investments.

i) Investment entity exemption:

The Directors have considered whether the Company meets the definition of an investment entity as stipulated in the provisions of IFRS 10. Entities that meet the definition of an investment entity within IFRS 10 are required to measure their subsidiaries, other than those that provide investment services to the Company and do not themselves meet the definition of an investment entity, at fair value through profit or loss rather than consolidate them.

The Company's purpose is to make investments through the Investment Partnership for capital appreciation and it will measure performance of its investments on a fair value basis. The Company holds 99.83 per cent of the commitment in the Investment Partnership through its wholly owned subsidiary, Midco. Midco was incorporated in Guernsey and its principal place of business is Guernsey. The Board has assessed whether the Company has all the elements of control as prescribed by IFRS 10 in relation to the Company's investment in the Investment Partnership and has concluded that the Company does have control of the Investment Partnership. Midco and the Investment Partnership are therefore both classified as subsidiaries of the Company. The Board has also assessed that the Company meets the criteria of an investment entity and therefore the subsidiaries are recorded at fair value through profit and loss rather than being consolidated. The Board's determination that the Company is classified as an investment entity involves a degree of judgement due to the complexity of the wider structure encompassing the Company, Midco and the Investment Partnership.

ii) Use of last sales price published by the exchange: 

The Directors believe that a key judgement relates to the valuation of the investments in Ferguson plc ("Ferguson") and Unilever plc ("Unilever") held through the Investment Partnership. The ordinary shares of Ferguson have a primary listing on the New York Stock Exchange, and the ordinary shares of Unilever have a primary listing on the Main Market of the London Stock Exchange.  In each case, the Directors must determine whether the market is sufficiently liquid for the last sales price published by the exchange to be a fair value in accordance with IFRS principles. The Directors have assessed that there is a sufficiently liquid market in the exchanges for the investments held through the Investment Partnerships and accordingly they consider the quoted share price to be the appropriate basis for the valuation of the investments.

There are no key sources of estimation uncertainty.

4.   Income tax

The Company is exempt from taxation in Guernsey under the provisions of the Income Tax (Exempt Bodies) (Guernsey) Ordinance, 2008 and is charged an annual exemption fee of £1,200.

5.   Investment at fair value through profit or loss

The Company owns 100 per cent of the share capital of its subsidiary Midco.  Midco holds 99.83 per cent of the commitment in the Investment Partnership and has no other assets or liabilities. This investment is valued based on its share of the net assets of the Investment Partnership.

Movements in the cost and carrying value of this investment in Midco during the year were:

As explained in Note 3 the investment in Midco and its interest in the Investment Partnership is shown in the Company's balance sheet as a single investment carried at fair value because the Company is defined as an investment company under the provisions of IFRS 10.  The following tables provide an analysis of the assets and liabilities and the income statement of the Investment Partnership.

Summary financial information of the Investment Partnership

The financial statements for the Investment Partnership are prepared under IFRS. 

Foreign exchange options

For the period between March 2020 and February 2022 the Investment Partnership entered into a currency call options to offset a portion of the Investment Partnership's U.S. Dollar exposure arising from its investment in Ferguson, which receives the vast majority of its revenues in U.S. Dollars. In light of the approval of the Company's revised Investment Policy in July 2021 and the expectation at the time that the Company would have a longer duration than originally anticipated, the Investment Manager determined that it was no longer necessary to continue hedging currency exposure when the last option expired in February 2022. 

Incentive allocation

The Investment Partnership's investments in Ferguson and Unilever were treated as a "Stake Building Investment" as at 30 June 2022.

If the investment in Ferguson continues to be a "Stake Building Investment" until realisation, the incentive allocation ("Incentive Allocation") will be equal to 20 per cent of net returns on the investment, payable after the Investment Partnership has distributed to its partners an amount equal to the aggregate capital contributions made in respect of the investment (excluding any capital contributions attributable to management fees).

The Investment Partnership's investment in Ferguson, unless otherwise agreed with the Company, will cease to be considered a "Stake Building Investment", and will instead be considered an "Engaged Investment", if and when Trian Investors Management, LLC (the "Investment Manager") obtains representation on Ferguson's board of directors, through one or more partners of Trian Fund Management, L.P. ("Trian Management").  If the investment becomes an "Engaged Investment", the Incentive Allocation will be equal to 10 per cent to 25 per cent of the Investment Partnership's net returns on the investment (excluding any capital contributions attributable to management fees) following disposal of a target company, as set forth in greater detail in the Investment Partnership's Amended and Restated Limited Partnership Agreement (the "LPA").

The Investment Partnership's investment in Unilever was treated as a "Stake Building Investment" until the appointment of Nelson Peltz, a partner of Trian Management, to the Unilever board of directors on 20 July 2022, upon which it began to be treated as an "Engaged Investment".

As at 30 June 2022, there was an incentive allocation accrual of £41,552,000 (30 June 2021: £49,085,000; 31 December 2021: £78,950,000) which, under the terms of the LPA, Trian Investors 1 SLP, L.P., the special limited partner of the Investment Partnership ("Trian SLP") will be entitled to receive. The incentive allocation will be solely borne by the Company through Midco and is treated as fair value movement through profit and loss in the Statement of Comprehensive Income.

Management fee

The Investment Manager is entitled to management fees in consideration of its work equal to one twelfth of 1 per cent of the adjusted net asset value of the Investment Partnership, calculated as of the last business day of the preceding month. The management fee is solely borne by the Company through Midco and is treated as fair value movement through profit and loss in the Statement of Comprehensive Income. For the period ended 30 June 2022 management fees of £2,607,000 were paid to the Investment Manager by the Investment Partnership (period ended 30 June 2021: £2,107,000; year ended 31 December 2021: £4,606,000).

6.   Fair value

IFRS 13 "Fair value measurement" requires the Group to establish a fair value hierarchy that prioritises the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The only financial instruments carried at fair value is the investment in Midco which is fair valued at each reporting date.

The Company's investment in Midco has been classified as Level 2 as its valuation has been derived from the value of the assets and liabilities in the Investment Partnership. A reconciliation of the movement in Level 2 investments is set out in the table in Note 5. Due to the nature of the investments, they are always expected to be classified under Level 2. There were no transfers between levels during the six month periods to 30 June 2022 and 30 June 2021 or the year to 31 December 2021.

In the accounts of the Investment Partnership the financial instruments carried at fair value are:

Valuation techniques

The value of the Company's investment in Midco is based on the value of Midco's limited partner capital account within the Investment Partnership. This is based on the assets and liabilities of the Investment Partnership, principally the value of the underlying investments, the loan, the currency options and cash.  Any fluctuation in the value of the underlying investments will directly impact on the value of Midco's investment in the Investment Partnership while taking into account the impact of the Incentive Allocation.

Valuations are determined in accordance with a pricing policy agreed between the Directors and the Investment Manager from time to time. Calculations will be made in accordance with IFRS principles or as otherwise determined by the Board.

In accordance with the LPA, for the purposes of calculating the Net Asset Value ("NAV") of the Investment Partnership, its assets are valued on the following basis:

·   Listed investments are valued at the last sales price published by the principal exchange on which they are listed.

·   The valuation of the currency options was performed by utilising an external data source which used proprietary software and a valuation model to perform the fair value calculation. The valuation model used is the Black-Scholes model.

The Board approves the valuations performed by the Investment Manager and monitors the range of reasonably possible changes in significant observable inputs at each reporting date.

7.   Receivables and prepayments

8.   Trade and other payables

The carrying value of trade payables and other payables approximates their fair value.           

9.   Share capital and capital management

Capital risk management

The Company's objective for capital risk management is to realise returns through a compulsory redemption to take place by 30 June 2023 and then to proceed with a winding-up. The Company considers its capital to consist of the Shares issued and retained earnings.

The Board reviews the Company's NAV monthly, as calculated in accordance with IFRS, and the Company's Share price (as well as its discount or premium to NAV per Share) in the context of market conditions, with input from the Investment Manager and its Corporate Brokers. As shown in the tables below, the Company has repurchased a total of 19,566,913 Shares at a discount to NAV in the period from February 2020. Share repurchases are subject to the Company's discretion based on market and economic conditions, the price and trading volume of the Shares and other factors.

No dividend was declared or paid in the period to 30 June 2022.

The Company has the ability to hold its own Shares in treasury. All Shares repurchased by the Company are currently being held in treasury, and the Company may use this ability again from time to time in the future. The Company's Articles of Incorporation, the Companies Law and the Protection of Investors Law do not limit the number of Shares held in treasury provided that at least one share of any class is held by a person other than the Company. The Company is not subject to any externally imposed capital restrictions.

Ordinary shares of no par value

As detailed further in Note 15, the LPA provides that Trian SLP will receive part of its incentive allocations in the form of Shares in the Company. The amount of the incentive allocation which will be settled in Shares under this agreement is subject to limits on the number of Shares which can be issued to Trian SLP without triggering a mandatory offer for the Company under the U.K. Takeover Code. Had the incentive allocation crystallised at 30 June 2022 it is estimated that a maximum of £7,876,440 could have been settled by the issue of 5,049,000 Shares (31 December 2021: maximum of £11,197,720 could have been settled by the issue of 5,165,000 Shares; 30 June 2021: not applicable).  As discussed in Note 17 below, as part of the Redemption and related proposals, and conditional on their successful implementation, it has been agreed with Trian SLP that its Incentive Allocation may (at Trian SLP's election) be settled through an in-specie distribution of the Investment Partnership's underlying assets rather than in cash or through a further issue of Shares.

10. Net Asset Value per Share

The IFRS NAV per Share is arrived at by dividing the IFRS Net Assets by the number of Shares in issue net of treasury Shares.

11. (Loss)/earnings per share

There were no dilutive potential Shares in issue as at 30 June 2022, 30 June 2021 or 31 December 2021.

12. Financial risk management

Financial risk management objectives

The Company's activities expose it to various types of financial risk, principally market risk and credit risk. The Company has minimal exposure to liquidity risk. The Board has overall responsibility for the Company's risk management and sets policies to manage those risks at an acceptable level.

Financial risk factors

The Company's investment objective is to realise capital growth from its investment in one or more target companies with the aim of generating significant capital return for shareholders. At 30 June 2022 the Company's only significant financial assets are those held through the Investment Partnership, via Midco, consisting of listed equity investments and cash and cash equivalents held at both levels.

Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company manages its credit risk by scrutinising the financial standing of counterparties with which it enters into transactions, using external credit ratings where available. Credit risk is reviewed periodically to identify balances that may have become impaired or uncollectable.

An event of default is a pre-specified condition or threshold that, if met, allows the lender or creditor to demand immediate and full repayment of a debt or obligation. The Company is exposed to credit risk through its balances with banks. The credit risk on receivables is considered to be minimal. The table below shows the Company's credit exposures:

The table below shows the Investment Partnership's credit exposures:

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result of market price changes. The Company is exposed to market price risk, currency risk and interest rate risk.

Market price risk

Market price risk arises as a result of the Company's exposure to the future values of its listed investments. By way of example, if the price of its listed investments moved by 15 per cent as at 30 June 2022, the effect on the NAV of the Company would be an increase or decrease of £56,384,000 (30 June 2021: £113,906,000 based on 30 per cent movement; 31 December 2021: £74,266,000 based on 15 per cent movement). A change of 15 per cent reflected a reasonable change in the share price of the listed investments based upon the period ended 30 June 2022. Please see Note 17 for post year-end information.

Currency Risk

As at 30 June 2022, the Company had exposure to currency risk as a result of its investment in Ferguson through the Investment Partnership, which has its primary listing in New York and its price quoted in U.S. Dollars. The Company also had exposure to currency risk as a result of its investment in Unilever through the Investment Partnership, which is a global company operating in numerous markets and in several currencies. The Investment Partnership has drawn down US$50 million of the US$100 million revolving credit facility detailed in note 15, which exposes the Company to fluctuations in the exchange rate between U.S. Dollars and Pounds Sterling. As at 30 June 2022, the Investment Partnership holds assets of £431,271,000 (US$523,736,000) and liabilities of £41,577,000 (US$50,491,000) denominated in U.S. Dollars. The Board consider that a 5% movement in market currency rates is reasonably possible, based on historic market analysis and current market conditions. Had the exchange rate between Pound Sterling and U.S. Dollar strengthened/weakened by 5 per cent with all other variables held constant, the increase/decrease in the net assets of the Investment Partnership would amount to approximately £19,485,000 (US$23,662,000). Any foreign exchange gain/loss on the investment in Ferguson is disclosed as investment gain/loss whereas any foreign exchange gain/loss on the credit facility is disclosed as foreign exchange gain/loss in the summary financial information of the Limited Partnership in Note 5. As at 31 December 2021 and 30 June 2021 the Company through the Investment Partnership held an option, which expired for nil proceeds in February 2022, to purchase £125,000,000 for US$181,250,000. In light of the approval of the Company's revised Investment Policy in July 2021 and the expectation at the time that the Company would have a longer duration than originally anticipated, the Investment Manager determined that it was no longer necessary to continue hedging currency exposure when the last option expired. 

Interest rate risk

The Company, through the Investment Partnership, has entered into a credit facility with Bank of America, N.A., London Branch ("Bank of America") allowing an aggregate amount of up to $100 million to be borrowed at an interest rate equal to 1.35% per annum plus the federal funds rate and is therefore subject to interest rate movements set by the U.S. Federal Reserve interest rate policies. As at 30 June 2022 the federal fund rate was 1.58% while at 31 December 2021 the rate was 0.08%. Such a movement of 1.5% would equate to an increase/decrease in the interest payable of £618,000 (US$750,000) over the course of a year at Investment Partnership level. Both the Company and the Investment Partnership earn immaterial amounts of interest income on cash and cash equivalents held.

13. Financial Instruments

14. Related parties

Key management personnel

The Directors are considered to be the Key Management Personnel of the Company. They are all non-executive and receive an annual fee denominated in Pounds Sterling.

The Chairman receives an annual fee of £55,000, the Chairman of the Audit Committee receives £45,000, and the other two non-executive Directors receive £40,000. 

Directors' fees and expenses for the period to 30 June 2022 amounted to £78,000 (six month period to 30 June 2021: £70,000; year to 31 December 2021: £185,000), of which £8,000 was outstanding at the period end (six month period to 30 June 2021: £8,000; year to 31 December 2021: £nil).

The Directors did not receive dividends on their Shares during the period to 30 June 2022, period to 30 June 2021 or year to 31 December 2021.

Trian Subscriber

Trian Subscriber, a company owned by the Investment Manager's partners and certain of their affiliates, held voting power over 28.95% of the Company's outstanding Shares as at 30 June 2022 (30 June 2021: 17.19%; 31 December 2021: 28.55%).

Management Fee

Under the management agreement between the Investment Partnership and the Investment  Manager, the Investment Manager is entitled to management fees in consideration of its work equal to one twelfth of 1 per cent of the adjusted net asset value of the Investment Partnership. This is detailed in notes 5 and 15.

Incentive Allocation

Under the terms of the LPA, Trian SLP, the special limited partner of the Investment Partnership, is entitled to receive an incentive allocation based on the investment performance of the Investment Partnership. This is detailed in notes 5 and 15.

Intergroup balances

As at 30 June 2022 the Company owed £231,000 to the Investment Partnership (30 June 2021: £nil; 31 December 2021: £358,000) which has been repaid subsequent to 30 June 2022.

15. Significant Agreements

Trademark fees

Trian Management has granted to the Company, Midco and the Investment Partnership a non-exclusive licence to use the name, logo and graphic identity "Trian" in the UK and the Channel Islands in the corporate name of these entities and in connection with the conduct of their business affairs, and the Company is using the name, logo and graphic identity "Trian" within the Annual Report and these Interim Financial Statements pursuant to such licence. Trian Management receives a fee of £70,000 per annum split between the Company, Midco and the Investment Partnership for the use of the licensed name, logo and graphic identity. For the six month period ended 30 June 2022, fees of £23,000 were paid by the Company in relation to the licence (six month period ending 30 June 2021: £23,000; year ending 31 December 2021: £47,000).

Administration Agreement

On 19 September 2018, the Company and Ocorian Administration (Guernsey) Limited ("Ocorian") entered into an administration agreement. Under the terms of the agreement the Company (alongside the Investment Partnership) is charged a fixed administration fee of £97,000 per annum from 27 September 2018 payable monthly in arrears, administration fees for Midco of £5,000 per annum, NAV preparation fees of £10,000 per annum, compliance officer services of £6,000 per annum, MLRO services of £3,000 per annum and data protection officer services of £2,000 per annum. Fees are adjusted annually to rise in line with the Guernsey Retail Price Index. For the six month period ended 30 June 2022, aggregate fees of £78,000 were paid to Ocorian (six month period ended 30 June 2021: £76,000; year to 31 December 2021: £143,000).

Management Agreement

The management agreement between the Investment Partnership and the Investment Manager was amended and restated on 19 July 2021 and made effective as of 14 June 2021, in order to reflect the revised investment policy and revised policies and guidelines on recycling sale proceeds and return of capital which are each described in Note 1 above.  No revisions were made to the manner in which management fees are calculated.

The Investment Manager is entitled to management fees in consideration of its work equal to one twelfth of 1 per cent of the adjusted NAV of the Investment Partnership, calculated as of the last business day of the preceding month. The management fee is payable in advance to the Investment Manager on the first business day of each calendar month. The management fee is solely borne by the Company through Midco. For the six month period ended 30 June 2022, management fees of £2,607,000 were paid to the Investment Manager (six month period ended 30 June 2021: £2,107,000; year ended 31 December 2021: £4,606,000). See Note 17 for details of changes agreed to the Management Fee subsequent to the period end.

LPA and Calculation of Incentive Allocation

Under the terms of the LPA, Trian SLP is entitled to receive an incentive allocation based on the investment performance of the Investment Partnership.  The LPA was amended and restated on 19 July 2021 to provide that Trian SLP will receive future incentive allocations (net of amounts required to cover certain tax liabilities) in the form of Shares, to be valued at NAV at the time of issuance and, on the issue of the Shares, the Company's investment in the Investment Partnership (through Midco) will increase by the value of the Shares issued. The amount of the incentive allocation which will be settled in Shares under this agreement is subject to limits on the number of Shares which can be issued to Trian SLP without triggering a mandatory offer for the Company under the Takeover Code. As discussed in Note 17 below, as part of the Redemption and related proposals, and conditional on their successful implementation, it has been agreed with Trian SLP that its Incentive Allocation may (at Trian SLP's election) be settled through an in-specie distribution of the Investment Partnership's underlying assets rather than in cash or through a further issue of Shares.

The Incentive Allocation may be between 0 to 25 per cent of the net returns of the Investment Partnership. The calculation of the incentive allocation is described in more detail in Note 5 above. As at 30 June 2022, there was an incentive allocation accrual of £41,552,000 (as at 30 June 2021: £49,085,000; as at 31 December 2021: £78,950,000). See Note 17 for details of changes agreed to the Incentive Allocation subsequent to the period end.

Credit Facilities

In March 2021, the Investment Partnership entered into a revolving credit facility (the "UBS Credit Facility") with UBS Bank USA ("UBS"), which permitted the Investment Partnership to borrow an aggregate amount of up to US$70 million at an interest rate equal to one month LIBOR plus 1.75%. There were no commitment or closing fees associated with the facility. No borrowings under the UBS Credit Facility were made.

On 29 March 2022 the UBS Credit Facility was terminated and replaced with a US$100 million revolving credit facility with Bank of America (the "BoA Credit Facility") having a three year term, which permits the Investment Partnership to borrow an aggregate amount of up to US$100 million at an interest rate equal to a fixed rate plus 1.35% per annum.  The portion of the US$100 million BoA Credit Facility commitment which is not drawn will be subject to a commitment fee of 0.40% per annum.  In connection with establishing the facility, the Investment Partnership pledged listed investments (valued at £431,271,000 at 30 June 2022) as collateral under the new facility. As at 30 June 2022 total outstanding borrowing under this credit facility amounted to £41,173,000 (US$ 50,000,000) (30 June 2021: £nil; 31 December 2021: £nil). 

16. Auditor remuneration

The auditor's remuneration relating to services to the Company for the period was:

In addition, the fee for the audit of the Investment Partnership of £8,000 (period to 30 June 2021: £7,000; year to 31 December 2021: £15,000) is payable by the Investment Partnership.

17. Subsequent events

The Company's NAV as at 31 August 2022 is £424,301,000, or 169.03 pence per Share, which is a 8.0% increase compared to 30 June 2022.

The Investment Partnership's investment in Unilever was treated as a "Stake Building Investment" until the appointment of Nelson Peltz, a partner of Trian Management, to the Unilever board of directors on 20 July 2022, upon which it was treated as an "Engaged Investment" as detailed in Note 5. Had Unilever been treated as an "Engaged Investment" as at 30 June 2022, the impact on the incentive allocation accrual would be immaterial.

On 5 August 2022, Chris Sherwell was replaced on the Board by Robert Legget who was appointed as Audit Committee Chair and Senior Independent Director on 15 August 2022.

On 2 September 2022 the Board announced that the Company will, by no later than 30 June 2023, compulsorily redeem no less than 95 per cent of each shareholder's holding in the Company, such redemption to be satisfied by a distribution of the Investment Partnership's underlying assets (including an in specie distribution of shares) at a value equivalent to the Board's estimate of the then prevailing net asset value (the "Redemption"). Once the Redemption has been completed the Board will commence a process to wind-up the Company with any residual net assets to be returned to shareholders through that process.

It has further been agreed, conditional on the successful implementation of these proposals: (a)  with the Investment Manager that on Redemption it will receive its final Management Fee payment in lieu of notice calculated, through to 31 December 2023; (b) with Trian SLP that it will continue to be entitled to receive the Incentive Allocation which will be determined based on the performance of the Investment Partnership at or about the time of Redemption (i.e., on or before 30 June 2023); and (c) with Trian SLP that its Incentive Allocation may (at Trian SLP's election) be settled through an in-specie distribution of the Investment Partnership's underlying assets rather than in cash or through a further issue of Shares.

In August 2022, the Investment Partnership sold 352,819 ordinary shares of Ferguson and received approximately $44 million of sale proceeds. The Investment Partnership intends to use these sale proceeds to repay outstanding borrowings of approximately $43 million as well as accrued interest and other fees due under the BoA Credit Facility.  At the time that this borrowing is repaid, the Investment Partnership also intends to terminate the undrawn commitment under the BoA Credit Facility.

Investment Manager's Report Disclosure Statement and Disclosures

General Considerations

The Investment Manager's Report is for general informational purposes only and does not constitute any advice or recommendation to invest in Trian Investors 1 Limited (the "Company"), Ferguson plc ("Ferguson") or Unilever plc ("Unilever") or enter into or conclude any other transaction. The Investment Manager's Report should not be construed as legal, tax, investment, financial or other advice. It does not have regard to the specific investment objective, financial situation, suitability, or the particular need of any specific person who may receive the Investment Manager's Report and should not be taken as advice on the merits of any investment decision. The views expressed in the Investment Manager's Report represent the opinions of Trian Investors Management, LLC (the "Investment Manager") and its parent, Trian Fund Management, L.P. (collectively, "Trian") and are based on publicly available information with respect to Ferguson, Unilever and the other companies referred to therein. Trian recognises that there may be confidential information in the possession of Ferguson, Unilever and the other companies discussed in the Investment Manager's Report that could lead such companies to disagree with Trian's conclusions. Trian does not endorse third-party estimates or research which are used in the Investment Manager's Report solely for illustrative purposes.

Select figures presented in the Investment Manager's Report, including investment values, have not been calculated using generally accepted accounting principles ("GAAP") or International Financing Reporting Standards ("IFRS") and have not been audited by independent accountants. Such figures may vary from GAAP or IFRS accounting in material respects and there can be no assurance that the unrealised values reflected in the Investment Manager's Report will be realised. Nothing in the Investment Manager's Report is intended to be a prediction of the future trading price or market value of securities of Ferguson, Unilever or the Company. There is no assurance or guarantee with respect to the prices at which any securities of Ferguson, Unilever or the Company will trade, and such securities may not trade at prices that may be implied in the Investment Manager's Report. The estimates, projections, pro forma information and potential impact of Trian's analyses set forth in the Investment Manager's Report are based on assumptions that Trian believes to be reasonable as of the date of the Investment Manager's Report, but there can be no assurance or guarantee that actual results or performance of Ferguson, Unilever or the Company will not differ, and such differences may be material. The Investment Manager's Report does not recommend the purchase or sale of any security.

The Investment Manager's Report is based upon information reasonably available to Trian as of the date of the Report. Furthermore, the information, which includes information and data used and derived or obtained from filings made with regulatory authorities and from other public filings and third party reports, has been obtained from sources that Trian believes to be reliable; however, these sources cannot be guaranteed as to their accuracy or completeness. No representation, warranty or undertaking, express or implied, is given as to the accuracy or completeness of the information contained in the Investment Manager's Report, by Trian or any of its affiliates or its or their respective partners, members, or employees, and no liability is accepted by such persons for the accuracy or completeness of any such information. Trian reserves the right to change any of its opinions expressed in the Investment Manager's Report at any time as it deems appropriate. Trian disclaims any obligation to update the data, information or opinions contained in the Investment Manager's Report.

Forward Looking Statements

The Investment Manager's Report contains forward-looking statements. All statements contained in the Investment Manager's Report that are not clearly historical in nature or that necessarily depend on future events are forward-looking, and the words "anticipate," "believe," "expect," "estimate," "plan" and similar expressions are generally intended to identify forward-looking statements. The statements contained in the Investment Manager's Report that are not historical facts are based on current expectations, speak only as of the date of the Investment Manager's Report and involve risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such statements. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of Trian. Although Trian believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements included in the Investment Manager's Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included in the Investment Manager's Report, the inclusion of such information should not be regarded as a representation as to future results or that the objectives and plans expressed or implied by such forward-looking statements will be achieved. Trian will not undertake and specifically declines any obligation to disclose the results of any revisions that may be made to any forward-looking statements in the Investment Manager's Report to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Not an Offer to Sell or a Solicitation of an Offer to Buy

Under no circumstances is the Investment Manager's Report intended to be, nor should it be construed as, an offer to sell or a solicitation of an offer to buy any security. The funds managed by Trian are in the business of trading -- buying and selling -- securities. It is possible that there will be developments in the future that cause one or more of such funds from time to time to either purchase or sell shares of Ferguson or Unilever in open market transactions or otherwise or trade in options, puts, calls, contracts for difference or other derivative instruments relating to such shares. Consequently, Trian's beneficial ownership of Ferguson's and Unilever's shares may vary over time depending on various factors, with or without regard to Trian's views of Ferguson's and Unilever's business, prospects or valuation (including the market price of Ferguson's and Unilever's ordinary shares), including without limitation, other investment opportunities available to Trian, concentration of positions in the portfolios managed by Trian, conditions in the securities markets and general economic and industry conditions. Trian also reserves the right to take any actions with respect to any investments in Ferguson and Unilever as it may deem appropriate, including, but not limited to, communicating with the management of Ferguson and Unilever, the board of directors of Ferguson and Unilever, other investors and shareholders, members, stakeholders, industry participants, and/or interested or relevant parties about Ferguson and Unilever or seeking representation on the board of directors of Ferguson and Unilever, and to change its intentions with respect to any investments made in Ferguson and Unilever at any time.