TIDMAMAT
RNS Number : 1881I
Amati AIM VCT PLC
13 April 2022
Amati AIM VCT plc (the "Company")
Legal Entity Identifier: 213800HAEDBBK9RWCD25
Annual Report & Financial Statements
For the year ended 31 January 2022
The Directors are pleased to present the Annual Financial
Results of the Company for the year ended 31 January 2022.
The information set out below does not constitute the Company's
full statutory accounts for the year ended 31 January 2022 in terms
of Section 434 of the Companies Act 2006 but is derived from those
accounts. Statutory accounts for the year ended 31 January 2022
will be posted to Shareholders and delivered to the Registrar of
Companies, in due course. The Auditors have reported on those
accounts; their report was (i) unqualified, (ii) did not include a
reference to any matters to which the Auditors drew attention by
way of emphasis without qualifying their report and (iii) did not
contain a statement under Section 498 (2) or (3) of the Companies
Act 2006. The text of the Auditors' report can be found in the
Company's full Annual Report and Accounts. Audited statutory
accounts for the year to 31 January 2021, which were unqualified,
have been lodged with the Registrars of Companies.
OUR STRATEGY
The investment objective of the Company is to generate tax free
capital gains and income on investors' funds through investment
primarily in AIM-traded companies.
DIVID POLICY
The Board aims to pay annual dividends of around 5% of the
Company's Net Asset Value at its immediately preceding financial
year end, subject to distributable reserves and cash resources, and
with the authority to increase or decrease this level at the
Directors' discretion.
Highlights
For the year ended 31 January 2022
NAV Total return
for the year
-7.5%
(2021: +38.9%)
GBP31.3m
invested in qualifying
holdings during the year
(2021: GBP16.0m)
Year end
Net Asset Value per share
180.7p
(2021: 206.1p)
GBP65m
The prospectus offer launched in July 2021 raised GBP65m by
close of the offer in February 2022
Key data
31/01/22 31/01/21
----------------------------------- ------------- -------------
Net Asset Value ("NAV") GBP247.1m GBP238.3m
Shares in issue 136,720,797 115,589,550
NAV per share 180.7p 206.1p
Share price 166.5p 190.5p
Market capitalisation GBP227.6m GBP220.2m
Share price discount to NAV 7.9% 7.6%
NAV Total Return for the year
(assuming re-invested dividends) -7.5% 38.9%
Numis Alternative Markets
Total Return Index* -3.5% 20.5%
Ongoing charges** 1.9% 2.1%
Dividends paid and declared
in respect of the year 9.0p 10.5p
----------------------------------- ------------- -------------
* Numis Alternative Markets Index is included as a benchmark for
performance as this index includes all companies listed on
qualifying UK alternative markets.
** Ongoing charges calculated in accordance with the Association
of Investment Companies' ("AIC's") guidance.
See Alternative Performance Measures on pages 77 and 78 of the
full Annual Report and Accounts.
Table of investor returns
to 31 January 2022
From Date NAV Total Numis
Return with Alternative
dividends Markets
re-invested Total
Return Index
---------------------------------------------------------------- ------------------- -------------- ---------------
NAV following re-launch of the VCT under management of Amati
Global
Investors ("Amati") 9 November 2011* 208.0% 65.2%
---------------------------------------------------------------- ------------------- -------------- ---------------
NAV following appointment of Amati
as Manager of the VCT, which was known as ViCTory VCT at the
time 25 March 2010 223.1% 69.8%
---------------------------------------------------------------- ------------------- -------------- ---------------
*Date of the share capital reconstruction when the NAV was
rebased to approximately 100p per share.
A table of historic returns is included on page 76 of the full
Annual Report and Accounts.
Dividends paid and declared
-14.3%
2022 total dividends per share
9.0p
5% of NAV
Cumulative dividends per share
85.74p
Dividend history
Since the re-launch of the VCT under the management of Amati
Global Investors*
Year ended 31 January Total Cumulative
dividends dividends
per share** per share
p p
------------------------ -------------- ------------
2011 4.74 4.74
2012 5.50 10.24
2013 6.00 16.24
2014 6.75 22.99
2015 6.25 29.24
2016 6.25 35.49
2017 7.00 42.49
2018 8.50 50.99
2019 7.50 58.49
2020 7.75 66.24
2021 10.50 76.74
2022 9.00 85.74
------------------------ -------------- ------------
* On 25 March 2010 Amati Global Investors were appointed as
Manager of ViCTory VCT. On 8 November 2011 Invesco Perpetual AIM
VCT merged with ViCTory VCT and the name was changed to Amati VCT
2. On 4 May 2018 the Company merged with Amati VCT and the name was
changed to Amati AIM VCT.
**Total dividends per share are the declared dividends of the
financial year.
Fund performance
A graph depicting the Amati AIM VCT NAV Total Return and Numis
Alternative Markets Total Return Index from change of Manager on 19
March 2010 (first Net Asset Value calculated on 25 March 2010) to
31 January 2022 can be found on page 3 of the full Annual Report
and Accounts.
Historic performance
A graph depicting the Amati AIM VCT NAV Total Return and Numis
Alternative Markets Total Return Index from inception of fund to 31
January 2022 can be found on page 3 of the full Annual Report and
Accounts.
Extracts from Strategic Report
Chairman's Statement
This report has been prepared by the Directors in accordance
with the requirements of Section 414A of the Companies Act
2006.
Overview and Investment Performance
Following a rise of almost 8% in the first half of the year, the
performance of the portfolio fell away in the second half to close
the year down 7.5%, on a NAV total return basis. Some of this fall
was for company specific reasons, in particular Polarean Imaging
and Frontier Developments, while some was due to a sharp
deterioration in sentiment. This stemmed from inflation rising to
much higher levels than forecast by central banks, bringing with it
the prospect of higher interest rates, rising bond yields and the
withdrawal of liquidity through the ending of quantitative easing.
This has led to some significant de-ratings of many growth
companies. On top of this, there was the deepening crisis caused by
Russia's military build-up around Ukraine.
The Company made twelve new qualifying investments during the
year. Having invested GBP19.7m in the first half, a total of
GBP31.3m was invested across the year as a whole. Six of the new
investments come under the broad category of environmental
technology, being companies providing technologies, products and
services which will help enable, in a myriad of different ways,
both energy transition away from oil and gas and the reduction of
greenhouse gas emissions. With high levels of capital being
deployed to this end around the world, these are competitive areas.
However, with such big changes to every aspect of our economy being
required over the next 30 years to reach net zero emissions there
are also abundant opportunities for new technology to be developed
and commercialised and the UK provides fertile ground in which to
create such companies. Healthcare also remained well represented
amongst our new investments, with software and training companies
also featuring. Fuller details of the new investments and of
investment performance are given in the Manager's Review which
follows.
Corporate Developments
The Board announced in April that it intended to launch a
Prospectus Offer (the "Offer"). This opened on 30 July seeking to
raise up to GBP40m with an over-allotment facility to raise up to a
further GBP25m. This Offer saw strong demand and the initial GBP40m
was raised after only four business days. On 15 December 2021, the
Board announced that, as the Company had continued to identify
attractive investment opportunities and having considered the
current rate of investment activity, it intended to utilise the
over-allotment facility of GBP25m and re-open the Offer in February
2022. This was confirmed by the Board in its announcement on 14
February this year, with the Offer re-opening on 16 February and
closing on 21 February, having been fully subscribed.
Ahead of its new financial year, the Board took the decision to
transfer its company secretarial services. LDC Nominee Secretary
Limited, part of The Law Debenture Corporation p.l.c. ("Law
Debenture") was appointed as Company Secretary on 1 February 2022.
Contact details for Law Debenture are set out below.
At the AGM this year, shareholders are being asked to vote on a
resolution to cancel the entire amount standing to the credit of
the Company's share premium account as at the date the relevant
Court order is made. Subject to confirmation by the High Court of
Justice in London and the reduction in capital taking effect, the
amount so cancelled will be credited to the Company's distributable
reserves. This will improve the Company's distributable reserves
position and will provide the Company with flexibility to support,
amongst other things, share buy-backs and the payment of dividends
or other distributions to shareholders in the future. Shareholders
were last asked to approve such a resolution in 2018.
Dividend
The Board aims to pay annual dividends of around 5% of the
Company's Net Asset Value at its immediately preceding financial
year end, subject to the Company's distributable reserves and cash
resources, and with the authority to increase or decrease this
level at the Directors' discretion.
As at 31 January 2022 the net asset value was 180.7p. In line
with this, the Board is proposing a final dividend of 4.5p per
share, to be paid on 22 July 2022 to shareholders on the register
on 17 June 2022. When added to the interim dividend of 4.5p per
share, this would make total dividends for the year 9.0p per share,
which is 5% of year end NAV.
The Board would like to remind shareholders about the Dividend
Re-investment Scheme ("DRIS"). This allows shareholders to use
their dividends to buy new shares issued by the Company on the
dividend payment date priced at the most recently published NAV per
share. Shares issued by the DRIS, being new shares, have the same
tax benefits as shares bought in our standard share offers. The
only difference is that they do not have to meet the requirement to
be bought more than six months before or after any share sales, so
income tax relief can be claimed on them at 30% of the subscription
value regardless of any share sales made, provided that the other
standard tests are met, such as not investing more than GBP200,000
in VCT shares in any one tax year, whether through an Offer or on
the market. If you wish to join the DRIS please contact the
Company's registrar.
Annual General Meeting ("AGM")
The AGM this year will be held at Barber-Surgeons' Hall,
Monkwell Square, Wood Street, London EC2Y 5BL starting at 2pm on
Thursday 16 June 2022. This will be followed by presentations from
the Manager and investee companies, and the Amati Guildhall
Creative Entrepreneurs Award. Details are being sent to you with
this report.
The Notice of AGM is set out on pages 79 to 84 of the full
Annual Report and Accounts.
At the date of this report, there are no UK Government imposed
restrictions in connection with the Covid-19 pandemic on the
holding of public gatherings that would affect the holding of the
AGM in London. However, the situation relating to Covid-19 is
constantly evolving and the UK Government may re-impose
restrictions in connection with Covid-19 and/or implement further
measures that affect the holding of shareholder meetings.
Accordingly, it is possible that at the date of the AGM measures
may be in place that would restrict attendance at the AGM.
The Board recognises that the Company's AGM represents an
important forum for shareholders to put questions to the Directors,
to express their views on governance and to become fully informed
about matters relating to the AGM resolutions. It understands that
attending in person may not be possible for all shareholders who
wish to attend. Therefore, the Company intends to also make
available a live stream facility to allow shareholders to watch and
listen to the AGM and the investor event which follows. If
shareholders wish to use this facility please register your
interest by emailing info@amatiglobal.com and shortly ahead of the
event the Company's Manager will post a link and instructions on
how to join the event on its homepage at www.amatiglobal.com .
Shareholders watching the AGM will not be counted towards the
quorum of the meeting and will not be able to participate in the
formal business of the meeting, including asking questions and
voting on the day.
The Board encourages shareholders to engage with the Board and
the Company's Manager. In addition to asking questions at the AGM,
shareholders can email any questions they may have either on the
business of the AGM or the portfolio to info@amatiglobal.com by 10
June 2022 . The Company's Manager will publish questions together
with answers on the page dedicated to the AGM on the Manager's
website prior to the AGM being held. The Company's Manager will
reply to any individual shareholder questions submitted by the
deadline of 10 June 2022, before the AGM.
The Board also encourages shareholders to exercise their votes
in advance of the meeting. Shareholders are advised to vote through
the Company Registrar's online voting facility (details of which
can be found at page 82 of the full Annual Report and Accounts) or
by form of proxy. Shareholders who hold their shares through an
investment platform or other nominee service are also encouraged to
contact their investment platform or other nominee service as soon
as possible to arrange for votes to be lodged on their behalf.
Board Changes
In 2005, I was invited to join the board of Amati VCT plc at its
foundation, when it was then, First State Investments AIM VCT plc,
going on to chair first Amati VCT plc and then the Company after
the merger with Amati VCT plc in 2018. Since its creation, I have
seen the Company grow and develop to its current size and success.
I shall be retiring from the Board after this year's AGM and I
would like to thank all of my board colleagues, past and present
and the Company's Manager, for their support and hard work
throughout my tenure. After six years on the board, Susannah
Nicklin also intends to retire from the board before the end of
this year to devote more time to other interests and recent
appointments.
During the year we appointed Fiona Wollocombe to the board with
a view to addressing the board's succession plans and I am
delighted that she has agreed to take over as Chair. With her
experience of VCTs and the investment sector, I am confident that I
leave your board and the Company in the best of hands. It has been
a privilege to have played a part in the evolution of our VCT.
Outlook
Since the aggressive attack by Russia on the Ukraine, we have
experienced extreme investor sentiments which have led to a
dramatic fall in the FT Indices after our year end. Our
well-balanced portfolio has not been immune to derating along with
the market, even for those companies with high elements of service
and technical expertise. With inflation, interest rates and energy
prices rising, there are ongoing headwinds. Our portfolio contains
a diverse range of well-resourced companies, mostly with high
barriers to entry derived from intellectual property and specialist
skills. It also consists of both early-stage companies with good
cash resources addressing potentially large markets and, where we
have held investments for longer periods, maturing businesses with
typically low levels of debt. Most of these businesses should be
well placed to perform in more difficult economic conditions. It is
in the nature of VCT investing that if we exit positions in more
mature companies we cannot buy them back again because they would
no longer fit the qualifying VCT criteria, so we have a strong
incentive to be long term investors. This has proven to be
beneficial over the years. It might be expected that the more
challenging market conditions allow us to make new investments at
lower valuations, and we anticipate having opportunities to take
this advantage and deploy our recently raised funds during the
course of 2022.
We all hope for peace soon.
Peter A. Lawrence
Chairman
12 April 2022
For any matters relating to your shareholding in the Company,
dividend payments, or the Dividend Re-investment Scheme, please
contact The City Partnership (UK) Ltd on 01484 240 910, or by email
at amativct@city.uk.com.
For any other matters please contact Amati Global Investors on
0131 503 9115 or by email at info@amatiglobal.com. Amati maintains
an informative website for the Company - www.amatiglobal.com - on
which monthly investment updates, performance information, and past
company reports can be found.
Fund Manager's Review
Market Review
During the year under review, some light finally began to appear
at the end of the Covid tunnel, with the global rollout of
vaccination programmes now leading to greatly reduced rates of
hospitalisations and deaths in most countries. Hopefully, we can
now look towards a future with limited fear of further lockdowns
and gradually falling levels of restrictions.
Despite this clear evidence of progress on the pandemic, it has
been a mixed year for equity markets, with the strong returns
reported in the first half unwinding during the second half.
Investors are now focusing heavily on geo-political and economic
factors which gave increasing cause for concern as we entered 2022.
This has come at a time when equity valuations look stretched
compared to history, especially in the US. In turn, this has led to
market sentiment changing, with high growth sectors such as
healthcare and technology seeing material profit taking, whilst
out-of-favour sectors including oil and gas, mining and banking,
have enjoyed a return to form after a number of fallow years.
The ever increasing build-up of Russian troops and armaments
around the Russian-controlled borders of Ukraine became an ever
more worrying development during the year. Relatively few
commentators saw this as the pre-cursor to an all-out invasion of
the kind that took place on 24 February 2022, but the level of
geo-political risk was rising throughout the period.
The extraordinary level of quantitative easing to support
pandemic policies during 2020 and 2021 has meant that we are now in
an era of higher inflation and an upward trajectory to interest
rates. Inflation rose to levels the likes of which younger
investors will not have seen in their careers. Markets are
increasingly coming to the view that inflation may be with us for
some time. It is hard to escape the conclusion that central banks
and finance ministers miscalculated in creating as much liquidity
as they did in 2020 and 2021. Towards the end of 2021, we saw
dramatic increases in global energy costs, led by rising oil and
gas prices, leaving questions about ongoing energy security,
particularly in the EU, but the UK has also paid little attention
to this in recent years. This comes against ongoing and costly
commitments to deliver reduced carbon levels post the COP26
conference.
Moving closer to home, it has been a disappointing year for AIM
investors with the Numis Alternative Markets Total Return Index
falling by 3.5%. This was materially below both the Numis Smaller
Companies (plus AIM excluding Investment Companies) Index which
rose by 11.6%, and the Numis Large Cap index which rose by 19.5%.
The recent increases we have seen in bond yields and interest rate
expectations have led to a more difficult environment for the
valuation of early-stage companies in general. However, UK asset
prices remain modest by international standards and the derating we
have seen over the past few months has brought valuations back in
line with longer term norms.
Performance
The VCT's NAV Total Return for the period was -7.5%. This
underperformed the benchmark Numis Alternative Markets Total Return
Index, which returned -3.5%.
After rising 7.9% in the first half, the tone of the market
became increasingly negative in the second half of the year. In
addition, a couple of the previously best performing investments in
the portfolio hit some specific issues.
Saietta , which was bought as pre-IPO investment and then added
to at the point of IPO, was the biggest positive contributor to
performance during the period. Other recent IPOs such as
Northcoders and Arecor Therapeutics have also done well, with more
detail in the section on Portfolio Activity below. Corporate
activity also boosted performance. Universe was acquired by
Professional Data Solutions at a 129% premium, and Xplorer Capital
Growth acquired CloudCall at a 76% premium. Water Intelligence, the
water leak detection company predominantly operating via
franchisees in the US, was also a significant contributor, rising
by 73%. Earnings have grown rapidly over the last few years, as the
company has been acquiring underperforming franchises to operate
directly. It has also successfully developed a national sales
channel to sell to insurers. Accesso Technology, a global leader in
online ticketing and electronic queuing systems, rose by 83% after
the company saw earnings upgrades as its customers made greater use
of its products once lockdowns began to ease. Angle, the maker of
Parsortix, a device which can isolate circulating tumour cells in
blood samples for analysis, having raised GBP20m in July, rose
strongly over the year, as did SRT Marine Systems as the company
finally delivered on some contract wins, after several delays,
exacerbated by Covid.
Frontier Developments , the video games developer, was the
biggest negative contributor in the period, falling by 56%. The
company's launch of Jurassic World Evolution 2 ("JWE2") undershot
expectations, which had been set high. Whilst the launch was smooth
and glitch-free, the game was released into a crowded Thanksgiving
schedule, as several launches that had been delayed by Covid came
to market at the same time. Additionally, JWE2 did not have the
support of a concurrent cinema release, as the next instalment in
the franchise has been pushed to June 2022. Revenues were also
lower than expected from Elite Dangerous: Odyssey after the
gameplay of the new release did not work well across different
devices. The console release was also delayed. We are confident
that Frontier remains a world-class video games developer, and the
company continues to broaden its portfolio of games, creating a
more diversified business. Nonetheless, developing video games
always carries a degree of risk and unpredictability. Tristel fell
by 29%, as further outbreaks of Covid reduced the number of
elective surgeries taking place and consequently it sold fewer kits
for sterilising surgical equipment.
Polarean Imaging ("Polarean") , which had risen strongly in the
first half of the year, then fell sharply from its high of 110p in
October 2021. The U.S. Food and Drug Administration ("FDA")
responded to its application for approval of its medical device
with a Complete Response Letter ("CRL") as they had additional
questions about the submission. This was unexpected. We believe it
was part of a wider phenomenon in 2021, where the FDA had devoted
so much time to Covid related approvals, with reduced underlying
capacity due to working from home and self-isolation, that it
pushed approvals back using whatever means it could, using a CRL or
just by responding later than the normal regulatory timetable
specified. We had sold around 1m shares ahead of the approval, but
this did not alter the fact that as Polarean was our largest
holding, the fall had a big impact on the Fund's NAV. On the
positive side, a recent study in Oxford has shown that Polarean's
device can play a key role in diagnosing long Covid where this is
caused by lung impairment.
Portfolio Activity
The Company made twelve new investments and two follow-on
investments during the period. The new investments comprised eight
Initial Public Offerings ("IPO"), one secondary placing, and three
pre-IPO investments. The pre-IPO investments and several of the
IPOs we took part in are focused on environmental technologies, or
in other words, bringing new technologies to market which are
important to the goal of reducing greenhouse gas emissions. The
pre-IPO investments all took the form of convertible loans with a
small amount of equity investment.
Pre-IPO Investments
In March, prior to its flotation, we invested an initial GBP2.6m
in Saietta, which had developed a novel design for an axial flux
electric motor. These motors have advantages over competitors in
terms of torque density, power efficiency and low cost of
manufacture. The first market to be targeted is for outboard motors
in Europe, where the company has launched its first products under
the brand Propel. The longer-term targets are the light motorbike
market (125cc) in Asia, where countries are trying to improve air
quality, and reduce pollution and carbon emissions, and also
delivery and commercial vehicles and high-performance cars. When
the company floated in June, we invested a further GBP2.5m, and the
shares have performed strongly since then. In November, the company
acquired the Dutch electric bus drive train designer and
manufacturer, e-Traction, for very limited consideration in a
distressed sale by Evergrande. This added a new engineering team, a
range of patent protected designs, capability around inverter
design, a European operating base, and an existing customer base
for electric bus drive trains.
We invested GBP2m in EleXsys Energy in September. The company
uses innovative technology to allow clean energy producers to feed
multiple times more energy back into existing electricity
distribution grids, and turns current one-way grids into two-way
smart grids, without requiring significant spend on infrastructure
or equipment. We invested GBP3m in Flylogix in November. Flylogix
has developed remotely piloted small fixed-wing aircraft that can
be used for monitoring purposes in remote locations at sea. Its
initial focus is on the measurement of methane emissions from oil
and gas infrastructure in the North Sea, but is expanding this
service to other geographies, led by customer demand. It is also
looking to enter the market for bird and mammal surveys for
prospective wind farms around the UK. Remotely piloted aviation is
safer, cheaper and has a much reduced carbon footprint versus
conventional aviation. There are several demand drivers and
applications worldwide for its technology, which has brought
together smart software, 4G and satellite communications, and
low-cost electronics to develop a new generation of smaller, more
efficient aircraft.
IPO Investments
We supported three new healthcare IPOs. In May we invested
GBP1.9m in Arecor Therapeutics, a drug development services
company, which uses its Arestat platform to enhance the formulation
of drugs to improve their therapeutic properties. Arecor has an
impressive list of pharma, generic and biotech clients as well as
potential significant upside from an internally developed pipeline
of clinical programmes and has performed well since float. In the
same month we invested GBP0.7m in Trellus Health, whose software
platform provides expert personalised care for the treatment of
Inflammatory Bowel Disease and other complex chronic conditions,
aiming to cut healthcare costs by reducing hospital admissions and
tailoring care to the individual patient to improve their
resilience in the face of their symptoms. In December we invested
GBP3.6m in Aptamer. The company develops affinity ligands, which
are biological molecules that bind other molecules, in the way that
antibodies do for example. Aptamers are very small in comparison,
and their attributes offer benefits to cost, manufacturing and
likelihood of binding. The company works with 75% of the world's
top 20 pharma companies with repeat custom. Clients use Aptamers
across healthcare applications, such as therapeutic
delivery, purification, diagnostics and bioprocessing.
Three of the eight IPO investments added to our portfolio of
software, training and ecommerce companies. In May we invested
GBP3m in Glantus, which had developed software to automate the
process of checking and auditing Accounts Payable items for large
corporate customers. This is a function in the past that has often
been taken on by specialist consultants. Glantus has acquired two
such consultancy businesses, allowing it to gain from the
efficiency that the software can bring, whilst broadening its
customer reach. This is a competitive area, but one in which
Glantus has a broad product set and customer base, with low levels
of churn. In March we invested GBP1.7m in In the Style, an
ecommerce retailer specialising in providing inclusive clothing
collections by social media influencers. Sales have grown strongly
during the pandemic, but supply chain issues brought margins down
to hardly breakeven. After some disappointments, a change of
management has seen the founder replaced as CEO, bringing in a more
experienced pair of hands. Lastly, in July we invested GBP1.8m in
Northcoders, which provides training to IT novices and junior
software engineers. There continues to be an acute shortage of
coders, programmers, and developers in the UK. Recently the company
has expanded into providing apprenticeship courses. Northcoders'
student numbers and revenues took an inevitable hit in 2020 from
the impact of the pandemic, but the company reacted quickly and
within six months it was able to transition its onsite offering
into on-line courses. It can now offer a full range of onsite and
hybrid-online content from its technology-based teaching platform.
This operational leverage will drive EBITDA margins to more than
30%, and the IPO funds will enable the company to expand to new
locations.
The remaining two IPOs were in buildings related products - and
services which are coming to the fore for environmental reasons; we
invested GBP0.75m in Zenova in July and GBP1.95m in Eneraqua in
November. Zenova has developed an intriguing array of new fire
safety, thermal insulation, and temperature management technologies
in the form of paints, renders and sprays. The remarkable features
of these products can be seen in demo videos on the company's
website. Due to the early stage of the business, we made a small
investment but with a right to subscribe for a further 6,578,947
shares up to 9 months after the IPO. Eneraqua designs and installs
energy and water systems for large buildings in both the public and
private sectors, involving ground and air source heat pumps. It has
a patented device which overcomes variable mains pressure to
provide constant water flow. This reduces water consumption which
in turn reduces heating requirements and system costs. It is
working with three utility companies and 28 local authorities and
housing associations, on both new and replacement systems.
Secondary Placings and Follow-On Investments
In March, we invested GBP1.7m in another new holding, GeTech,
through a secondary placing. GeTech's core business is based around
its geoscience and geospatial database and software products.
Historically, these have been sold principally to oil and gas and
mining customers. In addition to detailed geological and gravity
mapping, GeTech's data can show how the geology of any given
location has been formed. Over the past few years, the company has
focused on diversifying its revenue streams, applying its data sets
to water, transportation, nuclear, pipeline and electricity
infrastructure sectors. In 2021 it bought the rights to acquire H2
Green, a company developing UK sites as hydrogen hubs for
industrial use, and the placing was used to fund the development of
these projects.
Follow-on investments over the year included GBP1.5m in
Cloudcall, the online consumer privacy and security software
provider, which was subsequently bid for; GBP1m in Velocys, which
is focused on technology for creating Sustainable Aviation Fuel
from waste; and GBP1.3m in Polarean as part of a $25m total
fundraise - the bulk of this was to enable the company to build
sales and marketing capability ahead of anticipated FDA approval
(which has since been delayed) as well as additional trials, EU
expansion, and further R&D expenditure.
On the sell side, we took significant profits in Ilika, which
had performed very strongly since our follow-on investment in 2020
and reduced holdings in Eden Research, Rua Life Sciences, Synairgen
and Falanx.
Outlook
The outlook is overshadowed by the ongoing Russian invasion of
Ukraine, which beyond creating countless human tragedies, weakens
global stability significantly. With this act, Russia has done
something that many in the West would have believed unthinkable,
although, in reality, it has taken the pathway towards ever
increasing aggression and willingness to use massive military force
beyond its borders step-by-step over the last decade. In no small
part, Russia's ability to become such a threat has been enabled
through the vast income generated from sales of oil and gas to
Europe. It is a classic case of the natural resources curse in
action, as described eloquently in Leif Wenar's book, "Blood Oil:
Tyrants, Violence, and the Rules that Run the World", written in
2016. The external oil and gas revenues coming to resource cursed
countries in which a dictator has established absolute power with
whatever level of violence is required, leads to a vicious circle
in which the regime in power has no interest in cultivating civil
society at home, because they can obtain vast wealth from abroad as
long as any local opposition is suppressed. Wenar uses a poignant
word taken from CIA circles to describe the consequences of Western
powers choosing to ignore this phenomenon - "blowback".
Unfortunately, this only stops when the regime changes or the
natural resource revenues cease. With Russia owning close to a
quarter of the world's natural gas reserves this is a big problem.
Even a sea-change in mindset cannot suddenly provide a way out of
European dependence on Russian gas; that will take 3-5 years or
more.
This has served as a sharp reminder of just how much we still
depend on oil and gas as crucial sources of energy, however much we
might wish that this was not the case. This can't be changed simply
by cutting supply, it can only be changed by changing the structure
of demand. This in turn acts as a reminder of just how much there
is to do to bring about the energy transition towards carbon-free
alternatives. Step one of this transition is to avoid war and
promote international co-operation, a step which now looks much
more difficult to achieve. Step two is to develop the technologies
to enable de-carbonisation, and that is an area we have been
actively supporting through portfolio investments.
The companies in which the VCT invests are typically rich in
intellectual property and specialist know-how, focused on products
and services which are important to customers, and therefore should
be able to maintain pricing power against an inflationary backdrop.
However rising interest rates and the withdrawal of quantitative
easing will continue to keep stock market ratings under pressure,
so returns will need to come from positive earnings growth over the
coming years, and we remain optimistic that the majority of
portfolio companies should be well placed for this .
Dr Paul Jourdan, David Stevenson, Anna Macdonald and Scott
McKenzie
Amati Global Investors
12 April 2022
Investment Portfolio
as at 31 January 2022
Original Cost* Aggregate Valuation Fair value Market FTSE Sector Dividend %
Company name Amati VCT bookcost at 4 May 2018# GBP'000 Cost** GBP'000 movement Cap Yield(NTM) of net
GBP'000 GBP'000 in year GBPm % assets
GBP'000
------------------ ------------------------------------- ----------------------- ----------- ----------- ------------ ----------- ---------------- ------------- ---------
TB Amati UK
Smaller
Companies Fund 3,331 6,261 9,592 15,387 62 - Financials 1.2 6.2
Polarean Imaging
plc(1) - 5,218 5,218 14,566 (2,637) 121.5 Health Care 0.0 5.9
Keywords Studios Information
plc(1) 323 4,851 5,174 12,808 (1,057) 1,923.3 Technology 0.1 5.2
Information
Ideagen plc(2) 565 2,738 3,303 12,612 (952) 778.3 Technology 0.2 5.1
Learning
Technologies Information
Group plc(1) 780 3,771 4,551 11,530 186 1,315.5 Technology 1.0 4.7
Saietta Group Consumer
plc(1,3) - 5,100 5,100 11,265 6,165 178.6 Discretionary 0.0 4.5
Frontier
Developments Communication
plc(1) 341 4,357 4,698 8,628 (11,040) 545.2 Services 0.0 3.5
Tristel plc(2) 542 2,747 3,289 7,560 (3,135) 193.5 Health Care 1.9 3.1
GB Group plc(2, Information
3) 236 2,967 3,203 7,404 (2,243) 1,650.7 Technology 0.8 3.0
Water
Intelligence
plc(2) 180 1,038 1,218 6,925 2,933 147.6 Industrials 0.0 2.8
Largest ten
investments 45,346 108,685 44.0
------------------ ------------------------------------- ----------------------- ----------- ----------- ------------ ----------- ---------------- ------------- ---------
AB Dynamics
plc(1) 209 2,370 2,579 6,625 (1,954) 333.7 Industrials 0.4 2.7
Diurnal Group
plc(1) 732 3,508 4,240 5,130 (570) 91.3 Health Care 0.0 2.1
MaxCyte Inc.(1) 449 1,535 1,984 4,552 (1,965) 459.5 Health Care 0.0 1.8
Craneware
plc(2,3) 298 3,601 3,899 4,189 (537) 692.8 Health Care 1.8 1.7
Aptamer Group
plc(1) - 3,677 3,677 4,085 408 89.6 Health Care 0.0 1.7
Anpario plc(2) 276 1,553 1,829 3,786 196 134.8 Health Care 1.7 1.5
Angle plc(1) - 1,615 1,615 3,618 989 263.4 Health Care 0.0 1.5
Velocys plc(1) - 2,248 2,248 3,439 (552) 88.8 Energy 0.0 1.4
Consumer
Sosandar plc(1) - 1,872 1,872 3,245 1,529 57.6 Discretionary 0.0 1.3
Northcoders Consumer
Group plc(1) - 1,800 1,800 3,040 1,240 21.1 Discretionary 0.0 1.2
Largest twenty
investments 71,089 150,394 60.9
------------------ ------------------------------------- ----------------------- ----------- ----------- ------------ ----------- ---------------- ------------- ---------
Flylogix Limited
Ordinary shares
& 10%
Convertible
loan notes (1, Information
4) - 3,000 3,000 3,000 - - Technology 0.0 1.2
Arecor
Therapeutics
plc(1) - 1,900 1,900 2,943 1,042 97.4 Health Care 0.0 1.2
Amryt Pharma plc
ADR (1,3) - 1,607 1,607 2,135 528 646.7 Health Care 0.0 0.9
Amryt Pharma plc
Contingent
Value Rights
("CVRs")(3) - - - 711 (21) - Health Care 0.0 0.3
Consumer
Quixant plc(2) 419 3,777 4,196 2,684 418 102.3 Discretionary 1.0 1.1
Ilika plc(1) 131 646 777 2,677 (1,830) 219.6 Industrials 0.0 1.1
Synairgen plc(1) - 478 478 2,639 467 388.8 Health Care 0.0 1.1
Glantus Holdings
plc(1) - 3,000 3,000 2,500 (500) 32.2 Financials 0.0 1.0
Intelligent
Ultrasound
plc(1) - 1,625 1,625 2,460 238 42.0 Health Care 0.0 1.0
Ixico plc(1) - 1,409 1,409 2,415 (1,711) 23.1 Health Care 0.0 1.0
Brooks Macdonald
Group plc(2) - 1,154 1,154 2,289 622 411.2 Financials 3.4 0.9
Getech Group
plc(1) - 1,700 1,700 2,272 572 19.7 Energy 0.0 0.9
Solid State
plc(2) 259 261 520 2,192 889 90.6 Industrials 1.8 0.9
Diaceutics
plc(1) - 1,557 1,557 2,172 (697) 89.1 Health Care 0.0 0.9
Fusion
Antibodies
plc(1) 565 1,779 2,344 2,154 (421) 23.9 Health Care 0.0 0.9
Belvoir Group
plc(1) 404 379 783 2,030 677 95.1 Real Estate 3.3 0.8
Elexsys Energy
Ordinary shares
& 8%
Convertible
loan notes (1, Information
4) - 2,000 2,000 2,000 - - Technology 0.0 0.8
Science in Sport Consumer
plc(2) 811 1,145 1,956 1,979 750 89.2 Staples 0.0 0.8
Eneraqua plc(1) - 1,955 1,955 1,821 (134) 85.7 Industrials 0.0 0.7
Verici Dx
Limited(1) - 800 800 1,800 (1,200) 63.8 Health Care 0.0 0.7
SRT Marine Information
Systems plc(1) 709 465 1,174 1,733 308 73.9 Technology 0.0 0.7
Accesso
Technology Information
Group plc(1,3) - 221 221 1,659 752 309.5 Technology 0.0 0.7
Creo Medical
Group plc(1,3) - 1,613 1,613 1,522 (1,084) 213.6 Health Care 0.0 0.6
Hardide plc(1) 695 2,361 2,361 1,492 136 18.4 Materials 0.0 0.6
Rosslyn Data
Technologies Information
plc(1) 614 1,308 1,922 1,199 (1,305) 11.6 Technology 0.0 0.5
One Media iP
Group plc(1) - 1,240 1,240 1,151 - 14.5 Financials 0.0 0.5
Equals Group Information
plc(1) - 1,137 1,137 1,130 654 136.3 Technology 0.0 0.5
Property
Franchise Group
plc (The)(2) 155 197 352 926 378 100.6 Real Estate 3.3 0.4
Byotrol plc(1) 511 348 859 925 (700) 16.8 Materials 0.0 0.4
Eden Research
plc(1) - 857 857 893 (1,077) 23.8 Materials 0.0 0.4
Kinovo plc(2) 676 1,005 1,681 862 280 24.9 Industrials 0.0 0.3
Falanx Group
Limited(1) - 1,657 1,657 805 (167) 5.3 Industrials 0.0 0.3
Rua Life
Sciences plc(1) - 1,690 1,690 775 (1,504) 12.2 Health Care 0.0 0.3
In Style Group Consumer
plc(1) - 1,667 1,667 750 (917) 47.2 Discretionary 0.0 0.3
Trellus Health
plc(1,3) - 700 700 648 (53) 59.8 Health Care 0.0 0.3
Zenova Group
plc(1) - 750 750 592 (158) 14.0 Materials 0.0 0.2
Block Energy
plc(1) - 3,000 3,000 588 (895) 7.5 Energy 0.0 0.2
Information
Netcall plc(2) - 110 110 428 92 104.8 Technology 0.6 0.2
Brighton Pier
Group plc (The) Consumer
(1) 314 175 489 337 235 33.2 Discretionary 0.0 0.1
MyCelx
Technologies
Corporation(1) 440 205 645 295 206 14.2 Industrials 0.0 0.1
Velocity
Composites
plc(1) 496 307 803 230 35 7.3 Industrials 0.0 0.1
LoopUp Group Information
plc(1) 476 2,027 2,503 135 (545) 14.1 Technology 0.0 0.1
Information
Synectics plc(2) - 342 342 123 (27) 16.0 Technology 1.3 -
FireAngel Safety
Technology Consumer
Group plc(1) - 690 690 91 (28) 26.3 Discretionary 0.0 -
Bonhill Group Communication
plc(1) - 670 670 84 8 9.9 Services 0.0 -
Allergy
Therapeutics
plc(1) - 29 29 66 19 160.9 Health Care 0.0 -
Merit Group Communication
plc(1) - 596 596 31 (23) 10.3 Services 0.0 -
Investments held 1,954 - - -
at nil value
------------------ ------------------------------------- ----------------------- ----------- ----------- ------------ ----------- ---------------- ------------- ---------
Total investments 135,562 214,737 86.9
--------------------------------------------------------- ----------------------- ----------- ----------- ------------ ----------- ---------------- ------------- ---------
Net current assets 32,337 13.1
--------------------------------------------------------- ----------------------- ----------- ----------- ------------ ----------- ---------------- ------------- ---------
Net assets 135,562 247,074 100.0
--------------------------------------------------------- ----------------------- ----------- ----------- ------------ ----------- ---------------- ------------- ---------
1 Qualifying holdings.
2 Part of holding qualifying, part is non-qualifying.
3 These investments are also held by other funds managed by
Amati.
4 The investments of Ordinary Shares and Convertible loan
notes:
Flylogix Limited ("Flylogix")
Consists of 392 Ordinary Shares in Flylogix at fair value of
GBP300,000 and 10% Convertible Loan Notes at GBP2,700,000. The
interest for 18 months from the date of issue on the Convertible
Loan Notes is waived if Flylogix is admitted to AIM within that
18-month period, subject to a minimum equity raise of GBP10m. The
Convertible Loan Notes are convertible into Ordinary Shares after
listing. If Flylogix is not listed on AIM, interest is payable at
10% per annum for a term of 5 years. The Board are of the opinion
Flylogix will list on AIM and the interest receivable of GBP66,000
to the Balance Sheet has therefore not been accrued.
Elexys Energy plc ("Elexys")
Consists of 202,737 Ordinary Shares in Elexys at fair value of
GBP200,000 and 8% Convertible Loan Notes at GBP1,800,000. The
interest for the year from the date of issue on the Convertible
Loan Notes is waived if Elexys is admitted to AIM, subject to a
minimum equity raise of GBP5m. The Convertible Loan Notes are
convertible into Ordinary Shares after listing. If Elexys is not
listed on AIM, interest is payable at 8% per annum for a term of 5
years. The Board are of the opinion Elexys will list in the next 12
months and the interest receivable of GBP48,000 to the Balance
Sheet date has not been accrued.
# This column shows the original book cost of the investments
acquired from Amati VCT plc ("AVCT") on 4 May 2018.
* This column shows the book cost to the Company as a result of
market trades and events or asset acquisition.
** This column shows the aggregate bookcost to the Company
either as a result of market trades and events or asset
acquisition.
NTM The Manager rebates the management fee of 0.75% on the TB
Amati UK Smaller Companies Fund and this is included in the
yield.
All holdings are in ordinary shares unless otherwise stated.
Investments held at nil value: Celoxica Holdings plc(1),
Leisurejobs.com Limited(1) (previously Sportweb.com), Polyhedra
Group plc(1), Rated People Limited(1), Sorbic International plc,
TCOM Limited(1) and VITEC Global Limited(1).
As at the year end, the percentage of the Company's portfolio
held in qualifying holdings for the purposes of Section 274 of the
Income and Corporation Taxes Act 2007 was 90.01%.
Analysis as at 31 January 2022
Qualifying portfolio
The portfolio of qualifying investments in the Company as at 31
January 2022 is analysed in the graph which can be found on page 16
of the full Annual Report and Accounts, by date of initial
investment and market capitalisation. The size of the circles
represents the relative size of the holdings in the portfolio by
value.
The top ten qualifying portfolio companies are labelled. The
dates of investments in securities held solely by Amati VCT plc
prior to the merger with Amati VCT 2 plc in May 2018, are given as
the dates those securities were originally acquired by Amati VCT
plc.
Sector split
The portfolio of investments in the Company as at 31 January
2022 is analysed in the graph by sector which can be found on page
16 of the full Annual Report and Accounts. This includes a sector
split of the investments within the TB Amati UK Smaller Companies
Fund which in the Investment Portfolio table above is classed as
Financials.
Investment Policy, Company Objectives and Investment
Strategy
Company Objectives
The objectives of the Company are to generate tax free capital
gains and regular dividend income for its shareholders while
complying with the requirements of the rules and regulations
applicable to VCTs.
Investment Policy
The Company's policy is to hold a diversified portfolio across a
broad range of sectors to mitigate risk. It makes Qualifying
Investments (as defined in the Income Tax Act 2007 (as amended)) in
AIM-traded companies and non-Qualifying Investments as allowed by
the VCT legislation. The Company manages its portfolio to comply
with the requirements of the rules and regulations applicable to
VCTs.
Investment Parameters
Whilst the objective is to make Qualifying Investments primarily
in companies traded on AIM or on the Aquis stock exchange
("Aquis"), the Company may also make Qualifying Investments in
companies likely to seek a quotation on AIM or Aquis. With regard
to the non-qualifying portfolio the Company makes investments which
are permitted under the VCT regulations, including shares or units
in an Alternative Investment Fund (AIF) or an Undertaking for
Collective Investment in Transferable Securities (UCITS) fund, and
shares in other companies which are listed on a regulated market
such as the Main Market of the London Stock Exchange. For continued
approval as a VCT under the ITA the Company must, within three
years of raising funds, maintain at least 80% of its value (based
on cost price, or last price paid per share if there is an addition
to the holding) in qualifying investments. 30% of new funds raised
in accounting periods beginning after 5 April 2018 are to be
invested in qualifying holdings within 12 months of the accounting
period following the issuance of shares. Any investments by the
Company in shares or securities of another company must not
represent more than 15% of the Company's net asset value at the
time of purchase.
Borrowing
The Company has the flexibility to borrow money up to an amount
equal to its adjusted capital and reserves but the Board's policy
is not to enter into borrowings.
Investment Strategy for Achieving Objectives
The investment strategy for achieving the Company Objectives
which follows is not part of the formal Investment Policy. Any
material amendment to the formal Investment Policy may only be made
with shareholder consent, but that consent applies only to the
formal Investment Policy above and not to any part of the Strategy
for Achieving Objectives or Key Performance Indicators below.
(a) Qualifying Investments Strategy
The Company is likely to be a long-term investor in most
Qualifying Investments, with sales generally only being made where
an investment case has deteriorated or been found to be flawed, or
to realise profits, adjust portfolio weightings, fund new
investments or pay dividends. Construction of the portfolio of
Qualifying Investments is driven by the historic investments made
by the Company and by the availability of suitable new investment
opportunities. The Manager may co-invest in companies in which
other funds managed by Amati Global Investors invest.
(b) Non-Qualifying Investments Strategy
The assets of the portfolio which are not in Qualifying
Investments will be invested by the Manager on behalf of the
Company in investments which are allowable under the rules
applicable to VCTs. Currently, cash not needed in the short term is
invested in a combination of the following (though ensuring that no
more than 15% of the Company's funds are invested in any one entity
at the time of purchase):
(i) the TB Amati UK Smaller Companies Fund (which is a UCITS
fund), or other UCITS funds approved by the Board;
(ii) direct equity investments in small and mid-sized companies
and debt securities in each case listed on the Main Market of the
London Stock Exchange; and
(iii) cash or cash equivalents (including money market funds)
which are redeemable within 7 days.
Environmental, Social and Governance ("ESG") Policies
The Investment Manager recognises that managing investments on
behalf of clients involves taking into account a wide set of
responsibilities in addition to seeking to maximise financial
returns for investors. Industry practice in this area has been
evolving rapidly and Amati has been an active participant in
seeking to define and strengthen its principles accordingly. This
involves both integrating ESG considerations into the Investment
Manager's investment decision-making process as a matter of course,
and also signing up to major external bodies who are leading
influencers in the formation of industry best practice. The
following is an outline of the kinds of ESG factors that the
Investment Manager will take into account as part of its investment
process, reflecting the specific inputs and outputs of a
business.
-- Environmental - climate change; use of natural resources;
pollution; waste and impact on bio-diversity; and taking into
account any positive environmental impacts.
-- Social - use of human capital; potential product or service
liabilities; stakeholder opposition; and taking into account any
positive social considerations.
-- Governance - ownership and control; management structure and
quality; pay and alignment; accounting issues; business ethics; and
tax transparency.
-- Human rights - weighing up the risks of activities in
countries with Freedom House Scores below 33 and based on Clean
Trade principles; not investing in companies extracting natural
resources in countries which score below 15; risk of exposure to
corruption and unreliable legal frameworks; risk of benefiting from
slave labour; risk from adverse political developments impacting a
business negatively.
Board Diversity of Investee Companies
The Board, through the Manager, considers Board diversity to be
an important consideration in its investment decision on investee
companies.
Key Performance Indicators
The Board expects the Manager to deliver a performance which
meets the objectives of the Company. A review of the Company's
performance during the financial year, the position of the Company
at the year end and the outlook for the coming year is contained in
the Chairman's Statement and Fund Manager's Review. The Board
monitors on a regular basis a number of key performance indicators
which are typical for VCTs, the main ones being:
-- Compliance with HMRC VCT regulations to maintain the Company's VCT Status. See below;
-- Net asset value and total return to shareholders (the
aggregate of net asset value and cumulative dividends paid to
shareholders, assuming dividends re-invested at ex-dividend date).
See graphs on page 3 of the full Annual Report and Accounts ;
-- Comparison against the Numis Alternative Markets Total Return
Index. See graph on page 47 of the full Annual Report and Accounts
;
-- Dividend distributions. See table of investor returns above;
-- Share price. See key data above; and
-- Ongoing charges ratio. See key data above.
Fund Management and Key Contracts
Management Agreement
Amati Global Investors was appointed as Manager to the Company
on 19 March 2010. Under an Investment Management and Administration
Agreement dated 19 March 2010, and subsequently revised and updated
in two separate agreements, an Investment Management Deed ("IMA")
and a Fund Administration, Secretarial Services and Fund Accounting
Agreement ("FASSFAA"), on 30 September 2019, the Manager agreed to
manage the investments and other assets of the Company on a
discretionary basis subject to the overall policy of the Directors.
The Company will pay to the Manager under the terms of the IMA a
fee of 1.75% of the net asset value of the Company quarterly in
arrears. In November 2014, with shareholder consent, the Company
amended its non-qualifying investment policy to permit investment
in the TB Amati UK Smaller Companies Fund, a small and mid-cap fund
managed by the Manager. The Company receives a full rebate on the
fees payable by the Company to the Manager within this fund either
through a reduction of fees payable by the Company or a direct
payment by the Manager.
Annual running costs are capped at 3.5% of the Company's net
assets, any excess being met by the Manager by way of a reduction
in future management fees. The annual running costs include the
Directors' and Manager's fees, professional fees and the costs
incurred by the Company in the ordinary course of its business (but
excluding any commissions paid by the Company in relation to any
offers for subscription, irrecoverable VAT and exceptional costs,
including winding-up costs). No performance fee is payable as the
Manager waived all performance fees from 31 July 2014 onwards.
Administration Arrangements
Under the terms of the FASSFAA, the Investment Manager also
agreed to provide certain fund administration, company secretarial
and fund accounting services to the Company. The Company agreed to
pay to the Investment Manager a fee of GBP92,800 (subject to an
annual increase in line with the retail prices index) quarterly in
arrears in respect of the provision of these services. With effect
from 1 February 2021 the annual increase will be in line with the
consumer prices index. The appointment of the Investment Manager as
investment manager and/or administrator, company secretary and fund
accountant may be terminated with twelve months' notice. Where the
Investment Manager negotiates and structures an investment directly
with a company, most commonly as a convertible loan, the Investment
Manager retains the right to charge the investee company a fee. Any
legal expenses incurred by the Investment Manager will be paid out
of this fee.
Under the FASSFAA, the Manager has the right to appoint suitable
representatives to provide administration, secretarial and fund
accounting services to the Company. The Manager engaged The City
Partnership (UK) Limited to act as company secretary and Link
Alternative Fund Administrators Limited to act as fund
administrator and accountant.
During the year the Manager and Board agreed that a new Company
Secretary would be sought with whom the Company would contract
directly. Law Debenture were appointed as Company Secretary of the
Company from 1 February 2022.
Fund Manager's Engagement
The Board regularly appraises the performance and effectiveness
of the managerial, administration and secretarial arrangements of
the Company. As part of this process, the Board will consider the
arrangements for the provision of investment management and other
services to the Company on an ongoing basis and a formal review is
conducted annually. In the opinion of the Board, the continuing
appointment of the Manager, on the terms agreed, is in the
interests of the shareholders. The Directors are satisfied that the
Manager will continue to manage the Company in a way which will
enable the Company to achieve its objectives.
VCT Status Adviser
Philip Hare & Associates LLP ("Philip Hare &
Associates") is engaged to advise the Company on compliance with
VCT requirements. Philip Hare & Associates review new
investment opportunities, as appropriate, and review regularly the
investment portfolio of the Company. Philip Hare & Associates
work closely with the Manager but report directly to the Board.
Principal and Emerging Risks
The Audit Committee regularly reviews the Company's risk
register, which assesses each risk and classifies the likelihood of
the risk and the potential impact of each risk on the Company. The
Board considers that the Company faces the following major risks
and uncertainties:
Potential Potential Impact Mitigation
Risk
----------------- -------------------------------------------- --------------------------------------
Investment A substantial portion of the Company's To reduce the risk, the Board
Risk investments are in small AIM traded places reliance upon the skills
companies as well as some unquoted and expertise of the Manager
companies. By their nature these and its strong track record
investments involve a higher degree for investing in this segment
of risk than investments in larger of the market. Investments
fully listed companies. These are actively and regularly
companies tend to have limited monitored by the Manager and
product lines and niche markets. the Board receives detailed
They can be reliant on a few key reports on the portfolio in
individuals. They can be dependent addition to the Manager's
on securing further financing. report at regular Board meetings.
With the changes to VCT regulations The Manager also seeks to
introduced in the Finance Act limit these risks through
2018 focusing investment in knowledge building a diversified portfolio
based companies, newer investments with companies in different
may well be made at an earlier areas within sectors and markets
stage in the lifecycle and may at different stages of development.
result in a reduced exposure to
asset based businesses leading Investments in unquoted companies
to increased volatility in the in particular are subject
value of an investee company's to strict controls and investment
shares. Further, the majority limits in recognition of the
of the new investments will be significant risks involved.
in companies which have invested In relation to investments
in developing and commercialising of this nature there is an
intellectual property, which brings expectation that the investee
with it the risk that another company will seek admission
company might develop superior to AIM within two years of
technology, or that the commercialisation the initial investment, in
strategy may fail. In addition, order to de-risk the investment,
the liquidity of these shares to the extent that this is
can be low and the share prices possible, within an acceptable
volatile. time frame.
----------------- -------------------------------------------- --------------------------------------
Venture Capital The current approval as a venture To reduce this risk, the Board
Trust Approval capital trust allows investors has appointed the Manager
Risk to take advantage of income tax which has significant experience
reliefs on initial investment in venture capital trust management
and ongoing tax-free capital gains and is used to operating within
and dividend income. Failure to the requirements of the venture
meet the qualifying requirements capital trust legislation.
could result in investors losing In addition, to provide further
the income tax relief on initial formal reassurance, the Board
investment and loss of tax relief has appointed Philip Hare
on any tax-free income or capital & Associates as VCT Status
gains received. In addition, failure Adviser to the Company. Philip
to meet the qualifying requirements Hare & Associates reports
could result in a loss of listing every six months to the Board
of the shares. to confirm compliance with
the venture capital legislation,
A sunset clause was put in place to highlight areas of risk
in the VCT regime to secure ongoing and to inform on changes in
EU approval at the time of the legislation independently.
UK's departure from the European
Union. At present it is not clear Other tax reliefs such as
whether the UK Treasury will take tax-free dividends and exemption
action to amend the legislation from capital gains tax would
to extend or remove the date of remain unaffected by the sunset
the sunset clause. Without an clause. VCT boards and their
extension or removal there would managers are actively liaising
be no initial income tax relief with the UK Treasury to encourage
for new subscriptions after 5 the addressing of this issue.
April 2025. The absence of upfront
tax relief may limit VCTs' ability
to raise funds.
----------------- -------------------------------------------- --------------------------------------
Compliance The Company has a premium listing Board members and the Manager
Risk on the London Stock Exchange and have considerable experience
is required to comply with the of operating at senior levels
rules of the UK Listing Authority, within quoted businesses.
as well as with the Companies In addition, the Board and
Act, Financial Reporting Standards the Manager receive regular
and other legislation. Failure updates on new regulations
to comply with these regulations from the auditor, lawyers,
could result in a delisting of the Company Secretary and
the Company's shares, or other other professional bodies.
penalties under the Companies
Acts or from financial reporting
oversight bodies.
The Alternative Investment Fund
Managers (Amendment etc.) (EU
Exit) Regulations 2019 ("AIFMD")
is a directive affecting the regulation
of VCTs. Amati AIM VCT has been
entered in the register of small,
registered UK AIFMs on the Financial
Services register at the Financial
Conduct Authority ("FCA"). As
a registered firm there are a
number of regulatory obligations
and reporting requirements which
must be met in order to maintain
its status as an AIFM.
----------------- -------------------------------------------- --------------------------------------
Internal Failures in key controls within The Board seeks to mitigate
Control Risk the Board or within the Manager's the internal control risk
business could put assets of the by setting policy, regular
Company at risk or result in reduced reviews of performance, enforcement
or inaccurate information being of contractual obligations
passed to the Board or to shareholders. and monitoring progress and
compliance.
Inadequate or failed controls
might result in breaches of regulations
or loss of shareholder trust.
The Manager operates a robust
risk management system which is
reviewed regularly to ensure the
controls in place are effective
in reducing or eliminating risks
to the Company. Details of the
Company's internal controls are
on page 42 of the full Annual
Report and Accounts .
----------------- -------------------------------------------- --------------------------------------
Financial By its nature, as a venture capital The Company's policies for
Risk trust, the Company is exposed managing these risks are outlined
to market price risk, credit risk, in full in notes 15 to 18
liquidity risk, interest rate to the financial statements
risk and currency risk. below. The Company is financed
through equity.
----------------- -------------------------------------------- --------------------------------------
Economic Events such as economic recession, The Manager seeks to mitigate
Risk not only in the UK, but also in economic risk by seeking to
the core markets relevant to our adopt a suitable investment
investee companies, together with style for the current point
a movement in interest rates, in the business cycle, and
can affect investor sentiment to diversify the exposure
towards liquidity risk, and hence to geographic end markets.
have a negative impact on the
valuation of smaller companies.
The economic future for the UK
and the wider world would appear
to be as uncertain as it has ever
been in the last few decades.
Actual war in Europe and the possibility
of war in the East combine to
give grave concern for the future.
This follows two years of the
Covid-19 pandemic and the ensuing
impacts on the UK and global economies
where government debt has not
been as high as it is now since
World War 2. Government actions
to deal with Covid-19 and to boost
the economy during the pandemic
now result in rising inflation
and therefore interest rates,
the impacts on the cost of living
being exacerbated by rising energy
prices caused by poor Government
energy policy decision making
in the rush to go green, reliance
for energy supplies on countries
with corrupt regimes and the impact
of the Russian invasion into Ukraine.
The Covid-19 pandemic and the
measures taken to control the
outbreak had already led to volatility
in stock markets and other financial
markets in the UK and a downturn
in the UK economy. The future
development and long-term impacts
of the outbreak are unknown. Despite
a permanent trade agreement between
the UK and EU and the end of the
transition period on 31 December
2020 there remains uncertainty
and potential volatility in markets
and for the economy while practicalities
are addressed.
----------------- -------------------------------------------- --------------------------------------
Operational Failure of the Manager's, or other The Manager regularly reviews
Risk contracted third parties', accounting the performance of third-party
systems or disruption to their suppliers at monthly management
businesses might lead to an inability meetings and the Board consider
to provide accurate reporting at quarterly board meetings.
and monitoring or loss to shareholders.
----------------- -------------------------------------------- --------------------------------------
Concentration Although the Company has a diversified Portfolio weighting limits
Risk portfolio of investments the ten apply to the portfolio's largest
largest holdings such that no holding
investments account for almost is allowed to approach a size
half of the total investments. of 10% of the portfolio, with
A material fall in any one investment action normally taken well
can have a significant impact before that level particularly
on the overall net asset value. where the shares have become
overbought with no underlying
earnings justification.
----------------- -------------------------------------------- --------------------------------------
Section 172 Statement
Directors' Duty to Promote the Success of the Company
This section sets out the Company's Section 172 Statement and
should be read in conjunction with the other contents of the
Strategic Report. The Directors have a duty to promote the success
of the Company for the benefit of its members as a whole and in
doing so to have regard to a number of matters including:
-- the likely consequences of any decision in the long term;
-- the interests of the Company's employees;
-- the need to foster business relationships with suppliers, customers and others;
-- the impact of the company's operations on the community and the environment;
-- the desirability of the Company maintaining a reputation for
high standards of business conduct; and
-- the need to act fairly between members of the Company.
As an externally managed investment company, the Company does
not have employees. Its main stakeholders therefore comprise the
shareholders, the Investment Manager, other service providers and
investee companies.
To ensure that the Directors are aware of, and understand, their
duties they are provided with a tailored induction, including
details of all relevant regulatory and legal duties as a Director
of a UK public limited company when they first join the Board, and
continue to receive regular and ongoing updates and training on
relevant legislative and regulatory developments.
They also have continued access to the advice and services of
the Company Secretary, and when deemed necessary, the Directors can
seek independent professional advice. The Terms of Reference of the
Board's committees are reviewed periodically and describe the
Directors' responsibilities and obligations and include any
statutory and regulatory duties.
Stakeholder Importance Board Engagement
---------------------- ---------------------------------- -------------------------------
Shareholders Continued shareholder support The Board places great
and engagement are critical importance on communication
to the continuing existence with its shareholders
of the business and its future and encourages shareholders
growth. to attend the AGM
and an annual investor
event and welcomes
communication from
shareholders as described
more fully on pages
39 to 40 in the Statement
of Corporate Governance
in the full Annual
Report and Accounts
.
Investment The Manager's performance The Board's decisions
Manager is fundamental for the Company are intended to achieve
to successfully deliver its the Company's objective
investment strategy, meet to generate tax free
its investment objective and capital gains and
its long-term success. income on investors'
funds and maintaining
the Company's status
as a VCT is a critical
element of this. The
Board regularly monitors
the Company's performance
in relation to its
investment objectives
and seeks to maintain
a constructive working
relationship with
the Manager.
Representatives of
the Manager attend
each quarterly board
meeting and provide
an update on the investment
portfolio along with
presenting on macro-economic
issues. The Board
also expects good
standards at the companies
within which the Company
is invested and, as
described below, the
Manager was a Tier
1 signatory to the
2012 UK Stewardship
Code and in March
2022 has been accepted
as a signatory to
the 2020 UK Stewardship
Code. The Manager
is also a signatory
to the Principles
for Responsible Investment.
Other service In order to function as an The Board maintains
providers, investment trust with a premium regular contact with
including: listing on the London Stock its key external service
The registrar, Exchange, the Company engages providers, and the
the receiving a diverse and experienced quality of the provision
agent, the range of advisors for support of these services
tax adviser, with meeting all relevant is considered by the
the auditor, obligations. Board at Board meetings.
the lawyers,
the Company
Secretary and
the Fund Accountant
Investee companies The Company's performance The Manager does not
is directly linked to the have board representation
performance of its underlying in any investee company
investee companies but does interact
and accordingly communication with Directors and
with those entities is regarded senior management
as very important. of investee companies
regularly.
The Board's primary
focus in promoting
the long-term success
of the Company for
the benefit of the
members as a whole
is to direct the Company
with a view to achieving
the investment objective
in a manner consistent
with its stated investment
policy and strategy.
Key decision making
The mechanisms for engaging with stakeholders are kept under
review by the Directors and discussed at Board meetings to ensure
they remain effective. The Board has policies for dividends, share
buybacks and the dividend re-investment scheme, all of which it is
considered are for the benefit of shareholders. During the year the
Directors discussed these and re-affirmed their commitment to the
policies. Examples of the Board's principal decisions during the
year, and how the Board fulfilled its duties under Section 172, are
set out below:
Principal Decision Long-term impact Stakeholder Engagement
-------------------------- ------------------------ -----------------------------------------
To issue new Issuing new shares The Board considered the direction
shares in the allows the Company and future aims of the Company
Company to increase its and the desire to continue to
liquidity, and invest in growth businesses
the successful with the aim of benefiting all
investment of stakeholders. A key part of
the capital raised that is fundraising, to provide
in new issuances new funds for investment in
will promote new or existing investee companies
growth in the (where allowed by VCT regulations).
Company's NAV. Aligned with this is the need
to maintain sufficient cash
balances to be able to take
advantage of investment opportunities,
to maintain stable and predictable
dividends for investors, and
to provide liquidity for shareholders
by facilitating buybacks.
Following the successful prospectus
offer that was launched in July
2021 and which raised GBP40m,
the Board decided to re-open
the Offer in February 2022 using
the over-allotment facility
owing to the strong demand seen
from investors and raised its
full GBP25m. This decision was
taken on the basis of the deployment
of funds and the pipeline of
investment opportunities.
A resolution giving the Directors
the authority to allot shares
is voted upon by shareholders
at the AGM each year and receives
a high level of support from
shareholders. Given the high
demand seen for the latest Offer,
a General Meeting was convened
and held on 2 March 2022 at
which shareholders again voted
in favour of giving the Board
authority to allot further shares.
To make new appointments Continuing to During the year, the Board was
to the Board develop and evolve pleased to appoint Fiona Wollocombe
the Board, so as a non-executive director.
that it contains She brings significant VCT experience
an appropriate to the Board. Fiona's appointment
mix of skills, is made to promote the best
diversity and long-term interests of the Company.
experience is
important to
promote the long-term
success of the
Company.
Environmental, Social and Governance ("ESG") Policies, and
Responsible Ownership
The Company has no employees and no premises and the Board has
decided that the direct impact of its activities is minimal;
therefore it has no policies relating to social, community and
human rights issues. The Company's indirect impact occurs through
the range of organisations in which it invests and for this it
follows a policy of Responsible Ownership.
In terms of external validation and support, Amati Global
Investors, the Manager, was a Tier 1 signatory to the 2012 UK
Stewardship Code and in March 2022 has been accepted as a signatory
to the 2020 UK Stewardship Code which aims to enhance the quality
of engagement between investors and companies to help improve
long-term risk adjusted returns to shareholders. Amati's approach
to Stewardship and Shareholder Engagement can be found at
https://www.amatiglobal.com/storage/644/Stewardship_and_Shareholder_Engagement-v2.pdf
. Amati is also a signatory to the UN-supported Principles for
Responsible Investment (PRI), which works to support its
international network of signatories in incorporating ESG factors
into their investment and ownership decisions. The PRI acts in the
long-term interests of its signatories, of the financial markets
and economies in which they operate and ultimately of the
environment and society as a whole.
Voting on portfolio investments
In 2021 the Manager voted in respect of 48 Amati AIM VCT
holdings at 69 company meetings on a range of ESG issues.
Business Conduct
The Board takes its responsibility to prevent bribery very
seriously and has a zero-tolerance policy towards bribery. It has
committed to carry out all business in an honest and ethical manner
and to act professionally, fairly and with integrity in all its
business dealings and relationships. The Manager has its own
anti-bribery and corruption policy.
Global Greenhouse Gas Emissions
The Company is a low energy user and is therefore exempt from
the reporting obligations 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, implementing the UK Government's
policy on Streamlined Energy and Carbon Reporting. The Company has
no greenhouse gas emissions or energy consumption to report from
the operations of the Company, nor does it have responsibility for
any other emission producing sources. Under listing rule
15.4.29(R), the Company, as a closed ended investment fund, is
currently exempt from complying with the Task Force on Climate
related Financial Disclosures.
Other Matters
VCT Regulations
The Company's investment policy is designed to ensure that it
meets the requirements of HM Revenue & Customs to qualify and
to maintain approval as a VCT:
(i) The Company must, within three years of raising funds,
maintain at least 80% of its investments by VCT value (cost, or the
last price paid per share, if there is an addition to the holding)
in shares or securities comprised in qualifying holdings (this
percentage rose from 70% to 80% for accounting periods beginning on
or after 6 April 2019 which for the Company was from 1 February
2020). At least 70% by VCT value must be ordinary shares which
carry no preferential rights. A further condition requires that 30%
of new funds raised in accounting periods beginning after 5 April
2018 are to be invested in qualifying holdings within 12 months of
the accounting period following the issuance of shares;
(ii) The Company may not invest more than 15% of its investments
in a single company and it must have at least 10% by VCT value of
its total investments in any qualifying company in qualifying
shares approved by HM Revenue & Customs;
(iii) To be classed as a VCT qualifying holding, companies in
which investments are made must have no more than GBP15 million of
gross assets at the time of investment and GBP16 million after
investment; they must be carrying on a qualifying trade and satisfy
a number of other tests including those outlined below; the
investment must also be made for the purpose of promoting growth or
development;
(iv) VCTs may not invest new capital in a company which has
raised in excess of GBP5 million (GBP10 million from 6 April 2018
if the company is deemed to be a Knowledge Intensive Company) from
all sources of state-aided capital within the 12 months prior to
and including the date of investment;
(v) No investment may be made by a VCT in a company that causes
that company to receive more than GBP12 million (GBP20 million if
the company is deemed to be a Knowledge Intensive Company) of state
aid investment (including from VCTs) over the company's lifetime. A
subsequent acquisition by the investee company of another company
that has previously received State Aid Risk Finance can cause the
lifetime limit to be exceeded;
(vi) No investment can be made by a VCT in a company whose first
commercial sale was more than 7 years prior to date of investment,
except where previous State Aid Risk Finance was received by the
company within 7 years (10 years in each case for a Knowledge
Intensive Company) or where both a turnover test is satisfied and
the money is being used to enter a new product or geographical
market;
(vii) No funds received from an investment into a company can be
used to acquire another existing business or trade;
(viii) Since 6 April 2016 a VCT must not make "non-qualifying"
investments except for certain specified investments held for
liquidity purposes and redeemable within seven days. These include
investments in UCITS (Undertakings for Collective Investments in
Transferable Securities) funds, AIF (Alternative Investment Funds)
and in shares and securities purchased on a Regulated Market. In
each of these cases the restrictions in (iii) - (vii) above are not
applied; and
(ix) Non-qualifying investments in AIM-quoted shares are not
permitted as AIM is not a Regulated Market.
During 2018, HMRC stopped issuing pre-clearance letters for VCT
investments. They are encouraging VCTs not to use the advance
assurance service for investments and have stated that where a VCT
has taken reasonable steps to ensure an investment is qualifying,
the VCT status will not be withdrawn where an investment is
ultimately found to be non-qualifying. The Manager and the Board
rely on advice from Philip Hare & Associates regarding the
qualifying status of new investments. The Manager monitors
compliance with VCT qualifying rules on a day-to-day basis through
a combination of automated and manual compliance checks in place
within the business. Philip Hare & Associates also review the
portfolio bi-annually to ensure the Manager has complied with
regulations and has reported to the Board that the VCT has met the
necessary requirements during the year.
PRIIPs Regulations
The Company is required to publish a Key Information Document
(KID), which sets out the key features, risks, potential future
performance and costs of PRIIPs (Packaged Retail and
Insurance-based Investment Products). This document is available at
the website of Amati Global Investors: www.amatiglobal.com.
Statement on Long-term Viability
In accordance with the UK Corporate Governance Code published in
July 2018 (the "Code"), the Directors have carried out a robust
assessment of the prospects of the Company for the period to
January 2027, taking into account the Company's performance and
emerging and principal risks, and are of the opinion that, at the
time of approving the financial statements there is a reasonable
expectation that the Company will be able to continue in operation
and meet liabilities as they fall due over that period.
To come to this conclusion, the Manager prepares and the
Directors consider an income statement forecast for the next five
years which is considered to be an appropriate time period due to
its consistency with the UK Government's tax relief minimum holding
period for an investment in a VCT. This time frame allows for
reasonable forecasts to be made to allow the Board to provide
shareholders with reasonable assurance over the viability of the
Company. In making their assessment the Directors have taken into
account the nature of the Company's business and Investment Policy,
its risk management policies, the diversification of its portfolio,
the cash holdings and the liquidity of non-qualifying
investments.
The Directors have considered in particular the likely economic
effects and the impacts on the Company's operations of the war
taking place in Ukraine, rising inflation and interest rates and
the effects of the COVID-19 pandemic.
The longer-term economic outlook is very difficult to predict
but in considering preparing the long term viability of the Company
the Directors noted the Company holds a portfolio of liquid
investments and cash balances whose value is a multiple of
liabilities.
Other Disclosures
The Company had no employees during the year and has five
non-executive directors, two of whom are male and three are
female.
On behalf of the Board
Peter A. Lawrence
Chairman
12 April 2022
Extracts from the Directors' Remuneration Report
Directors' Annual Report on Remuneration
Directors' fees for the year (Audited)
The fees payable to individual Directors in respect of the year
ended 31 January 2022 are shown in the table below.
Year ended 31 January 2022
(audited)
-------------------- ------------------------------------------------------------------------------------------------
Fees Taxable benefits Total Total Fixed Total variable
remuneration remuneration
GBP GBP GBP GBP GBP
-------------------- --------- ------------------ --------- ------------------------ ----------------------------
Peter Lawrence 25,378 - 25,378 25,378 -
Julia Henderson 22,905 - 22,905 22,905 -
Susannah Nicklin 22,905 - 22,905 22,905 -
Brian Scouler 22,905 - 22,905 22,905 -
Fiona Wollocombe* 14,744 - 14,744 14,744 -
108,837 - 108,837 108,837 -
-------------------- --------- ------------------ --------- ------------------------ ----------------------------
*appointed on 10 June 2021
Year ended 31 January 2021
(audited)
------------------- -------------------------------------------------------------------------------------------------
Fees Taxable benefits Total Total Fixed remuneration Total variable remuneration
GBP GBP GBP GBP GBP
------------------- -------- ------------------ -------- -------------------------- -----------------------------
Peter Lawrence 24,960 - 24,960 24,960 -
Julia Henderson 22,575 - 22,575 22,575 -
Susannah Nicklin 22,575 - 22,575 22,575 -
Brian Scouler 22,575 - 22,575 22,575 -
92,685 - 92,685 92,685 -
------------------- -------- ------------------ -------- -------------------------- -----------------------------
Directors are remunerated exclusively by fixed fees and do not
receive bonuses, share options, long-term incentives, pension or
other benefits. There have been no payments to past Directors
during the financial year ended 31 January 2022, whether for loss
of office or otherwise.
Directors' shareholdings (Audited)
The Directors who held office at 31 January 2022 and their
interests in the shares of the Company (including beneficial and
family interests) were:
31 January 2022 31 January 2021
Shares held % of issued Shares held % of issued
share capital share capital
-------------------- ------------- ---------------- ------------- ----------------
Peter Lawrence 941,660 0.69 859,130 0.74
Julia Henderson 19,360 0.01 17,068 0.01
Susannah Nicklin 25,777 0.02 20,396 0.02
Brian Scouler 60,381 0.04 52,669 0.05
Fiona Wollocombe* 13,755 0.01 - -
-------------------- ------------- ---------------- ------------- ----------------
*appointed on 10 June 2021
Subsequent to the year end Fiona Wollocombe's beneficial
interest increased by 6,008 shares and Susannah Nicklin's
beneficial interest increased by 4,807 shares, both under the Offer
on 2 March 2022.
The Company confirms that it has not set out any formal
requirements or guidelines for a Director to own shares in the
Company.
On behalf of the Board
Susannah Nicklin
Chairman of the Remuneration Committee
12 April 2022
Statement of Directors' Responsibilities
The Directors are responsible for preparing the annual report
and the financial statements in accordance with UK Financial
Reporting 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's financial statements and have
elected to prepare the company financial statements in accordance
with UK Financial Reporting 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.
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 and prudent;
-- state whether they have been prepared in accordance with UK
Financial Reporting 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 group and the
company will continue in business;
-- 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 ensuring that the annual report and accounts, taken
as a whole, are fair, balanced, and understandable and provide the
information necessary for shareholders to assess the group's
performance, business model and strategy.
Website Publication
The Directors are responsible for ensuring the annual report and
the financial statements are made available on a website. Financial
statements are published on the company's website in accordance
with legislation in the United Kingdom 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.
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
and loss of the company.
-- 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
Peter A. Lawrence
Chairman
12 April 2022
Income Statement
for the year ended 31 January 2022
Note 2022 2022 2022 2021 2021 2021
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- ------ ---------- ---------- ---------- ---------- ---------- ----------
(Loss)/gain on investments 8 - (18,123) (18,123) - 69,766 69,766
Income 2 701 - 701 567 - 567
Investment management fees 3 (1,115) (3,345) (4,460) (799) (2,398) (3,197)
Other expenses 4 (514) - (514) (455) - (455)
(Loss)/profit on ordinary activities
before taxation (928) (21,468) (22,396) (687) 67,368 66,681
Taxation on ordinary activities 5 - - - - - -
-------------------------------------- ------ ---------- ---------- ---------- ---------- ---------- ----------
(Loss)/profit and total
comprehensive income attributable
to shareholders (928) (21,468) (22,396) (687) 67,368 66,681
-------------------------------------- ------ ---------- ---------- ---------- ---------- ---------- ----------
Basic and diluted (loss)/earnings
per ordinary share 7 (0.73)p (16.93)p (17.66)p (0.64)p 62.76p 62.12p
-------------------------------------- ------ ---------- ---------- ---------- ---------- ---------- ----------
The total column of this Income Statement represents the profit
and loss account of the Company. The supplementary revenue and
capital columns have been prepared in accordance with The
Association of Investment Companies' Statement of Recommended
Practice ('AIC SORP'). There is no other comprehensive income other
than the results for the year discussed above. Accordingly a
Statement of Total Comprehensive Income is not required.
All the items above derive from continuing operations of the
Company.
The notes below form part of these financial statements.
Statement of Changes in Equity
for the year ended 31 January 2022
Non-distributable reserves Distributable reserves
Share Share Merger Capital Capital Special Capital Revenue Total
capital premium reserve redemption reserve reserve reserve reserve reserves
GBP'000 GBP'000 GBP'000 reserve (non- GBP'000 (distributable) GBP'000 GBP'000
GBP'000 distributable) GBP'000
GBP'000
---------------- --------- --------- --------- ------------ ----------------- ---------- ----------------- --------- -----------
Opening
balance as at
1 February
2021 5,780 61,635 425 731 107,450 75,023 (11,420) (1,345) 238,279
(Loss)/profit
and total
comprehensive
income for
the year - - - - (26,784) - 5,316 (928) (22,396)
---------------- --------- --------- --------- ------------ ----------------- ---------- ----------------- --------- -----------
Contributions by and distributions to shareholders:
Repurchase of
shares (88) - - 88 - (3,431) - - (3,431)
Shares issued 1,144 48,216 - - - - - - 49,360
Costs of share
issues - (306) - - - - - - (306)
Dividends paid - - - - - (14,432) - - (14,432)
---------------- --------- --------- --------- ------------ ----------------- ---------- ----------------- --------- -----------
Total
contributions
by and
distributions
to
shareholders 1,056 47,910 - 88 - (17,863) - - 31,191
---------------- --------- --------- --------- ------------ ----------------- ---------- ----------------- --------- -----------
Closing
balance as at
31 January
2022 6,836 109,545 425 819 80,666 57,160 (6,104) (2,273) 247,074
---------------- --------- --------- --------- ------------ ----------------- ---------- ----------------- --------- -----------
for the year ended 31 January 2021
--------------------------------------------------------------- ----------------- ---------- ----------------- --------- -----------
Opening
balance as at
1 February
2020 4,703 26,084 425 629 35,762 86,479 (7,100) (658) 146,324
Profit/(loss)
and total
comprehensive
income for
the year - - - - 71,688 - (4,320) (687) 66,681
---------------- --------- --------- --------- ------------ ----------------- ---------- ----------------- --------- -----------
Contributions by and distributions to shareholders:
Repurchase of
shares (102) - - 102 - (3,170) - - (3,170)
Shares issued 1,179 35,875 - - - - - - 37,054
Costs of share
issues - (324) - - - 198 - - (126)
Dividends paid - - - - - (8,484) - - (8,484)
---------------- --------- --------- --------- ------------ ----------------- ---------- ----------------- --------- -----------
Total
contributions
by and
distributions
to
shareholders 1,077 35,551 - 102 - (11,456) - - 25,274
---------------- --------- --------- --------- ------------ ----------------- ---------- ----------------- --------- -----------
Closing
balance as at
31 January
2021 5,780 61,635 425 731 107,450 75,023 (11,420) (1,345) 238,279
---------------- --------- --------- --------- ------------ ----------------- ---------- ----------------- --------- -----------
The accompanying notes below are an integral part of these
financial statements.
Balance Sheet
as at 31 January 2022
Note 2022 2021
GBP'000 GBP'000
------------------------------------------------- ------ ---------- ----------
Fixed assets
Investments held at fair value 8 214,737 215,398
Current assets
Debtors 9 1,972 46
Cash at bank 31,833 24,967
Total current assets 33,805 25,013
------------------------------------------------- ------ ---------- ----------
Current liabilities
Creditors: amounts falling due within one year 10 (1,468) (2,132)
------------------------------------------------- ------ ---------- ----------
Net current assets 32,337 22,881
Total assets less current liabilities 247,074 238,279
------------------------------------------------- ------ ---------- ----------
Capital and reserves
Called up share capital* 11 6,836 5,780
Share premium account* 109,545 61,635
Merger reserve* 425 425
Capital redemption reserve* 819 731
Capital reserve (non-distributable)* 80,666 107,450
Special reserve 57,160 75,023
Capital reserve (distributable) (6,104) (11,420)
Revenue reserve (2,273) (1,345)
Equity shareholders' funds 247,074 238,279
------------------------------------------------- ------ ---------- ----------
Net asset value per share 12 180.7p 206.1p
------------------------------------------------- ------ ---------- ----------
* These reserves are not distributable.
The financial statements above and below were approved and
authorised for issue by the Board of Directors on 12 April 2022 and
were signed on its behalf by
Peter A. Lawrence
Chairman
Company Number 04138683
The accompanying notes below are an integral part of these
financial statements.
Statement of Cash Flows
for the year ended 31 January 2022
2022 2021
GBP'000 GBP'000
------------------------------------------------------------------------------------------- ---------- ----------
Cash flows from operating activities
Investment income received 626 512
Investment management fees (4,427) (2,796)
Other operating costs (485) (449)
Net cash outflow from operating activities (4,286) (2,733)
-------------------------------------------------------------------------------------------- ---------- ----------
Cash flows from investing activities
Purchases of investments (32,872) (15,991)
Disposals of investments 13,596 2,593
Net cash outflow from investing activities (19,276) (13,398)
Net cash outflow before financing (23,562) (16,131)
-------------------------------------------------------------------------------------------- ---------- ----------
Cash flows from financing activities
Proceeds of share issues* 46,748 35,570
Cost of share issues (306) (126)
Payments for share buy-backs (4,194) (2,437)
Equity dividends paid* (11,820) (7,000)
Net cash inflow from financing activities 30,428 26,007
Increase in cash 6,866 9,876
-------------------------------------------------------------------------------------------- ---------- ----------
Reconciliation of net cash flow to movement in net cash
Increase in cash during the year 6,866 9,876
Net cash at 1 February 24,967 15,091
Net cash at 31 January 31,833 24,967
-------------------------------------------------------------------------------------------- ---------- ----------
Reconciliation of (Loss)/Profit on Ordinary Activities Before Taxation to Net Cash
Outflow
from Operating Activities
(Loss)/profit on ordinary activities before taxation (22,396) 66,681
Net loss/(gain) on investments 18,123 (69,766)
Less dividends reinvested (71) (67)
Increase in creditors, excluding corporation tax payable 64 406
(Increase)/decrease in debtors (6) 13
-------------------------------------------------------------------------------------------- ---------- ----------
Net cash outflow from operating activities (4,286) (2,733)
-------------------------------------------------------------------------------------------- ---------- ----------
*Adjusted to exclude non-cash dividends re-invested under the
Dividend Re-investment Scheme.
The accompanying notes below are an integral part of these
financial statements.
Notes to the Financial Statements
1 Accounting Policies
Basis of Accounting
The financial statements have been prepared under FRS 102 'The
Financial Reporting Standard applicable in the UK and Republic of
Ireland' and in accordance with the AIC SORP.
Basis of Preparation
The functional currency of the Company is Pounds Sterling
because this is the currency of the primary economic environment in
which the Company operates. The financial statements are presented
in Pounds Sterling rounded to the nearest thousand, except where
otherwise indicated.
Going Concern
The financial statements have been prepared on a going concern
basis and on the basis that the Company maintains VCT Status.
The Directors have made an assessment of the Company's ability
to continue as a going concern and are satisfied that the Company
has adequate resources to continue in operational existence for a
period of 12 months from the date these financial statements were
approved.
In making this assessment, the Directors have considered in
particular the likely economic effects and the impacts of the war
taking place in Ukraine, rising inflation and interest rates and
the effects of the COVID-19 pandemic on the Company, operations and
investment portfolio.
The Directors noted that the Company, with the current cash
balance and holding a portfolio of liquid listed investments, is
able to meet the obligations of the Company as they fall due. The
cash available enables the Company to meet any funding requirements
and finance future additional investments. The Company is a
closed-end fund, where assets are not required to be liquidated to
meet day-to-day redemptions.
The Board has reviewed stress testing and scenario analysis
prepared by the Investment Manager to assist them in assessing the
impact of changes in market value and income with associated cash
flows. In making this assessment, the Investment Manager has
considered plausible downside scenarios. These tests included the
modelling of a reduction in income of 50%, increase in costs of 50%
and a reduction in net asset value of 50%, any or all of which
could apply 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, and the
Directors believe that it is possible the Company could experience
further reductions in income and/or market value, the opinion of
the Directors is that this should not be to a level which would
threaten the Company's ability to continue as a going concern.
The Directors, the Investment Manager and the Company's other
service providers have put in place contingency plans to minimise
disruption. The Board was satisfied that there has been minimal
impact to the services provided during the year and are confident
that this will continue. Furthermore, the Directors are not aware
of any material uncertainties that may cast significant doubt on
the Company's ability to continue as a going concern, having taken
into account the liquidity of the Company's investment portfolio
and the Company's financial position in respect of its cash flows,
borrowing facilities and investment commitments (of which there are
none of significance). Therefore, the financial statements have
been prepared on the going concern basis.
Segmental Reporting
The Directors are of the opinion that the Company is engaged in
a single segment of business, being investment business. The
Company primarily invests in companies listed in the UK.
Judgements and Key Sources of Estimation Uncertainty
The preparation of the Financial Statements requires management
to make judgments, estimates and assumptions that affect the
application of policies and reported amounts in the financial
statements. The estimates and associated assumptions are based on
historical experience and various other factors that are believed
to be reasonable under the circumstances, the results of which form
the basis of making judgements about carrying values of assets and
liabilities and the allocation of income and expenses that are not
apparent from other sources. The nature of estimation means that
the actual outcomes could differ from those estimates, possibly
significantly.
The most critical estimates and judgments relate to the
determination of carrying value of unquoted investments at fair
value through profit or loss. The policies for these are set out in
the notes to the financial statements below. The Company values
unquoted investments by following the International Private Equity
Venture Capital Valuation ("IPEV") guidelines. Further areas
requiring judgement and estimation are recognising and classifying
unusual or special dividends received as either capital or revenue
in nature. The estimates and underlying assumptions are reviewed on
an ongoing basis. There are no further significant judgements or
estimates in these financial statements.
Income
Dividends receivable on quoted equity shares are taken to
revenue on an ex-dividend basis except where, in the opinion of the
Directors, their nature indicates they should be recognised in the
Capital Account. Where no ex-dividend date is quoted, dividends are
brought into account when the Company's right to receive payment is
established.
Fixed returns on non-equity shares and debt securities are
recognised on a time apportionment basis, provided there is no
reasonable doubt that payment will be received in due course.
Interest receivable is included in the accounts on an accruals
basis. Where interest is rolled up or payable on redemption it is
recognised as income unless there is reasonable doubt as to its
receipt.
All other income is accounted for on a time-apportioned accrual
basis and is recognised in the Income Statement.
Expenses
All expenses are accounted for on an accruals basis. In respect
of the analysis between revenue and capital items presented within
the income statement, all expenses have been prescribed as revenue
items except as follows:
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 is currently allocated 25% to revenue and
75% to capital, which reflects the Directors' expected long-term
view of the nature of the investment returns of the Company.
Issue costs in respect of ordinary shares issued by the Company
are deducted from the share premium account.
Taxation
Deferred taxation is recognised in respect of all timing
differences that have originated but not reversed at the balance
sheet date. Deferred tax assets are only recognised when they arise
from timing differences where recovery in the foreseeable future is
regarded as more likely than not. Timing differences are
differences arising between the Company's taxable profits and its
results as stated in the financial statements which are capable of
reversal in one or more subsequent periods. Deferred tax is not
discounted.
Current tax is expected tax payable on the taxable income for
the year, using tax rates enacted or substantively enacted at the
balance sheet date and any adjustment to tax payable in respect of
previous years. The tax effect of different items of expenditure is
allocated between revenue and capital on the same basis as a
particular item to which it relates, using the Company's effective
rate of tax, as applied to those items allocated to revenue, for
the accounting year.
No tax liability arises on gains from sales of fixed asset
investments by the Company by virtue of its VCT status.
Investments
In accordance with FRS 102, Sections 11 and 12, all investments
held by the Company are designated as held at fair value upon
initial recognition and are measured at fair value through profit
or loss in subsequent accounting periods. Investments are initially
recognised at cost, being the fair value of the consideration
given. After initial recognition, investments are measured at fair
value, with changes in the fair value of investments recognised in
the Income Statement and allocated to capital. Realised gains and
losses on investments sold are calculated as the difference between
sales proceeds and cost. Also included within this heading are
transaction costs in relation to the purchase or sale of
investments.
In respect of investments that are traded on AIM or are fully
listed, these are valued at bid prices at close of business on the
Balance Sheet date. Investments traded on SETS (London Stock
Exchange's electronic trading service) are valued at the last
traded price as this is considered to be a more accurate indication
of fair value.
Fair values for unquoted investments, or for investments for
which the market is inactive, are established by using various
valuation techniques in accordance with IPEV guidelines. These are
constantly monitored for value and impairment. The values and
impairment, if any, are approved by the Board. The shares may be
valued by using the most appropriate methodology recommended by the
IPEV guidelines, including revenue multiples, net assets,
discounted cashflows and industry valuation benchmarks.
Convertible loan stock instruments are valued using present
value of future payments discounted at a market value of interest
for a similar loan and valuing the option at fair value.
Contingent Value Rights (CVRs) pay out if certain hurdles are
achieved and are valued at the amount payable per share on
achievement of those hurdles, discounted for certain probabilities
and the time to the value date to reflect the illiquidity of the
holdings, and further discounted for payment, if it becomes due,
being made either in the form of loan notes or shares issue at
market value.
The valuation of the Company's investment in TB Amati UK Smaller
Companies Fund is based on the published share price. The valuation
is provided by the Authorised Corporate Director of the fund, T
Bailey Fund Managers Limited.
Financial Instruments
The Company classifies financial instruments, or their component
parts, on initial recognition as a financial asset, a financial
liability or an equity instrument in accordance with the substance
of the contractual arrangement. Financial instruments are
recognised on trade date when the Company becomes a party to the
contractual provisions of the instrument. All financial instruments
are designated upon initial recognition as held at fair value
through profit or loss, and are measured at subsequent reporting
dates at fair value, with changes in the fair value recognised in
the Income Statement and allocated to capital.
Financial instruments are derecognised on the trade date when
the Company is no longer a party to the contractual provisions of
the instrument.
Cash and Cash Equivalents
For the purposes of the Balance Sheet, cash comprises cash in
hand and demand deposits. Cash equivalents are short-term, highly
liquid investments and money market funds that are readily
convertible to known amounts of cash and which are subject to
insignificant risk of changes in value.
For the purposes of the Statement of Cash Flows, cash and cash
equivalents consist of cash and cash equivalents as defined above,
net of outstanding bank overdrafts when applicable.
Foreign Currency
Foreign currency assets and liabilities are translated into
sterling at the exchange rates ruling at the balance sheet date.
Transactions during the year are converted into sterling at the
rates ruling at the time the transactions are executed. Any gain or
loss arising from a change in exchange rate subsequent to the date
of the transaction is included as an exchange gain or loss in the
capital reserve or the revenue account depending on whether the
gain or loss is of a capital or revenue nature.
Short-term Debtors and Creditors
Debtors and creditors with no stated interest rate and
receivable within one year are recorded at transaction price. Any
losses arising from impairment are recognised in the income
statement in other operating expenses upon notification.
Dividends Payable
Final dividends are included in the financial statements when
they are approved by shareholders. Interim dividends payable are
included in the financial statements on the date on which they are
paid.
Share Premium
The share premium account is a non-distributable reserve which
represents the accumulated premium paid on the issue of shares in
previous periods over the nominal value, net of any expenses.
Merger Reserve
The merger reserve is a non-distributable reserve which
originally represented the share premium on shares issued when the
Company merged with Singer & Friedlander AIM VCT and Singer
& Friedlander AIM 2 VCT in February 2006. The merger reserve is
released to the realised capital reserve as the assets acquired as
a consequence of the merger are subsequently disposed of or
permanently impaired. There have been no disposals of these assets
during the year.
Capital Redemption Reserve
The capital redemption reserve represents non-distributable
reserves that arise from the purchase and cancellation of
shares.
Special Reserve
The special reserve is a distributable reserve which was created
by the authorised reduction of the share premium account and can be
applied in any manner in which the Company's profits available for
distribution (as determined in accordance with the Companies Act
2006) are able to be applied.
Capital Reserve
The following are taken to the capital reserve through the
capital column in the Income Statement:
Capital reserve - other, forming part of the distributable
reserves:
-- gains and losses on the disposal of investments;
-- realised exchange gains and losses of a capital nature; and
-- expenses allocated to this reserve in accordance with the above policies
Capital reserve - investment holding gains, not
distributable:
-- increase and decrease in the value of investments held at the year end; and
-- unrealised exchange gains of a capital nature.
Revenue Reserve
The revenue reserve represents accumulated profits and losses
and any surplus profit is distributable by way of dividends.
2 Income
Year to Year to
31 January 31 January
2022 2021
GBP'000 GBP'000
------------------------------ ------------- -------------
Income:
Dividends from UK companies 701 554
Interest from deposits - 13
------------------------------ ------------- -------------
701 567
------------------------------ ------------- -------------
3 Management Fees
The Manager provides investment management and administration,
secretarial and fund accounting services to the Company under an
Investment Management Agreement ("IMA") and a Fund Administration,
Secretarial Services and Fund Accounting Agreement ("FASSFAA").
Details of these agreements are given above.
Under the IMA the Manager receives an investment management fee
of 1.75% of the net asset value of the Company quarterly in
arrears.
The Company received a rebate of its management fee for the
investment in the TB Amati UK Smaller Companies Fund.
The investment management fee for the year was as follows:
Year to Year to
31 January 31 January
2022 2021
GBP'000 GBP'000
------------------------------------------------------------------------ ------------- -------------
Due to the Manager by the Company at 1 February 1,016 615
Investment management fee charged to revenue and capital for the year 4,460 3,197
Fee paid to the Manager during the year (4,427) (2,796)
Due to the Manager by the Company at 31 January 1,049 1,016
------------------------------------------------------------------------ ------------- -------------
In addition to the investment management fee the Manager also
receives a secretarial and administration fee of GBP96,000 (2021:
GBP95,000) paid quarterly in arrears. As detailed in the Fund
Management and Key Contracts above, the original investment
management agreement from 2010 was revised and updated in two
separate agreements on 30 September 2019, a IMA and a FASSFAA. The
FASSFAA's updated fee allowed for the costs incurred by the Manager
for fund administration, secretarial services and fund accounting
to be fully recovered from the Company where they had not been
previously. The fee level in the FASSFAA is subject to an annual
increase in line with the retail prices index; with effect from 01
February 2021 the annual increase will be in line with consumer
price index. See note 4.
No performance fee is payable in respect of the year ended 31
January 2022, as the Manager has waived all performance fees from
31 July 2014 onwards.
Annual running costs are capped at 3.5% of the Company's net
assets. If the annual running costs of the Company in any year are
greater than 3.5% of the Company's net assets, the excess is met by
the Manager by way of a reduction in future management fees. The
annual running costs include the Directors' and Manager's fees,
professional fees and the costs incurred by the Company in the
ordinary course of its business (but excluding any commissions paid
by the Company in relation to any offers for subscription, any
performance fee payable to the Manager, irrecoverable VAT and
exceptional costs, including winding-up costs).
4 Other Expenses
Year to Year to
31 January 31 January
2022 2021
GBP'000 GBP'000
------------------------------------------------------------------- ------------- -------------
Directors' remuneration 109 93
Directors' employer's national insurance 4 4
Directors' expenses 2 -
Auditor's remuneration - audit of statutory financial statements 35 30
Administration and secretarial services 94 94
Other expenses 270 234
------------------------------------------------------------------- ------------- -------------
514 455
------------------------------------------------------------------- ------------- -------------
The Company has no employees. The Directors are therefore the
only key management personnel.
Details of Directors' remuneration are provided in the audited
section of the directors' remuneration report above and on page 45
of the full Annual Report and Accounts .
5 Tax on Ordinary Activities
5a Analysis of charge for the year
Year to Year to
31 January 31 January
2022 2021
GBP'000 GBP'000
--------------------- ------------- -------------
Charge for the year - -
--------------------- ------------- -------------
5b Factors affecting the tax charge for the year
Year to Year to
31 January 31 January
2022 2021
GBP'000 GBP'000
------------------------------------------------------- ------------- -------------
(Loss)/profit on ordinary activities before taxation (22,396) 66,681
Corporation tax at standard rate of 19% (2021: 19%) (4,255) 12,669
Effect of:
Non-taxable dividends (133) (105)
Non-taxable losses/(gains) on investments 3,443 (13,255)
Movement in excess management expenses 945 691
Tax charge for the year (note 5a) - -
------------------------------------------------------- ------------- -------------
Due to the Company's tax status as an approved Venture Capital
Trust, deferred tax has not been provided on any net capital gains
arising on the disposal of investments as such gains are not
taxable.
No deferred tax asset has been recognised on surplus management
expenses carried forward as it is not envisaged that future taxable
profit will be available against which the Company can use the
benefits. The amount of unrecognised deferred tax asset is
GBP5,992,000 (31 January 2021: GBP3,609,000). These values reflect
prospective corporate tax rates of 25% and 19% substantively
enacted at the respective balance sheet dates.
6 Dividends
Amounts recognised as distributions from capital to equity
holders during the year:
2022 2022 2021 2021
Revenue Capital Revenue Capital
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------------------------------------- ----------- ---------- ---------- ----------
Second interim dividend for the year ended 31 January 2020 of 4.25p
per ordinary share paid
on 24 July 2020 - - - 4,472
Interim dividend for the year ended 31 January 2021 of 3.50p per
ordinary share paid on 27
November 2020 - - - 4,012
Final dividend for the year ended 31 January 2021 of 7.00p per - 8,278 - -
ordinary share paid on 23 July
2021
Interim dividend for the year ended 31 January 2022 of 4.50p per - 6,154 - -
ordinary share paid on 26
November 2021
--------------------------------------------------------------------- ----------- ---------- ---------- ----------
- 14,432 - 8,484
--------------------------------------------------------------------------------- ---------- ---------- ----------
Set out below are the interim and final dividends paid or
proposed on ordinary shares in respect of the financial year:
2022 2022 2021 2021
Revenue Capital Revenue Capital
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------------------------------------- ----------- ---------- ---------- ----------
Interim dividend for the year ended 31 January 2022 of 4.50p per
ordinary share (2021: 3.50p) - 6,154 - 4,012
Declared final dividend for the year ended 31 January 2022 of 4.50p
per ordinary share (2021:
7.00p)* - 6,698 - 8,278
--------------------------------------------------------------------- ----------- ---------- ---------- ----------
- 12,852 - 12,290
--------------------------------------------------------------------------------- ---------- ---------- ----------
* Based on shares in issue on 12 April 2022. The payment of a
final dividend will, as always, be subject to ensuring that the
Company has sufficient distributable reserves at the time of
payment.
7 Earnings per Share
2022 2021
Net(loss) Weighted Basic and Net(loss)/ Weighted Basic and
/profit average diluted profit average diluted
GBP'000 shares Earnings GBP'000 shares Earnings
per share per share
pence pence
---------- ----------- ------------- ------------ ------------ ------------- ------------
Revenue (928) (0.73)p (687) (0.64)p
Capital (21,468) (16.93)p 67,368 62.76p
---------- ----------- ------------- ------------ ------------ ------------- ------------
Total (22,396) 126,840,235 (17.66)p 66,681 107,332,617 62.12p
---------- ----------- ------------- ------------ ------------ ------------- ------------
8 Investments
Level 1* Level 2* Level 3* Total
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------------------------------------- ---------- ---------- ---------- ----------
Opening cost as at 1 February 2021 107,385 - 2,054 109,439
Opening investment holding gains 107,381 - 69 107,450
Opening unrealised loss recognised in realised reserve (228) - (1,263) (1,491)
---------------------------------------------------------------------- ---------- ---------- ---------- ----------
Opening fair value as at 1 February 2021 214,538 - 860 215,398
---------------------------------------------------------------------- ---------- ---------- ---------- ----------
Analysis of transactions during the year:
Realised (losses)/gains on sales (679) - 744 65
Unrealised losses on investments (18,167) - (21) (18,188)
Purchases at cost 27,977 - 5,000 32,977
Sales proceeds received (14,644) - (871)** (15,515)
Closing fair value as at 31 January 2022 209,025 - 5,712 214,737
---------------------------------------------------------------------- ---------- ---------- ---------- ----------
Closing cost as at 31 January 2022 128,607 - 6,955 135,562
---------------------------------------------------------------------- ---------- ---------- ---------- ----------
Closing investment holding gains as at 31 January 2022 80,646 - 20 80,666
Closing unrealised loss recognised in realised reserve as at 31
January 2022 (228) - (1,263) (1,491)
---------------------------------------------------------------------- ---------- ---------- ---------- ----------
Closing fair value as at 31 January 2022 209,025 - 5,712 214,737
---------------------------------------------------------------------- ---------- ---------- ---------- ----------
Equity shares 209,025 - 501 209,526
Preference shares - - - -
CVRs - - 711 711
Convertible loan notes - - 4,500 4,500
---------------------------------------------------------------------- ---------- ---------- ---------- ----------
Closing fair value as at 31 January 2022 209,025 - 5,712 214,737
---------------------------------------------------------------------- ---------- ---------- ---------- ----------
* Refer to note 14 for definitions
** Includes final repayment of China Food Company plc Loan Notes
now fully disposed.
Holdings of ordinary shares in unquoted companies rank pari
passu for voting purposes. Preference shares and CVRs have no
voting rights.
The Company received GBP15,515,000 (2021: GBP2,381,000) from the
sale of investments in the year. The bookcost of these investments
when they were purchased was GBP6,855,000 (2021: GBP3,825,000).
These investments have been revalued over time and until they were
sold any unrealised gains/(losses) were included in the fair value
of the investments.
2022 2021
GBP'000 GBP'000
----------------------------------------------------------- ---------- ----------
Realised gains on disposal 65 911
Unrealised (losses)/gains on investments during the year (18,188) 68,855
Net (losses)/gains on investments (18,123) 69,766
----------------------------------------------------------- ---------- ----------
Transaction Costs
During the year the Company incurred transaction costs of
GBP44,000 (31 January 2021: GBPnil) and GBP8,000 (31 January 2021:
GBP3,000) on purchases and sales of investments respectively. These
amounts are included in the gain on investments as disclosed in the
income statement.
9 Debtors
2022 2021
GBP'000 GBP'000
---------------------------------- ---------- ----------
Receivable for investments sold 1,919 -
Prepayments and accrued income 53 46
---------------------------------- ---------- ----------
1,972 46
---------------------------------- ---------- ----------
10 Creditors: Amounts Falling due within One Year
2022 2021
GBP'000 GBP'000
--------------------------------- ---------- ----------
Payable for share buy-backs 249 1,012
Payable for investments bought 34 -
Other creditors 1,185 1,120
--------------------------------- ---------- ----------
1,468 2,132
--------------------------------- ---------- ----------
11 Called Up Share Capital
2022 2022 2021 2021
Ordinary shares (5p shares) Number GBP'000 Number GBP'000
------------------------------------------------ ------------- --------- ------------- ---------
Allotted, issued and fully paid at 1 February 115,589,550 5,780 94,039,012 4,703
Issued during the year 22,880,426 1,144 23,589,915 1,179
Repurchase of own shares for cancellation (1,749,179) (88) (2,039,377) (102)
At 31 January 136,720,797 6,836 115,589,550 5,780
------------------------------------------------ ------------- --------- ------------- ---------
During the year a total of 1,749,179 ordinary shares of 5p each
were purchased by the Company at an average price of 1.96p per
share.
Further details of the Company's share capital and associated
rights are shown in the Directors' Report on page 33 of the full
Annual Report and Accounts.
12 Net Asset Value per Ordinary Share
2022 2021
Net Ordinary NAV Net assets Ordinary NAV
assets shares per share GBP'000 shares per share
GBP'000 pence pence
----------------- ---------- ------------- ------------ ------------ ------------- ------------
Ordinary share 247,074 136,720,797 180.7 238,279 115,589,550 206.1
----------------- ---------- ------------- ------------ ------------ ------------- ------------
13 Significant Interests
The Company has the following significant interests (amounting
to an investment of 3% or more of the equity capital of an
undertaking):
Nominal % held
-------------------------------- ------------ --------
Falanx Group Limited 80,500,000 15.3
Northcoders Group plc 1,000,000 14.4
Polarean Imaging plc 25,114,469 12.0
Getech Group plc 7,727,000 11.6
Leisurejobs.com Limited 58,688 11.4
Ixico plc 5,031,300 10.5
Rosslyn Data Technologies plc 35,274,692 10.4
Fusion Antibodies plc 2,341,463 9.0
Hardide plc 4,521,963 8.1
One Media iP Group plc 17,714,000 8.0
Block Energy plc 51,136,000 7.8
Glantus Holdings plc 2,941,176 7.8
Saeitta Group plc 5,364,232 6.3
Rua Life Sciences plc 1,358,348 6.1
Intelligent Ultrasound plc 15,869,000 5.9
Sosandar plc 12,480,000 5.6
Diurnal Group plc 9,500,000 5.6
Byotrol plc 25,000,001 5.5
Aptamer Group plc 3,142,042 4.6
Zenova Group plc 3,947,368 4.2
Water Intelligence plc 814,660 4.2
Tristel plc 1,844,046 3.9
Velocys plc 53,987,142 3.9
Eden Research plc 14,282,652 3.8
Kinovo plc 2,155,010 3.5
Velocity Composites plc 1,150,294 3.2
Arecor Therapeutics plc 840,708 3.0
-------------------------------- ------------ --------
14 Financial Instruments
The Company's financial instruments comprise equity, CVRs and
fixed interest investments, cash balances and liquid resources
including debtors and creditors. The Company holds financial assets
in accordance with its investment policy to invest in qualifying
investments predominantly in AIM traded companies or companies to
be traded on AIM.
Classification of financial instruments
The Company held the following categories of financial
instruments at 31 January:
2022 2022 2021 2021
Book value Fair value Book value Fair value
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------------------------- ------------- ------------- ------------- -------------
Assets at fair value through profit or loss
Investments 214,737 214,737 215,398 215,398
Assets measured at amortised cost:
Accrued income and other debtors 1,972 1,972 46 46
Cash at bank 31,833 31,833 24,967 24,967
Liabilities (amounts due within one year) measured at
amortised cost:
Payable for investments bought (282) (282) (1,007) (1,007)
Accrued expenses (1,186) (1,186) (1,125) (1,125)
---------------------------------------------------------- ------------- ------------- ------------- -------------
Total for financial instruments 247,074 247,074 238,279 238,279
---------------------------------------------------------- ------------- ------------- ------------- -------------
Investments (see note 8) are measured at fair value. For quoted
securities this is generally the bid price or, in the case of SETS
securities, the last traded price. As explained in note 8, unquoted
investments are valued in accordance with the IPEV guidelines.
Changing one or more inputs for level 3 assets would not have a
significant impact on the valuation. For example, revenue multiple
calculations are used to value some unquoted equity holdings. These
multiples are derived from a basket of comparable quoted companies,
with appropriate discounts applied. These discounts are subjective
and based on the Manager's experience. In respect of unquoted
investments, these are valued by the Directors using rules
consistent with IPEV guidelines. Investments in TB Amati UK Smaller
Companies Fund are based on the published fund mid-price NAV. The
fair value of all other financial assets and liabilities is
represented by their carrying value in the balance sheet.
The Company's investing activities expose it to various types of
risk that are associated with the financial instruments and markets
in which it invests. The most important types of financial risk to
which the Company is exposed are market risk, credit risk and
liquidity risk. The nature and extent of the financial instruments
outstanding at the balance sheet date and the risk management
policies employed by the Company are discussed below.
The Company measures fair values using the following fair value
hierarchy into which the fair value measurements are categorised. A
fair value measurement is categorised in its entirety on the basis
of the lowest level input that is significant to the fair value
measurement of the relevant asset as follows:
Level 1 - the unadjusted quoted price in an active market for
identical assets or liabilities that the entity can access at the
measurement date.
The Company's level 1 investments are AIM traded companies and
fully listed companies.
Level 2 - inputs other than quoted prices included within Level
1 that are observable (i.e. developed using market data) for the
asset or liability, either directly or indirectly.
The Company's level 2 assets are valued using models with
significant observable market parameters.
Level 3 - inputs are unobservable (i.e. for which market data is
unavailable) for the asset or liability.
Level 3 fair values are measured using a valuation technique
that is based on data from an unobservable market. Discussions are
held with management, statutory accounts, management accounts and
cashflow forecasts are obtained, and fair value is based on
multiples of revenue.
Financial assets at fair value
Year ended 31 January 2022 Year ended 31 January 2021
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Equity shares 209,025 - 501 209,526 214,538 - 81 214,619
Preference shares - - - - - - 47 47
CVRs - - 711 711 - - 732 732
Convertible loan
notes - - 4,500 4,500 - - - -
---------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
209,025 - 5,712 214,737 214,538 - 860 215,398
---------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Level 3 financial assets at fair value
Year ended 31 January 2022 Year ended 31 January 2021
Equity Preference Loan Equity Preference Loan
shares shares stock CVR Total shares shares stock CVR Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP000 GBP'000
----------------- --------- ------------ --------- --------- --------- --------- ------------ --------- -------- ---------
Opening balance
at 1 February 81 47 - 732 860 81 47 - 339 467
Purchases at
cost 500 - 4,500 - 5,000 - - - - -
Disposal
proceeds (353) (207) (311) - (871) - - (93) - (93)
Total net
gains/(losses)
recognised in
the income
statement 273 160 311 (21) 723 - - 93 393 486
----------------- --------- ------------ --------- --------- --------- --------- ------------ --------- -------- ---------
Closing balance
at 31 January 501 - 4,500 711 5,712 81 47 - 732 860
----------------- --------- ------------ --------- --------- --------- --------- ------------ --------- -------- ---------
The fair value of the Level 3 investments are derived as
follows:
Equity shares are valued by using revenue multiples, net assets,
discounted cashflows and industry valuation benchmarks.
Contingent Value Rights (CVRs) pay out if certain hurdles are
achieved and are valued at the amount payable per share on
achievement of those hurdles, discounted for certain probabilities
and the time to the value date to reflect the illiquidity of the
holdings, and further discounted for payment, if it becomes due,
being made either in the form of loan notes or shares issued at
market value.
Convertible Loan Notes (CLNs) are valued using the present value
of future payments, benchmarking to a similar CLN. The value will
also be referenced to the underlying assets held and disclosures
made by the underlying investee company.
15 Risks
The risks identified arising from the financial instruments are
market risk (which comprises market price risk and foreign currency
risk), liquidity risk and credit and counterparty risk.
The Board and Investment Manager consider and review the risks
inherent in managing the Company's assets which are detailed
below.
16 Market Risk
Market risk arises from uncertainty about the future prices of
financial instruments held in accordance with the Company's
investment objectives. It represents the potential loss that the
Company might suffer through holding positions by the way of price
movements, interest rate movements and exchange rate movements.
The Company's strategy on the management of market risk is
driven by the Company's investment objective as outlined above. The
management of market risk is part of the investment management
process. The Board seeks to mitigate the internal risks by setting
policy, regular reviews of performance, enforcement of contractual
obligations and monitoring progress and compliance with an
awareness of the effects of adverse price movements through
detailed and continuing analysis, with an objective of maximising
overall returns to shareholders. Investments in unquoted stocks and
AIM traded companies, by their nature, involve a higher degree of
risk than investments in the Main Market. Some of that risk can be
mitigated by diversifying the portfolio across business sectors and
asset classes. The Company's overall market positions are regularly
monitored by the Board and at quarterly Board meetings.
Market price risk
Market price risk arises from any fluctuations in the value of
investments held by the Company. Adherence to investment policies
mitigates the risk of excessive exposure to any particular type of
security or issuer. The portfolio is managed with an awareness of
the effects of adverse price movements through detailed and
continuing analysis with the objective of maximising overall
returns to shareholders.
The assessment of market risk is based on the Company's
portfolio as held at the year end. The assessment uses the AIM
All-Share Index as a proxy for the AIM Qualifying Investments and
quoted Non-Qualifying Investments and illustrates, based on
historical price movements, their potential change in value to the
AIM All-Share Index.
The review has also examined the potential impact of a movement
in the market on the CLN investments held by the Company, whose
values will vary according to the value of the underlying security
into which the loan note instrument has the option to convert.
As at 31 January 2022 97.34% (31 January 2021: 99.60%) of the
Company's investments are traded. A 30% decrease in stock prices as
at 31 January 2022 would have decreased the net assets attributable
to the Company's shareholders and increased the loss for the year
by GBP62,708,000 (31 January 2021: GBP64,361,000); an equal change
in the opposite direction would have increased the net assets
attributable to the Company's shareholders and turned the loss into
a profit for the year by an equal amount.
As at 31 January 2022 2.66% (31 January 2021: 0.40%) of the
Company's investments are in unquoted companies held at fair value.
A change in market inputs that would result in a 30% decrease in
the valuations of unquoted investments at 31 January 2022 would
have decreased the net assets attributable to the Company's
shareholders and increased the loss for the year by GBP1,714,000
(31 January 2021: GBP258,000); an equal change in the opposite
direction would have increased the net assets attributable to the
Company's shareholders and reduced the loss for the year by an
equal amount.
Currency risk
The Company's performance is measured in sterling, a proportion
of the Company's assets may be either denominated in other
currencies or are in investments with currency exposure. Any income
denominated in a foreign currency is converted into sterling upon
receipt. At the Balance Sheet date, the Company exposure to USD
consisted of investments of GBP2,846,000 (31 January 2021:
GBP860,000).
A 5% rise or decline of Sterling gains foreign currency (i.e.
non Pounds Sterling) assets and liabilities held at the year end
would have increased/decreased the net asset value by GBP142,000
(2021: GBP43,000).
Interest Rate Risk
Interest rate movements may affect the level of income
receivable on cash deposits and any fixed interest securities. The
Company holds two fixed interest investments GBP4,500,000 (2020:
GBPnil). Interest receivable is determined by whether the
underlying investee companies of the Convertible Loan Notes held
will list on AIM.
The Company holds a cash balance at 31 January 2022 of
GBP31,833,000 (2021: GBP24,967,000). If the level of cash was
maintained for a year, a 1% increase in interest rates would
increase the revenue return and net assets by GBP318,000 (2021:
GBP249,000). Management proactively manages cash balances. If there
were a fall of 1% in interest rates, it would potentially impact
the Company by turning positive interest to negative interest. The
total effect would be a revenue reduction/cost increase of
GBP318,000 (2021: GBP249,000).
17 Credit Risk
Credit risk is the risk that the counterparty to a financial
instrument will fail to discharge an obligation or commitment that
it has entered into with the Company. The carrying amount of
financial assets best represents the maximum credit risk exposure
at the balance sheet date. At 31 January 2022, the financial assets
exposed to credit risk, representing convertible loan stock
instruments, amounts due from brokers, accrued income and cash
amounted to GBP38,267,000 (31 January 2021: GBP25,013,000). The
convertible loan in Sorbic International plc is secured over the
buildings and land use rights of the companies.
Credit risk arising on transactions with brokers relates to
transactions awaiting settlement. Risk relating to unsettled
transactions is considered to be small due to the short settlement
period involved, the high credit quality of the brokers used and
the fact that almost all transactions are on a 'delivery versus
payment' basis. The Manager monitors the quality of service
provided by the brokers used to further mitigate this risk.
All the assets of the Company which are tradeable on AIM are
held by The Bank of New York Nominees, the Company's custodian.
Bankruptcy or insolvency of the custodian may cause the Company's
rights with respect to securities held by the custodian to be
delayed or limited.
At 31 January 2022, cash held by the Company was held by The
Bank of New York Mellon. Bankruptcy or insolvency of the
institutions may cause the Company's rights with respect to the
cash held by it to be delayed or limited. Should the credit quality
or the financial position of the institutions deteriorate
significantly the Company has the ability to move the cash at short
notice. The Board monitor the credit worthiness of BNYM, currently
rated at Aa1 (Moody's).
There were no significant concentrations of credit risk to
counterparties at 31 January 2022 or 31 January 2021.
18 Liquidity Risk
The Company's financial instruments include investments in
unlisted equity investments which are not traded in an organised
public market and which generally may be illiquid. As a result, the
Company may not be able to quickly liquidate some of its
investments in these instruments at an amount close to their fair
value in order to meet its liquidity requirements, or to respond to
specific events such as deterioration in the creditworthiness of
any particular issuer. The proportion of the portfolio invested in
unlisted equity investments is not considered significant given the
amount of investments in readily realisable securities.
The Company's liquidity risk is managed on an ongoing basis by
the Manager in accordance with policies and procedures in place as
described in the Strategic Report above. The Company's overall
liquidity risks are monitored on a quarterly basis by the
Board.
The Company maintains sufficient investments in cash and readily
realisable securities to pay accounts payable and accrued expenses.
At 31 January 2022, these investments were valued at GBP132,107,000
(31 January 2021: GBP159,776,000). The Directors consider that
frequently traded AIM investments with a market capitalisation of
greater than GBP200m represent readily realisable securities. The
Company is a closed-end fund, assets do not need to be liquidated
to meet redemptions, and sufficient liquidity is maintained to meet
obligations as they fall due.
19 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;
-- to satisfy the relevant HMRC requirements; and
-- to maximise the income and capital return to its shareholders.
As a VCT, the Company must have, within 3 years of raising its
capital, at least 80% by value of its investments in VCT qualifying
holdings, which are relatively high-risk UK smaller companies. In
addition at least 30% of new money raised during an accounting
period must be invested in qualifying holdings within 12 months of
the end of the financial year in which the funds are raised. In
satisfying these requirements, the Company's capital management
scope is restricted. The Company does have the option of
maintaining or adjusting its capital structure by varying
dividends, returning capital to shareholders, issuing new shares or
selling assets to maintain a certain level of liquidity. There has
been no change in the objectives, policies or processes for
managing capital from the previous year.
The structure of the Company's capital is described in note 11
and details of the Company's reserves are shown in the Statement of
Changes in Equity above.
The Board, with the assistance of the Manager, monitors and
reviews the broad structure of the Company's capital on an ongoing
basis. This review includes:
-- the need to buy back equity shares for cancellation, which
takes account of the difference between the net asset value per
share and the share price (i.e. the premium or discount);
-- the need for new issues of shares; and
-- the extent to which revenue in excess of that which is to be
distributed should be retained.
The Company is subject to externally imposed capital
requirements:
a. as a public limited company, the Company is required to have
a minimum share capital of GBP50,000; and
b. in accordance with the provisions of the Income Tax Act 2007,
the Company as a Venture Capital Trust:
i) is required to make a distribution each year such that it
does not retain more than 15% of income from shares and securities;
and
ii) is required to derive 70% of its income from shares and securities.
These requirements are unchanged since last year and the Company
has complied with them at all times.
20 Post Balance Sheet Events
On 24 February 2022, following the Company's year end, in the
largest conventional military attack in Europe since World War II,
Russia began an invasion of Ukraine. Global markets reacted with
shock, AIM itself fell by 3% in one day. Markets have fallen
further with the effect of economic sanctions rolled out across the
world, with AIM falling further since. This has had an inevitable
impact on the Company's net asset value but the Directors continue
to be of the view that the Company is a going concern that is
viable into the longer term.
The Company announced the re-opening of the Offer on 16 February
2022 and raised a further GBP25,000,000 which was available under
the over-allotment facility.
The following transactions have taken place between 31 January
2022 and the date of this report:
-- 12,280,842 shares allotted
-- 150,616 shares bought back
21 Related Parties
The Company retains Amati Global Investors as its Manager.
Details of the agreement with the Manager are set out above. The
number of ordinary shares in the Company (all of which are held
beneficially) by certain members of the management team are:
31 January 31 January 31 January 31 January
2022 2022 2021 2021
shares held % shares held shares held % shares held
------------------ -------------- ---------------- -------------- ----------------
Paul Jourdan 723,985 0.53% 631,470 0.54%
David Stevenson 26,753 0.02% 17,583 0.02%
Anna Macdonald* 7,855 0.01% n/a n/a
------------------ -------------- ---------------- -------------- ----------------
*Subsequent to the year end Anna Macdonald's shareholding
increased by 4,807 shares under the Offer on 2 March 2022.
The remuneration of the Directors, who are key management
personnel of the Company, is disclosed in the Directors'
Remuneration Report on page 45 of the full Annual Report and
Accounts , and in note 4 above.
Corporate Information
Directors
Peter Lawrence
Julia Henderson
Susannah Nicklin
Brian Scouler
Fiona Wollocombe
all of:
27/28 Eastcastle Street
London
W1W 8DH
Secretary
LDC Nominee Secretary Limited
8(th) Floor, 100 Bishopsgate
London
EC2N 4AG
Fund Manager
Amati Global Investors Limited
8 Coates Crescent
Edinburgh
EH3 7AL
VCT Status Adviser
Philip Hare & Associates LLP
Hamilton House
1 Temple Avenue
London
EC4Y 0HA
Registrar
The City Partnership (UK) Limited
The Mending Rooms
Park Valley Mills
Meltham Road
Huddersfield
HD4 7BH
Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
Solicitors
Dickson Minto W.S.
16 Charlotte Square
Edinburgh
EH2 4DF
Custodian
The Bank of New York Mellon SA/NV
London Branch
160 Queen Victoria Street
London
EC4V 4LA
Annual General Meeting
Attendance at the meeting
The Annual General Meeting of Amati AIM VCT plc (the "Company")
will be held at the Barber-Surgeons' Hall, Monkwell Square, Wood
Street, Barbican, London EC2Y 5BL on Thursday 16 June 2022 starting
at 2pm.
The Company intends for the meeting to be held in person,
subject to any changes in guidance from the Government regarding
the Covid-19 pandemic. The AGM will also be live-streamed for those
who wish to view it but cannot attend in person.
As is our normal practice, there will be live voting for those
physically present at the AGM. Shareholders are advised that it
will not be possible to vote or ask questions virtually during the
live-stream and we therefore request all shareholders, and
particularly those who cannot attend physically, to submit their
votes by proxy, ahead of the deadline of 2pm on Tuesday 14 June
2022 to ensure that their vote counts at the AGM.
Shortly ahead of the AGM, the Company's Manager will post a link
and instructions on how to join the event on its homepage at
www.amatiglobal.com .
Shareholders who are unable to join the meeting physically can
email any questions they may have either on the business of the AGM
or the portfolio to info@amatiglobal.com by 10 June 2022. The
Company's Manager will publish questions together with answers on
the page dedicated to the AGM on the Manager's website prior to the
AGM being held. The Company's Manager will reply to any individual
shareholder questions submitted by the deadline of 10 June 2022,
before the AGM.
The full audited Annual report and Accounts for the year ended
31 January 2022 will shortly be available on the Company's website
www.amatiglobal.com . It will also be submitted to the National
Storage Mechanism ("NSM") and will be available for inspection
there, situated at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
A copy of the Annual Report and Accounts, which includes the
Notice of Annual General Meeting, will be posted to shareholders
shortly.
For further information, please contact the investor line at
Amati Global Investors on 0131 503 9115 or by email at
info@amatiglobal.com .
Neither the contents of the Company's website nor the contents
of any website accessible from hyperlinks on this announcement (or
any other website) is incorporated into, or forms part of, this
announcement.
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END
FR UUVWRUVUSAAR
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